How to overcome roadblocks in financial services innovation

Frank Gargano

Innovation often requires leaders to pivot entire institutions toward unfamiliar offerings, a task that can be difficult to manage.

To help ease this burden, banks of all sizes are enlisting the help of fintech firms to develop new services such as online account opening platforms and gamified finance applications. But with each added product or acquisition, come challenges for ensuring that the projects don't fall behind schedule and become obsolete.

Speakers on a panel discussion Tuesday at the Most Powerful Women in Banking conference offered advice on how to maintain communication across teams within an organization and navigate multifaceted initiatives.

The Most Powerful Women in Banking 2023

The Most Powerful Women in Banking 2023

September 27, 2023 8:10 AM

Speed is a crucial element across many stages of a product's development lifecycle, from idea to execution, and requires properly assigning skilled staff members to keep the pace of work moving, said Diane Morais, president of consumer and commercial banking at the Detroit-based Ally.

"We think about how we can cut out fat, how we can make sure that the right people are in the right places so that we're clearing barriers. … One of my favorite sayings at work is 'you're looking at your calendar, I'm looking at my watch,'" Morais said.

Morais has been with the organization since 2008, when she started out as a deposits executive and went on to lead the company's Ally Bank unit as its president and CEO from 2015 to 2017. In her current role, she spearheaded Ally Financial's efforts to eliminate overdraft fees last year and has added a new credit card and a wealth management service. 

Ally Financial has launched several tech initiatives this year, including a cloud-based platform for artificial intelligence projects and single sign-on capabilities for consumers.

Morais emphasized that "informed and measured speed matters, not stupid speed," and part of that means "knowing who your teammates are and making sure that they are there from the beginning" of any project, she said.

"The times that we see that things did not go well and we got tripped up on the 5-yard line is when somebody maybe didn't have that necessary context from [the start] and is now asking all these questions standing on the brink," Morais said. "So we get all of our partners in early to not get out of alignment."

But before addressing concerns about managing campaigns, securing the confidence of other decisionmakers within the company is the first key hurdle to navigate when deciding if a tool is a best fit for all involved.

Bridgit Chayt, head of commercial payments and treasury management at Fifth Third Bank in Cincinnati, explained how tenured executives are often concerned about the initial and long-term impacts that unfamiliar concepts could have when faced with rapid development.

"With speed, people are concerned about what they don't know and what's ahead if we're going really fast. … When we go throughout the organization to convince others that we have an opportunity for innovation at speed, we also make sure to tell them how we can exit as well," Chayt said.

In her role for the $206.4 billion-asset Fifth Third, she oversaw its back-to-back acquisitions of payments company Rize Money and Big Data Healthcare, a commercial-payments fintech, that closed in the same week this May. The newly added companies empowered Chayt and her team to aid the bank's business clients with improved cash flow management and automated payments.

Chayt remarked that it's important to remember the original purpose of the acquisition "as they have something you don't" while underscoring how the value of the deal is greatly impacted by the level of assimilation after the fact.

"Whether that was in the mindset, or whether it was the technology, there was a formula there that was working that you weren't recreating in your own organization," Chayt said.

The concept of partnerships with fintechs has grown across the financial services industry, as regulators draft supportive legislation and credit unions with smaller economies of scale adopt modern solutions that would otherwise be out of reach.

In the last few months, the $7.7 billion-asset Michigan State University Federal Credit Union in East Lansing and the $17 billion-asset Mountain America Credit Union in Sandy, Utah, joined the cohort of institutions working with third-party firms to better aid communities of underserved members.

Panelists highlighted the importance of recognizing the benefits of these campaigns to consumers.

"We're in the business of trying to help our customers be more successful," Chayt said.