Sept 15, 2022
12 minutes

Product Innovation in the Banking Sector

If you want to be successful in a crowded or competitive market, you have to be innovative. But product innovation isn’t just about building complex gadgetry in an attempt to outdo the competition. The lure of new technologies can be impossible to resist, but if it doesn’t solve a problem, what is it good for? Most new products fall flat because creators get caught up in the “how?”, and forget about the most important questions: “who?” and “why?”

Who are you building your product for and why are you building it? In his TED talk The art of innovation, Silicon Valley venture capitalist, Guy Kawasaki, teaches that if you start with the desire to make meaning, you will likely make money.

Here at Crowdlinker, we created our Fireside chat as a way to pick the brains of great innovation leaders, helping new founders find their feet in emerging markets. Our inaugural episode gave us the chance to sit down with Director of product innovation at ATB financial, Julie Kerr, to find out how this big banks approach to edge innovation has helped ATB differentiate themselves within a highly competitive financial market.

By diving into alternative potential business models and income streams outside of the bank, ATB has become a pioneer in delivering more than just financial services. But their success isn’t simply down to new technologies like AI or quantum computing. The innovation team at ATB understands that for a product to be well received, your primary focus has to be on your customer pain point, or as Kerr puts it, “the bleeding neck wound.” 

“In an innovation lab, you’re trying to build products for customers that might not even exist yet - trying to anticipate problems that may not resonate for another 5 or 10 years.”

Kawasaki calls this jumping the curve, and advises that  “great innovation occurs when you get to the next curve - when you go from telephone to internet.”

The Innovation Pipeline

So, exactly how does the innovation team at ATB predict people’s problems to champion product innovation? Kerr explains that crowdsourcing ideas from everyone on the team enables them to collect a significant pool of concepts that can then be put through a comprehensive evaluation process.

That means collecting ideas from a large cross section of different people, in different industries and disciplines. Including product managers, designers, data scientists, engineers, and developers. 

The greater the cross-section, the more creative you can be with your team. If you’re a new start-up with a small team around you, and you’re lacking an innovation culture internally, you could consider partnering with a digital product studio like Crowdlinker to extend your potential for innovation. By leveraging the creative and strategic perspective of an experienced team, you could expose your company to new cultures and processes, not only expanding your combined knowledge, but also feasibly ramping up your time to market. 

For the ideas that meet ATBs specific criteria, the next step in their innovation pipeline is a 1 week design sprint where the team can map out a proof of concept (POC). This is usually an intense 1 week process using Google Design Sprint, where one of the most important criteria is to communicate with potential prospects and prove that the idea being put forward would address a real pain faced by real customers. 

The majority of ideas drummed up in this prosperous innovation lab struggle to make it past this POC stage. In fact, when asked to give a ratio of ideas that are killed vs those that are generally accepted, Kerr explained it’s around 10:1. Those that make it still have a long way to go however, facing an intensive pitching process to secure funding, around 3 weeks to build out the prototype, and another round of proving out the value of the product before beginning to build the MVP. 

Stay Focused

It can be a long road, but it’s essential that innovators avoid getting too carried away during each stage of the creative process. You don’t want to drive 100 miles west, only to realize you missed the exit and should’ve been heading east all along.

Equally, try to remain mindful about how emotionally attached you are to an idea. Constantly evaluating your ideas is a crucial element to achieving success. Sometimes that means learning to pivot, or allowing yourself to be ruthless enough to kill something that just isn’t meeting a real world customer pain point. As Kerr puts it, “Love the problem, the solution can change.”

“I think experimentation fails when people aren’t open to admitting that the product isn’t the right fit. Failure is part of the job. Be open to being wrong.”

It’s essential to every project that you can prevent your team from going off on a tangent. The best way to keep your team focused on the problem you initially set out to solve is by reiterating the vision of the product in every single meeting. You should always endeavor to be crystal clear about the definition of the MVP you’re trying to build.

By adding customer impact in addition to the objective, you can understand the consequences to your user if the product doesn’t have a specific feature set. This will allow you to discern the impact of omitting or including particular functions and features to your MVP and even your end product, helping to keep your team grounded and avoiding unnecessary add-ons. 

