Monika Drobná, head of innovation management at Komerční banka, brings a huge wave energy with her - information and ideas that either wash you away or teach you to surf. It is absolutely clear that only a fraction of people would be able to jumpstart an innovation centre so quickly and with such results.
The laboratory was established in November 2016, in cooperation with Idea of Sense, after two months of preparation. It is located outside the premises of the bank, and the main advantage of the location soon became apparent, according to Monika.
“When people started to use the space outside the bank, they began to think differently. New methods started to work, and people were suddenly able to switch modes.”
The bank knew that it needed something like a sandpit. Rather than a physically defined place, it would be a space where we could do things differently. This is the type of project that am always pleased with. In addition, I am also pleased to meet new people, and I like to try new things - basically, I'm an early adopter... And yet, in the banking sector, everyone is on the same starting line. Most of the major banks are going through agile transformation. And because the core business is the same for all, it is about bringing better value-added service for clients, as well as ideas about how to use available services so they function in clients’ real lives rather than just looking nice in presentations.
At the beginning, we had to define space for new approaches. My main task was to communicate, internally and externally. I had to tell everyone that the role of our innovation lab would be to provide a service. We needed for people in the bank to understand that a lab facilitates innovation, but innovation itself is already in their hands. Thanks to this clearly defined role, our innovation centre today has an integral place in internal processes.
Certainly. The differences are in the perception. While nowadays you can buy almost anything just like buying a bread roll at the store, I see innovation by its nature as a process. It is a tool that helps you improve, advance, or get to something new. Nowadays, many companies present themselves as innovators simply because they have an innovative product.
I think we have managed to convince them that innovation is the primary path that we need to take to find and jointly enhance results.
If we let the client stand idly by during this process, and just try from within the bank to think of what they may need and then sell it to them, it is very difficult to find a functional method. Once this knowledge is understood through every stage, people start to perceive the innovative methods which the lab promotes as very important. They find that we can once again place the client at the true centre of attention. This approach has been known for a long time, but it seems that some corporations have forgotten about it. It's true that by forgetting, they may have simplified their lives for a certain time, but they will soon have to transform themselves if they are to withstand the market.
As a bank, we must continually deliver innovative products and services, and there are plenty of verified methods for doing this. We have even created a catalogue of them inside the bank, which we present to all relevant parties. Their choice depends on how generally or narrowly specific topics are defined.
The aim of the agile part of the bank is to test its ideas every two weeks and progress in their implementation with clients and non-clients alike. Everything they do is summarised on a quarterly basis, and a plan is set for the next quarter. We manage to do this thanks to agile transformation. We have also tested Design Thinking principles and found that we can increase the attractiveness and likelihood of success of a new product or service by up to 80%. The percentage of success is so high that, for the bank, it is worthwhile to invest in innovative methods and people in this area.
Six sprints during one quarter is still very few. This shows that things are moving, even though it means a big change for a lot of people. Ideas either begin to work very quickly, or they are deferred without major losses. The result is that the output is relevant, and we keep pace with the world outside the corporation. We can therefore try out ideas directly with clients. This is a huge win and an enormous motivation.
Certainly. The bank was accustomed to introducing only finished products to the market. We want to begin marketing services that are still in development. Then you can test different versions, because sometimes the ongoing development of the realities of the market requires this. Until recently, such a process was possible only through third parties such as innovation agencies.
SG recognizes the need to work with innovative methods and has launched the Internal Start-up Call and provided the opportunity for its employees to establish a start-up within the scope of an internal business programme. This idea is that the selected accelerator or incubator creates start-ups and quickly sends them to the market. And it is this speed that has been missing for us. Even in the framework of our two-year or three-year functioning it is evident that speed and flexibility is what we urgently need to improve. We were happy to get involved in this initiative as Komerční banka. We got multiple start-ups going and enabled our own employees to do business with less risk and to use already existing resources, know-how and data. As a result, the bank is profiting, because people are working in it who have contact with the real market. They want to do things differently, and this is forcing the Bank to change retroactively.
Innovative laboratories exist in almost every country where SG has branches. In particular, we are in quite close contact within the European business division, and we routinely share information.
Generally, Innolab either draws from outside opportunities through cooperation with third parties, or someone inside comes up with an idea or strategies. For example, how to reduce within two years the number of branches by 20% and increase sales via digital channels by 40%. Our task is to find concepts that can do that. We determine the needs of clients in in-depth interviews, and once we find a solution, we meet with clients again, to learn which concepts they are most interested in. We find out whether they wanted and knew how to use a particular solution or whether any of them would even be willing to change their bank. Then according to the results, we revise the strategy, move on and scale.
Our first project was a smart watch app. We introduced it just a few days after Apple had started selling smart watches on the Czech market, at a time when smart watches had only five enthusiasts in the Czech Republic, most of whom imported them from Germany. We focused on looking ahead, immediately developing new features in mobile banking, and offering our clients superior functionality. This is, I think, the reason why our mobile banking service has been evaluated as the second best on the market. We have a great digital team at KB.
I see other great opportunities in neural networks and artificial intelligence. For example, we developed and now use across the bank a chatbot for orientation of new employees, helping them with the adaptation process. Another pilot project makes it easy to find information in the database of internal rules. It can respond to questions based on searched-for information, and it gradually learns and improves. These technologies also help the client to easily create a payment order from an invoice or from a postal money order, which is then confirmed with a fingerprint. And this is just the beginning.
The client is a crucial part of the process for verifying new features.
We have therefore had to define a new ecosystem for testing the recruitment of respondents and finding the appropriate moderators and equipped space. When you encounter clients, you must be able to ask questions. You have to create the right scenario for an interview. Because you only have an hour with the client and that hour is often the decisive factor in whether the idea is killed or moves to implementation. It is also why in selected roles within the bank we focus on education, on determining if the moment of client engagement is effective and how to properly ask questions. We know that this can create significantly more attractive concepts for clients than when we think from our desks. In fact, we return to what should be absolutely natural.
Yes. In cooperation with HR, we are preparing a system of education about how to involve innovative methods in daily work in the framework of the new agile organisation and potential cooperation.
Those who try us introduce more and more topics and want to cooperate. And I think that they are basically acting as ambassadors for what we are doing. And that is great.
I personally love to work with students and am happy to have them join my team. I enjoy the fresh, open-minded thinking, and we always find ways we can mutually benefit. For example, they are great at working with the latest technology. Logically, they prefer working on their own projects to working on a project that they submit to the bank, for example as part of a competition. All they need is an idea, and they establish a company and start doing business as early as the age of 20. And how will such people use banks? Or better put, how should service appear so that they will want to use them? These are questions to which we are jointly seeking answers in Innolab. And it is a lot of fun. And that would be difficult to say about work at a bank, wouldn’t it?
Komerční banka. Interview with Monika Drobná, head of innovation management at Komerční banka.
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