How Citi and Wells Fargo are creating cultures of innovation

It’s easier to change an organization’s technology stack than its culture or talent pool, and for banks, sometimes the biggest obstacle isn’t technology or regulation, it's force of habit. Wells Fargo and Citibank know that now. Both banks have created dedicated innovation units within their organizations in 2015 -- Wells Fargo’s Innovation Group launched in July 2015 and that October, Citibank launched Citi FinTech -- to help accelerate the banks’ delivery of digital products and services. Citi FinTech is specifically focused on mobile-first experiences. Carey Kolaja, global head of product at Citi FinTech, and Sherrie Littlejohn, executive vice president of Wells Fargo’s innovation group, spoke at CB Insights’ Future of Fintech conference in New York Wednesday and talked about the challenges they’ve faced trying to rebuild company culture from inside. Pushing the limits of ‘no’ Innovators get told ‘no’ a lot when they’re pitching new projects. Innovation can be too expensive to implement, too difficult to implement, or just plain old be out of line with regulatory requirements. A lot of that comes from bankers on autopilot that are just too used to the stodgy old bank culture Citi is trying to change. “We still live on a lot of historical architecture, but what has really encumbered us is people, and the perception that the limitations are the regulatory environment,” Citi’s Kolaja said. “Changing the way people look at why the ‘no’ is there has been really important.” That’s not to say that regulatory compliance isn’t important or that regulation isn't there to protect people. But having leadership that pushes back on why people on other parts of the business say no to innovation has been a big part of the equation for Citi FinTech. Kolaja explained that twice a week, the product team meets with representatives of the controls team, which oversees the pace of changes in products, processes and the legal and regulatory environment. “We walk them through the user story and walk them through the product we want to build,” Kolaja explained. “In doing so we expedite the process, but the big learning there was we have people who say ‘you can’t do that.’” Often though, they say that “because it was an old policy or it was opinion.” Educational opportunities Technology moves so fast that it can seem natural to hire the right talent for its increasingly digital operations and processes from the outside. But Wells Fargo’s Littlejohn, said that as important as it is to seek new talent and partner with the right startups, it’s just as important to develop existing talent. Banks have sought to invest more in young tech talent and data scientists and some are facing competition with financial startups over college graduates. While many say it can be difficult to find the right people, Littlejohn said she sees that as an opportunity for Wells Fargo, which might not be doing enough internal training and development around new technologies. “Thats one of the roadblocks we have: we’re so busy operationally trying to keep things running that we haven't seen a way to make room for ourselves to learn and train and teach and be curious about how to make this new world come to fruition,” she said. “We need to educate our team members to understand what these new technologies are.” The fact that new technologies that automate antiquated processes removes the need for some jobs is a harsh reality, she added. Historically, whenever new technology has eliminated old jobs, there has also been job creation. Wells can foster the talent for those inevitable jobs internally as well as seeking new skills externally. She didn’t say if the bank is preparing for that now, just that it’s an area of opportunity. “Culture is difficult,” she said. “Being afraid that suddenly you won’t have a job tomorrow — that's real for people.”