Why Many Bank Innovation Efforts Fizzle (And How to Change That)

Banks and credit unions are striving to adapt to consumers’ post-pandemic behaviors, knowing they need new ways to make rapid changes and innovate at scale. In an exclusive Banking Transformed podcast interview, author and former head of innovation at Citibank, Amy Radin, points out common missteps institutions make in this process and how to overcome them.

Never before has innovation been such a critical imperative for financial institutions. McKinsey notes that while 90% of executives believe the pandemic will fundamentally change how they do business over the next five years, less than a quarter are confident and prepared to capture new growth opportunities. In fact, two-thirds of these executives believe it will be the most challenging moment in their career.

In a Banking Transformed podcast, Amy Radin, principal of Pragmatic Innovation Partners and author of the book “The Change Maker’s Playbook: How to Seek, Seed and Scale Innovation to Any Company,” discusses how banks and credit unions can respond to market disruption.

Radin, who grew up in a family business and saw entrepreneurship from the inside out, had a corporate career that included stints at American Express, AXA Group, E-Trade and, notably, EVP and Chief Innovation Officer at Citibank. She says she was always the person attracted to “what’s new, next, and coming.” “Even though it was many years before I actually had the word innovation or digital in my title, I always worked on the front end of what was happening,” she says.

Radin started Pragmatic Innovation Partners to help startups and existing institutions engage in digital transformation. In her book she focuses on reducing uncertainty and ambiguity about innovation and realizing its benefits using a pragmatic approach.

In her podcast conversation with Jim Marous, Co-Publisher of The Financial Brand and CEO of the Digital Banking Report, Radin addresses four key ways financial institutions can make innovation part of their culture.

Key #1: Innovation as a Constant, Not an Event

The pandemic has led consumers to adopt technology and digital behaviors on a scale most have never done before, Radin observes. The ripple effects of this change, and its impact on preferences and practices in financial services, will be felt for years.

“In financial services, people are integrating digital into their lives much more than anybody imagined would be possible in such a short span of time. That’s the area where financial institutions need to focus,” Radin states.

“You can’t jump in and out of innovation. Some bank leadership teams don’t see that.”

— Amy Radin, Pragmatic Innovation Partners

Digital natives are now starting their own businesses and becoming primary drivers in the economy. Financial institutions will need digital-first capabilities for such people to bank, especially on mobile devices.

Read More: Why Most Banks Fail at Innovation (And Why TD Bank Doesn’t)

While this offers opportunity, it also creates a threat because innovation can’t operate with an “on/off switch,” says Radin. Banks and credit unions need to constantly build innovation momentum and be in the game at all times. “You can’t jump in and out of innovation. I think the risk is that some bank leadership teams don’t see that,” she said.

Key #2: Start By Addressing Customer Needs

Many financial institutions have been reassessing their perspectives on innovation, but struggle with where to start or how to structure their efforts. While it’s common for companies to dump money into innovation labs, such broad-based efforts don’t always bear fruit.

Banking Transformed PodcastsHosted by top 5 banking and fintech influencer, Jim Marous, the Banking Transformed podcast examines major leadership and cultural challenges and the impact of digital disruption on the banking’s future.


One of the most fertile grounds for innovation is targeted initiatives that address the most pressing customer experience needs, says Radin. Common examples of this can include the account opening process or outreach during the first 60 days of owning a product. Banks and credit unions can start identifying the most effective innovations by mapping out the customer journey with a team to identify the gaps.

While it’s tempting to view innovation as a matter of adding products or capabilities, it’s more often about enabling speed and simplicity. Jim Marous observes in the podcast that when he interviewed Dominic Venturo, Chief Digital Officer at U.S. Bank, the banker observed that the most effective innovation often removes parts of processes to streamline experiences.

What financial institutions need now are executive sponsors that can build teams to support innovation and know when to break the rules, Radin believes. The most innovative organizations are those that target customer needs with institutional knowledge and the desire to make radical changes when required.

Read More: Banks Say Innovation Now More Important Than Ever

Key #3: Foster a Culture of Curiosity

Even with executives who can deliver the resources and know when to break the rules, they still need to build credibility with teams around them, Radin states. This requires a collaborative environment where internal stakeholders can bring their most important problems before senior executives. In many cases, the best results come from brainstorming sessions where people can be forthcoming about their disagreements and work them out.

“If the things you’re experimenting with are always succeeding — if you never have failure of any kind with your tests — then you’re probably not pushing the envelope as hard as you need to,” Radin maintains.

Innovation leaders often are externally focused and market-focused with a “culture of curiosity,” says Radin. And because it’s so easy for financial institutions to get bogged down on immediate needs, it’s essential to keep a pulse on what is happening on the outside through external relationships, external partners and other technology companies.

What It Means:

Those who only look inside banking for ideas tend to fall into groupthink and become copycats.

Innovative change makers tend to see problems as possibilities and opportunities and solve them through collaboration, according to Radin. They tend to see possibility and educate to create the future without being held back by fear.

Read More:

Key #4: Seek Incremental Innovation

Too often financial institutions think of innovation in terms of groundbreaking initiatives. Realistically that rarely happens.

Radin’s organization worked with a consultancy that discovered at least 90% of innovations are incremental. Financial institutions may find some of the most viable options are in initiatives that make the customer experience easier and more cost-effective.

Fortunately, many of these innovations can be scaled rapidly and have a notable impact on the bottom line. Banks and credit unions can gain innovation momentum by identifying efforts that solve a problem for a significant number of customers. “As you iterate and continue to build, you grow and expand upon what you learned,” Radin states.

Financial institutions can look to data analytics and modern technologies to identify and support the most promising innovations. Radin, who spent 14 years at American Express as a direct marketer, says she learned on the front lines how data and technology can support personalized products and services.

Those direct marketing skills, combined with discipline, process orientation and structure, can set the stage for an innovative mindset.

“You’re constantly trying things, you’re experimenting, you’re testing and learning,” says Radin. “You come to regard tests that don’t work as learning opportunities, not as failures.”

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