OPEN INNOVATION & CROWDSOURCING AS MODELS FOR BANKS

Selena Sol presents…..

selena@selenasol.comhttp://www.linkedin.com/pub/eric-tachibana/0/33/b53

http://www.slideshare.net/selenasol

a thought piece for a banking conference in Malaysia

As an industry, we’re reasonably good at Top-Down Innovation

But we generally suck at Bottom’s-Up or Outwards-In Innovation

X

X

Don’t misinterpret!

Stay good at Top-Down Innovation

But also develop other forms so that you have flexibility as a leader

Though nowhere near the end of our journey at UBS, we’ve made some

solid progress

Open Innovation

Transforming vendors into partners is scary, but has huge ROI potential

Open Innovation means questioning assumptions about your business

model

Anti Money-Laundering

Kno

w Y

our C

lient

Regulatory ReportingPayments Exchange Connectivity

Sof

twar

e D

evel

opm

ent

Loan OriginationCore bankingMobility

QUESTIONWhat are your core competencies?

Market Data

Data Centers

PROPOSALA bank:

• holds your money safely • helps you grow it• helps you transact

That’s it.

Everything else is a legacy assumption

That can be challenged

Challenge your core competency assumptions

Then open innovate non-core functions

transform your business

Homework for Banking CIOs

• Toyota doesn’t build carsLean Production Value Chains

• Amazon is not a bookstoreLong-Tail Fulfillment

• Cisco doesn’t create new productsthe very un-tech tech company

Open Innovation also helps us deal with a built-in risk-averse

industry personality

Our business model is risk averse

Our people self-selected for risk-averse personality types when

they applied

This makes us great at incremental, ‘riskless’ innovation

But makes us crap at disruption

Open Innovation can help with this Achilles heel.

Open Innovation means developing 3 integrated skills

SensingExploringAbsorbing

Quiz

How many of the following companies do you know?

• First Meta• Play Moolah• Investo Presto• Bill Pin• Pandai

Don’t fly to Silicon Valley!

Companies disrupting financial industry models are bursting

through the pavement of Asia’s cities right now, if you look.

SINGAPORE SINGAPORE

WHERE WE CAN FIND INSPIRATION

• Digital Payments• Leverage

Innovation & New Product Incubation consultancy

• Biotechnology and bio-informatics algorithms

INNOVATION CLUSTERS• Interactive Digital Media (Social Media)• Biotechnology• Mobile payment• Cloud (AWS hub)• Water tech / clean energy

TRENDING MACROECONOMIC DRIVERS• Small size, business-friendly, managed

economy• Financial industry domain & IT skills abundant• Regionally-strong entrepreneurship

infrastructure• Device savvy population – multiple devices

per person

INCUBATOR, VENTURE, GOV’T COMMUNITY• SGEntrepreneurs• Founders Institute• Singapore Venture Capitalist Association• Information Development Authority Singapore• BANSEA

UBS INNOVATION POTENTIAL 9/10Relevance to UBS biz HighMobile penetration HighInternet penetration HighUniversity Base HighR&D Infrastructure Mature

WHERE WE CAN FIND INSPIRATION

• Look to gaming and gamification for next-generation user experience

INNOVATION CLUSTERS• Massively Multiplayer Online Role Playing

Games (MMORPGs)• Fashion and entertainment

TRENDING MACROECONOMIC DRIVERS• Korea Chic• Language barriers

INCUBATOR, VENTURE, GOV’T COMMUNITY • Korea Venture Capitalist Association• Private Equity Korea

UBS INNOVATION POTENTIAL 9/10Relevance to UBS biz MedMobile penetration HighInternet penetration HighUniversity Base HighR&D Infrastructure Med

SOUTH KOREA SEOUL

Go out and get involved• Research institutes• Local Start-up scene (setup an internal start-up club)• Existing vendors

Do something weird

Some of the next-generation work in big data visualization comes from

bio-informatics and television production, not banking.

Learn by investing in targeted corporate ventures

Crowdsourcing

Crowdsourcing eats waste

10% of everyone’s time is spent waiting for someone else at work

If you have a regional headcount of 1,000, that is 100 FTE’s worth of

effort that is idle.

What could you build with 100 spare people?

Who wouldn’t love to spread their wings and get out of the day-to-day

grind from time to time?

Crowdsourcing is a great way to create cross-business and cross-location relationships, naturally

Case Study: UBS Just Do It Program• 3 - 5 day projects that are not urgent• Need “onboarding” support