We interviewed Mario Costantini, Head of innovation and Acceleration at Intesa Sanpaolo to understand how they are leading their innovation.LTP:
LTP: FinTech verticals that will stand out in 2017?
MC: First of all, I’d like to underline some cross innovation streams: big data, artificial intelligence, blockchain and biometrics will have a deep influence both in banking and in insurance business areas.
As far as “verticals” are concerned I deem that the outstanding business areas could be:
- Distribution networks, that will be under progressive digital pressure
- InsurTech will acquire more and more relevance
- Digital lending, supported by alternative scoring solutions, under the pressure of tech giants’ digital platform and new brand digital banks
- There will be a steady increase in transactional services – thanks to the continuous increase of digital services and e-commerce transactions.
In addition, I believe that 2017 will be an important preparation period for wealth management, the cause of the introduction of Mifid2, that has been put-off in 2018.
LTP: Can you please tell us about Intesa's innovation priorities?
Mario Costantini: We have been working for the last two years on the brand new internet banking website and mobile app. We have worked hard with the business and IT department and we have introduced many innovative services to our customers. We are very proud of the achieved results. This year, we’ll continue to work on the mobile app and website, leveraging our Israeli Technology Hub and our Service Design Lab, to get the most value for our customers.
In addition, we’re working to introduce a widespread usage of the artificial intelligence to reduce the cost to serve, make more and more efficient operational processes and to find innovative ways of interaction with customers.
Then we’ll continue to invest in developing new digital products, both in banking and insurance space, that could be available in different networks and touch points to reach new customers.
Finally, we’ll continue to work on permissioned and permissionless blockchains: the further target in our pipeline is to pass from proof of concepts to pilots, by developing, at least, minimum viable products.
LTP: How do you work with startups? Collaboration? Competition or coopetition?
MC: It’s out of doubt that startups introduced a higher level of competition for banks and this was facilitated by many rules issued by European Commission, whose aim was exactly to open the market and, whenever possible, to get a cost reduction for consumers and enterprises.
From Intesa Sanpaolo's perspective, the FinTech ecosystem (in which we include also Italian and international research centers and universities) is a huge opportunity for accelerating innovation and providing a better level of services for our customers. In our working model, the collaboration with startups represents an essential element to accelerate innovation in our banking services.
LTP: How do you make sure that the innovation strategy translates in execution?
MC: Close collaboration with business and technology divisions is the key element to allow technology transfer from proof-of-concepts and pilots to actual services for our customers. The Innovation Center organizes periodical meetings with all our banking stakeholders where we show trends and possible new technological solutions to stimulate discussions and involvement. Understanding business needs deeply is to design, test and implement innovative initiatives. We have also a department specifically devoted to Service Design: we deem that this will help to introduce innovation in banking services. In order to reach such a goal, we use the service design approach which involves multi-disciplinary teams working with stakeholders and end-users throughout the whole design process.
LTP: PSD2 – Opportunity or threat for banks?
MC: Rules and regulations issued in the business payments area over the last 20 years actually had a great impact on banks revenues; the mentioned legislation usually introduced only compliance burdens on banks and, in some instances, pricing constraints. With PSD2, there is a significant shift: the opening of customers account information to third-parties introduces a number of issues (technical and security issues for instance) but banks have an opportunity to offer new services, for example by aggregating accounts information or try and exploit account data for offering services to prospects. In one sentence: from a mere compliance behavior, banks can finally choose to redefine their role in the new framework caused by PSD2. As a consequence, we find it as a great opportunity to capitalize on the investments made over the last two years in cutting-edge services in our new website and new mobile banking app. Thanks to PSD2, we can make such innovative services available also to competitors’ customers.