IBM Design Thinking brings a wealth of innovation to wealth management

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Most people who know the name Branch Rickey know him as the president and general manager of the Brooklyn Dodgers who played a key role in helping Jackie Robinson break the Major League Baseball color barrier in 1947.

I also know him for something he said several decades earlier. In a speech to a YMCA group in 1915, Mr. Rickey said: “There is no luck.  Luck is the residue of design.”

I agree with Mr. Rickey’s observation. And in my 5 years as a partner in the financial services arm of IBM’s Interactive Experience unit, I’ve also come to believe that innovation is the residue of design, as well. In fact, design is central to our mission of helping wealth management firms innovate in an era of digital disruption.

For decades, many wealth management firms have been taking an inside-out approach, focusing on products or services instead of on clients. As technology and user experiences have evolved and competition has increased over the last decade, clients now have much more control, significantly influencing how product and offering teams go to market. As a result, wealth management innovation requires an outside-in approach that begins with deeply understanding and empathizing with clients’ needs.

Framework for innovation

At IBM, we’ve developed a framework for innovation that we call “IBM Design Thinking.” (Click here to read our whitepaper on digital reinvention.)design-thinking

With 24 consecutive years of leadership in U.S. patents, IBM knows a thing or two about creating a framework for innovation.

At the forefront of the IBM Design Thinking framework is placing end users at the center of innovation when tackling problems and developing solutions. Client needs and experiences are paramount.

In most cases, client-centric means that clients themselves wind up becoming a vital part of the innovation process. In wealth management, this could mean creating advisory panels, pilot programs and surveys to elicit feedback.

We worked with a traditional financial firm to take that a big step further. Together, we set up conference rooms to simulate the experience of visiting a financial advisor’s office, complete with assistant’s office and waiting room with flat screen TV. In that setting, their innovation teams observed how actual advisors and customers interacted with technology and each other.

And we worked with a top-tier fintech who tested competitor websites from a client’s perspective, seeing how many clicks it would take to open an account or obtain financial information. The insight from that experience helped inform the design of their next product’s customer experience.

At many companies, innovation is the purview of the technologists. They come up with an idea, then “run it up the flagpole.” IBM Design Thinking turns that notion on its head. It asserts that responsibility for innovation runs across an organization and is best accomplished by interdisciplinary teams.

Bringing technologists together with executives, analysts and customer-facing financial advisors ingrains customer centricity in the innovation process, helping companies pivot quickly when market conditions change.

These teams have expanded, becoming inter-company ecosystems to share costs and risks. Some even have engaged regulatory bodies as ecosystem members.

The third principle of IBM Design Thinking is what we call restless reinvention (or continuous reinvention). This is about enhancing or scaling a company’s existing offerings and solutions, rather than always looking ahead to the next big thing. It becomes important when, for example, a new regulation threatens an existing offering or capability. Deploying small, agile innovation teams can address these issues, even turning barriers into competitive advantages.

Benefits of design thinking

So what can you do to bring the benefits of design thinking into your wealth management organization?  We recommend a three-step approach:

  • First, do an innovation self-assessment. Is innovation in your organization product-centric or user-centric? Are there participants from multiple disciples to represent clients’ viewpoints and pain points?
  • Next, select a reasonably high-value project. Select a team to approach it with the Design Thinking framework. Reduce risk by making sure the proposed outcomes are well defined so you can measure the impact of innovation effectively. Then you can see how Design Thinking changes the team dynamics and results.
  • Finally, if Design Thinking demonstrates value on one project, consider expanding it across a business unit or even across the enterprise. Distributing responsibility for innovation across the organization makes it more transformative. Employees become more client-centric, collaborate across functional and organizational silos to achieve outcomes, and continuously improve offerings and processes.

For more information on how to make IBM Design Thinking a centerpiece of your innovation journey, go to IBM’s:

Design Thinking homepage:

Banking and Financial Markets homepage:

Interactive Exchange homepage:

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