The Innovation Ecosystem: Innovation hubs convene key stakeholders for financial services

Innovation hubs convene key stakeholders for...

As financial services companies grapple to keep pace with advances in technology and the ever-changing needs of its customer, they often get bogged down in looking for ways to improve upon their current models, products and processes. The pace of internal innovation can be enhanced by tapping into external catalysts and engaging with a cross-section of industry stakeholders.

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Tapping into a broad entrepreneurial network

Innovation hubs are sprouting in pockets around the world from New York to Tel Aviv, the Netherlands to Hong Kong and elsewhere. Although each offers a unique community, they bring start-ups and entrepreneurs together with government groups, regulators, academic bodies and established institutions under one physical roof.

Level39 in London’s Canary Wharf district is one such hub. With a vision to nurture high-potential technology companies in an optimum environment, it provides office, event and social facilities, and convenes relevant constituents of the financial services industry to accelerate innovation.

Level39 has provided a helpful platform for financial institutions, regulators, government, investors, mentors and tech start-ups to collaborate on innovation and foster a nurturing ecosystem. For example, the UK Chancellor has used Level39 to launch pioneering policies for financial innovation with regard to digital currencies, blockchains, fintech and alternative finance providers.

Incubating ideas to address customer gaps

As a key member of this network, financial companies can help direct innovation to address both organizational issues and customers’ needs and wants, and leverage solutions that best fit their mandate. This has been attractive to financial institutions from across the globe.

Singapore’s DBS Bank wanted to better serve the credit needs of its small business customers, a constituency that alternative lenders and fintechs threaten to take from traditional banks. Through their partnership with Level39, DBS discovered AMP Credit Technologies’ new platform that electronically verifies cash flows. Striking a deal with AMP, DBS Bank has brought the new solution in-house to launch mLoan, a product that provides short-term unsecured capital loans up to SDG100,000 to small businesses that do not have audited accounts and personal income statements readily available.

“Leveraging advanced credit and data analytics, we are able to design a working capital loan for these small businesses that might otherwise be under-served,” explained Joyce Tee, Regional Head of SME Banking at DBS Bank.

Accelerating innovation together

In addition to advancing individual innovations, the technology hub also aims to develop innovative capabilities that are necessary to address broad, industry-wide issues.

Australia’s innovation hub, Stone & Chalk, has a growing membership base of 85 startups and 250 entrepreneurs and partners that include American Express, ANZ Bank, and Credit Union Australia. To leverage its community to help tackle cyber security, Stone & Chalk, together with co-host Data61 and partners KPMG and the Australia-Israel Chamber of Commerce, held a one-day cyber security summit that gathered industry experts from financial companies along with innovators, government bodies and research organizations to examine core challenges, assess gaps and explore opportunities.

Establishing new ways of working

Such broad collaborations as well as those more individual ones offered by innovation hubs can connect your company with a community that offers a catalogue of leading edge ideas and solutions. However, these innovation can only progress from inception to reality with access to more agile models, technology and tools. They also require a culture open to continuous learning and development made possible through formalized coaching, feedback and reflective practice sessions to define new ways of working that benefit innovators, corporates and others alike.

Questions to consider

  1. How can you tap into external innovation hubs to help create internal innovation momentum?
  2. What are the right frameworks to maximize collaboration and creativity between your business and your innovation hub?
  3. Are you measuring success and the impacts to your organizational capacity for change?


Innovation Ecosystem

Innovation Ecosystem is a series of nine articles examining each of the third-party partners financial institutions should consider

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