How Israel’s Oldest Bank Is Engaging Employees to Become a Leader in Banking Innovation
In 2013, Bank Leumi embarked on a journey to make innovation one of its prime strategic goals. In order to achieve this goal, the Bank undertook an initiative to change their corporate culture, so every employee would see innovation as part of their daily work; an aim they should constantly aspire to. As part of the new corporate strategy, Leumi realized that it would need an innovation management software engine to support the initiative.
Following a successful pilot that resulted in the implementation of several innovative ideas, the Bank chose Qmarkets’ enterprise-grade Q-max software as the tool which they would deploy to their entire workforce. Since deployment, the Bank has run ongoing idea challenges, engaging thousands of the bank’s employees in online idea brainstorming to tackle a variety of the company’s challenges.
We sat down with Bank Leumi’s Head of Internal Innovation, Ran Gavriel Zivan, to hear what led up to this process and what it entails for the Bank and the financial sector as a whole.
Qmarkets: In a recent televised interview, Head of Innovation & Digital at Leumi, Michal Kissos-Hertzog, shared her outlook on the current state of the global finance industry, highlighting some of the massive challenges which the sector is facing, from new disruptions such as blockchain technology and regulatory changes, to rapidly changing customer expectations in the “digital age”. All of these factors affect not only how we perceive the role of banks today, but also how we consume financial services as a whole. New non-bank financial service providers (such as Google and Amazon) are stepping into the game and now offering payment services to customers. How do you view these challenges to Bank Leumi as a leader in the Israeli Finance industry?
Ran Gavriel Zivan: These are all legitimate concerns, but only for financial companies which are not preparing for disruption. Transformation in general is a must, but there are also many specific challenges which we need to overcome. We need to find a way to improve both internal communication with employees and external communication with customers. We want to develop new services and products using nascent technologies such as transaction processing. Finally, we must expand into new markets and explore with new lines of business.
QM: Is that where an innovation management software fits in?
Ran: Exactly. We understood that these challenges could all be tackled through the power of the “Wisdom of the crowds” by inviting our employees to participate through a digital innovation initiative.
In order to achieve this, we approached Qmarkets. We needed to have the capability to present our operational and strategic challenges to our employees and allow them to submit ideas and collaborate on solutions. Qmarkets not only serves as our ideation management system, but also as an employee portal for all innovation-related issues. They allowed us to effectively manage the process from end-to-end and ensure that the bank sees a clear and measurable benefit from the submissions.
“Involving just Innovation leaders is not enough, and in my opinion, that is where many organizations fail when it comes to innovation. We understood early on that we needed to touch the entire ‘fabric’ of the bank. For innovation to take place, the organization needs to support innovation at all levels, starting in the field.”
QM: What is Bank Leumi’s main driver in deploying a company-wide innovation management platform?
Ran: Our main driver was the desire to change the bank’s corporate culture, which can only be achieved if the entire workforce takes part in the initiative. Involving just Innovation leader personnel is not enough, and in my opinion, that is where many organizations fail when it comes to innovation. We understood early on that we needed to touch the entire ‘fabric’ of the bank.
For innovation to take place, the organization needs to support innovation at all levels, starting in the field. Our branch employees are the ones that interact with our customers daily, and literally see “the whites of their eyes”, as we say in Hebrew. They know the customer’s pain points and how we could do things differently; so, they are a vital source for innovative ideas. That is why the ideation platform needs to be deployed in all 230 branches we have across Israel, open to all employees.
QM: What made Leumi choose Qmarkets as a partner in their innovation initiative?
Ran: There are two main reasons we chose Qmarkets. First, we needed a way to manage all of the amazing ideas which our employees submitted. In the past we’ve used Excel, and experienced first-hand how impossible it is to manage hundreds or even thousands of ideas using this method. So, it was important to have powerful evaluation tools which would allow us to manage the quantitative data which would be produced by the system. Secondly, we needed to set up an “Innovation Library” for the employees, which would provide transparency and allow all employees to view all up-to-date information regarding innovation in the bank.
We compared Qmarkets’ offering to competing idea management software vendors, and found Qmarkets to be superior on a number of levels. Most importantly, Qmarkets offered the ability to tailor the solution in-depth to our existing decision-making processes, IT infrastructure, and user interface requirements.
QM: Can you share some details about the pilot which Leumi used to test Qmarkets’ idea and innovation management software?
Ran: Our pilot generated some pretty great ideas. We started off with just 500 participants and 370 partners. This included what we call our “100 Forum” – a special group of experts and managers from a variety of departments within the bank.
We had several campaigns tackling a variety of challenges, from improving our customer experience to developing new products and services. In the end there were 7 or 8 ideas which progressed to full implementation. These immediate results made it easy to justify going ahead with a company-wide deployment.
QM: That’s great – can you please describe how you launched the initiative company-wide?
