Postcards From The Digital Edge: Innovation Lessons From The Best

Andy Hirst

In 1903, the president of the Michigan Savings Bank advised Henry Ford’s lawyer, Horace Rackham, not to invest in the Ford Motor Company. “The horse is here to stay but the automobile is only a novelty – a fad,” he said.

Not his best professional moment. Disruption can be unsettling and blindsiding in the short term. But underestimating it can have lasting consequences.

Digitization has blown the doors off barriers to entry for new fintech market entrants. Blockchain, machine learning, cloud, and IoT have accelerated the pace and tempo of day-to-day business, giving financial services a new resting heart rate. And disruption is eating market share for breakfast.

Now that the disruptive dust is starting to settle a bit, we are seeing a few important trends emerge. The most obvious is the shift between traditional vendors and fintechs. There’s still an element of competitive tension, of course, but we are seeing much more engagement and interest in collaboration than competition. Rather than going directly after banking consumers, more fintechs are looking at banks as potential business partners. Areas such as budgeting, payments, and wealth management are ripe for innovation and apps that solve people’s specific finance problems. In the era of open banking and open APIs, the focus and opportunity clearly lies in partnerships and collaboration.

Likewise, as industry players become more collaborative, we are seeing greater awareness and recognition of the need to manage the juxtaposition of their organisational and cultural mindset with the old and the new, as much as their technology landscape. Banks are digital, not branch, and AI, chatbots, and machine learning are starting to become the norm – which changes the way we think about and approach problems and solutions.

This industry collaboration and recognition of the need for a shift in mindset is driving innovation in both large established vendors with legacy systems, and agile fintechs with no IT baggage. Innovation is everywhere. The likes of Emirates NBD are piloting machine learning to provide better customer service. Discovery are using IoT to help lower customer premiums. Klarna are out innovating competitors with faster and better client engagement, and Ageas is leveraging cloud models to set up and enter new Asian markets in record time.

These exceptional doers, who have baked innovation into their thinking, shaken the corporate tree, and drawn a line between traditional 20th-century business models and their digitally fluent mindset, are the true industry leaders of our time in my view.

Great changes mean greater opportunities. The innovations taking place today will most likely take shape in ways we may not expect. Removing friction from the customer journey and keeping pace with rapidly moving, open, loosely coupled marketplaces will not just help you shake your own organisational tree, but also nurture its long-term growth.

Learn how to bring new technologies and services together to power digital transformation by downloading “The Future Services Sector: Connected Services for Continuous Delivery.”


Andy Hirst

About Andy Hirst

Andy Hirst is vice president of Banking Solutions, SAP Banking Industry Business Unit, at SAP. He is responsible for driving the success of the SAP go-to-market strategy in Line of Business Cloud Applications and Analytics in Financial Services. Previously, Andy was responsible for Capital Markets solutions for banking. Andy is an expert in Big Data and analytics use cases in financial services and has been involved in many digital banking initiatives for banks.