This can be difficult, with many innovators reluctant to release products that aren’t quite perfect. But getting your product into the hands of your customers quickly is often key. Kerr explains that, for an innovation lab, speed and velocity of how ideas are being produced is an indication of success.

So, although it takes time to move through each stage of the project as a product laboriously passes through myriad checks and balances, constantly evaluating the validity of it’s application, it’s also important to be aware of time and budget constraints.

In Kawasaki’s Ted Talk, he advises product innovators to keep in mind the Bobby Mcferrin song, ‘Don't worry, be happy,’, adapting this line to “don’t worry be crappy”. Kawasaki says that when you jump to the next curve, it’s ok to have elements of crappiness. If your idea can address a pressing customer pain point, seeking perfection for the first launch won’t help you further your chances of success. Just move the product, and allow your idea to evolve within the hands of your customers, allowing you to focus on developing your product features alongside the needs of your customers. You will then be better informed when it comes to updating your product through later releases, with more data from real prospects. 

Overcome Roadblocks

Every project is subject to hitting roadblocks from time to time, so overcoming these quickly and efficiently can be crucial. Kerr explains that one industry’s perspective can be limiting, and the best way to move past these obstacles is to leverage everyone you come into contact with. Seeking mentorship in a single individual can be useful, however to give your project the best chance of success, you should aim to check in with peers, prospects, and all of the people you meet across different industries, focussing back to the problem that kickstarted your idea. 

To help you quash roadblocks effectively and protect your time, you can search for partners to help fill in the gaps where your knowledge falls short. So, we thought we’d ask Kerr how the team at ATB best evaluates the potential for successful partnerships when seeking outside support. 

“Our partners become an extension of our team. When we’re evaluating this, it’s really about how flexible they can be. You need a partner that can understand your process and respect your process. We’re not going to get it right straight away, so everything has to be iterative and agile”

Overall, however, there’s no perfect fit formula for finding the right people. But there are a few qualities that can boost your innovation potential. Kerr believes many innovation leaders can often become trapped in the way they think about their approach to developing new products. To sharpen your skill set and give yourself the ability to remain agile in fast moving markets, it’s wise to train your mindset, rather than focusing all of your learning on specific industries. Read as much as you can, question the things that you see, network with new and unique people, and write down all of your ideas. Train your mind to work like an innovation leader, and always keep in mind, “Don’t focus on the shiny new thing, focus on the people you’re trying to serve.”

How to be Great 

To be successful, you have to be able to demonstrate the value of your product. To do that you need data that will substantiate your pitch. Demonstrating what a user would experience when using your product, with the help of prototypes, or drawings can give stakeholders or investors an idea of what the user will feel and highlight key pain points. When going through this process in a corporate scenario, it’s important to remember that change doesn’t happen quickly, and persistence is often key to pushing your product through to the development stage. But if you can remain focussed on the problem you set out to solve, and demonstrate the value of your solution effectively with the support of data, your idea is worth pursuing. 

Anyone could potentially have a great idea, and as Kerr explains, a specific skill set isn’t necessarily significant to building a good team. In fact, it’s better to have greater diversity in this area and avoid getting too caught up in the idea of traditional linear roles. To be effective within a well functioning product innovation team, you should remain receptive to new ideas without fixating on becoming a subject matter expert. Allow yourself to be honest about where your knowledge falls short, and be open to bringing in the right people to fill in the gaps. Whether that’s additional training or expert speakers, or partnering with a digital product studio or agency. 

According to Kerr, the most important qualities every great innovation leader should have begins with the desire to make change, or introduce products that will be the catalyst for change. You should have an ability to learn and pick out key insights quickly. But the number one quality every innovator should possess is curiosity. 

To find out more about the Innovation team at ATB financial, follow this link to watch the full interview with Julie Kerr. We cover our predictions for industry trends over the next 5 years, compare the experience of working at the innovation lab vs product management roles within traditional startup and enterprise environments, and so much more.

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