Every year, there are two innovation award ceremonies that recognize the best-of-the-best in financial services innovation in an array of categories. Both Efma (an association of 3,300 financial institutions in 130 countries) and the Bank Administration Institute (BAI) review hundreds of applications from organizations worldwide and ask members and judging panels to determine which new innovations stand out from the rest.
While the specific innovations recognized often differ between these competitions, surprisingly a few organizations and geographic regions seem to excel each year. For instance, the top five organizations that have been recognized by Efma over the past six years have been Intesa Sanpaolo, Banco Bradesco, CaixaBank, Deniz Bank and TEB.
The Efma–Accenture Banking Innovation awards program aims to identify and award the most innovative projects in the retail banking sector at a global level. The goal of this program, now in it’s sixth year, is to identify and share worldwide best practices in the retail banking distribution and marketing arena.
Innovations in ten categories are recognized, including two overarching awards for Global Innovator of the Year. The categories in 2018 were:
- Best Use of Analytics and Artificial Intelligence
- “Phygital” Distribution and Experience
- Digital Marketing and Communication
- Neobank and Specialized Player Innovations
- New Product Offering Innovation
- Social, Sustainable and Responsible Banking
- Workforce Experience
- Global Innovator of the Year (both Challenger and Established players)
A total of 185 financial institutions from 59 countries submitted 433 innovations for the 8 award categories in 2018. The three criteria used for evaluation included: Originality — uniqueness of the strategy; Impact — strategic capacity to generate long-term competitive edge and return on investment; and Universality — adaptability for use in other markets and countries.
“It’s been another strong year for innovation in the industry, so we’re excited to recognize the best innovations in the banking industry,” stated Piercarlo Gera, Global Managing Director for Financial Services Distribution & Marketing Services at Accenture. According to Ambrogio Terrizzano, Accenture Interactive Financial Services Lead, “The boldest common ground we saw this year among innovation efforts was the focus on creating human experiences.”
According to Accenture, the keys to building a human experience include:
- Setting a human purpose: Solve bigger and deeper needs of a customer, with the aim of then shaping the product or channel experience accordingly.
- Alignment of front line: Make sure your customer contact employees “live the brand” of being human-focused.
- A singular experience: Create consistency in terms of the tone of interactions you offer to customers across all touchpoints.
- Giving back to people: Reward valuable interactions with tangible and emotional benefits that customers value the most (beyond points).
- Engage beyond traditional boundaries: Develop solutions that are available where the customer lives, works and interacts without regard to market footprints.
- Sharing the customer dream: More than just providing financial services, deliver solutions that help the customer achieve non-banking goals.
- Nurture a fan base: Become so obsessed with a better customer experience that customers become fans.
I was fortunate enough to be the co-master of ceremonies for the second year in a row this year, where bronze, silver and gold awards were presented. The award presentation was broadcast live globally. Below are the gold level award winners from the competition.
Using Analytics and Advanced Intelligence to Help Small Businesses
Plink from Bancolombia is the gold award winning analytics and advanced intelligence solution that brings together merchants and consumers, providing value to both based on the vast amount and richness of data Bancolombia has on Colombian consumers and retail businesses, and their analytics and AI capabilities.
For merchants, Plink provides access to a wealth of information on the health of their business, how their sales are evolving, how they compare with their competitors, who their customers are (demographics, income, profession, etc.), where they live (through heat maps of their customers locations), purchasing habits, etc. This helps merchants make the best decisions on their business.
Plink even includes a platform where offers can be uploaded for targeted delivery. Bancolombia sends the right offers to the relevant customers only, via the Plink app. The monetization of this innovative service comes from merchants. While there is a free model, with a basic tier of reports, more advanced reports and capabilities are available for a fee.
The key benefits of Plink are :
- Merchants. Availability of data and insights to improve their businesses on a daily basis, bringing a powerful differentiation for Bancolombia.
- Consumer. Plink provides an intelligent platform that delivers relevant and timely offers, with data captured and analyzed by Bancolombia. Plink also helps drive adoption of digital payment alternatives.
- Bancolumbia. Plink represents the first platform business for the bank, generating an alternative source of revenue, positively impacting non-interest income.
Total implementation time was 12 months, from the original idea, through validations, business case approvals and building the scalable platform and launch.
Expanding Payment Functionality With Biometrics
Winning a gold award for ‘phygital’ delivery, PeoPay is a mobile banking application provided by Bank Pakao S.A., representing the first application in Poland to take advantage of biometrics in transaction confirmations. It allows customers to pay abroad in foreign currencies and enables online shopping to be paid for directly from the phone. It also enables payments in all contactless terminals in Poland and abroad.
