Imagine a place where you’re encouraged to think outside of the box, tinker with new technologies, propose “crazy” ideas for how to better connect with customers and partners, and collaborate creatively with every breed of corporate colleague—from senior VPs to interns—as well as the greatest minds in FinTech. A place like this exists, and it’s probably in a financial institution near you. It’s called an innovation lab, and places just like it are popping up in organizations across the world.
A Fresh Idea?
Innovation labs are not necessarily a new concept, but they’re becoming more popular in the historically legacy system-based financial services industry, where next-generation technology tends to be slower in the uptake. You could say that these breeding grounds for progress are designed to blend the old with the new—and the financial services industry is ripe for evolution.
Financial institutions are partnering with external partners, commonly upstart FinTech companies, but also universities and entrepreneurs, to embrace new technologies with greater speed and agility—while enabling the business to focus on its core competencies. By creating a hub for innovation that operates like a sidecar that’s largely unencumbered by the underpinnings of bureaucracy and regulation, the organization can pursue competitive, quicker-to-market solutions with efficiency, leveraging the resources of their partners.
Accelerating Digital Agendas
The Financial Brand gives a Peek Inside 7 of The Banking World’s Coolest Innovation Labs, including Standard Bank’s Playroom Innovation Centre, Captial One’s Labs (all three of them), Wells Fargo’s Digital Innovation Lab. Industry innovation labs like these may not do exactly the same things in exactly the same ways, but they’re generally operating to seed new ideas and provide an open environment for company leaders, staff, customers, clients and partners to test and evaluate new technologies. Participants operate in a physically and culturally open space where they’re free to get down-and-dirty with hardware, data, and each others’ ideas.
A plucked-from-the-headlines example of an industry player successfully employing the innovation lab approach is Deutsche Bank. With plans to spend up to EUR 1 billion on digital initiatives in the next five years, the global financial services company recently opened an innovation lab in Palo Alto, CA, following the launch of innovation labs in both Berlin and London in 2015. Their aim, in partnership with IBM, is to cultivate relationships with tech start-ups in Silicon Valley to aid in the development of new products, services, and international processes. Read the press release for details.
In the payments space specifically, industry professionals have plenty of opportunities to play with technology alongside engineers, developers, start-ups, and other stakeholders. Innovation labs in the global payments community include MasterCard’s Lab Group, FreedomPay’s Innovation Lab, and Singapore’s The Open Vault at OCBC, and they’re focusing on exploring transformative solutions in security and biometrics, data and analytics, and mobile.
Working together in innovation labs around the world, stakeholders are finding new ways to solve problems, overcome challenges and, most importantly, use technology to bring every player—let’s say the industry at large—closer to its goals. For more about industry innovation, read Disruption and Analytics: Driving Payments to the Next Generation and Fintech: Reinventing the Financial Services Industry. And stay tuned for extended coverage on what’s new on the payments landscape.