Ran: In November 2016, we implemented the system across the whole workforce of 10,000 employees. To support the launch, we initiated an extensive kick-off campaign, which included all sorts of engagement-boosters, internal communications and prizes, such as trips to professional conferences abroad. This campaign alone compelled 5,500 of our employees to log-in to the system for the first time in order to begin submitting ideas and contributing to the project.
QM: How have you continued to engage users in your project since then?
Ran: We know that success depends on engagement, so we continue to invest dedicated resources in making sure that we are reaching our employees in every way possible: from screen savers to emails, text messages, even press releases. Every couple of weeks we view who participated, and when we identify a certain group in the bank who performed especially well, we often reward them with a small token of our appreciation.
In addition, we have two main events: “Innovation Month” every November and an “Innovation Week in the summer. The Qmarkets platform is promoted heavily through these two events as the focal point for innovation at Bank Leumi, which results in hundreds of daily logins.
QM: How have you integrated the system with your unique corporate infrastructure and existing innovation initiatives?
Ran: The process we’ve built is being tailored to the needs of every individual department which uses it, integrating with both the hierarchy across individual branches and the cross-functional departments from within these various branches. As we’ve had an Innovation Department for a while now, we needed the new software to be able to integrate with the existing innovation management process which we’d been using at Bank Leumi.
QM: What are some of the custom features or functions which were required by Bank Leumi?
Ran: Probably the most innovative thing about our platform is that we give employees the ability to submit not just answers to challenges, but also whole challenges themselves. This is quite rare, as most of the time with crowdsourcing software there is still a top-down process where moderators are the only ones who can define a challenge. Luckily, Qmarkets’ software was flexible enough to allow us to implement this crucial function.
Alongside this, we also needed to create a custom workflow and idea-flow process which would allow us to handle ideas according to our specific company culture and infrastructure.
“We know that success depends on engagement, so we continue to invest dedicated resources in making sure that we are reaching our employees in every way possible: from screen savers to emails, text messages, even press releases… The Qmarkets platform is promoted heavily as the focal point for innovation at Bank Leumi, which results in hundreds of daily logins.”
QM: Could you please share any details about your idea-flow process?
Ran: So it goes through several phases. At the first phase, a challenge or forum manager initiates a campaign, or alternatively is chosen to support a campaign initiated by an employee, and helps push ideas forward.
The manager is supported by a group of what we call “Content Experts” which provide advice from various angles including legal, information security, risk management, regulation, etc.
After the content experts finish scrutinizing the idea, it either goes back to a brainstorming session or proceeds to the next stage. At the next stage, the idea is categorized as one of the following:
- Closed and archived (either the idea isn’t “up to scratch”, or was tried before and failed).
- Suspended because there isn’t enough maturation to deploy it (it is reviewed again after a set time).
- Complete removal of the idea because it is irrelevant or inappropriate
An accepted idea is categorized as:
Local – at the bank division level, within a current work scope and budget. In this case, the idea doesn’t require additional budget and the Head of the specific bank division will oversee deployment.
Across the board – requires more than one division in order to implement, or an additional budget outside the scope of the division, or another type of complexity that requires central bank resources. This idea is screened by the Bank’s Innovation Department.
At the final stage, the idea is reviewed by the Top Innovation Committee before a final implementation commitment.
QM: A 2014 PwC survey of financial services executives points to an inherent conflict regarding innovation in banking: innovation is about speed, operating with ambiguity and failing, whereas banks are conservative and traditional because “you don’t take risks with money”.
How do you deal with this inherent conflict? How do you bring innovative culture into the bank? How do you get employees to accept failure in themselves and in their colleagues?
Ran: At a managerial level, this has historically been a challenge. However, with field employees the story is a bit different. In general, the new “digital” generation has no problem connecting to the innovation culture, but the “old guard” can find it problematic. This is a digital gap that we need to pass, and the “Leumi Ideas” project is one of the main tools we are using to overcome it. As I mentioned earlier, we see the idea management platform as a tool to educate workers and expose them to a new mode of thinking and operating.
QM: What kind of vision do you have for the future of Bank Leumi, and how do you see Qmarkets’ involvement?
Ran: Qmarkets software is the engine of Bank Leumi’s Innovation management initiative, and it answers the exact needs of the organization across multiple levels. We’re very happy with it, both visually and on a technical level. This platform acts as an enabler to bridge the gap between various employees when it comes to deploying and cultivating internal innovation. Our vision is to be an organization that is able to deal with today’s banking challenges through ongoing company-wide innovation, with workers who both accept and initiate change. We also plan to boost our engagement with start-ups, bringing more new technologies, products and services into the fold. Looking ahead, two years from now we will have a system that communicates with the organization to answer the exact challenges which we are facing, while also helping us overcome key challenges.