Quotes from the Innovation Roundtable

Quotes from the Innovation Roundtable
They said it couldn’t be done, but we held the latest installment in Celent’s series of innovation roundtables in Tokyo recently. Our innovation roundtables put the focus squarely on interactive discussion among the participants. This is a relatively untried model in Japan, where events typically take the form of conventional conferences with presentations. We’re glad we tried it though, because we got a very interesting line-up of firms. Participants included the whole spectrum: banks, capital markets firms, and insurers; Japanese and foreign firms; traditional mega-institutions and alternative new entrants. The discussion was lively; below are some quick notes I took of some of the more interesting comments made, to capture a bit of the flavor of the day. Why Innovate? “Innovation is not the goal, it is a method and a tactic.” “We need to innovate because it has become difficult to differentiate us from our competitors.” “In today’s environment, innovation is necessary if you want to stay profitable.” Paths to Innovation “Incremental innovation is an axymoron. You can’t innovate by increments; innovation requires a big bang change.” “It might be possible to rearrange existing elements to create something new.” “When to innovate? If our clients think a new service is interesting, we try and create it for them and see if it succeeds.” “Innovation needs to be business driven.” “Financial institutions need to have an innovation division; an incubation unit that accumulates ideas from throughout the company.” IT and Innovation “IT is not the impetus for innovation, but because IT inevitably evolves, that creates need for innovation.” “Legacy is a barrier: it is hard to throw things away.” Cultural Challenges “We need to justify ROI on any investment each fiscal year. It is hard to show this on an innovation project.” “If you think about it, financial institutions don’t even have R&D departments.” Quote of the Day “Changing company culture is really about changing oneself. I personally enjoy innovation and change. Innovative culture is about getting a bunch of people together who enjoy change.”

It’s The Little Things

It’s The Little Things
I bought my wife some flowers recently, and was shocked to discover that the florist—as of this minute, my ex-florist—no longer gives out those little cards you tuck in the arrangement. The person behind the counter said, “We have these new ones from Hallmark, for only 99 cents…” Huh? I’m spending $20 on cut flowers that cost you only $5, and you think it’s smart to eliminate the cards that cost you two cents each? That’s nonsense. The real story here is that service experiences cannot be disaggregated. As a customer, I don’t view the Buy Wife Flowers Exercise as 10 separate steps, each with its own decision tree and cost benefit. I want it all, end to end, seamlessly. A good selection of fresh flowers, nice vases, honest and helpful service, a fast checkout process, maybe some ribbon, and those little cards that make sure I get full credit for my thoughtfulness. For that, I’m willing to pay $20. Start messing with the formula, I assure you I will look elsewhere. It’s the same with all of my financial institutions. The basic product features and price are important. So, too, are how they sell to me, how they communicate routinely with me, what happens when things go wrong. And if I’m sitting across the desk from someone, how they treat my five-year-old when he interrupts a financial transaction with an explanation of his favorite Lego. It all matters. The institutions I am loyal to are the ones that understand this. For example, I got an honest-to-goodness email from someone in a local bank branch when she noticed something unusual about my account that was, in fact, my mistake. “It didn’t look right, so I thought I’d ask,” she said. Problem solved, customer won over. In the case of the Lego interruption (a different bank), the rep couldn’t have been more patient, which taught my son an important lesson about polite listening. The next time the bank calls me to offer a new service, I’ll return the favor. I’m still waiting for one of my insurers or my broker to do something small but meaningful to convince me that I’m something other than a random, periodic check for them. They’ve got the big pieces in place, which is why I have relationships with them. But until I experience the extra touches and perhaps an occasional nice surprise, I’ll keep my eyes open for other providers.

Disruptive Innovation: The Next Day

Disruptive Innovation: The Next Day
What a journey! Celent’s “What’s next: The Search for Disruptive Innovation” brought together an exciting group of people to look into innovation in financial services yesterday in the Bay area. You could feel it in the air.  Cases from all around the world were the perfect set-up to let our minds wonder during one day exclusively dedicated to innovation. Too many things I would like to share with you for just one blog, but better than that, please be my guests and look into what people had to say about the different sessions during the day as they shared their thoughts through twitter #celentnext: https://twitter.com/search?q=%23celentnext&src=tyah&f=realtime  As for me, I would like to share with you my main takeaways:
  • Innovation is inevitable. Either you innovate, even at the extent of having to reinvent yourself, or someone else will do and then you will have no business to re-invent.
  • Innovation management is improving but is still on the “must do” list for many.
  • Any time we talk about innovation we end with a few imperatives: Be bold enough to try, execute to perfection and learn and adapt. Always remember that the breakthrough will be possible only if you achieve a systemic approach to innovation, which is totally tied to your organization culture and how it deals with innovation.
  • You need to protect your innovation initiatives for them to nourish.
  • The industry needs to find a balance between what millenials expect today from financial services and running a profitable business. Both sides can and should learn more from each other, and don’t forget that there is nothing such as a free meal.
  • It is not all about financial transactions. Customer experience and delight comes from other sources of interchange that might have financial transactions as a consequence but do not put them in the center of the scene. That is why customers want simple interactions, convenience and logically designed touch points. Nothing more, nothing less.
Most of the presentations will be available soon in our website and the video recording of the sessions will be there as well in a few weeks.  If you want to know more please ask. The entire Celent team will be happy to chat with you around the exciting theme of innovation.  Have a great day!

