Fintech UX

Daryl Wilkinson: from Nationwide to Lab12

Daryl Wilkinson, from Nationwide to Lab12.
Written by Devie Mohan

Devie Mohan talks to Daryl Wilkinson about the power of innovation, and how his new venture will harness his experience.

Update, 18 July 2016: This article refers to Lab12 Innovation, which has since been rebranded to DWC Ltd.

Daryl Wilkinson is outgoing head of group innovation at Nationwide Building Society, a role he is leaving by the end of 2015 to launch Lab12 Innovation, a strategy and innovation services company. Daryl was responsible for setting up the innovation function at Nationwide.

It was great to meet up with my fellow BankNXT contributor at Sibos 2015, where we talked about business strategy, innovation, and deep, empathic thinking.

You have a very unique profile compared to the others I’ve talked to as part of my Sibos series of interviews. On the one hand, you’ve founded an innovation team in a traditional bank (Nationwide), but now you’re leaving to create your own innovation venture. Why the shift?

I believe experience counts, and I take pride in the fact that Jake Chambers and I have the experience of anticipating changing consumer needs and market developments, and then defining and implementing strategy to respond to these changes; being accountable as business managers thereafter for the results.

Value exists in the ability to think a problem through thoroughly, and having the communication skills to advise someone on a course of action to address it. That cerebral input is strengthened when backed up by decades of hands-on experience of making things happen in large, complex organizations.

We chose to launch Lab12 Innovation so we could apply our collective experience and thought leadership to help others. The motivation to make a larger contribution in rapidly changing markets drove us to act, and I have to admit that I’m loving every minute. The freedom to act quickly, the responsibility to make the business work and the motivation of doing something I really believe in. It’s priceless.

Your innovation function had a very interesting setup within Nationwide, with a sub team purely focused on UX, for example. Can you explain a little about the rationale behind how the team was structured?

We built a multidisciplinary team focused on ensuring the ability to stimulate ideas that we could then develop end to end from inception through to design, engineering and customer testing. This required a slightly unique approach to fostering and recruiting the necessary skills and culture. We needed diversity, but also strength and direction that comes from a shared mission.

Let me discuss this in more depth, as it’s a bigger answer than just referencing my prior job. Great teams have a higher purpose, and the authenticity and skills to confidently express themselves. Performance follows trust and capability, unconstrained by the old ways of ‘command and control’ management. Expansive thinking is required, as well as the ability to empathize deeply with the customer and the experiences they might have when engaging with your product, services and the underlying technology and processes that enable them. We chose to augment strategists and analysts with behavioral scientists and social anthropologists to help us with this.

Those deep thinkers and the market opportunities they anticipate and discover need to be brought to life quickly and in a compelling way. This is where great design comes into the frame, and early stage wireframes and prototypes.

Engineering follows, and as Jake often says, “code beats paper”, so we strive to hand a minimum viable product across to customers and/or stakeholders as quickly as possible, to test the appeal in as realistic a way as possible. I think it communicates ideas and tangible outcomes, particularly complex technology-based outcomes such as new payment solutions, biometric authentication, or AI-based services, far easier than PowerPoint slides and Excel-based analytics. This rapid prototyping and the engagement it fosters is key in the end to end process of innovation, particularly for maintaining stakeholder engagement and to accelerate the path to launch.

These empathetic, creative and engineering skills are extremely effective when married up with more traditional people that are able to provide the structure, pace and discipline one expects from any development organization. The leadership atop assures the culture by communicating a compelling vision of the future to galvanize action, while ensuring the team has the confidence and clear path to do their jobs and express themselves fully.

How closely did you work with regulators? Did you enjoy it? I’ve heard both versions from all innovation heads I’ve interviewed: they’re loved as well as despised.

I’m speaking with representatives from the regulatory bodies almost weekly. I believe good regulation helps everyone, and it’s a consultative process at times, but also imposed. Constraints of regulation are no more a challenge than the constraints of cost, resource availability, time, technology, people, culture, leadership, and so on (I could go on). My point is simple: innovation is a tool to solve problems and enable opportunities. When used well, it can overcome constraints. If you’re dealt a perfect hand, you don’t have to think about how to win.

