When even a former chairman of the US Federal Reserve says "the only useful banking innovation was the invention of the ATM [automated teller machine in the 1970s]" then the financial services industry has probably been castigated from all sides.
Paul Volcker might have given his example of the ATM as a way of criticising the complex financial products brought out before the financial crisis started in 2007, but Citigroup, the bank that pioneered the "hole in the wall" cashpoint, has been generating what it expects will be the next wave of innovation.
However, Deborah Hopkins, chief innovation officer at Citi since May 2008 and head of its Growth Ventures and Innovation unit, said the next generation’s equivalent of the ATM for impact would probably be a business model rather than piece of technology.
She said: "The new ATM will be an unusual business model very focused on user experience.
"But technology is still important as the consumerisation of IT is meaning the line is blurring between consumers and corporations as both often have the same request for simple, easy-to-use products available on the internet while mobile.
"Mobile is a lifestyle but Basel III [the global banking regulatory standard] and legislation may see a unique model come out offering different products to people."
With a background at Citi as chief operations and technology officer and head of corporate strategy, mergers and acquisitions, Hopkins reports to Don Callahan, Citi’s chief administrative officer, to "drive crossbusiness, client- focused innovation across the company," the company said when she took on the role in 2008.
In a group with 265,000 employees, Hopkins is trying practically to provide innovative answers the bank can use around the world. She is also trying to encourage a sense that change can happen. She said: "I am trying to make innovation a habitand take the bank from ideation [thinking of ideas] to execution with a portfolio of innovative projects.
"However, we also need to establish the concept of process and a common language so we know what kind of disruptive or critical projects to do and can track them by the right metrics."
This work is likely to lead to the launch of an ideas platform to crowd source new services and reward those behind them.
The other part of her unit, growth ventures, is, to Hopkins, "trying to do upper right-hand corner work that is disruptive and new to Citi".
In order to do this, Hopkins, who has worked for a roster of global companies, including General Motors, Boeing, Du Pont and Lucent Technologies, is building a team of 22 "renaissance men – those that can think and execute" with diverse backgrounds and "few bankers".
The departure over the summer of two senior executives at Growth Ventures and Innovation, including Hopkins’ deputy Jeff Semenchuk and Dion Lisle, has come as the bank has moved its innovation centre to California from the east coast and hired venture leaders around the world, such as Wei Hopeman in Shanghai.
Hopkins said the shift from Chicago and New York to Palo Alto, California, and a new office close to the venture capital firms "is a 180-degree change in life and the type of dialogue you can have – it is proving to be really exciting. The days are long but rich".
They are working on Citi’s big strategic challenges, Hopkins said. She added: "The world is becoming very urbanised and we are using the tag Citi for cities to try to serve all the needs of the top 100 to 150 metropolitan centres. These needs can be infrastructure, transit, taking cash out of the public pay [and making it electronic] or building new gathering spots. This idea fits with Citi’s global reach and our tendency already to be located in cities."
The other big challenge is to make use of analysis to make sense of the data coming from a digital world and so help make better decisions as part of a commitment to "responsible finance, that is that the bank is working in the best interests and on behalf of its clients".
This "actionable information" allied with an "underscore of simplicity is long overdue in the banking world, which is a service that has added layers to the design without it being clear that the end-to-end result for the customer has been improved", Hopkins added.
The team is using three venture models to develop projects: incubation, spin-outs and minority equity investment in third parties, such as the $15m series B round in July for Shopkick, where it can take up-and-coming companies and teach them how to scale globally. What all three models offer is a sense that Citi is trying to build a partnership with other firms, including competitors,
Hopkins said. She added: "Partnership underscores everything we do, especially in financial services. It is messy work collaborating with competitors or unusual bedfellows and takes time."
With software company Microsoft and digital advertising agency Razorfish, Citi formed a joint venture, called Bundle, to compete with Mint, a personal finance website that
Intuit bought last year for $170m in a deal that signified technology-based start-ups could grow rapidly and prove a threat to established financial services companies.
Led by Jaidev Shergill, an executive vice-president of Growth Ventures and Innovation, and now chief executive of Bundle, the start-up is using Citi’s consumer spending data displayed on a computer system under in an independent brand comparing Citi with peers’ products.
In a similar fashion, in June Citi said the children of its private banking customers could use a website, Spend Grow Give, developed by start-up Tile Financial to log in to parent-funded accounts for discretionary spending, investments and one-click giving to charities.
Other projects at Citi include Mobile Money Ventures, a $16m venture with Korea-based SK Telecom to develop mobile phone banking applications and systems, and Obopay, which was testing phone-tophone payments before being stopped at the end of last year.
The Growth Ventures and Innovation team has also been working on the next generation of bank branches. In April, Citi in Japan said it was "reinventing banking to be more customer-centric".
It added: "We are moving away from the banking model that requires our customers to come to us, to a model where we are everywhere for customers when they need us."
This shift involves touchscreen workstations customers can use on their own, assisted by branch staff, or by video link to online advisers from their home. Callahan told news provider the Wall Street Journal at the time: "What is so compelling is the shift from a one-size-fitsall retail bank to full-service banking anytime, anywhere.
"Market conditions have made Japan the right place to develop this functionality, but its success should help us build a global template. In some ways, we are viewing Japan as a lab for the whole world."
He added: "This marks the biggest change in retail customers’ experience since the debut of the ATM four decades ago."
Factbox:
Key people
Vikram Pandiit, chief executive;
Don Callahan, chief administrative officer;
Deborah Hopkins, chief innovation officer;
Chris Kay, deputy, head of innovation;
Wei Hopeman, venture leader in China and head of Asia;
Sarita James, chief operating officer;
Satish Menon, venture leader in Singapore; and
Steven Kietz, executive vice-president.
$132m spent on social investment programmes in 2009.