Paul Steenkamp, Head of Innovation Capability, Standard Bank, chats to Ventures Africa about his unique role at Standard Bank, one of the largest banking groups on the continent.
VA: You recently joined Standard Bank. Why?
PS: I’m delighted to be working for a bank that is helping Africa realize its potential, and is committed to remaining relevant, profitable and sustainable.
VA: What’s your role?
PS: I’m helping to build a metaphorical playground within the bank. The playground is designed to be irresistible to the entrepreneurially inclined employee. People come to the playground to solve for heartfelt business opportunities or challenges – that matter most to our customers. I spend the rest of my time protecting those on
the playground from stuff that doesn’t matter to our customers.
VA: A playground? Sounds fluffy. Isn’t banking a serious business?
PS: Don’t get me wrong. We are in the business of generating sector leading Return on Equity, and that is our top priority. How we choose to do so using innovation as a lever is what excites me.
Banking is serious. It’s seriously exciting. I can’t think of a more exciting sector to be in right now. It’s the poster child for disruption.
VA: Banking? Exciting? Really?
PS: Absolutely. The challenges banks face are massively juicy. Increasing costs of compliance, technology disruption, non-traditional competitor pressures, social and behavioural change. The list goes on and on. If you’re a puzzle junky, banking’s the place to be.
VA: Many of us are up for a challenge, but banking? I’m not convinced.
PS: Banking allows us to touch millions of businesses and lives every day. Banking is at the center of the economies and communities we operate in. In the most innovative companies in the world, regardless of their size, sector and age, employees feel a sense of purpose in what they are doing. Standard Bank is in a unique position to make a difference in the future of this continent, and that makes the work meaningful and energising.
VA: That’s assuming Standard Bank survives the tsunami of disruption hitting the banking sector?
PS: Agreed, the trick is remaining relevant. It is vital if we are to remain profitable and sustainable.
VA: Relevant. Is that the new term for innovation?
PS: I wish it was. There are often lots of acidity and baggage associated with the term innovation in a big organization like ours. Innovation is not a fuzzy “nice to have”. Nor is it limited to ‘sexy’ customer facing products and channels. It is a discipline. It is everyone doing things better and differently – in every part of our business, and at all levels.
VA: How will Standard Bank stay relevant?
PS: One of the ways to remain relevant is to embrace open innovation. This means we’re open to partnerships that are mutually rewarding and help deliver a great customer experience. Gone are the days when we want to build, own and operate everything ourselves. We believe in the power of 1 + 1 = 3.
VA: Who are you willing to partner with?
PS: If it’s commercially viable to do so, we’ll partner with third parties, suppliers, universities, start-ups, fin tech companies – even non competing banks from across the globe.
VA: You’re willing to partner with other banks?
PS: For sure. In the first week of December, we’re bringing together a select group of the world’s most forward-thinking banks to share their innovation experience and strategy. The primary goal is to determine collaboration opportunities and cross-pollination potential between like-minded yet non-competing banks. With a specific focus on innovation, participating banks enjoy opportunities to connect, share, learn and grow through a series of workshops and events. We will also explore partnership opportunities with leading fintech firms from around the globe, who will pitch via the ‘Matchi Global Innovation Challenge’ for their place to present their agile design and build skills to the participating banks at the summit. We’re sponsoring and hosting this inaugural Summit with Matchi. Matchi is an Innovation Matchmaking platform that brings banks and innovators together. We helped co-design this platform which showcases a collection of market-ready solutions for many of the challenges that impact delivery to our clients.
VA: Is embracing open innovation enough?
PS: No, we also need to become more agile in the way we manage ourselves and organize work. We need to enable all types of innovation – from the very big to the very small. If doing something better or differently helps turbo charge our strategy, we must do it. And we also need to attract, retain and engage the best talent.
VA: What do you mean by from the very big to the very small?
PS: An innovation can be something radical – a game changer that disrupts banking or another industry. These innovations win awards and attract lots of media attention. They’re fantastic. They help build mojo amongst stakeholders, but they’re easily copied. Standard Bank has a proud track record of these kinds of innovations, including more recently, the launch of SnapScan and MasterPass.
Innovation is also about taking care of the deep plumbing. Without a solid foundation, sexy innovations like the ones referred to above can’t be delivered. Standard Bank’s core banking transformation represents a massive, complex, systemic innovation that takes many labour years to implement. And it’s not for sissies.
The market tends to view Standard Bank as conservative, but in the case of our core banking transformation, my view is that the bank has shown how progressive, brave and committed it is to staying relevant. It’s something our direct competitors have side-stepped for years.
While regeneration at foundation level is critical, the biggest part of our innovation portfolio must be made up of really small, quick wins. Every single Standard Bank employee is capable of doing something better or different within the context of our own day job. Cumulatively, these incremental innovations are an enormous source of competitive advantage. What’s more, because they aren’t visible to our competitors, they can’t be copied. Each one is low risk – it can’t break the bank. And perhaps best of all, these quick wins help ‘democratise’ innovation – allowing for all of us to be involved and play a part.
By the way, we are already shooting the lights out in this space. There are a number of highly successful incremental innovation related programmes running throughout Standard Bank, that are generating hundreds of millions of Rands of verified business benefit annually. I’m excited about how much value will be unlocked when we extend and align these programmes across the entire bank.
VA: Talking innovation is one thing – enabling and cascading innovation within a large and complex business is another. Is that where the playground comes in?
PS: Yes. Standard Bank is jam packed with people who understand our strategy, and know what needs to be done in order for us to realize it. We need to trust and empower these people to implement innovations that deliver the bank’s strategy.
Autonomy is a key ingredient in building an innovation capability. We are not proposing that people recklessly abandon their day jobs. Rather, we’re creating an environment that not only encourages discretionary effort, but it facilitates it too.
PS: To win in an increasingly competitive and uncertain future, we need to attract, retain and engage Masters of the Banking Universe. Given the raging War for Talent, it’s equally important that we grow our own superstars. Most superstars are obsessed with developing mastery – and it’s vital that we accommodate them by providing room and resources for them to ‘play’.
VA: Any parting advice for business leaders out there?
PS: Don’t wait for the perfect strategy, operating model, practices, processes and technology before infusing innovation into your business. Work to surface and enable the real heroes in your business, those who are brave enough to take accountability for doing things differently and better. Innovation is not a silver bullet. In this fast changing world, innovation is increasingly becoming less of a differentiator, and more of a ticket to the game.
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