Banks told to shed 'legacy stuff' for real innovation to happen

Singapore

FINANCIAL institutions need to adapt their culture in the age of disruption in order to see real innovation.

This sentiment was expressed by leaders hailing from pioneering fintech firms during a panel discussion at the Singapore Fintech Festival on Monday. The panellists agreed that culture makes or breaks whether an organisation can birth solutions that are innovative.

"Innovation doesn't happen because a bank decides, 'Oh we need to look sexier and smarter, so we are going to have something called innovation'," said Shailesh Naik, founder and chief executive of MatchMove Pay.

He pointed out that a great number of financial institutions have been launching innovation centres. "But I have yet to see an innovation centre set up by a bank or a financial institution that has really produced stuff that compares to a five-person startup. And that, I think, is because of the culture," said Mr Naik.

"I think banks do need to supercharge and recharge their tech capabilities, and until they deal with all their 'legacy stuff', it's just lipstick on a bulldog."

Founder of Hong Kong-based TNG FinTech Group Alex Kong related his experience of being "in and out of different innovation labs" in the firm's first year.

"It was a complete waste of time," said Mr Kong. He said the banks learnt from the startup's ideas and mistakes, but there was not a lot of innovation.

"The intention was to tag onto our ideas," said Mr Kong.

Kim Fournais, co-founder and CEO of Danish investment bank Saxo Bank, highlighted that organisations are still wary of disrupting their traditional lines of business, and this fear is causing them to shrink back from being truly innovative.

A "startup culture" appears to be the key to innovation. M-DAQ founder Richard Koh shared how his firm tries to make everyone a stakeholder in the company by encouraging them to use 20 per cent of their time - "just like Google" - for special projects.

"Except that the 20 per cent time over here is 20 per cent out of 120 per cent," said Mr Koh.

"After your work day, you are involved in some special activity projects, and some of these may happen to become a real product, for a real client. But for others, it is a learning experience."

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