In this exclusive interview, Catherine T., head of an innovation program at a major French banking group. She takes us behind the scenes of this innovative initiative, and shares valuable insights into the collaboration between a major corporation and startups; as well as practical advice to help SMEs develop their innovation strategy.
Q: Can you tell us about the innovation program and why your company decided to launch this initiative?
A: This program was launched at a time when our Group was looking to accelerate its digital transformation. Our US subsidiary was already working with a technology partner in California, which naturally influenced the launch of this initiative. The aim was to meet growing customer demands, remain competitive, reduce time-to-market and create value with new offerings. For example, to develop the "beyond banking" concept, which aims to offer services beyond traditional financial products, open innovation is an ideal tool.
Q: How does this program fit in with the Group's overall innovation strategy?
A: Innovation in our Group can take many forms, ranging from the development of innovative offerings in-house, to collaboration with startups, right through to merger and acquisition processes. The program is part of the second aspect, facilitating collaboration with startups.
Positioned as a cross-functional hub for transformation and innovation serving all the Group's entities, the program works with all the innovation hubs in all the Group's businesses: insurance, real estate, retail banking, corporate banking, leasing, payment solutions, and so on. We support these hubs by providing them with market intelligence, a sourcing capability for the best startups, and a methodology for carrying out pilots within a suitable framework, both contractually and physically. The aim is then to scale up.
Q: What criteria do you use to select innovative startups?
A: We evaluate several aspects: the product, the associated technology, the market traction, the team, the investors, and the growth potential. We generally propose 2 or 3 startups to our in-house teams, who then meet these startups to check the fit. Feeling" also plays an important role. While our team often has an opinion on the startup, it's the business that will be working with the startup that remains the final decision-maker.
Q: How do you facilitate collaboration between in-house teams and startups?
A: We act as a bridge between startups and the Group's various departments. We look at over 300 startups a year, and follow around 50 to 60 startups a year, 5 to 10 of which will have the chance to enter the pilot phase.
Our pilot methodology is rigorous. To be able to carry out a pilot, we have to meet certain prerequisites, both on the startup side and on the group side. We then support the pilot throughout the process. This methodology, which includes close monitoring, standardized interviews and mandatory workshops, is put in place to ensure that the project is a success.
Q: What are the main challenges encountered when integrating startup innovations?
A: The main challenges are linked to the length of processes, and the notion of time, which is not the same for a large group as it is for a start-up. Legal, regulatory, IT and security constraints mean that the integration process can take a long time. In any case, participating in this initiative represents a label of quality for startups, making it easier for them to acquire other customers.
Q: Can you give us a concrete example of a successful innovation?
A: An excellent example is a data-driven solution to measure, pilot and automate the decarbonization of IT systems. We accelerated this in 2022. After a tender process and a successful pilot, we are currently negotiating a framework contract. The collaboration began in January 2023 with our retail bank and has been extended to several Group entities. The collaboration is a real success and fully meets the Group's decarbonization challenges.
Q: How does this innovation program help the Group to remain competitive in a constantly changing financial environment?
A: It enables us to rapidly introduce crucial innovations, as was the case with solutions for improving cash flow visibility or deploying cyber insurance. These collaborations give us a vision of future trends, help us to anticipate change, and stay competitive.
Q: What lessons could SMEs learn from your experience for their own innovation process?
A: The principles we apply are equally valid for SMEs. It's crucial to clearly define your expectations, what you want to do in the short, medium and long term, and what you want to internalize or outsource. You need to concentrate on your core business and seek partnerships for the rest. Testing with startups before going in-house can be a good strategy. Finally, monitoring is essential to detect trends and anticipate changes.
Q: What advice would you give to SMEs wishing to implement an innovation strategy?
A: I'd recommend working with a partner who can help them choose the right startups, as we do. You have to remain open-minded, but also learn to decode the world of innovation and startups, whose codes are not the same as those of a large group or SME. It's crucial to be vigilant, to monitor collaborations closely with regular updates, and to be alert to warning signs such as delays or lack of transparency.
Another option to explore is partnering with other players in your ecosystem to collaborate and invest together in innovation. This is a good alternative to costly in-house development.
Q: Is open innovation and collaboration with startups the solution for all SMEs?
A: It may not be the solution to every problem, but it's certainly an approach to be seriously considered. It takes time and learning, and it's important to find the right coaches. This approach can shake up the corporate culture, which can be positive in speeding up certain projects. However, the psychological aspect should not be overlooked, especially when integrating technologies such as AI. It's crucial to reassure employees and involve them in the integration process. Innovation must be implemented gradually, in collaboration with teams, to overcome internal reluctance and accelerate the transformation.
Innovation is essential if we are to remain competitive, propose new offers and better meet customer demands. In an ever-changing world, companies need to explore various options for innovation. Among these, working with startups is proving to be the most agile, least costly and least risky approach. Catherine recommends that SMEs work with a partner to better select startups and effectively monitor their innovation activities. By adopting this approach, companies can not only boost their growth, but also ensure that they meet the growing expectations of their customers while adapting to new market trends.
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