I have a central philosophy of parenting. It is one which, when I realized it, nearly broke my heart. But it is true, nonetheless. As a mother, in order to do my job as a parent in the best way possible, I need to ensure that my position will become redundant. My main goal, as one of the two main care givers for my son, is to guarantee that someday, he will no longer need me.
Now, I know what you are thinking. Children will always need their parents – even if they are 40 and living on the other side of the world! Trust me, our only son, our only child, will always be my baby. Even though, now, he is fast approaching teenage-hood, has a fuzzy growth on his upper lip and his voice is getting way too deep.
But when my husband and I brought our new born baby boy home from the hospital I was completely overwhelmed by how much this little life needed me – both physically and emotional – just to survive. (I know, it seems a bit *duh* now). My husband is and was a very involved parent. Outside of the breast feeding, I can’t think of one parenting activity my husband failed take part in. However, when you have a baby, there is no down-time. You either work to make sure this child is fed, cleaned, clothed and kept safe at all times, or you’ll end up with a heartbeat rolling around naked on the ground, screaming and covered in poo.
Now our son is approaching 13 (Excuse me while I take a few minutes to sob in the corner). This morning he brought me a cup of coffee, dressed in his school uniform. A uniform I did not put on him. He took it out of his closet (or more likely from the end of his bed) and put it on ALL BY HIMSELF. Dressing my son is a job I no longer do. He can tie his own shoe laces. He can make himself his own bowl of cereal in the morning. He can order his own pizza via his Osper card (FinTech natch!) and all his poo ends up in the toilet – where it belongs. All of these jobs, these jobs I did full time 13 years ago, I no longer do, because my husband and I taught him to do these activities for himself. Our former jobs are redundant, and unless I want an unemployed, overweight 40-year-old virgin living in my granny flat – I anticipate making a few more of our *jobs* redundant in the future.
Now where am I going with this? Oh yes, the innovation lab. In my opinion, the innovation lab is like a parent. In the early stages the lab has lots of jobs, but its main goal is to ensure its own obsolescence.
Let me explain.
A number of years ago I worked at a small research consultancy, where I project-managed a system selection for a UK hedge fund looking for an operational risk system. Now, this hedge fund was not looking for a startup (this was before FinTech was ‘a thing’). They were looking for a large, enterprise-wide, very expensive risk system. The guy in charge knew exactly what he wanted, and from which company, on day one. But he needed to make sure and rule out a few options. My involvement in the project lasted 18 months. I am not sure how much longer it took to finally ‘select’ the operational risk system that the hedge fund wanted in the first place – because I left the company before the decision was finalized.
I tell this story, because these procedures – the procurement and auditing processes, the preferred vendor lists, the long-ass sales cycles – are one of the reasons why banks launched innovation labs in the first place.
Outside of dealing with innovation internally – that dreaded word intrepreneur – innovation labs at banks became that ‘open door’ that allowed early and late stage startups to enter their hallowed halls.
For those of you who have seen me speak, you know I don’t view FinTech as a sector or a group of companies. I see FinTech as a mindset – whether that mindset (basically to make banking better) originates from a tiny startup, an established tech firm or an old fashioned bank – improving the state of financial services should be the end goal and the main focus of FinTech. When I was at Startupbootcamp, we saw very few consumer facing or B2C companies. Most of the startups that applied to the accelerator programme and were accepted were looking to sell into large banks and financial institutions. Despite that, none of these startups would have made it onto the short list for that system selection project I worked on many years before – they were just too small. By establishing ‘labs’, large banks and other firms could offer an open door through which startups could to enter the building, speak with stake holders and maybe, just maybe, secure a coveted pilot or proof concept. The lab was a huge advancement, for incumbent firms, at the time.
Over the course of my career I have spoken to more banks than a human should have to in a lifetime. When FinTech-fever was just ramping up, I saw quite a lot of hype. Banks joined external accelerators, they started internal incubators, corporate venture funds were created, white boards were drilled,into walls and an entire rainbow of markers and Post-It notes were made available to a new generation of ‘cool kids’ inside the bank.
