Last month, and after many weeks of planning, we supported the FCA to deliver a highly collaborative two-day hackathon focused on improving access to financial services. You can look this up on Twitter using the hashtag #FCAsprint. To our knowledge, this was the first event of its kind by any regulator worldwide, and saw big-name brands come together with a shared purpose, including KPMG, Visa Europe, Funding Circle, Lloyds Banking Group, the Post Office, iProov, HCL Financial Services, Fidor and the Financial Services Consumer Panel.
Chris Woolard, director of strategy and competition at the FCA, had this to say: “The TechSprint was a new way of working for the FCA. Over the course of two days, participants came together to generate solutions and foster innovation at pace.
“The enthusiasm, energy and creativity shown during the event demonstrates that there is huge potential for collaboration between the fintech community and those more established within the industry.”
This event was lively – the energy in each room and across Twitter was inspiring. The friendly competition between breakout teams, within the context of everyone being in it together, was a truly unique experience. Post-event, I remain inspired by how individuals broke down their usual barriers to work together. Could it be that the interaction between companies who may otherwise consider themselves competitors was the genuine innovation?
Competition makes us faster. Collaboration makes us better
Collaboration between different organisation types can yield benefits if managed well. Small fintechs are attributed with being agile and more open to taking risks, yet they can be held back by the financial complications of such an approach. Small and large working together leverages the best of both, with the small fintechs having the financial backing of the large, established organisation to take the chance.
There are great examples of large organisations utilising the benefits of small, agile startups to test and grow an idea before sweeping in with the scale and customer base to make it commercially viable. BBVA Compass announced its strategic partnership with Atom in 2015 in order to utilise its digital banking services to serve a growing demand in the UK. Atom has the right product in the right place, and BBVA the experience and stature to drive growth in line with changing customers’ demands. Early in 2016, JP Morgan announced its new service Chase, which, through a partnership with alternative lender OnDeck, enabled it to break into the online lending market.
It’s not just finance organisations enjoying the fruits of collaboration to improve customer experience. For instance, I hear of fashion designers working alongside publishers to directly link consumers from the clothes they see in glossy magazines to a retailer with the item in stock. This mutual effort gives the consumer a fantastic experience they will not forget.
When the time is right
Designing collaboration into strategic ventures from day one is where I see innovation actually transcending. Currently, we have cash-rich, established firms with the route to market taking quick wins from startups who have developed their innovation far enough to get noticed. Innovation labs and accelerators have tried to start these relationships earlier by offering mentoring and support for businesses. Take for example Lab126 that enabled Amazon to bring products such as the Kindle (and in the US, the Amazon Dash Button) to market.
Taking this further could potentially see traditional competitors working side by side on developments that will see industry benefit. All parties come to the table with open books and share responsibility and results from their research. Together, these teams develop a solution that’s better than would be produced working in isolation. I can think of a few opportunities in financial services where this makes sense.
Stop, collaborate and listen
By collaborating, organisations and industries stand a better chance of finding the innovative solutions to the issues they face. This isn’t as easy as putting two groups of people in a room and letting them get on with it. It requires a shift in attitude by employees who are more comfortable keeping developments closely guarded until they’re ready for launch. The decision to be open needs to filter throughout, from board to project team members. Individuals who share make learning faster and better for the teams around them. Individuals on teams created with innovation in mind need to understand their common goal and what they and those around them bring to the table. Teams need to respect each other’s contributions and be open to their ideas being developed, dropped, changed, reworked and critiqued. Facilitators employed within teams can help make the interactions happen; they understand who’s doing what and who can help them bring the two parts together.
It’s more than an office
Moving from a large, corporate machine to managing my own business this year has exposed just how different these environments are. To be effective, however, leaders must find a way to merge different organisations to create an environment conducive to stimulating the minds of the team. The physical space can be an enormous influence. Innovation rarely happens around a conference room table in a boardroom. Space needs to inspire and be flexible enough to encourage and facilitate interaction. Budgets need to be considered, along with the governance and process to draw down funds quickly. It’s possible to alienate individuals from smaller organisations by expecting them to have the same processes seen within large companies.
Finally, having the right tools to enable effective sharing of documents and test ideas safely and seamlessly is essential. There is no bigger barrier to collaboration than systems fighting each other. If sharing becomes laborious, it stops, and in turn collaboration breaks down. Simple systems that can be accessed by all are essential. These may require an adjustment to traditional procedures for some companies, but finding a secure process everybody is comfortable with will make or break collaboration.
All of this assumes the right leadership to begin with, and as I reflect on our #FCASprint, it strikes me that our real success was the innovation in how things get done. A handful of people wanted to try something new, and in communicating this, many others volunteered their time and resources to make it happen. This begins with visionary leadership, pulling your head up to see past today and towards a future more compelling for your customers and employees.
– This article is reproduced with kind permission. Some minor changes have been made to reflect BankNXT style considerations. Read more here. Main photo: Rawpixel.com, Shutterstock.com