The bank took advantage of a hybrid model — combining the PeoPay application functions (using telephone native functions) and the m.pekao24.pl mobile service. The result is an application which contains all important functions of Pekao24 electronic banking and the older PeoPay payment application, preserving ergonomics and responsiveness to customer needs at the same time.
The growing number of customers traveling abroad was an impulse to introduce a unique solution enabling convenient phone payments from currency accounts without additional currency conversions. Some of the more unique features include:
- Approving transfers and withdrawals from ATMs up to a specified limit with a fingerprint.
- Paying by phone abroad directly in the local currency. The customer uses the phone at the terminal (as a card), and the application recognizes the currency of the transaction and collects money from the foreign currency account.
- Paying for internet shopping by the phone without logging into online banking. The customer chooses “I pay with Pekao Bank” on the website of the store opened on the phone, then selects “Pay with PeoPay.” The application opens automatically and asks the customer to approve payments.
- The ability to scan the invoice number from a card, invoice or e-mail instead of rewriting. The transfer form with the completed invoice number is automatically opened.
Using Social Influencers to Connect with Millennials
One of the more unique gold winners was Brazil’s Banco Bradesco in the digital marketing and communication category. As a sponsor of the 2018 Brazilian edition of Lollapalooza, one of the world’s largest music festivals, Bradesco developed a four-phase strategy: promotion, pre-event, event and post event.
The main objective of the multichannel initiative was to allow the public to know about and interact with the festival either in person or virtually. Bradesco enlisted the help of social influencers, including YouTubers, photographers, artists, music specialists, and professional Twitter communicators who co-created content during the entire campaign.
In pre-event phases, posts focused on the activation of the bank’s customers and non-customers, who could apply for tickets, and provided guides on how to enjoy the festival in the best way. During the three days of Lollapalooza, social content covered, in real time, everything that happened on the stages including posts on Facebook, Twitter and Instagram.
In the post-event phase, festival creators and the Bradesco team shared — by means of music, videos and pictures — all the highlights of the event. During the communication period, over 53 million users were reached on Facebook and Instagram, 30 million on YouTube, with 655 million impressions, 102 million views, and 3 million clicks. The hashtag #todosnolollaBR was used over 29,000 times.
The sponsorship and associated communication served to link the music universe to the Bradesco brand, in addition to democratizing the access to anything that was happening at the event.
Building a Financial Community Using a Neobank Platform
As the gold award winner in the challenger bank category, perennial innovation leader Fidor Bank partnered with Abu Dhabi Islamic Bank (a leading UAE retail bank) to launch the Middle East’s first financial community and smart bank concept. Inspired by the success of Fidor Bank’s community that has over 750,000 community members, moneysmart.ae will be ADIB’s dedicated community and smart bank. It’s highly tailored products are targeted at the Millennial market and only available online and through mobile.
The objectives are to increase financial knowledge among Millennials, help consumers manage their finances and build their wealth, create an active community that can engage, review and co-create the future of banking together with ADIB while differentiating the brand in the highly competitive UAE market.
Fidor provided ADIB with a unique and inclusive digital banking ecosystem that serves as a platform that educates, integrates and reinforces the way customers manage their financial well-being. The platform helps to develop financial discipline to ensure smart savings, effective budgeting, and high-return investments.
The uniqueness of the Fidor moneysmart.ae solution is that it is not a mobile wallet like many neobanks, but a current account with credit solutions up to 120,000 euros. The customer base grows organically through development of the banking community with a social media-like ecosystem. The digital bank is fully empowered using Fidor Bank’s operating system, fidorOS — middleware that helps boost the performance of the bank without having to replace its legacy systems.
Providing Simplicity and Choice in a Personalized Account
At a time when consumers want the ability to personalize their experience, Poland’s Alior Bank introduced a new current (checking) account — Konto Jakże Osobiste — to its current customers. The gold award winner for new product offering is a personalized bank account that allows account holders to choose the benefits they want … and don’t want. These features and benefits can be freely changed through a new online banking platform and new mobile application or at any Alior Bank branch.
The benefits offered have been tailored to the needs and expectations of customers so that they can use them at any time, and in a selected number and configuration depending on the current situation of the customer. For instance, customers who often travel abroad and need quick access to money can customize their account to suit their needs before they depart. Just a few clicks are necessary to activate or cancel a benefit.
