Random Thoughts

I sympathize with the present day inventors who claim great inventions. Their so called great inventions do not see the light of the day, after they announce over the media. I have some questions to ask.

- What went wrong with such inventors and their inventions?

- Where to start ideas for successful inventions?

- Where to breed such inventions?

Possibly our inventors focused mainly on what they could offer instead of what the users wanted. Possibly our inventors tried to generate a new concept or idea and tried to sell them.

Invariably all successful great inventions addressed then existing pain or problem areas and tried to innovatively address the unimpressive solutions to them. Some were thus in fact just an improvement to existing processes and/or products.

An ideal approach paper for innovation process should address customer focus, cost focus and regulation affects.

The innovators in the financial industry initially and mainly attempted at reducing transaction and information costs, search cost, portfolio selection cost, monitoring costs, risk management costs and liquidity costs. Great scope existed then. (Even now?)

I have highlighted the cost aspect in the beginning itself as it is Challenge Number 1 in the list of challenges faced by financial institutions which are:

- Reduce cost of acquisition of new customers

- Retain credit worthy customers

- Maximize profit contribution per customer

- Optimize fee income and interest income

- Reduce cost of delivering the best people service

- Quality at low transaction cost

- Maintain a high quality portfolio

Regulation also plays a major role in innovation as its affects are to be provided for in addition to customer focus and owners’ cost concerns.

Our financial institutions will always need to Segment markets and build up in depth knowledge of customers, Develop wide range of demand driven products and services, Leverage on appropriate technologies and Develop multi channel networks for delivery of products and services. You name any innovation effort in financial industry. It will fall under any one of these major areas.

Action Plans

The cluster approach is the ideal approach to innovation efforts. Clusters are geographic concentrations of interconnected companies, specialized suppliers, service providers and associated institutions in a particular field according to Michael Porter who popularized the concept in his book The competitive Advantage of Nations published in 1990. Clusters tend to increase the productivity of their constituent companies, drive innovation in their industry and stimulate the creation of new business.

Blends of minds and money produce the best cocktail of productivity, patents and economic growth. Our venture capitalists have a sure role to play in innovation efforts. I know some very good ideas could not be taken to the next level, just for the sake of initial seed money. They were not spotted by the VCs or the promoters of the ‘ideas’ were afraid to market their ‘ideas’ to attract investment.

In financial industry co-creation could be easily attempted. Customers could be invited to offer suggestions for new products or services or the improvement of existing ones. Business partners could contribute to the development of new products or processes. As it is a process in which a product or service is developed through a collaborative efforts with external partners, it may meet with higher levels of acceptance and success. At the cost of repetition, I would like to mention that innovation in financial industry will depend more heavily on collaboration.

Innovation ultimately comes down to talent and focus. One will need likeminded people who are not just passionate about having ideas but about developing them too. Talent, innovation, and creativity are not distributed evenly; they concentrate in specific locations.

Make my wallet slimmer

Here goes my Idea No.1 for Innovation.

My wallet ordinarily contains wad of currency notes (not more than ten pieces at a time), just one foreign currency coin (Japanese 50 Yen Coin – I like the design of the coin!) though it is not a legal tender in my country of residence and many, literally, many cards – driving licence (national, international), credit cards (three banks!), debit cards (three banks!), PAN Card (Income Tax Card in my country), Voter Identification Card.

All these cards add to the thickness of my wallet. Even if I don’t have wad of currency notes, one who has an outside look, will feel that I have a very ‘thick’ wallet. I have a different issue. Despite this feel look factor leading to better outside appreciation, I have a problem at hand. It is quite unwieldy to carry this wallet.

Can you help me to make my wallet slimmer?

In the first phase, why cant I demand from my bankers to issue single card which can be used as a debit and credit card. It is for me, when to use the card as a credit card or debit card. I don’t need two cards for the purpose. I am not an illiterate to be provided with two cards with two different colours and background to identify them as a debit or credit card. This will straightaway reduce the number of cards, I use by half.

In the second phase, why can’t all the banks in the world sit together and facilitate their customers (like me) to hold me only one card where I will have all these banks’ credit and debit cards are loaded. Just one card I will flash - I will have the option to use Bank X, Y or Z’s Debit or Credit Card!

Well. I have tried to put my problem and pain area strictly speaking from my personal experience!

Are there any takers and facilitators?