“We used to be called a bank. Now, we are a tech company that is trusted and licensed to operate in financial services," is how Barbara Chapman, ASB Bank CEO, described the bank when she was interviewed in the PwC New Zealand CEO Survey 2015.
For James Bergin, ASB chief architect, this shift in thinking from the CEO means “trying to take the best of what successful technology companies are doing”.
It also means recognising “there are very few limits on how you can use technology to solve customer problems in exciting ways.”
“That may translate to things like agile development, continuous delivery, design thinking,” says Bergin. “These are common in technology companies."
The whole goal is to try to iterate the concept a bit more so we can test it a bit more, then iterate it a bit more and test it a bit more. These are techniques that are common in modern start-ups as well as modern tech companies.
Bergin has been in the role for three years, with part of his remit being to head the Innovation Lab. The lab, on the ASB North Wharf building on Jellicoe Street in Auckland, lets ASB staff and customers test new technologies being used to perform a range of banking functions.
He shares with CIO New Zealand how they applied his CEO’s radical redefinition of banking in regards to the development of Clever Kash – a physical, cashless moneybox that lets parents give their children pocket money, even when they don’t have cash on-hand.
Clever Kash evolved from the Kashin moneybox ASB launched in 1964.
Instead of holding coins, Clever Kash accepts virtual money from the ASB mobile app. The money in the child’s bank is displayed on Clever Kash’s tummy, which makes noises each time cash is transferred from the bank’s mobile app.
“We are currently in the process of testing this with our customers to help us refine the product, and will be launching Clever Kash on a larger scale later this year,” says Bergin.
Clever Kash aimed to solve a customer problem - how to teach children the value of good money habits such as earning and saving money.
ASB had commissioned a nationwide survey of 1015 parents of children aged 5 to 12 years. The survey found 59 to 74 per cent of parents across New Zealand struggle to teach their children the real tangible value of money in a cashless society.
Up to 80 per cent of daily transactions we do are not using cash. These days cards, mobiles phones or the Internet are how we pay for things, says Bergin.
Citing an actual scenario, he cites the case of a father and a son attending a local sporting event. The son wants to buy a souvenir and the father says yes. But when they get home, the father says they will get the money from the son's Clever Kash acount. The son realised he did not want that to happen.
Initially they gave the device to children of staff and then children of customers to test. With the initial launch, the team had targeted 10,000 registrations of interest within three months - within five days of it being publically available there were more than 31,000 registrations.
Having a team and space at the ASB Innovation Labs was integral to moving the concept from idea to the first prototypes, explains Bergin. All the initial work on the alpha prototype hardware and software was created internally.
The Innovation Laboratory team were doing two week sprints on minimum viable products.
“The whole goal is to try to iterate the concept a bit more so we can test it a bit more, then iterate it a bit more and test it a bit more. These are techniques that are common in modern startups as well as modern tech companies.”
“How we update Clever Kash is as important as the device itself,” says Bergin, who talked about the project at the 2016 TEDx in Auckland. Clever Kash was also one of two high commended awardees for the innovation category at the 2016 CIO100 awards.
For instance the ASB mobile app, which is linked to Clever Kash, is getting releases all the time from the digital team.
“It is something which is constantly changing and evolving,” he explains. “You have to because customer needs change and evolve, and you have to adapt to meet them.
He offers some sage advice for CIOs outside the finance sector on what worked well in this project.
The first step involved building teams to work on the innovative project.
“ASB had a great, cross-functional team involved in the project. We were all full of enthusiasm to challenge the status quo, do something new and work in an extremely agile manner,” he says.
Keeping it small, engaging the right people and engaging them on the problem that they were trying to solve, was critical to the success of Clever Kash, he says.
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“Everything about how we have done this from sponsorship down to the team, has been collaborative,” he says.
“We did not jump straight into it and say, ‘here is everything, here is the design and the specification’.
“We started small and then added people as we needed to add them,’’ he says.
“I am under the office of Russell Jones [executive general manager - technology and innovation]. But there are other GMs involved. It is a matter of building that collaborative team.
The initial collaboration was between the marketing and the technology teams.
Then the ASB legal team got involved to do an exhaustive patent search. External partners were then brought on board to help with the character design, product design, manufacture, electronics design and development of the beta prototype.
The collaboration effort on Clever Kash was across the entire organisation, as well as with some of ASB’s creative agencies and partners. These included Saatchi & Saatchi, Assembly, Kamahi Electronics and 4Design.
“It needed to be a collaboration because it is so world leading - it is breaking so much new ground,” says Bergin.
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He says there were animated discussions around ‘what if we can do this or that’.
Thinking differently meant embracing the fact that producing a physical ‘good’ is not currently a core ASB business function. As well, the team had to find high-quality, New Zealand-based suppliers to partner with to bring Clever Kash to life, he says.
“This also means being able to reach out to international partners, as we move into the next phase of larger scale production.”
Continuous approach to innovation
Looking back on the project, Bergin says organisations need to let go of a “project mentality” to innovation.
“It needs to be an organisational, collaborative, continuous approach to innovation,” he says.
“If you are gearing yourself for purely project-led innovation, you may be closing yourself off to some other opportunities.”
He says the team is now very focused on responding to the massive demand for the product.
“We are always exploring. My lab team is always looking at all sorts of things.”
He says ASB has been getting licensing requests from international financial institutions, "further peer recognition that ASB has developed a product that solves a genuine problem for parents all over the world".
The next step
“We have only just started,” he says. “It is great to be able to build on the heritage of innovation ASB has, to springboard us into this new way of working.
At the TEDx in Auckland, he asks: “What’s next? Where are other examples where money being intangible is a problem?”
For instance, when a person uses a credit card, “there is no sense of loss, of having something being taken away... “Could we do something about that without having to rely back on the inconvenience of physical cash?”
“What about donations?”
He asks the audience how often they are walking on the street and a charity is seeking donations. “You really want to help them out but you do not have cash and they do not take Eftpos.”
“There are lots of problems we can solve,” he concludes.
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