Practical banking innovation

Those involved in innovation tend to be enthralled by the new and shiny. Quick, agile institutions are young and spearheaded by founders armed with disruptive business models and even more disruptive technology. However Jamie Broadbent, head of digital, innovation and design at RBS International (RBSI), feels “there is something kind of magical about working for an institution that’s 300 years old … and is still here”.

Based in Jersey in the Channel Islands, RBSI is the offshore commercial banking arm of NatWest Group. The bank is currently reimagining itself as a relationship bank for the digital world. Mr Broadbent says this is not about taking everything the bank offers and making it digital, but more around “understanding how the world is changing, how people’s behaviours are changing and then slotting the bank into that”.

Mountain to climb

One of the changes that most excites and scares Mr Broadbent is the maturing of Generation Z, or ‘Zoomers’ as they tend to be called in the mainstream press. This group generally consists of those born between 1997 and 2010.

“I think this next wave of consumers is going to change the game [because] they are tech native,” he says. “They are motivated in very different ways: they think differently about education; they think differently about careers [and] about money.”

One of the ways Mr Broadbent says Zoomers are thinking differently is that they are “seeking purpose”. This generation values diversity, equality, individualism and fairness, but they are also financially prudent and have absolutely no relationship with the banks of today, he says. “They want to deal with organisations that stand for things that represent who they are,” he adds. 

Mr Broadbent argues that the traditional banking industry will lose this demographic if it fails to reinvent itself around them. 

“I’m not sure the folks that represent our bank at the most senior levels necessarily get that,” he adds. “We’ve got a real mountain to climb in order to reengineer in such a way that we’re going to be relevant for this next wave of consumers.”

Narrow focus

In his role as head of digital, innovation and design, which he has held since 2019, Mr Broadbent spends a lot of time meeting with emerging fintech companies hoping to sell into banks. His experiences have led him to discover that “not all fintechs are created equal”. 

One common issue is dealing with fintech companies that are “in love with their own solution”, he says and have not focused on the bank nor its problems. 

“I might agree to an hour meeting, and I get 55 minutes of ‘this is us, this is what we do, this is why we’re fantastic’ and then we get to the last five minutes: ‘So, do you want to buy what we’re selling?’,” he quips.

“It’s that car-crash moment where you go: ‘You don’t really understand who we are and what we do, and the problems that we have.’”

The best fintech companies are the ones that have taken the time to understand the needs of a particular bank, such as the space they operate in, their customers, their challenges “and then come with a very targeted approach”, says Mr Broadbent. 

Another big challenge is around pace and expectations.

“Fintechs have a culture of move fast and break things,” he says. “The second that the bank doesn’t work, that’s a big problem so, instead what we do is … we innovate in a way that is controlled and safe and steady.”

Learn from each other

The most successful fintech companies he sees are those who have brought bankers into their ranks who have experience with the pace of innovation at traditional financial institutions. 

“What I would love to see going forward is a bit more fluidity of people movement between the two camps,” he adds. “Rather than fintechs over here and banks over there, I think we would really benefit from mobility in both directions and that would ultimately lead to improved conversations and [allow for] better collaboration.”

Mr Broadbent admits that there are elements of banks and financial services that can stifle innovation, such as legacy technology, arduous governance processes, long project cycles and heavy regulation. However, “it is a genuine privilege to work in an industry that absolutely everybody is affected by — absolutely everybody depends on the movement of money,” he says. 

Money is like oxygen, he posits. “When there’s plenty of it, there’s not a problem, the second you don’t have enough, it’s all you can think about.

“The role of financial institutions to really help people thrive in life is massive, and can’t be understated,” he adds. “If you’re talented, smart and you want to really make a difference in the world, consider financial services, because there you can really have an incredible impact.”