BankerVision

The Centre for Future Banking blog

Over at the Centre for Future Banking, which is a joint initiative between Bank of America and MIT Media Labs, work is going on to "invent the future of banking". That may or may not be aspirational, but the fact of the matter is something else is happening over there as well.

They just launched a blog, written by the people working at the labs, about what they're working on. They did it with a "powered by Bank of America" logo on it. And it sits at a URL which is very definitely owned by Bank of America.

This, in my view, is very interesting.

It is a pretty open secret that I work for a major UK bank. For good and proper reasons, myself, and my colleagues who blog about our work, do so with a perceptual distance between ourselves and the institution. I don't have any corporate branding here, neither do I ever mention my institution by name. There are good reasons agreed with our management for these precautions, and I think many other bank bloggers are in pretty much the same boat. We are trailblazing internally, and caution in how we present our views is essential if we want to keep writing.

Oh, I know there are lots of other bank blogs nowadays with the corporate brand on. But have a look at them: they are more often than not opportunities for professional communicators to put messages into that demographic which reads online. There is this lack of reality in most: where is that personal voice that social media pundits say is so important for the customer intimacy which social media is supposed to engender?

The Future Banking Blog seems to be different though. It may have corporate branding, but the people involved are real people. You can see their photos, and know who they are. They even – get this – accept guest bloggers. That, as far as I know, is unprecedented for a corporate bank blog.

Here is something else different: the pieces being published are thought leadership style things, the products of smart brains sharing. That's quite different to the fare you normally get in bankers blogs, excepting those in the banking echo chamber. Most of the time, banking blogs are thinly veiled advertorial targeted at lowest-common-denominator customers.

In any case, this effort is a bit of step up for the rest of us. And perhaps it will provide some impetus for the rest of us to associate ourselves more closely with our brands as well.

Good on you Jeff, and colleagues. Can't wait to see what you do with it.

We so don’t want to be strategic

I spent some time, the other day, talking with a vendor who decided our institution is a "strategic" account. The upshot of this is we get all this dedicated sales resource, and they have greater ability to make "investments" in us to help us use their new technologies.

The particular vendor involved sells hardware boxes for a living, and does so successfully. And because we are a strategic account, it means there is a great deal of internal pressure on them to move lots and lots of inventory. Apparently, strategic accounts spend more money than anyone else.

The thing is, I hate it when we are a "strategic" account for vendors. The problem, you see, is what a vendor means by strategic is very different to what we mean. They think we are strategic if they can get a lot of money out of us. We think a partner is strategic if they provide a capability which we can't get anywhere else.

You'll not be surprised to discover the lack of intersection of these two perspectives often means that only side cares about "strategic".

Anyway, so we're a strategic account for this box-pushing vendor. And the fact of the matter is what they sell is pretty much commodity. We don't really care about it all that much so long as it works. There's no point having a meeting that makes their stuff go faster, or do what it does in a slightly different way.

Anyway, when you put this to a company that considers you are a strategic, you can see the "you don't get it" in the eyes of everyone in the meeting. And, immediately, the hunt is on to find someone that does get it. The flurry of phone calls that spreads, octopus like, across our divisions is miraculous to behold.

Now, all of this causes a pile of noise, and it is very, very distracting. We spend so much time closing down initiatives we don't want, that we run out of time to start the ones we do. And all because we are strategic.

In one particular case, the vendor determined it didn't like the fact that we'd selected a competitor's product as a standard. So they started handing out free trials of their product across the bank. You can imagine what our reaction was. And theirs: "you are strategic, it is not an option for us to have you use that product".

Here is my challenge to vendors: before you decide we are a strategic account, please ask us if we want to be a strategic account. Most of the time we won't want to be, I can guarantee it. Strategic comes with a high level of pain and very little benefit.

And, if we're going to be strategic, please, oh please, find a value proposition that works for us. More sales people isn't it. Bigger financial targets don't help us. And neither does directed investment in new stuff we don't want.

But maybe you can build something unique to us that gives us an advantage over our competitors? Now that would be strategic.

Oh, and if you'd like to know who I'm talking about, have a look in your data centres and see which bit of kit has the most blinking lights. That's the vendor.

Introducing Innovation Market

So sorry I vanished into thin air after I kicked up that recent ruckus about banks not doing social media. You see, the manuscript of Futureproofing is due with the publishers in January, and I'm on that final death march to get everything done. But I digress, because what I wanted to talk about today is something that my team and I have been working on for some time.

We've been struggling, you see, with finding a way to create an innovation culture that's quite different to the one we have now. What happens in most banks (and I know this from the research I've been conducting for FutureProofing) is that staff dump ideas into some kind of suggestion scheme, and a central team does something with them. Most ideas, of course, don't go anywhere, and it's not because they are bad: the key problem is there is never enough innovation resource to do everything that shows up.

You have to pick and choose. In the end, you leave a lot of money on the table.

Turning an idea into reality is hard work. But creating the idea in the first place is fun. Therein lies the dysfunction between ideation and innovation. You can can get lots of people to do the former, but its so much harder to motivate the latter. But what if you could make the innovation part fun as well? That's what we've tried to do with something we've been working on that we call the Innovation Market.

Innovation Market is ideation with a difference. We've created a virtual currency we call Bank Beanz. We pay Beanz to our staff for participation in an online community that collects, rates, and categorises new ideas. Staff can vote for the ideas they like, or comment on them in forums.

We measure the buzz of all these activities, and then promote the most successful ideas onto an internal stock market. Then, staff can use their Beanz to buy into ideas they like. The price of the idea approximates the chance it has of going into production. Consequently, believers in the idea can get in low, and sell high. They can make windfall gains in Bank Beanz, and use them for rewards in our Innovation Store.

Yes, we back the Bank Bean with cold, hard, cash. It is an exceptional motivator.

Now, here's the fun part. Because we've created an internal market for ideas, we are getting all the standard market behaviours you get externally. Firstly, we had hyper inflation of the Bank Bean. We had to put special controls in place avoid what was essentially a system that just printed money. It is hardly a reward for participation when your Beanz buy you a gift voucher one day, and nothing the next. Anyway, we fixed that.

Then, we had insider trading in ideas. Just as we were about to try to fix that too, we realised something interesting: when you're talking Bank Beanz, insider trading can be a good thing. It makes people want to be on the inside so they can speculate successfully. And how do you get on the inside? You have to work on the team making the idea happen.

In other words, we coupled ideation and innovation together in a way that's fun. It was an interesting revelation to us.

Innovation Market just won at the Financial innovation Awards in London – it was voted most innovative IT project in a bank. We were thrilled of course.

But the most interesting thing now is to see where Innovation Market takes our programme in the future. The idea, we hope, is that with this coupling of ideation and innovation we'll make it possible to accelerate our pipeline of interesting things. Instead of being scale-limited with headcount constraints in the central innovation team, anyone can be an innovator.

And isn't that the definition of an innovation culture in the first place?