A leading Australian bank has opened a Fintech lab in Hong Kong for collaboration with some of the most promising start-up communities.
12 April 2016
The Commonwealth Bank of Australia – the country’s biggest with market capitalisation of more than A$128 billion – unveiled its first international Innovation Lab in Hong Kong. The Fintech lab, which launched in January, serves as a collaborative workspace, incubator for start-up companies, and as a customer-experience centre. In a twist on the usual incubator model, some of Asia’s brightest start-ups will work with the bank and its resources without ceding control or equity. Tiziana Bianco, Head of the Innovation Lab at the Commonwealth Bank of Australia, explains how the Lab works.
What is your role as head of the bank’s Innovation Lab?
My role is to best position the group’s innovative capability, products and services for consumers, business and institutional clients. This includes the incubation of new ideas, experimentation with different business models and technologies, and the testing of new concepts through working with and alongside the innovation ecosystem.
The Innovation Lab team also works closely with the sales and product teams to embed core innovation capabilities and continue to build understanding of the Commonwealth Bank’s successful innovation story.
How is the Innovation Lab structured?
The lab comprises four main zones to encourage collaboration and conversation and drive experimentation. The “Garage” spaces assist cross-functional project teams in bringing ideas to life; a “Collaboration Hub” encourages staff and clients to deep-dive into specific challenges and to co-create bespoke solutions; a usability testing facility, equipped with the latest eye-tracking technology, enables testing of digital platforms with customers; and the interactive spaces encourage conversations with visitors around key themes.
The “Garage” spaces and Collaboration Hubs are learn-by-doing spaces that are used by staff, clients, start-ups and business partners. The space allows people to work together without barriers, to brainstorm solutions, workshop designs and test prototypes.
Hong Kong is used to drive projects initiated by the Lab, and to conduct innovation training and design-thinking workshops.
What about the usability testing facility?
Here we facilitate the process of obtaining insightful and meaningful customer feedback on prototypes or interfaces for the purpose of rapid iteration. These user-testing facilities are equipped with eye-tracking hardware, microphones, cameras and heat-mapping software, which allows us to learn from customers at every step of the development process.
Internally run focus groups or prototype testing can be run out of these labs in order to gain a better understanding of our customers’ needs as we develop branded products.
Alternatively these facilities can be used by clients as we assist them in testing and refining their digital platforms or interfaces. If your clients are looking to improve the user experience of their websites or apps, then a day of usability testing in our lab could be very valuable.
The lab’s interactive displays focus on a couple of key themes: Big Data, virtual currencies and blockchain, Virtual Reality, the technologies and trends impacting the transport, natural resources, education and property sectors, as well as the latest innovations the bank has released to market.
The displays aim to act as catalysts to encourage conversation around key topics with staff, clients, regulators and other bank partners as a starting point to better identify ways in which we can work together.
Why was Hong Kong chosen to base your first lab outside Australia?
The city’s well-developed financial services sector, coupled with its ability to act as a gateway to the Chinese market, underpin substantial growth opportunities for its Fintech ecosystem. About 600 million digital-banking customers live within five hours flight of Hong Kong. By 2030, that figure is expected to have risen to 2.4 billion. In the Asia-Pacific region, Fintech investments have skyrocketed, from around US$880 million in 2014 to almost US$3.5 billion in just the first nine months of 2015, according to Accenture.
The decision to establish innovation labs in Hong Kong and [later in] London will enable the bank to capitalise on the current depth and future growth of these local Fintech ecosystems, deepen the bank’s innovation capability, share learnings and develop new capabilities with its Australian business, and support its clients in their global aspirations.
How will the bank work with start-ups?
The Hong Kong Lab’s approach to engaging with start-ups is a collaborative partnership model. We don’t look to take equity or run an accelerator programme, but rather work with start-ups on key customer focus areas where synergies exist from working with a start-up to solve a customer problem, rather than approaching the development ourselves.
Essentially that means understanding our customers and where potential needs or pain-points lie, delving into this problem space, identifying potential emerging trends or technologies that may assist in solving these issues, and either developing a solution in-house or, if we are connected to a start-up with an interesting idea or technology, bringing them into our lab and running a proof of concept, testing and iterating this concept with a pilot group of customers and ultimately scaling up the solution to meet the needs of our entire customer base.
This is a win-win situation as it not only solves a key problem for our customer base, but also gives the start-up access to a wide range of customers.
What are the advantages of working in Hong Kong?
Fintech companies are drawn to places where big financial services clients are located and headquartered. Hong Kong is a key financial centre for Asia and the world and acts as a gateway to China. These factors underpin substantial growth opportunities for its Fintech ecosystem.
The Hong Kong lab allows us to partner with the brightest minds across the city’s accelerator, government, university, start-up and Fintech communities to further develop creative and innovative solutions for our clients.
“The Hong Kong lab allows us to partner with the brightest minds across the city’s accelerator, government, university, start-up and Fintech communities to further develop creative and innovative solutions for our clients.”
Can you share some outcomes that have emerged from the lab?
We’ve had 40,000-plus guests from more than 1,600 companies through the Lab. We’ve run more than 40 projects with several now at pilot stage. Among them is the offers and loyalty app, in partnership with [shopping centre developer and operator] Westfield.
In just 10 weeks, the team successfully built a prototype, a back-end app to test with staff. The user test base is small at present, with about 2,000 registered users viewing at least two pages a day when they engage with the app. Merchants are using the platform as a new marketing channel and the bank is continually learning about the effectiveness of beacon and geo-location marketing techniques.
A resounding theme for businesses visiting the space has been how we have built and continue to develop our culture. We are very open and transparent about the working practices we use and our programmes such as Unleashing Innovation (a bank-wide crowd sourcing programme that encourages a bottom-up approach to innovation where staff members can submit ideas or write a business case). Successful ideas move into the Innovation Lab for incubation. For example, Cardless Cash was an idea enabling clients to withdraw cash from an ATM by using the CommBank App without a bank card.
We have also been piloting an initiative called CANapult, a DIY kit that empowers staff to turn an idea into a prototype using a detailed guidebook, innovation tools and a small budget.
Visiting the space has inspired our clients to create an area in their business dedicated to innovation where teams can come together to work on innovation initiatives in a less formal environment that is set up to enable more creative thinking. You can see our guests leave with ideas they can take back to the workplace and implement easily for maximum impact.
- Banking Services
- Hong Kong