For Alex Jimenez, vp at Zions Bank, the biggest change in the industry has been the reduction in paperwork. “Back in 1999, I remember working on projects to figure out what we were going to do once paper checks were going to be phased out,” he said.
Jimenez joined this week’s Tearsheet podcast to discuss how mobile and digital banking has changed, how to define innovation and how incumbent financial institution should begin to innovate.
Below are highlights, edited for clarity, from the episode.
“I’ve been having these discussions about innovation over the past couple of months. I wrote a blog on the topic and since then, the discussion has gotten more heated. A lot of people define innovation as any type of change or improvement. I don’t define it that way. That may be process improvement, but innovation really is taking a fresh look at a problem and coming up with a new approach to a solution.
There are some real dramatic examples, of course, like the Model T and iPhone. We haven’t really had examples like that in financial services. Mobile banking is really online banking over the phone for many banks. Checking accounts are still checking accounts, with different bells and whistles. There have been some innovation in channels but not really in products. Most banking innovation programs I’ve seen are just innovation theater.”
How a bank should approach innovation
“The biggest issue in innovation is defining the question and not necessarily getting the answer. A lot of people make an assumption that a lack of innovation is the root of the problem and then try to solve it. They’ll have a brainstorming session, come up with an idea, and that’s their innovation. Most of the time in innovation should be spent on the question. Is this the real question? Is this the real problem or are there underlying questions below that we need to answer?
Once you define the question really well, then you can brainstorm, and come up with and test ideas. I’ve seen a lot of groups define a question incorrectly that doesn’t solve the problem and what they end up doing fails. Spend a lot of time with a process that’s very specific in defining the question and then you can begin to innovate.”