Bending the Supply Chain Into a Supply Network

Bending the Supply Chain Into a Supply Network
The image of a supply chain is linear, stretching from one point to another, link-by-link, in an orderly procession. If each part does its part, success is realized. But, we all know that business does not really work like that.  Rather, activities are more random, concurrent and fluid. The case studies at the Celent innovation event, What’s Next: The Search for Disruptive Innovation, https://www.regonline.com/builder/site/Default.aspx?EventID=1237201 will explore how companies are making the transition from the step-by-step chain to the dynamic network that we increasingly experience. Over the next few weeks we will give you a preview of the program. This week we will preview cases of financial services firms that are using social networks to create new collaboration patterns with their customers, distributors, and employees. We have some fantastic examples of companies that are extending social technology in order to bend their supply chains into supply networks. The companies presenting on October 3 in San Francisco have applied social collaboration well beyond the Marketing function to use them to change traditional relationships between customers, distributors and employees. I’m not going to steal their thunder and give away all the valuable details in their cases but here’s a thumbnail sketch of what you’ll learn in the sessions:
  • How does an insurer reduce fraud, manage risk, decrease losses, minimize customer acquisition expense, and lower processing costs all at the same time? Join Sebastian Herfurth, founder and co-CEO of Friendsurance as he explains how his company is using social collaboration to turn the traditional insurance model on its ear and accomplish all these goals simultaneously.  His presentation details the mechanisms that allow their customers use social networks to agree to “cover” each other if there is a loss.
  • Don Montanaro, CEO of TradeKing Group, will describe how their focus on social networking immediately differentiated their firm from the 600-pound gorillas in the online brokerage industry by providing a safe, collaborative environment for investors to interact with peers and with the company itself. He will share examples of how TradeKing operationalizes social. Working closely with securities industry regulators to leverage social’s power beyond marketing, they have built industry leadership in key business functions like customer service.
  • With the increasing need to innovate and change the way business is being done, companies continue to struggle with tapping the skill and knowledge of their employees to identify ways to transform the business. Everyone recognizes what a valuable resource associates can be, but it is very difficult to collect and refine the “next great thing”. Chubb & Son uses social technology to build innovation as a part of the day-to-day, natural activity stream of all of their employees. Jon Bidwell, SVP and Chief Innovation Officer, will describe the social platform that reaches directly to front line support staff and interacts directly with agents and customers to engage them in the product development and feedback process. Their lessons learned are surprising and insightful.
The conference is a unique offering that will allow you to take a deep dive into what innovative leaders in financial services are doing to exceed market expectations.  If you haven’t already, join us in San Francisco on October 3 by registering today https://www.regonline.com/Register/Checkin.aspx?EventId=1237201 and stay tuned for more updates!

“Did I just Tweet my account number?”

“Did I just Tweet my account number?”

As if financial institutions don’t already have enough to do to keep up with developments in social media! They must clearly outline company policy to employees concerning what should and should not be posted, inform agents of the regulatory do’s and don’ts, and continually scan the internet to respond to comments about their brand. Now, it is clear that they must also guide customers about the appropriate and inappropriate use of social networking when dealing with fiduciary transactions.

As usage grows, requests to employ social tools as the main communication tool between customers and their financial providers will also increase. For example, Bank of America now offers a Twitter feed to their customers as a first point of contact. Customers tweet their inquiries, complaints, solutions, etc. and these are transferred to the BOA customer resolution system at a call center. A customer service professional asked me about this recently, “How does the bank prevent customers from tweeting their account number?” My reply? “They can’t.” Last week, I was speaking with one of the largest disability insurers in the U.S. and found that their claimants are asking them to track their recovery on Facebook. To paraphrase the question received from a client: “I am keeping my family and friends updated on my progress by posting on Facebook. Can’t you just follow along?”

These are only two data points, but I suspect there are many more. Customers need their awareness raised about what information should be protected when communicating with a bank or insurer. These institutions have been dealing with privacy and confidentiality protection for decades, but usually in a context where the conversation is more controlled and private. With the broadening use of social networking for operational processes, companies must explain and remind their customers of the sensitivity of data.

I took a look at the Facebook walls of ten U.S. financial institutions and noted that there was no mention of do’s and don’ts or reminders to safeguard information on these front pages. There were plenty of contests I could enter, and a few postings on positive service experiences, but no tips on how to keep financial data safe. There were mentions of confidentiality and privacy on some Info and Guideline pages, but these are the domains of attorneys and dedicated research analysts – not likely where John/Jane Q. Customer is going be.

As social sites become more “operational” in nature, highlighting this issue in high profile places such as the main wall will be necessary, but not sufficient to protect customers from themselves. Look for leading companies to aggressively coach their customers and prospects on how best to use social tools when posting/tweeting/blogging on the same valuable real estate that they now reserve for marketing messages.

(Thanks to Jacob Jegher for an assist on this post.)