Every financial services company wants to be innovative. Innovation brings new lines of business, increased revenue and decreased costs. But how can a bank or credit union encourage innovation amid the daily grind?
By definition, most institutions can’t move their headquarters to Silicon Valley. Changing your dress code may not produce results. Starting innovation labs and appointing innovation czars may help, or may turn into expensive “innovation theater.”
While these ideas may help to attract new talent, innovation truly begins with culture, and traditional banking culture works against innovation. That’s because innovative cultures accept that new ideas inevitably result in some failures — you might call it “the freedom to flop.” Innovative cultures embrace failure and the lessons it can teach, encouraging employees to try new ideas, take risks, and thus learn rapidly. Contrast this with most banking cultures — strongly influenced by regulatory, credit and operational risk management — and you can see the dilemma.
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