Banking / Finance

The case for bringing Innovation inside a Bank

Many banks recognize that they need to see digital changes as something that can happen inside the bank if they want to stay relevant in an environment filled with companies trying to cut them out of the financial equation.
“There are a lot of advantages to being a bank,” said O’Malley, who previously was chief executive of PerkStreet Financial, a cards reward startup that shuttered.
A bank comes with assets startups don’t have, like access to data and customers.
Of course, banks also come with decades-old technologies, expensive branches and fierce regulation.
But O’Malley, along with the PerkStreet team members who joined him at Eastern last year, believed they could build things more quickly if they incubated ideas within a bank.
“The real challenge is how to create the soul of a startup inside of an organization,” said Rao, who co-authored “Scaling Up Excellence: Getting to More Without Settling for Less.”
That is going to be perhaps more difficult for banks. All companies face the potential of disruption, but banks have an added difficulty because avoiding risk is often a part of their fabric.
“Banks are, by nature, conservative,” Rao said. “The really innovative ideas involve controversy.”

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