Banks are not considered hotbeds of innovation, but when Bank of the West launched its Quick Balance mobile app, its team knew it had to race to get it out before other banks beat them to it.
That’s when the San Francisco bank’s “radical collaboration” approach was born.
The key was to immediately engage employees from the bank’s compliance, risk, security and legal departments — as well as C-suite champions — so all operational and security concerns with the new app could be dealt with as they came up, said Navneet Arora, senior vice president, head of talent management and recruiting.
“There was a great need for speed because the product was cutting-edge,” Arora said. “It had to be because our customers were asking for mobile innovation, and we are competing with other banks that are also racing to develop mobile capabilities.”
Collaboration has become all the rage within the learning community, particularly as vendors race to launch new social technologies to facilitate it across functional units. But beyond technologies, organizations need a more comprehensive collaborative process to ensure that ideas, issues and concerns from all critical functions are heard and resolved at the outset. And most learning experts say the real objective of any collaborative endeavor should be to serve a business purpose.
Bank of the West understood that imperative, Arora said, and adopted the new collaborative process to launch its Quick Balance mobile app in just eight months — half the time it normally would take — and ahead of its competitors.
The new app, part of the bank’s mobile banking platform upgrade, lets customers get access to their balances with a single thumb gesture once they opt into the service. This is useful for customers who need their balances immediately — such as a busy mom shopping, holding a baby in one hand and checking her balance with the other.
Expedited development is rare for banks; most use a methodical, check-the-box approach that can bog down product development because concerns are typically addressed late in the process, Arora said.
Daniel Latimore, senior vice president, banking group at Celent, a Boston-based research and advisory firm, said banks historically have been “pretty siloed” in their approach to product development, resulting in longer time frames because they use serial processes for all of the steps instead of using parallel processing.
“This often happens when business managers start designing what they think is a great idea before they take it to their IT folks, who then tell them their idea is technologically infeasible, or it would cost $70 million to implement,” Latimore said.
However, more banks are getting their departments to collaborate earlier in the process, in part to compete with startup nonbanking firms, who claim they are unencumbered by legacy systems and can release new iterations as fast as every two weeks, Latimore said.
For development of Quick Balance, it became clear that operations, compliance and legal had to be involved early so their input could be “baked into the design,” thereby reducing the chance for bad surprises later on, said Mathieu Krogstad, vice president, mobile banking and payments. Indeed, they suggested design ideas to protect customers’ account information that proved much better than authenticating via SMS, text messages or online banking passwords.
Instead of these traditional methods, the bank introduced Mobile Pin, a six- to eight-digit numeric pin that simplifies the login experience.
“We weighed the benefits against the risks and ultimately delivered an easy, great user experience that also met risk and compliance regulations,” he said.
Jeff Judy, principal of risk management company Jeff Judy & Associates in Bloomington, Minn., said banking regulators also likely appreciated Bank of the West’s collaborative approach to handling risk and compliance issues early, and adopting an enterprise risk management approach. “Instead of analyzing risk within one department or function, banks need to analyze how each risk could impact all other areas across the organization.”
The bank also moved Krogstad’s team in with the IT team, headed by Mike Manowski, senior vice president, solution delivery in charge of technical project management, who was also in charge of connecting the app to the bank’s core system that contains customer account information. While all team members had access to Jive, instant messaging and email, the success of radical collaboration really was about the amount of face-to-face contact the members had with each other, Arora said.
Having the team physically work close together reduces the miscommunication that is typical on technical projects, Manowski said. Project owners such as Krogstad tend to communicate the features they want in a certain way, but designers can interpret those features another way, and developers and then testers can interpret the concept in their own ways.
“But with this project, Matt is physically sitting right next to me,” he said. “So when issues arose, such as when the software wasn’t working the way he wanted it to work, we could have a very quick conversation to make corrections.”
Key executives from all affected areas of the bank participated in collaboration meetings, to ensure “all the right players were at the table at the same time, including those who needed to make the decisions in an expedited time frame,” Arora said.
This was especially good for Gina Wolley, executive vice president, regional banking administration group, who was in charge of communicating launch updates to branch employees and training them on how to help customers navigate the new app and upgraded mobile banking platform. “The bank needed to get out in front of competitors, so there was a lot of energy around the launch, but also a great deal of pressures,” she said. “Also, my team had a lot of other projects in the pipeline in addition to the launch … We all had to keep communicating with our stakeholders to make sure we were all on the same page.”
The collaborative efforts bore fruit quickly: From the February 2013 launch of Quick Balance to the end of 2013, the number of 90-day active mobile users increased 333 percent; mobile banking enrollments increased 238 percent; and the percentage of enrolled mobile users who are active users rose from 12 to 73 percent. Bank of the West extended the collaborative process to launch Mobile 2.1 in November.
Count on Innovation
There are several habits that companies need to apply to increase consistency of innovation. First, Ashik Ardeshna, a partner and head of strategic IT and operations practice in North America at consultancy Oliver Wyman in San Francisco, said there should be some level of structured innovation management to bring an idea to fruition. “Bank of the West really took that on with its radical collaboration,” Ardeshna said.
Learning executives should take that point to heart: They can build all the social collaborative platforms they want, but if there is no systematic governance to at least guide the conversation and then do something constructive with the information they receive from employees, communication on such platforms can be fruitless and even counterproductive.
Further, companies need to have strong senior support to drive execution of innovation, not just ideation, Ardeshna said. Bank of the West accomplished that when the executives were included throughout the innovative life cycle.
Lastly, an organization needs to be more forward-looking to establish and maintain some level of innovation in the culture, he said. The core project team at Bank of the West did that by evangelizing the outcomes and radical collaboration process through the testing process through to post-launch celebrations to maintain the momentum. “And they shared the fruits of their efforts with the entire organization, which should be a strong signal for continued innovation,” he said.
As Bank of the West’s learning executive, Arora is now shepherding the new collaborative process throughout the organization, encouraging other functional and business unit leaders to adopt the process for other types of decision-making at the bank. For example, Arora, also head of recruitment, has secured buy-in from department leaders to meet with potential candidates for senior-level positions and get their perspective on candidates’ fit for the organization’s overall strategy.
But for the approach to really work, everyone also needs to be aware of the potential pitfalls. Arora helps by guiding conversations when necessary because he said decision-makers are time-constrained and need to be well-prepared.
“If you don’t engage with them in the right way, radical collaboration doesn’t work,” Arora said. “Our best advice: Take these steps to mitigate risk, prevent heartburn, remove roadblocks and engage with them before you’re in development, so that what you develop will come out aligning with what they want.”
