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How Banks Can Build Digital Intelligence to Achieve Digital Maturity and Drive Micro-Innovations

Aamod Gokhale

Managing Principal, Business Consulting, EPAM
  • Financial Services

In 2008, P&G and Google did something quite unique: they agreed to swap some employees “to learn how each company targets and markets to consumers.” It was only about a few dozen employees, but they reportedly learned a lot from one another in regards to how each business tackles online marketing.

The unusual experiment underlined how organizations can think of innovative ways to provide experiential training to employees on new skills. Ask any Learning expert about the most effective ways to train and you will hear of 70-20-10 and OSF models or research that essentially says that on-the-job learning is the most effective by far.

Therefore, it’s surprising that for all the effort banks have extended to digitally transform their businesses, this key element of employee training has been addressed by most with only a traditional change management approach. 

Change Management and Innovation

It is true that to many employees, the word ‘digital’ equates to automation and potentially losing their job. This poor understanding needs addressing to overcome natural resistance. Change management is of course critical, but equally insufficient. Traditional approaches have aimed rather low, trying to help employees cope with the change, rather than help them become if not evangelists then at least smart workers who understand customer centricity, customer experience and technology as a tool to express creativity at work.

It is another story that even these limited training efforts have faltered due to under-investment. The result is that, even as banks achieve higher maturity on the technology side, their overall digital maturity, or digital quotient, at an organizational level remains low, impacting competitive ability, innovation and employee morale. Ergo, banks urgently need to look beyond the traditional re-skilling methods.

The link between high digital intelligence1 of employees and innovation has been vastly underrated. When enabled and empowered sufficiently, an organization’s workforce represents a highly potent engine for innovation. It is also a huge factor for successful execution of digital strategy and has impeded banks’ adoption of Agile at scale.

What is Bottom-Up Innovation?

Employee-led innovation and the internal marketplace of ideas are, of course, not new concepts. They have been widely practiced for decades with great success. For example, the story of Richard Montanez, the janitor at Frito Lay, who came up with the idea for Flamin’ Hot Cheetos is being made into a movie. 3M is an iconic company famous for its innovation — much of which is employee-originated. Recently, the likes of Google and Facebook have benefitted hugely from tapping into the collective intelligence of the workforce. Bottom-up innovation is part of the cultural fabric at these companies and is rightfully nurtured by management.

It is not that banks don’t have processes and systems for encouraging innovation and capturing the ideas of employees. DBS is upskilling its employees in a big way and training contact center employees for new emerging roles. Deutsche Bank reports statistics on employee-led innovation in an annual HR report. However, compared to the success at Facebook, Google or 3M, banks by and large have not been very successful yet, despite the trainings, innovation management processes and sincere efforts toward evaluation and implementation of employees’ ideas.

Problems arise in the failure to sufficiently ingrain digital skills, values and cultural aspects in employees, mainly due to a lack of sufficient hands-on experiences and micro-innovations. Without a high level of digital intelligence across the board, banks cannot hope to achieve their digital ambitions nor match the technology start-ups on innovation. 

A Framework to Fuel Bottom-Up Innovation

Innovation is the source of competitive advantage in the digital economy. But it is not a one-and-done trick — it requires continuous innovation and the ability to quickly follow a competitor’s innovation. Innovation labs are useful but limited in their output and impact. One, they are small teams, and two, they typically operate in a partially isolated environment.

So, the question becomes how to leverage the hidden talent and ideas of the large workforce in a typical bank to fuel innovation at scale, continuously. We recommend a combination of approaches with the aim of creating expanding and self-accelerating cycles. For example:

  • Short trainings at the beginning in addition to on-demand trainings on basic concepts, methods and tools. Using new-age EdTech solutions can vastly improve how employees experience such trainings
  • Design thinking workshops to identify and prioritize problem statements within the employees’ own area or function
  • Co-execution of small projects (MVPs) with available tools or approved open source tools with scrum teams composed of a mix of trainee bank resources and experts
  • Hackathons to periodically generate new, exciting ideas and get employees to apply design thinking principles and other techniques to solve internal or external problem statements to spur innovation, design thinking and collaboration among diverse groups

We advocate for a pilot program in a select department or group, and then gradually scaling up the program both horizontally and vertically, meaning across departments and with more and more employees, micro-projects and MVPs. Technology is used as an enabler, and it is better to limit it to a few easy-to-train and easy-to-use tools which do not require computer engineering or programming expertise.

A very important final step after each iteration is to pick the most enthusiastic, innovative and skillful employees, then reward them and encourage them to become digital evangelists to convert or help others. This helps social learning within teams and also makes it scalable. The circle of evangelists expands and accelerates learning within. In reality, solving their own problems, bringing their own ideas to life and getting the confidence to actively transition to a digital future are very strong rewards and motivators by themselves.

Additionally, select employees can be periodically appointed to the innovation labs or even to start-ups incubated or funded by the bank to give them exposure and opportunity to hone their skills and bring their ideas and experience to formal innovation efforts.

Outcome Orientation

Like all digital transformations, digital intelligence and micro-innovation programs also need to be measured in terms of outcomes. An advantage of the above approach is that banks can start realizing benefits in the short term and scale without a proportionate increase in investment with time. There are frameworks and methods to measure innovation index and digital intelligence at both individual and organizational levels to allow objective assessment and tracking.

Adopting a hands-on learning approach aided by tools and executed by a combination of digital experts and bank employees will help to achieve both of these goals and create an innovation culture.


DQ Institute coined the term in 2016 with a focus on helping children and young adults adapt to the impact of new technologies on their daily lives. For the purpose of this write-up, it needs to be understood in the specific context of employees and digital transformation in the corporate sector, with a higher focus on cognitive abilities, associated hard and soft skills, and applicability to the business functions and roles.

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