Innovation in Financial Services, a conversation with Maarten Korz, Innovation Manager at Rabobank (Part 1 of 2)

Rabobank is one of the three most Sustainable banks worldwide. It is well aware of the responsibilities of banks being able to build or break sustainable innovation thus it is no surprise that it is also one of the most enterprising banking groups in Europe, in terms of conceptualizing and executing innovation strategies. Rabobank’s ethos, believes that sustainable growth of prosperity and well- being must never be at the expense of nature or the environment.

Rabobank  aims to keep this objective in mind in its activities and contributions to sustainable development. This also means helping customers becoming more sustainable. All kinds of products and services will be developed to  facilitate this, like investment funds, insurances, environmental loans, advisory services etcetera. Its cooperative organisational structure based on expert local knowledge helps it to successfully incorporate social media into its long term strategy in order to engage with its customer base.

Maarten Korz, Innovation Manager at Rabobank is responsible for spotting new socio-technological trends and incorporating them into the bank’s strategy to improve customer relations and the quality of services offered. He has agreed to talk to IntelligentHQ about his work and what innovation means to the bank and the financial services industry. maartin korz1

(Q) Could you tell us a bit more about your background and how you came to be in your current role, which is Innovation Manager at Rabobank?

(A) I studied psychology and communication science and I have always had an interest in New Media, Communications and Customer Experience. I have worked in communications departments for a couple of companies and in 1998 I started work for Rabobank in various project management roles within this group. For two years now I‘ve been working in the Innovations group. I work with a team of six people.

We do a couple of things: First of all we do what we call “trend watching”, where we try to spot and analyse new IT trends. We make a ‘top 10’ list of new IT trends that are important to our bank, such as gamification and social analytics. We then try to combine these trends with our business goals and the existing business roadmaps of our organisation. These are, depending on relevancy, the goals of our marketing departments, or business departments.

We have 30 to 40 pilots or proof of concepts each year that we seek to try out to improve our business course. This way we help the business through testing new technology and systems. We try to look 2-3 years forward estimations, to help us analyse what will be meaningful for the business in that time. Based on that and depending on the test results we go forward and hand our proposals to other departments and projects that can then use them. For example, we do a lot of projects on social CRM and social profiling. We consider what will be available to us in 2-3 years, and  then we give our results to other departments who can then incorporate our results into their business plans.

Our team has a different dynamic to the rest of our organisation. We do a large number of quick and low budget projects, spending no more than 10000- 150000 Euros to test a project over a couple of months. We then hand theresults over to the other departments within the bank. About 2/3 of our projects have eventually turned into new services we offer to our customers and employees. 1/3 of the projects won’t make it there, usually due to other factors such as high implementation costs.

So to summarise, we first do our testing, then we prepare a project, and then finally we try to generate enough momentum within our organisation (through presentations and workshops on the trends that we do research on) to stimulate our innovation networks. There are several people within our organisation who work on innovation. We try to bring these people together to share their knowledge and insight.

(Q) Spotting new trends: is it a manual process or are you using any software or dashboards for that?

(A) We use several dashboards. Each of the members of our team has their own system, such as google alerts, the blogs they follow, conferences they go to. We also use third party trends reports. We also do workshops every year to try and analyse the emerging trends, link them and then prioritize them.

(Q) Financial services providers have been often accused of being slow to innovate in the social media space. What challenges does your team face when trying to drive innovation in financial industry environment?

(A)   It really doesn’t take a lot to be innovative in the financial services industry, as the industry itself is conservative. What we do is build trust between the bank and its customers and so any disturbances in that process are undesirable. That is why a lot of companies in our industry are not motivated to change. It makes our jobs harder. The easy part is trend spotting. The hard part is finding places within our organisation willing to make the change. On the other hand the cooperative structure of the organisation gives us a bit of an advantage.  rabobank

We have over 140 local branches which enjoy a high level of autonomy and can take it upon themselves to innovate. That helps us, because, as these branches are close to the customers, end up knowing exactly what’s needed in the way of innovation and can help us by taking on trial projects. Yesterday, for example, I learnt of one of our local branches, which displays a large Tablet and a smartphone within the branch, so that the customers can be shown how mobile banking works. So if projects like that are successful on a local level, we can show their success stories to other branches. We are not really a very top-down organisation.

When we see something we think is worthwhile, we need to convince our local branches that they should implement the proposed changes. To help us do that we use the successful branches as ambassadors for innovation. One of the problems with that kind of organisational structure, of course, is that we have to be aware of what goes on in the different branches so that we don’t waste time ‘reinventing the wheel’. That’s something that we try to stay on top through encouraging our branches to share such information efficiently.

(Q) It sounds like the lack of bureaucracy helps innovation in your organisation. What impact does regulation in the Netherlands have on what you do and how you bring new products out?

(A) In the last two years there has been a huge focus on control. Sometimes that feels like it puts companies in a “freeze mode”, where we are like a rabbit staring motionless at the headlights of an approaching car. That is a definite disadvantage if you want to accelerate innovation and it’s something that worries me personally, because what I see is that the currently proposed solutions to the control problem are only introducing more control, more regulations, more checklists. I think this issue should be approached in a more innovative way. These regulations have our customers’ interest at heart and are put in place to protect our customers.

So I think, with this as a starting point, we should try to have a more innovative approach to the control issues. This in itself is hard, as the financial services industry is too focused on control and not giving people the freedom and the space to feel their way. And I think that, within boundaries, innovation is about feeling your way and making mistakes, which then help you to learn. That’s what is missing now and I guess that within 1-2 years we will get out of this control freeze but it’s difficult.

We’ve just opened a new office that is based on very different principles. We want our employees to be more entrepreneurial, to take on more responsibility: all these elements that give more freedom to the employees. We took the road towards this new way of working and it’s important to me and to the organisation to make this concept core to the company, which will result in making us more innovative. When I recently spoke at a conference in Europe on what we are trying to achieve, I could see that we have a serious advantage over our competitors in this respect and that we can use this to our advantage.

Conclusion Rabo Unplugged

What Maarten Korz is alluding to here is ‘Rabo Unplugged’. ‘Rabo Unplugged’ is the integrated style of working of Rabobank Nederland, inspired by developments at its subsidiary Interpolis and by Microsoft’s New World of Work principle, where people are the focus in a flexible work environment, supported by innovative technology. Information becomes independent of time and place, which creates a way of working with fewer rules, greater independence, better cooperation, and a more entrepreneurial spirit.

Staff are provided with the latest ICT (information and communications technologies) facilities and mobile equipment and make their own decisions as to where, when, and how they can achieve the best results in the most efficient way. “Rabo Unplugged means putting your trust in people, letting them take responsibility for their own work and create a work-life balance in their own way,” according to Piet van Schijndel, Member of the Board of Directors of Rabobank Nederland.

IntelligentHQ will be featuring part 2 of this interview stay tuned.