The benefits offered as part of the account were selected and developed jointly with customers during quantitative and qualitative research. Thirty different features and functionalities related to personal accounts were verified, with those identified as most attractive being selected.
Some of the benefits customers can choose from include free withdrawals from ATMs in Poland and abroad, free instant transfers (up to five a month), a higher interest rate on a savings account or an interest-free overdraft for ten days. Customers can also choose to participate in a loyalty program or enroll in a travel insurance package with emergency assistance covering car, medical and home insurance.
Some of the early results of the new account include an 11% increase of current account sales and an eight-point increase in current account Net Promoter Score.
Increasing Potential Car Owner Universe with IOT Technology
In an effort to enable more consumers to own a car (which translates to a better potential for meaningful employment), Shinhan Bank Japan leveraged internet of things (IOT) and GPS technology to limit risk of loan default. This gold winning innovation for social, sustainable and responsible banking involves installing an IOT device in a newly financed car that can identify the location of the car and deactivate the engine if a customer repayment falls overdue. In this way the bank limits its risk and expands the universe of consumers who can qualify for a loan.
In Japan, there are about 2.5 million of people who cannot purchase an automobile because of their working style and/and credit records. These consumers include part time workers, people who have less work experience or less established credit, and even those who have previously defaulted on a loan. The challenge becomes even more acute for the people who live in rural areas, where it is even more important to own an automobile for daily life.
As part of the initial test of the program, the bank collaborated with several car dealers, and all of them expressed their happiness and satisfaction with this new auto loan that used digital technologies to help secure loans and limit risk to the bank.
Creating New Innovations with Help of Current Employees
At a time when being a leader in innovation is most important for financial institutions, Austrian gold award winner for workplace innovation, BAWAG P.S.K. found that some of the best ideas can come from the people who already work in the bank.
The TREND_LOUNGE is an event at BAWAG P.S.K. where employees present their innovative ideas for consumer products and services. The ideas are presented within a three-minute time slot following comments from a jury. Then, more than 130 participants vote online for their favorite idea. The best ideas are awarded.
The TREND_LOUNGE event empowers the Bank’s workforce and has increased the awareness for innovation within the company. Furthermore, it has boosted the creativity of the employees and better leveraged the existing potential within the organization. As a result, the firm is constantly improving competitiveness and actively shaping the interaction between organization, technology and social change.
The TREND_LOUNGE takes place three times a year. For each event, up to 130 employees come from the headquarters and from various branches across Austria to voluntarily attend the event. Each TREND_LOUNGE has a theme. These have included customer satisfaction and financial well-being. In each event, up to ten ideas are presented with pre-selection of competing ideas being based on defined basic criteria. Throughout the process, communication and interaction is an essential part of the quality of the ideas presented and, in turn, their successful implementation.
So far, 57 product and service ideas have been developed and presented on stage, with several of the ideas already having been implemented and others to be implemented soon.
Global Innovator of the Year: Bradesco Bank
Banco Bradesco (Brazil) was named Global Innovator of the Year 2018 for the significant originality and impact of innovations it brought to market in the past year. Not only did it capture the gold award for digital marketing and communications, but the bank also took home the bronze award for workplace experience.
The top three organizations recognized as global innovators by Efma in 2018 were:
- Banco Bradesco (Brazil)
- USAA (United States)
- DBS Bank (Singapore)
Piercarlo Gera from Accenture stated, “Once again we have seen DMI Award winners shaping digital technologies to create innovations that generate value for both customers and their organizations, strengthening client relationships and having a strong impact on revenue growth and profitability. They engage customers while becoming more streamlined organizations that develop their people and drive industry progress. Retail banks are experiencing increasing competition from non-traditional providers, but they are rising to the challenge. The geographic diversity of this year’s winners shows that innovation truly knows no boundaries.”
Referencing the expansive innovation portal sponsored by Efma and Accenture, Vincent Bastid, CEO of Efma said, “The 2,764 innovations in our library — from 652 institutions operating across 94 countries — are proof of the hard work of banking leaders in transforming the retail financial services landscape as we know it. It’s exciting to see how these solutions play a part in reshaping the future of the industry.”
Innovation in banking is not universal, and many organizations need to embrace the change that is occurring in the marketplace, take qualified risks and be willing to disrupt current business models. The organizations that received awards this year (not just the top awards, but those who received silver and bronze recognition) are not unfamiliar with receiving kudos for their efforts. These firms are often named when we talk innovation in banking both as part of the Efma awards program as well as the awards distributed by the BAI.
It all starts with an innovation culture and a passion to innovate.