Open innovation at PostFinance: innovating (more) together

Many companies still have what’s known as “not-invented-here syndrome”, resulting in the tendency to prefer internal ideas. Open innovation takes a different approach. Rather than guarding innovation behind closed doors, this approach relies on openness, cooperation, and external expertise.

What is open innovation?

Open innovation means that companies open up their innovation process to innovate in partnership with external organisations such as startups, universities and colleges, trend- and future-oriented institutions or other companies and networks. Thanks to the external perspective, blinders are removed and attention is focused on ideas that were not on the company’s own radar.

The main goal of open innovation is to gain access to a wider range of ideas, expertise and resources than would be possible internally. After all, more knowledge can be generated together than by going it alone. So if, for example, a financial institution works with external parties to develop a solution for online debt collection, open innovation is what lies behind it.

Four reasons for open innovation

There are many reasons why open innovation is becoming increasingly popular: this method helps companies to remain innovative in a dynamic, complex and globally connected environment. Systematically incorporating external knowledge essentially means that companies can react more quickly to market changes, make better use of technological developments and reduce innovation costs.

Open innovation in the banking sector: opportunities and limits

Open innovation requires companies to open up, obtain external expertise and share their own knowledge. At first glance, this hardly seems feasible in the highly regulated financial sector, where you’d expect to find doors deadbolted rather than wide open. However, the opposite is true: partnerships with the outside world can be helpful, especially if new developments cannot be tested in-house for security or data protection reasons. They make it possible to try out ideas in an external and therefore generally less sensitive and regulated environment before deciding whether the issue should be driven forward internally. This makes banks more efficient in testing. Implemented correctly, open innovation can open up major opportunities, especially in the financial sector.

What role does open innovation play at VNTR?

Our job at VNTR is to ensure that PostFinance doesn’t miss out on any relevant topics. To this end, we try to anticipate the future and deal with topics, technologies and possible business models that are not yet addressed at PostFinance. Open innovation is a key pillar of our work. We wish to take advantage of the external perspective and the outside world to gain impetus and concrete innovations – from startups, universities, technology partners and innovation networks in Switzerland and abroad. This is because partnerships and participations are now an important part of ensuring that we remain fit for the future as a company. It doesn’t make sense to develop everything from scratch independently. The outside world can be used to innovate together and quickly.

How does VNTR manage to obtain external input?

We develop targeted networks concerning topics that are relevant to us. One example: Berlin is home to numerous startups from the financial sector, known as fintechs. We take a close look and foster contacts within this ecosystem. We are holding intensive discussions with network partners in Nordic countries, which are considered pioneers in digitization. Problems and a wide range of solutions have already arisen in these ecosystems that are still to come as Switzerland becomes more digital. We can therefore benefit directly from the head start in these countries and gain a glimpse into the future. By gaining an overview of the fintech world there, we can discuss specific questions such as “What cashless solutions are there for children at your company?” or build up knowledge about events. In Denmark, we attended FinTech Week, where the major players in the “Nordic” financial industry – both startups and banks – discussed the latest developments. An interesting aspect: at a round table, four financial institutions said exactly the same thing, namely that without the outside world, they wouldn’t be able to innovate at all. Startups make this possible for them.

Which forms of open innovation does VNTR use?

At VNTR, we subdivide our activities into Build, Partner and Invest.

In Build, the development of innovative solutions, co-creation can be a form of open innovation. In other words, we build the solution with external support.

When working with partners, for example, open innovation means that we specifically look for startups that offer us a solution to a challenge that we have identified in the company. In the next step, we test the existing solution with a proof of concept or feasibility study and decide in the case of a Go whether we wish to develop it further alongside the startup or leverage it as a customer. This procedure is known as venture clienting.

We also invest in startups through minority participations – for example, to gain early access to new technologies and work with the startups in this area. We learn a great deal when searching for exciting startups, as we obtain evidence about the development of relevant technologies through targeted market analyses. This is also a form of open innovation, just like when we bring our PostFinance specialists together with external partners to discuss an emerging topic or when we interact with innovation teams from other companies or universities.

In which topic areas are partnerships of interest to VNTR?

We essentially pursue open innovation all our innovation fields. We group trends into clusters that PostFinance has not yet focused on. These are trends that we consider uncertain, but which when implemented will have a high impact on the company. One of our current innovation fields combines trends in digital payments based on blockchain technology (distributed ledger technology payments, or DLT payments for short).

Another area of innovation focuses on human augmentation, i.e. people’s need to optimize themselves with technological devices. We find it exciting to have partnerships that give us access to relevant technologies, relevant knowledge and business models. This primarily involves partnerships with fintechs from the financial sector, insurtechs from the insurance sector and proptechs from the real estate sector. We also look for partners who can help us with a specific problem.

Which brand-new topics are currently on the horizon?

These are topics such as self-adaptive systems, i.e. systems that adapt on their own, or emotional systems and interaction, i.e. systems that adapt the design of products based on human emotions. Particularly in the case of such large and complex topics, we try to gain in-depth insights with open innovation and answer questions such as “Where does this already exist?”, “Are these topics still in research, or are there already some use cases?”, “Which startups are working on this?”, etc.