In search of competitive advantage in banking and fintech

Next week I’ll be in Las Vegas for Money 20/20 the huge payments and financial services innovation conference, and as always I’ll be on the lookout not only for cool ideas and technology but in particular those that can bring a competitive advantage for financial institutions.

There will be a ton of content on EMV, mobile and contactless payment developments, POS and transaction data, authentication and security, and of course, there will be lots of blockchains. The blockchain is the new “E-Business”, it will make you better, faster, stronger, smarter and better looking. I’m sure someone will try to tell me how much better my dining experience could be if the menu was on the blockchain.

Don’t get me wrong, I think blockchain technology holds incredible promise for many areas in financial services, and some truly brilliant people are doing amazing work. We’re going to see some real breakthroughs for the groups that solving problems that people (and banks) care about solving.

At the same time, what are we now— 15 years into talking about “omnichannel” experience? And probably going on 5 years into the backlash that we shouldn’t be thinking about channels at all (or at least not digital versus face to face). Many— if not most— financial institutions are still struggling to close the widening gap between what their customers expect and what they are able to deliver, as I wrote about recently (Bridging the Customer Experience Gap).

No shortage of ideas

It’s not the lack of technology that holds them back. Nor is it lack of great ideas.

But which ideas have been on the hype curve too long and which ones are ready for prime time? Why are some ideas viral with certain groups of people and unheard of in others? My colleagues and I have been spending a lot of time working on how ideas and people come together and how the most innovative organizations in the world embrace multiple approaches itodiscovering and implementing new ideas. (Read more: Innovation is More than the Next Big Idea)

I continue to believe that very few banks will be product innovation leaders, so the battle for most will be trying to become truly customer intimate after spending so many years investing in scale and scope and standardization and efficiency— the marks of infrastructure management. (Another topic I’ve been writing about for some time now: How Banks Can Compete in the Future)

So I’ll be looking for examples of innovative product ideas that can partner well with banks’ infrastructures to create that elusive customer intimacy, and bridge that customer experience gap.

Investing for impact

Next week I will also be working in partnership with Capital One to take a deeper dive into how they approach innovation. The bank runs three innovation labs, and they work on both the day-to-day incremental improvements into more transformative innovation, some of which come from acquisitions they have made along the way. I’ve shared this cool video on YouTube about their labs with my students at the Pacific Coast Banking School.

One of the key acquisitions was that of the big data analytics company Bundle in 2012, which ultimately resulted in Bundle founder and CEO Jaidev Shergill becoming Managing Partner for Capital One Growth Ventures.

On Tuesday October 27 from 3:30 to 4:30 I am moderating a discussion with Jaidev and his colleague Lauren Connelley at the Capital One Booth at the Venetian during Money 20/20. I encourage you to join us if you’re at the event, but I’ll report highlights here.

I’ll be talking with Jaidev and Lauren about their approach to investing and technology companies and how their strategic approach differs from a pure financial investor. A lot of the early stage companies I’ve worked with have struggled to gain insights directly from the banks they’re trying to sell to and partner with, and not all of their funding sources have been able to provide much help either.

I encourage you to join in the conversation.

Learn more about Capital One Growth Ventures here: growthventures.capitalone.com.

This article originally appeared here. Republished with permission. Submit your copyright complaints here.

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JP Nicols

Bank innovation consulting expert JP Nicols has been internationally recognized as a leading voice for innovation, strategy and leadership for the future of financial services.

JP is a trusted advisor to companies from startups to the Fortune 500, a popular writer, a top rated speaker, and is often quoted in the press on video and in print. He has been named to several lists as an influential thought leader in financial services.

A former senior bank executive, JP is the President and Chief Operating Officer of Innosect, a Silicon Valley based global innovation enablement and analytics company that has experience helping over 200,000 people contribute to projects and campaigns that have generated over $400 million in value.

He is also the co-founder of the Bank Innovators Council, an independent global membership organization with members in 65 countries that promotes and supports innovation in banking.

His work has been featured in some of the industry’s top publications, including American Banker, The Financial Brand, BAI Banking Strategies, Investment News, Bank Innovation and many others. Read more here.

Before his work in bank innovation consulting, JP served in various leadership and innovation roles at top financial institutions, including as the first Chief Private Banking Officer for a top five U.S. bank. He is an instructor at the Pacific Coast Banking School, and he serves on the advisory boards of NextBank USA and Advizr, and previously served on the advisory board of Balance Financial and as Vice Chair of the board of Forest Ridge School of the Sacred Heart.