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The Not-So-Secret Secret to Getting Innovation Right

In the midst of the myriad challenges COVID-19 has thrown up for financial institutions and the people and businesses they serve, the crisis is also propeling innovation forward, proving the worth of past technological investments, and shifting the view of digital initiatives from a ‘nice-to-have’ to a ‘need-to-have’, particularly in a time of social distancing.

Against this backdrop of crisis-galvanized change, senior content producer Laura Maxwell-Bernier caught up with Sunayna Tuteja, Head of Digital Assets and Blockchain at TD Ameritrade, to talk about how she is seeing this play out, and how financial institutions should approach digital transformation to ensure relevance in the ‘new normal’.

We are also delighted to announce that Sunayna will be expanding on the themes covered in our conversation at FinovateFall in September, where she will look at the next phase of this trajectory, how changed consumer behaviors will drive further change, and what role technology will have as the dust settles.

Laura Maxwell-Bernier: Crises like COVID-19 have historically shown us how quickly technology can go from a nice-to-have to a real necessity for consumers. How are you seeing this play out in the context of COVID-19?

Sunayna Tuteja: Innovation often gains traction in times of turbulence. We are certainly witnessing that play out at massive and magnified levels in the context of COVID-19. Technologies and trends that were already in motion reached escape velocity – in scale and speed of both investment and adoption accelerating in the span of weeks vs. years. Examples include tele-medicine, online learning, and omni-channel commerce. The necessity of solving a pain point combined with a sense of urgency is activating laser-focused action that otherwise might be slowed down by inertia. In short, digital transformation is now a matter of business resiliency, representing an ultimate shift from “nice-to-have” to “need-to-have”. 

Perhaps my favorite example is the Supreme Court of the United Sates (SCOTUS), an institution steeped in tradition which until recently conducted all oral arguments in person, behind closed doors and without cameras present. They too have had to adapt and transform. Last week the SCOTUS moved to hearing arguments via tele-conference, and also opened it to the public to listen in real time. While the new format may lack the usual pomp & circumstance, it ushers in an era of transparency & inclusivity. It’s a joy to witness this epic transition. Necessity is the mother of invention, or in this case adoption!  

LMB: What similarities are you seeing in the way financial services organizations are responding to COVID to how they responded after the 2008 financial crisis? What lessons should we be drawing from this in our planning for the longer-term repercussions of COVID?

Tuteja: An imperative for institutions (private and public) to innovate is the rapidly closing delta between novelty and necessity. It wasn’t that long ago that the notion of banking and trading on your mobile device was unfathomable – mobile phones were for playing Candy Crush and Angry Birds!  But within a matter of years, driven by a shift in consumer behaviors and expectations plus the rise of Fintech, incumbents have had to evolve and for many, the nice-to-have digital venues are now need-to-have primary on-ramps to attract, engage and retain consumers. Ergo, shocks like the global financial crisis and COVID-19 further reinforce and validate that tapping into the power of nascent yet powerful technologies to break down barriers and create next generation products/client experiences must be an evergreen endeavor. You need to maintain a persistent and pervasive focus on client-centric innovation to keep up with and surpass the evolving expectations and norms. 

At TD Ameritrade, we saw this thesis come to fruition as we embarked on transitioning our employees to work from home in a matter of 10 days whilst serving millions of clients during tumultuous market conditions. The firm’s steady investments over the years in capabilities like cloud, Artificial Intelligence, messaging, mobile etc. enabled a speedy and smart transition.

LMB: What implications do you see this crisis having for the rate of adoption of digital assets – stablecoins, CBDCs and the like?

Tuteja: Digital assets are uniquely qualified for these present times. Be it as an investment vehicle akin to bitcoin’s value proposition of ‘digital gold’ or the prospect of modernizing payments, remittances, money movement or banking the unbanked/underbanked driven via stablecoins, digital wallets and CBDCs, the opportunities abound. It’s fertile ground for projects in the digital assets space, including DeFi efforts currently focused on solving these important problems. Again, this momentum is driven by heightened need as we reimagine and reconfigure our day-to-day norms in the time of/after COVID. For example: In my role leading emerging tech and partnerships, I had the opportunity to work with several Asia Tech firms in China. As someone who needs her daily dose of Starbucks, it was always amusing when I tried to pay for my drink with cash or credit card. In a society that has adopted end-to-end digital payments driven by digital wallets embedded within messaging apps like WeChat, the notion of a cash or physical credit card interaction could not be more antiquated. While the proliferation of digital wallets and QR codes have been slow to gain momentum in the U.S., current circumstances may mark a significant shift as consumers are more conscious and concerned about what they touch and who touches their card.

In this new world order, businesses will have to strike a balance between efficiency and resiliency, and as business leaders we must deliver a compounding and comparative advantage to our constituents – customers, employees, and the communities we serve. All of which will enable a good deal of change management and digital transformation to ensure long-lasting relevance. Yet in these times of hyper-change, innovation guided by the voice of the customer is always in vogue.

The confluence of these developments combined with the current macro environment garner an important inflection point in the proliferation of this nascent technology & asset class. It is therefore incumbent on the institutions that consumers know and trust, to lead with prudence and pragmatism in addressing this growing demand from consumers for education and access to digital assets, and continue the journey of bringing Wall Street to Main Street.

LMB: What does the path forward for digital transformation look like as a whole, and what do you anticipate the long-term effects on technology adoption being?

Tuteja: I’ve long maintained that anything that can be digitized will be digitized, it’s a matter of timing and led by the consumer, with technology as the enabler vs. the driver of change. An evergreen approach is key because the timing and pace of adoption is often influenced by external factors as we are witnessing at the moment. I’m reminded of examples like Webvan and Pets.com, which are often cited as failures of the dot.com bubble. Yet their contemporaries, Instacart and Chewy.com, are gaining tremendous adoption today. As an organization, you don’t want be caught off guard and unprepared, hence a persistent evaluation of the evolving consumer needs combined with a “perpetual beta” mindset in deploying new technologies is critical.

While starting with the technology can be alluring, it can lead to “shiny object syndrome” and innovation theater without much value for the end constituents. The not-so-secret secret sauce is an obsession with customer-focused innovation. A myopic focus on solving gnarly problems to deliver meaningful value by breaking down barriers that enable consumers to take charge of their financial future with confidence. If that’s powered by blockchain and AI, great, but the tech ought be secondary to the problem statement. The litmus test we apply is: What is the problem we are solving? Why is this problem worth solving? And why are we or is this tech uniquely qualified to solve this problem? It’s always better to be solving the hard problems and shipping pain-killers vs. vitamins. A strong anchor to the problem statement is also useful in maintaining focus on investing in, experimenting with and operationalizing new capabilities while averting the trappings of fads or fear of missing out.

In this new world order, businesses will have to strike a balance between efficiency and resiliency, which will enable a good deal of change management and digital transformation to ensure long-lasting relevance. Yet in these times of hyper-change, innovation guided by the voice of the customer is always in vogue.