Partnering Strategically, Spending Smartly

Innovating with partners is key to success in the digital race—as long as it’s both driven by and tied back to strategy.

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As banks struggle to make the best use of their innovation budgets, they must weigh a range of spending challenges, addressing compliance, cybersecurity, technology and digital ubiquity, among others. Facing a technological environment that is changing at an accelerating rate, banks need to understand the need to make innovation part of the planning process and to choose capabilities that help differentiate them from competitors.

Hellenic Bank took advantage of advances in financial technology, including the use of application program interfaces (APIs), to develop, in just six months on a frugal budget, a groundbreaking mobile banking app that offers innovative features, award-winning design and a great user experience, says Natasha Kyprianides, group head of digital banking and innovation at the Cypriot bank.

Jabbour, FIS: If you believe true innovation comes from integration of a number of different capabilities, then APIs are critical.

“Hellenic Bank projects are linked to the bank’s organizational strategy, and the scope is to support the delivery of the desired business outcomes,” says Kyprianides. “These outcomes are focused on building enablers that will help migrate customers to digital channels by eliminating the need to visit branches, increase active usage, reduce operational cost, create growth opportunities and increase fee income. Digital initiatives are prioritized so as to bring about the best outcome for both the customer and the business.”

Celent senior analyst Michael Fitzgerald agrees that strategy needs to drive innovation adoption: “Adoption is where you realize the value. And the closer it is tied with company strategy, the more effective the implementation you end up with.”

Another key to success is having someone to manage the innovation budget. “There needs to be a respected senior executive to lead the effort and to do it visibly. That is a common characteristic of the programs that have been able to find and sustain traction,” says Fitzgerald. “Without a chief innovation officer or a viable respected person leading that charge, traction just doesn’t happen. You need someone to anticipate two or three chess moves ahead.”

Kyprianides devised Hellenic Bank’s digital transformation from a small Cypriot legacy bank into a mobile-first bank. “By investing in a unique user experience across all channels, the bank can achieve a greater level of differentiation and achieve customer stickiness. This approach is also aligned with our strategic goals to operate as an omnichannel bank,” she says.


Kyprianides, Hellenic Bank: Digital initiatives are prioritized to achieve the best outcome for both the customer and the business.

“We are also trying to maintain a first-mover advantage in our region in the area of open banking,” adds Kyprianides. “APIs can be a key enabler to ensure frictionless partner integration and facilitate innovation by allowing third parties to build entirely new apps that can be combined with the bank’s products, services, data and processes. This means that the bank will be able to expand its customer-facing digital touch points, having them built faster and at no cost while also having the opportunity to monetize them.”

Anthony Jabbour, chief operating officer of the banking and payments business at fintech giant FIS, recommends that banks leverage APIs, which provide the interface between customer-facing apps and the bank’s internal systems, but he warns they are not plug-and-play. “To all my CIO friends out there I say that, to help offset the expectations of the CEOs of the bank, they have to explain that although APIs are a great thing, there is still work in terms of bringing innovation to life. If you believe true innovation comes from integration of a number of different capabilities, then APIs are critical. I always advise our clients to spend their money on top of our money. If we’re building an innovation or capability, then leverage what’s already been built. If you want to further differentiate what we did, then leverage APIs to insert a capability that’s going to differentiate you.”

As the pace of innovation has dramatically increased, Jabbour says, integration and sustainability are the areas where banks should focus. “If an innovation is something you need to bring to market, you need to think about how you will continue to sustain it. Banks that rush out and build something one time, with no plan of how to sustain it—well, what may have been great when it first came out, because it was differentiating, but turned out to be a commoditized solution, will end up consuming a lot of time, energy and money.”

Fitzgerald, Celent: Partnering strengthens the industry, because it allows more variation.

Kyprianides stresses the importance of keeping sight of the big picture at all times through strategy and product vision to drive toward the goal. “Partnering options should be evaluated bearing in mind ‘acceleration’ to achieve faster time to market and platform integration,” rather than creating more silos, she says. “We [at Hellenic Bank] assess a development route [taking into account] the cost, faster time to market, seamless integration and capitalizing on continual updates by the product experts.”

Jabbour recommends that banks find a partner that can help with a broad spectrum of innovation, while Fitzgerald advocates partnering versus vending. “Partnering is different. It’s not vending. It’s not procurement. We are seeing banks buy start-ups, invest in funds, make partnerships with accelerators, etc. It’s actually quite exciting,” enthuses Fitzgerald. “And it strengthens the industry, because it allows some variation in there that the previous model didn’t really allow for.”