For the most part these labs served two main purposes. One was learning. And learning is good. These labs sent out executives to look for startups, find out the new tech trends and business model emerging, and report back to the bank. Maybe they put on a few workshops and hackathons, for people more used to working with Excel and Lotus Notes, to get a chance to play around with dried spaghetti and marshmallows in order to ‘think differently’.
Don’t get me wrong. I think learning is good and necessary. It should be a part of any innovation programme.
The second purpose is PR. Post-crash (hell, pre-crash) Banks didn’t exactly bring up warm and fuzzy feelings in people. They were, and still are, slow to change, risk adverse and bureaucratic – all things that are poison to an innovation project. However, open up a new building, with transparent walls populated by people in lax dress codes who use words like ‘agile’ and ‘scrum’ and ‘growth hacker’ and (Presto!) you have a defence against critics who compare banks to dinosaurs. Look, we’re experimenting! We have startups in the building! We did a pilot! (after seven months of negotiating)
Why so long to negotiate, you ask? Because pilots need a business sponsor. Once the innovation lab has secured a bonafide, shiny new FinTech startup, it is usually their job to go into the bank to find a business sponsor to pay for the pilot. Many banks have different procedures for this. Some banks don’t allow the money for the pilot to come out of the innovation lab budget – making the search for, communicating to and negotiation with, said business sponsor all that much harder.
We are now in 2017. If you work at a bank, you would have to be a certain type of cynical curmudgeon to sneer at FinTech now. FinTech is a thing. (If you have just emerged from Hobbit House – FinTech is just a quick way to say ‘Financial Technology’.) There are many people and business units at banks today that are actively seeking to find and work with startups that solve some of their internal and customer problems and meet their needs. Whether it be student loans or SME banking or pet insurance – there is a FinTech startup and an incumbent business unit waiting for each other to swipe right.
But wait – if the business units have listened to all the podcasts, and taken notes at events and collected more hackathon t-shirts that they know what do to with and now understand that true innovation means a change in business model, new technology and new revenues streams – doesn’t that make the innovation lab…*ahem* redundant?
Yes. And this is the problem we have today. Imagine if you fought, for years, for a measly £100 million pound budget in order to drag your creaking, legacy dusty old bank into the 21st Century. Imagine, year in and year out having to defend that budget against KPIs that don’t align with what you are doing. Imagine being treated as an extra resource – a research expense – an elaborate form of PR. How hard would you defend your turf, your open plan office? Those Post-It notes would be ripped from from your cold dead hands.
But what if, after all these years, all the roundtables and white papers and accelerator demo days – the learnings started to sink in. What if the ‘business units’ at firms – the loans, the pet insurance – started paying attention and changing their own internal culture? What if procurement departments adjusted how they dealt with smaller companies?
What if the ‘cool kid’ that shows up with a great idea on how to transform the bank – in an open and digital way – walked in wearing a jacket and tie or heels and pearls instead of a t-shirt and trainers? Would you still fight?
What if your child – after thousands of pounds spent on nappies and trainer pants, hours spent kneeling next to a plastic potty, several attempts demonstrating that a flushed toilet will not actually suck them down into a dark hole – what if , after all of that, your child walked up to you and said: ‘I used the potty and wiped myself‘ and you responded with, ‘But I spent all that money on Pampers – you put that nappy back on right now!’
You wouldn’t – would you? Because you would realize your bum-wiping days were over. Your job had become redundant.
The days of the innovation lab, in its current incarnation are numbered. Especially in regions where FinTech is mature.
It is sad. It does breaks your heart. But you will always have the memories of the bean bags and you will be allowed to keep a few Post-Its, flattened in a book, for the sake of nostalgia. But that is the road we need to take to make banking better. Because the alternative is an old, dusty, deposit-taking, lending-offering commodity operation taking up valuable space in your basement – that no one wants to partner with.