The New Bank Innovation Platform

One of the greatest benefits of an open innovation platform for a financial institution is that they can honestly say that they listen to what clients and potential clients want and, perhaps, more importantly what they need.
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It's about time that banks listen to what clients want and along the way figure out what they really need.


It will probably be difficult for banks to find clients or people who are enthusiastic about them or their products and services in light of recent crisis and scandals such as the Libor rigging or the foreign-exchange fixing.

However, the deeper problems lie in the loss of trust and the disengagement between the financial institutions and the client needs.

Financial institutions should take a hard look on how their current approach of launching new products and service for their clients hits the mark of fulfilling client true needs.

Market research alone will not provide a real or whole picture of what customers need and want.

A better approach for financial institutions to find innovation and inspirations is the use of crowdsourcing and open innovation.

The bank can get access through an innovation platform to potentially great ideas, innovations and inspirations, which would not happen within their organization because the 'outside of the box' thinking is often difficult if one is in the box.

Although some financial institutions have crowdsourcing innovation platforms set up, it has not been applied the way as recommended in this proposal.


Through an open innovation platform members can exchange ideas, innovations and thoughts. The bank will get instant feedback on what works or what customers want.

If the interest in the idea is big enough, a bank committee can further evaluate the proposals and apply its own criteria, such as feasibility, profitability, market potential, and the customer's added value to come to a conclusion.

How does a bank get enough members to participate in the innovation platform who also have the necessary knowledge and more importantly interest?

The right incentive mechanism solves one of the greatest challenges of how to keep the platform alive and interesting for the participating members. It complements the use of social media and gamification in an effort to attract and retain people.

In order to keep the platform alive, the incentive mechanisms must reward not only the idea provider, but also the contributors who improve an idea.

Many companies have some incentive mechanisms in place to compensate team members who contributed to a product or services. The problem with that current practice is that it works only for quantifiable contribution.

The proposal solves that problem by rewarding also the not quantifiable contributor who provided constructive and useful inputs to the original idea, regardless if their contribution is quantifiable or not, in the revenue sharing of implemented product or service.

The inclusion of the not quantifiable contributions in the monetary reward creates true added value for the crowdsourcing innovation platform.

In order to assess the contributions that are not quantifiable we need to consider the opinion of their peer members and the bank's committee as how much their contribution was helpful in the final solution, even though the contribution might not show or be obvious to the outside observer.

It is of its utmost importance that the key contributors are participating in the incentive mechanisms, because otherwise the interest to improve an idea with constructive thoughts and proposals will be limited. Many people tend to criticize ideas, therefore, hindering innovations instead of giving constructive comments.

The bank must check also potentially small and seemingly unpopular ideas for their potential, since big things often have small beginnings.

The benefits of such an open innovation platform can be tremendous for a bank -- with low costs to set it up and run it, but with enormous success potential.

One key advantage is that members provide innovations or ideas for free which the community of the platform reviews. The members will in the process also identify many of the benefits and risks.

Further, the bank will get access to a pool of people and fans that will freely share their thinking and wishes. This pool of participants can start new trends that will likely result in a win-win situation for bank and clients.

Finally, clients or potential clients will be integrated into the innovation process, and feel that their needs are understood and taken seriously by the bank.

The bank should not restrict members of the platform what ideas or thoughts they can or should discuss. Then they will have an open innovation platform that allows crowdsourcing to unfold its full potential.

The platform will further strengthen if the bank provides useful tools (research, videos, discussion forums, market data, and quotes) to its members.

An example of such an innovative proposal could be the 'Win-Win Fee Model' (see Huffington Post article 'Win-Win Fee Model' Revolutionizes Financial Industry Fee Model). Such a proposal would then be analyzed and improved by the members of the platform and then evaluated by the bank's committee and finally maybe implemented.

The members of the platform can be students, academics, investors, geeks, nerds, clients or interested people who want a solution to their needs come to life in a product or service.

Since the bank does not push any products or services to clients on their platform, it only has to address topics such as compliance, regulation or distribution among other things, when they evaluates the proposal or when they incorporate it.

One of the greatest benefits of an open innovation platform for a financial institution is that they can honestly say that they listen to what clients and potential clients want and perhaps more importantly what they need.

„Necessity is the mother of all invention."
Ascribed to Greek philosopher Plato (427 - 347 v. Chr.)

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