When I was in 5th grade, at the end of the academic year, just before the start of the summer vacation, our Physics teacher shared with us a “big secret”: he invented a “perpetuum mobile” machine. He went on a rant about how he has it all designed, could not build it because he did not have the resources, and how the “bureaucrats” at the patent office refused to look at his design because they did not accept, in principle, “perpetuum mobile” inventions. This was before the Internet, and his “revelation” made me spend a good part of my vacation at the public library devouring all books I could find (and understand, as I was only 11 years old) about inventions, a world that has fascinated me ever since. Not sure if my teacher really thought that he invented something unique, was just mad, or he was more clever than I understood at the time and his passionate speech in front of us was a subtle way to push us into a world of science exploration and discovery. (In case you missed this topic in physics class, a “perpetuum mobile” is a hypothetical machine that can do work indefinitely without an energy source. This kind of machine is impossible, as it would violate the first or second law of thermodynamics.)
Invention or Innovation?
I spent most of my career in a corporate computer technology environment, and found a lot of misconceptions about the meaning of “innovation” and “invention”. Let’s begin with a description of the most common misconceptions about what an “invention” is. I have worked with many brilliant software engineers, and their work results were amazing. The typical conversation with the members of my team that I was encouraging to use corporate resources to file a provisional patent application for the software component or application that they developed usually started with “but it’s not a big deal”. Like “if I do not win the Nobel prize for it why bother”. And my answer was always “so you copied the code from somewhere else”, of course followed by an indignant “no!” and my assertion “file a patent if it is your idea and execution and you did not copy it from somewhere else”. And this is the simplest definition of “invention”. We all know that great minds think alike, and each new idea comes in a dozen of simultaneous instances around the world. I still think that engineers should patent their ideas if it’s not copied from somewhere else and they or their employer have the money to do it.
Diffusion of Innovation
Innovation is different in the sense that it introduces the concept of domain, or scope — there is no “universal” innovation, only the deployment of new ideas in a country/company/field of activity. Take a collection of inventions, for example the technologies called today “cloud computing”, and use them for the first time in banking – that is an innovation. Or use them for the first time in your bank – that is innovation too. For the scientist or the researcher that has spent the last 15 years inventing and perfecting a new technology, cloud computing is a collection of inventions, some of them protected through patents. For the rest of us, innovation comes from using those technolgies in the domain/scope/context of our work.
When talking with friends and colleagues in financial services about innovation, many times I hear dismissive talk about various projects as “not truly innovative”. On further examination, the prevalent thinking amongst a segment of financial services technology gurus is that if, for example, he has seen a demo of NFC payments in a lab five years ago, all new deployments are not worth of the “innovative” label. Conveniently forgetting that true value is discovered use case by use case, with each new solution, with each new deployment, with each new customer segment and collection of business and technology partners. To stay within the same theme, while Apple Pay and Android Pay continue to grow and demonstrate every day the value of NFC technologies, it will take a while before all banks, all payment cards will be connected to all smartphones in the world. And each of those deployments, when going live, will be an innovative solution solving the problem in a specific domain and environment. At the conceptual level, the whole scenario is one of “diffusion of innovation”, and even those at the tail end of the diffusion process are true innovators.
Innovation at Moven
I am currently deep in the fintech trenches at Moven, navigating the ocean of choices we face in business model and technology innovation. We are building a company that is able to use the latest technologies to change the way customers use and benefit from financial services. And while the hype wave has moved to blockchain, Moven is fully committed and continuing to innovate in creating the best mobile banking customer experience.
One of the key changes in the way Moven works is that, while we offer banking services, we encourage customers to first think about their financial wellness. Customers need to be able to fund their account, make payments, see transactions and balances – but that’s “just” the basics. We all manage our finances one way or another – in our mind, on paper, in spreadsheets or some app — however most people (70% in the US by some measure) manage “by exception”. i.e. don’t manage or plan, and hope they will not run out of money. At Moven we believe that helping customers understand their financial wellness (also called money management, budgeting, personal financial management) should be the primary function of a financial services institution that deserves the trust of its customers. Many of the Moven app features help build a full money picture for customers, through real-time payment and receipt notifications, spending analytics and insights, rolling budgets – automatic, contextual, in-the-moment financial advice.
Some of Moven innovations are more technical in nature, still derived from the desire to make the Moven customer experience seamless. An example: instead of one-size-fits-all security, Moven has implemented “gradual” login, with security being automatically tightened or relaxed based on financial risk. Moven is also using Amazon Web Services to run its infrastructure, taking full advantage of cloud computing benefits. At this time, Moven is close to the top in cloud services usage among financial institutions.
What Moven also does differently is helping with the diffusion of innovation process, partnering with financial institutions around the world to bring the Moven mobile banking experience to millions of customers. The banks working with us will not be the first in the world doing it, however each of them is bringing significant innovations to the local market, to their customers, and improving the Moven platform through their unique requirements.
As an example of innovation diffusion in practice, Moven’s real-time money-management app is live in Canada since April 2016 as TD Bank MySpend — first tool of its kind for a Canadian bank. TD MySpend is a companion app to the TD mobile app for both Android and iOS platforms and leverages Moven’s financial wellness management tools to help customers track their spending habits from TD Bank accounts and credit card accounts, as well as receive instant notifications. The app went live in April 2016 and reached, for a while, #1 spot in the App Store in Canada.
We at Moven are thankful for so many banking innovators that think like us and work with us to bring our innovative mobile banking experience to the world.
The fall conference circuit is starting – if you want to chat with me, I will be in New York City on September 6 at NextMoney NYC, and September 7 and 8 at Finovate Fall, where we will be demoing the Moven platform.