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Great user experience is the primary goal, then start thinking about scaling

Great user experience is the primary goal, then start thinking about scaling

Paul Jennekens

Manager Marketing

09 September 2016

Great user experience is the primary goal, then start thinking about scaling


In order to become innovative, companies need the right people with the right skillset in the right teams. There should also be an infrastructure in place to remove barriers of compliancy, according to our previous blog on innovation at Dutch bank ING. The next step is the actual work; how can ideas be turned into valuable concepts and products or services with excellent user experience? In this blog Willem Schellekens, Cofounder of the ING Innovation Studio and ING’s corporate accelerator, talks about the changes in operational business and the importance of an autonomous team. Schellekens: “Hierarchy is killing for innovation.”

In the end, innovation has to be realised and ideas have to be turned into workable concepts. Schellekens states that the best way to achieve this, is to change the organisational structure from waterfall to agile. No more immense projects at the same time, to find out and the end that the customer has no interest in the developed service. The operational business has to be fast and flexible nowadays, that is what agile stands for. Schellekens: “Agile is about pulling short sprints, short goals with quick results.” This means working by the ‘build, measure, learn’ principle with constant feedback. “That is how you learn what works and what doesn’t, so you can constantly improve the product or service.”

Become agile or lose velocity

That is why the Dutch bank started working with squads and tribes. ING wants fundamental units in the future organisation with self-steering, autonomous teams of up to nine people. Those teams are responsible end to end for their own customer related missions. The teams (squads) are built around different disciplines with different areas of expertise and different backgrounds. A tribe is a collection of squads with interconnected missions, who work together towards a common goal. With this organisation structure ING becomes agile, which means the bank is flexible in adapting to the needs of the moment.

That agile way of working is quite challenging when a company wants to run an experiment and at the same time has to deal with various stakeholders, such as compliance, operational risk, branding, legal and IT. “Each stakeholder has its own interests when you are trying to find out if customers are interested in a particular proposition, which means that you first need to jump through a thousand hoops to meet all the requirements of the stakeholders. You will lose so much velocity that it becomes difficult to realise the proposition,” according to Schellekens. “It is much better to first find out whether the consumer is interested in the product and take the rest of the considerations into account in a later stage.”

Schellekens believes that innovation should be about what the consumer wants and not about what companies think that a generic group of people want. “It is a dynamic world of rapid change, where you need to find out what the consumer wants or needs. To offer a solution is just one piece of a larger puzzle, because the most important question is: did you understand the problem completely? If you do not understand it, the chances are small that that you will come up with an appropriate solution.” A lot of companies start their route to innovative services or products by segmenting customers into generic audiences to consequently develop overall solutions. “This is how you get products that nobody is enthusiastic about. What we really want to see is that you develop something fantastic with a great user experience for a small audience and then start thinking about scaling.”

Hierarchy is killing

What is important for innovation is a certain autonomy. Schellekens: “Hierarchy is killing for innovation. What you want, are autonomous teams that are able to take decisions based on knowledge they already possess.” This means the end for traditional silos, because to innovate you require all of the disciplines in the organisation to carry out an idea. The self-managed teams need to have designers, developers and marketers. Previously there were only sales or development departments which can carry out one task, but cannot solve the entire customer proposition for a specific problem or solution.

This means a radical change in the operational business of a lot of companies. It is therefore crucial that this transformation is backed by the highest echelons of the company. “It should not be an uphill battle,” according to Schellekens. “Make sure that innovation is included in the company’s strategy and that 20 percent of the revenue in 2020 should be generated through new initiatives, for example.” If these KPI’s are not set as objectives, it will be very difficult to control them and maximise profit, while developing new initiatives.” Innovation is not a separate division in the company. “If you want to innovate, this means a complete transformation of the entire company. It is never done, because it is a constant reassessment of the business; the ‘build, measure, learn’ principle not only counts for specific innovation projects, but also for transformation of the business.”

A platform to facilitate innovation

So it’s a constant movement in which you need at least three to five years to get up to speed, according to Schellekens. But in the meantime  so many new things will happen that you will have to keep moving. It is also important that you determine the vision of your company in relation with the development of innovations, because it is possible that those will change the nature of the business. But is that a bad thing? “You can say that ING is a bank where people store their money. Or you can say that it is a platform with a variety of services for the whole society. In the latter case, the company will get a different proposition which enables future innovations more easily.”

When the company is finally turned into a platform that enables and facilitates innovation, how do you know if an innovation is a success in this rapidly changing world? “You should turn that question around. It is not about what innovation brings, but whether or not banks can afford not to innovate?” Schellekens takes the fintech companies in Silicon Valley, Tel Aviv and London as an example. “They provide a great customer experience and that is how they get traction. You should not see this as shark attack, but more as a piranha attack. They take small bites out of the business model, but if banks quietly lean back and wait for innovation, they will be eaten before they know it.”

Several indicators in different phases

Banks cannot afford to wait to innovate, which is a challenge because it is difficult to invest in new technologies and simultaneously maintain the levels of service. What can they do to find out if a particular innovation is a success? Schellekens: “There are several indicators in different phases of the innovations. At the very beginning you want to have learnings to find out if the customer problem is big enough. If you really come up with a solution, you want to know the status of the adoption of the solution; how many people use it, is it viral and are they happy with it? It is also possible that banks need to stop certain initiatives to free resources for other projects.”

These are all indicators of a certain degree of success and it is therefore highly dependent per project, to determine the success. To measure it banks will need to have overview and insight. Schellekens: “Innovation should be seen as a funnel and with a portfolio approach.” A funnel is needed to see how fast a team is going and how much traction they get. The portfolio approach means that you look at how many innovations you have and in which phase those are. “That includes that banks will need to have an investment horizon; what will be the next big thing in payments, such as blockchain or artificial intelligence. Those will not be reality tomorrow, but it is important to follow these developments and take the next step. We are all working on these initiatives and I assume most banks do, which is a step further than follow. We aim to generate validated business options and viable business. Whatever technologies or business models will arise; the customer experience will always make the difference.”

Some technologies still seem like a small dot on the horizon, without knowing what the full potential is. How do banks know when to embrace these innovations? Schellekens: “The same is true as before: can banks afford not to?”