Did you feel threatened by fintech startups from a traditional bank point of view, and do you see yourself working closely with fintech startups at Lab12?

Fintech startups are not a head-on threat – never have been and never will be. Threats to incumbents are internal. There are big changes in the industry, and you can only decide whether these are threats or opportunities for banks in the context of their response to them. As in any other industry, if you don’t keep up with the changing needs of your customers, and you’re exposed to some competition that does, you’re in trouble.

Fintech new entrants and the substitute products they may provide offer entrepreneurial and innovative opportunities. Traditional banks have the really cool stuff such as lots and lots of customers, money and scale.

Lab12 is, and will, continue to work with startups. We’re a startup and we pride ourselves in residing in this ecosystem of value. One of our strengths is the network of big and small tech companies we can bring to the table when designing solutions to meet digital challenges.

Most banks have understood the need for a better customer experience by now. What do you think is the banking industry’s next big challenge (which is potentially also the next big opportunity)?

For starters, I agree, but there’s a big difference between recognizing the need for a better experience and being able to deliver it on a sustainable basis and maintain a lead over your old and new competitors. This is still a very big, current challenge.

Regarding the next big challenge/opportunity, I would say answering the questions posed by PSD2, which I wrote about in a previous blog …

PSD2 – banking without walls

The UK banks have done really well with multi-channel banking; there are several banks now with apps, wearables, voice-recognized services, what-not. Do you think the high level of investment in multi-channel engagement is worthwhile? What should be the ideal strategy that banks should follow with each of the channels?

I think there’s still a huge amount to do here. Many banks are still working on their first generation of these experiences, and they will need to iterate and hone them rapidly to keep pace and tailor the experience for rapidly evolving consumer devices.

Design specific experiences for each touchpoint while ensuring a common identity and set of principles for service across them, ideally using the best of digital and human touch in the most appropriate combination for each of those channels individually. Mortgage advice distributed via tablets in the comfort of your hands, wherever you are, is a good example of combining technology and the human touch within a complex and emotional use case. Omni-channel is really a data play, for better experiences (or should be).

I think it’s easy to overthink these definitions of multi- and omni-channel. The definitions are still widely misunderstood and interpreted differently by many senior bankers that I’ve spoken with. I also don’t like the terms, but accept that they can sometimes facilitate a shorter and more incisive conversation.

I also think banks are just starting with social media, and with mixed results. Banks need to be clearer about who they are and what they stand for, and make sure their social media (and all other channels) reflects this consistently. Social media is a great opportunity for some, but others need to accept that consumers don’t want or expect to talk to them like friends.

What do you think will be the key trends defining the fintech industry in the coming year? Are there any favorite startups you’re watching closely?

In the detail of solutions, AI, identity services, dynamic AAA, payments innovation, loyalty, blockchain (there, I said it!), and of course regulatory-wise, the impact of PSD2. I’m also increasingly curious about when the fintech bubble will burst. The most defining trend will be political and economic. Look at the great work government is doing now for London fintech, and how folk such as Eileen Burbidge are contributing.

I’m not watching any startups specifically, and generally look broadly across the market at startups and incumbents, consumer trends, regulatory and tech developments, and social media chatter.

We are all excited to see what Lab12 Innovation will be up to next year. Can you let us in on any secrets?

I have no secrets, but I do have a tip: we’ve seen all this before. Financial services isn’t the only industry to tackle the enablement of new competition by the convergence of regulatory, consumer and technology changes. I think we can learn a lot from the telecoms industry for one.

About the author

Devie Mohan

Devie Mohan is the co-founder and CEO of Burnmark, a fintech research company created in partnership with FinLeap. Devie is also the market strategist and UK co-ordinator for FinLeap, and a speaker, adviser, mentor and blogger in the fintech space.

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