1. In a few words, describe how Cisco approaches innovation and your role in the big picture.
Cisco balances internal and open Innovation. We constantly source ideas externally either through acquisitions (over 100 over the years) or idea sourcing challenges (eg. I-prize competition) open to the public. My team the Internet Business Solutions Group is focused on understanding the impact of technology on the future competitive dynamics of the Financial Services industry – both to help our clients anticipate the changes and improve their competitive position as well as boost Cisco’s relevance in the FS industry through the development/acquisition of the right enabling capabilities.
2. In the context of financial services, what trends do you see start-ups focused on?
There are several trends related to the FS industry, the overall economy and technology that are creating new opportunities to disrupt the existing value props. For instance,
- The emergence of mobility and mobile payments coupled with pressure on interchange fees in the US and the opportunity of financially enabling the unbanked in the developing world is certainly one where we’re seeing a lot of activity from large players e.g., Mobile Telcos, Google as well as a number of startups (P2P cash and Snappay are 2 such examples who presented on Feb 8 at the NY Innotribe event).
- The financial hardship that the economic climate has created for both individuals and SMBs coupled with the ability to provide automated advice digitally has created an opening for a number of PFM/OFM powered companies to help consumers get out of debt and reduce their cost of debt or businesses finance their operations or receivables
- Social networking is creating opportunities to better understand customers based on their interactions in the social media world and use this info to better assess credit, enable social trading (Lenddo, Roboinvest)
- Other emerging capabilities such as Machine to Machine communications are already generating new pockets of value and we will most likely see startups emerge to capture these new opportunities.
For more info, on the future of the FS industry, check our perspective on the:
3. How do you see traditional financial institutions positioning themselves towards start-ups and the start-up ecosystem?
Traditional FSIs are realizing that Innovation is now more than ever generated outside the walls of their institution and that this is a trend that is unlikely to revert. They are responding by:
- Adopting open Innovation models where they partner more closely with external innovators including large Cos such as Cisco, startups, universities, etc.
- Investing in Innovation Incubator functions that are ‘protected’ from existing BUs and from restrictive procedures, to enable them to pilot and course correct before bringing promising concepts back into the core business
- These Innovation Incubators are increasingly located in Silicon Valley vs. traditional financial centers because of the proximity of talent (tech DNA) in this area.
- They also often have an investment arm linked to them, so that they can invest or acquire promising startups that they identify
It is also interesting to note, that many of the FinTech startups have their business models or exit strategies dependant on traditional FSIs.
4. Considering that Innotribe focuses on collaborative innovation in financial services, what do you think we should pay attention to?
With Innovation happening outside their walls FSIs need a trusted idea exchange platform. Swift is already offering a global payments platform connecting thousands of FSIs around the world and is ideally positioned to enable the exchange of ideas.
The success of such a platform will depend of the quality of content provided, the relevance of participants and the energy that results from the dynamics within it – Innotribe will have to balance the appeal of a ‘by invitation only club’ with the critical mass needed to keep the creative energy flowing.
Another way to keep the platform energized is to favor quality blog contributions on the platform and to enable the community to exchange ideas virtually outside of physical meetings
At Cisco we use our collaboration capabilities including virtual collaboration rooms and our network of TelePresence video conferencing locations around the world to bring people together virtually ‘as if they were in person’ across time zones and continents … an option that I believe could be very valuable to Innotribe
5. Finally, are there any other things you think Innotribe readers need to know about your company or innovation activities?
Cisco is well known for its role in providing the infrastructure for digital connectivity and more recently the infrastructure for collaboration and communication (video, audio, and data) and our role in cloud and virtualization
Tomorrow’s world will be a hyper-connected one where a lot of the knowledge will reside outside of companies’ walls somewhere in the ‘cloud’ and the ability of companies to compete will be dependent on their ability to take advantage of the new Connected reality
Above and beyond providing the infrastructure, Cisco is committed to accelerate the advent of a Connected economy through investments in Innovation and the acceleration of idea exchange across the industry.
Connecting people and ideas is what Cisco’s Human Network and my team (Cisco-IBSG) are about. We are thrilled to be part of the Innovation tribe and journey that Innotribe has started, and we look forward to further collaboration with Innotribe and its members going forward.