It was intriguing to see the rise of innovation in banking during the 2000s.
Every bank had an innovation programme, a Chief Innovation Officer, an innovation mantra in their annual reports and an innovation organisation in the bank.
What is particularly noteworthy is that when the crisis hit in 2008, nearly every Chief Innovation Officer and their teams disappeared.
Innovation was off the agenda.
Now it’s back again, but this time it’s different.
This time it’s quieter, more serious and more committed.
You may say I’m wrong, but it’s an impression you get from talking to the banks and looking around the markets.
For example, the Branch of the Future was a regular feature of the innovation programs of the 2000s.
But often this Branch of the Future project was just the bank showing off.
Trying to gain kudos by appearing to be a thought leader on the leading edge.
In fact, on reflection, I think most of the innovation programs of the 2000s were like this: kudos projects to get recognition of being a bit edgy, delivering leadership.
There was no real commitment in these projects to changing the bank, changing the market or really turning things upside down.
Because it was just show boating.
Showing the world you were cool.
That is why, when the crisis hit, it was a no-brainer for most CEOs to look for cost savings and shut down these show boating projects and teams.
They all disappeared.
Now that we’re five years into the crisis and moving into post-crisis mode, I’ve seen more and more innovation leaders coming out of the closet of banks.
They’re back, but they’re different.
They’re not bragging or show boating, but they’re just getting on with internal developments and change.
In other words, they’re working on creating an innovation culture within the bank, rather than creating an innovation brand outside.
And there’s another change I’ve noted: overcoming the fear of failure.
During the 2000s, most of the innovation folks I talked to were frustrated with their bank leadership.
They wanted to provide innovation, but the bank’s leadership wanted a business case for investment.
If there was a business case for investment, then it wouldn’t be innovation as it’s been done before, the innovation guys cried.
They wanted to provide innovation, but the bank’s leadership was worried about looking foolish if they failed.
If you don’t allow for failure then you cannot innovate, the innovation guys cried.
They wanted to provide innovation, but the bank’s leadership was concerned about disrupting the existing business.
If you don’t allow for cannibalisation of the existing business then you aren’t truly committed to innovation, the innovation guys cried.
Now the really hard bit is that commitment.
Are banks truly committed to innovate?
Will they invest without a business case?
Will they allow failure?
Will they let the innovation cannibalise the existing business model?
The answer to all these questions this time around appears to be ‘yes’.
Things are changing so fast this time around, this decade, this perfect storm http://thefinanser.co.uk/fsclub/2012/12/2012-technologies-create-the-perfect-storm.html of technology and society, that bank leadership sees they have to innovate and change fast and with dynamics in order to keep up.
And it’s not just about keeping up with the competition, but keeping up with the customer’s needs.
That’s why innovation in banks is real this time around, not just show boating.
I may be wrong, but it is an impression.