Payments

Daily Review: The Key to a Successful Integration & Execution of Open Innovation

MEDICIGlobal Head of Content

“Innovation is not only about having an innovative technology or science; it is also about innovating the actual process of innovating. As Einstein famously said, “We cannot solve our problems with the same thinking we used when we created them.” There is no one process that fits all scientific and technological problems. The more experimentally R&D professionals think and behave, the easier it will be for them to adopt fundamental changes in the way they do their work.” – Why Do Open Innovation Efforts Fail? Scientists Want to Solve Problems Themselves. HBR

Pick #1. Why Do Open Innovation Efforts Fail? Scientists Want to Solve Problems Themselves

Hila Lifshitz-Assaf (New York University’s Stern School of Business), Michael L. Tushman (Harvard Business School), and Karim R. Lakhani (Harvard Business School) conducted a three-year study at NASA’s Space Life Sciences Directorate focused on closely tracking the opportunities and challenges involved with open innovation in an incumbent R&D organization over time.

“Over the course of one year, we observed as NASA took a two-track approach to solving 14 strategic problems: The organization used both the traditional collaborative R&D model led by its own experts and also open online innovation platforms led by crowds of non-domain experts.”

“The second approach led to relatively speedy solutions to three of the challenges and was particularly successful in the challenge of predicting dangerous solar storms, where it produced a breakthrough within a mere three months. But bringing the open source solutions to life proved more challenging. Some of the directorate’s scientists and engineers resisted the new approaches, citing process, budget, and procedural issues. The managers were able to solve those challenges, yet the tensions remained.”

Researchers found out why: The most resistant scientists and engineers saw open-source methods as a fundamental challenge to their professional identities. They defined themselves as “problem solvers,” but open innovation crowdsourcing platforms didn’t let them play that role; instead, they had to frame problems for someone else to solve.

“It is vital to refocus engineers and scientists on the higher purpose of their work and reframing the open innovation method as a tool that enables R&D professionals to achieve their mission faster. <…> More practically, our research showed us that managers should encourage and reward solution seeking. In every successful R&D organization, there are hero stories about problem solvers; these need to evolve to celebrate the innovators who find solutions in creative ways. These are the innovators who should get the spotlight and the resources. And rather than incentivizing only patents or publication, offer financial recognition to those who embrace the solution-seeking mindset.”

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Pick #2. Australian Banks Launch Mobile Payment Platform Beem It

CBA, Westpac, and NAB released a new mobile payment platform called Beem It, which will allow instant payments for all Australians and small business units. In October 2017, the three banks announced that they were working on the development of this new payments platform.

The new app will also allow the user to request payment or split a bill. Initially, the platform will have a sending limit of AUD 200 per day and a monthly receiving limit of AUD 10,000. All transactions made through the platform will be monitored in real-time.

Beem It can be used by all bank customers and small businesses owning a global scheme debit card issued by an Australian Authorised Deposit-taking Institution (ADI).

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Pick #3. InsurTech Giant ZhongAn Touts Blockchain’s Transformational Power, Signs up over 100 Hospitals to Improve Claims Processing

ZhongAn Tech is the specialized technology incubator of ZhongAn, China’s first truly digital insurer founded by Alibaba Group chairman Jack Ma Yun, Tencent Holdings chairman Pony Ma Huateng and Ping An Insurance chairman Peter Ma Mingzhe in 2013. ZhongAn Tech now serves about 10 Chinese insurers, helping them to better tailor their services and improve risk analysis.

ZhongAn Tech has already used blockchain to store all insurance policies from its parent ZhongAn Online in a secure manner. The InsurTech startup is also working with Shanghai’s insurance regulatory bureau to build a blockchain-based reinsurance platform, which can help improve security and the traceability of reinsured policies.

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Pick #4. Amazon Leads $12M Investment in India-Based Digital Insurance Startup Acko

Amazon – which has been linked with an Acko investment since the start of this year – backed lending startup Capital Float last month, and now it has led a $12 million funding round for Acko alongside Ashish Dhawan, the founder of PE firm ChrysCapital, and existing backer Catamaran Ventures. The deal takes Acko to $42 million in raised funding.

Acko was founded in late 2016 by Varun Dua, one of the co-founders of insurance comparison site Coverfox.

The company is likely to work with Amazon around e-commerce coverage – the first focus of which will be around gadget protection – although nothing is set in stone yet.

“The idea is to find some way to collaborate in the future,” Dua explained. “We’re a new-age insurance company and [Amazon] believes it can create value. They see that bundling financial service or something in the lending space [may] happen [in the future] given the data and numbers of users they sit on.”

Acko is aiming to raise a significant funding round next year which would be used to give it a war chest – capital is an important requisite for an insurance provider – and execute on its strategy for the following three years or so. Part of the current focus is bringing a new online approach to traditional insurance, whilst also figuring out new types of cover that apply to today’s digital age.

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Pick #5. Rakuten Invests in UK Payments Group Azimo

Rakuten led an investment in Azimo, which is based in the UK and has its technology team in Poland. Azimo competes with companies such as TransferWise, PayPal, and WorldRemit in the digital payments market. The company more than doubled the value of transactions it handled last year to more than $1 billion and has more than 1.5 million registered customers.

Rakuten Capital, the investment arm of Japan’s biggest e-commerce group, led the latest $20 million investment in Azimo, which took the total raised by the company to $50 million. The injection is expected to help the group through to its break-even target of next year.

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Elena Mesropyan

MEDICIGlobal Head of Content

Global Head of Content, MEDICI

Elena is a research professional with a background in social sciences and extensive experience in consumer behavior studies and marketing analytics. She is passionate about technologies enabling financial inclusion for underprivileged and vulnerable groups of the population around the world.