How to Dive into Innovation in 2023

When it comes to innovation, big picture ideas formulate and crystalize into concrete plans. Having the vision and enthusiasm for fresh solutions is just the start and drives the community bank journey to unearth specific, relevant and actionable opportunities. This “innovation funnel” approach is a popular business model that fuels a high-quality idea development process.

To that point, in my January Independent Banker column, I spoke about five trends shaping community banking in 2023, including digital transformation; instant and real-time payments; fintech-enabled solutions; embedded payments; and staffing shifts. If we then apply the innovation funnel mindset to these trends, the following approach emerges:

1. Start with digital transformation, which speaks to the larger innovation vision. ICBA’s ThinkTECH program has been exploring why this evolution is necessary, but as we kick off the new year, that focus is shifting to how we can implement it. At the request of our bankers, we launched a new digital transformation education series, designed to support you wherever you are on your innovation journey, including offering direct, practical roadmaps on how to implement innovative technology initiatives.

2. Evaluate how instant and real-time payments bolster your digital transformation efforts. With the launch of FedNow approaching, faster payments technology will continue to garner interest, and that bodes well for new digital initiatives on the horizon. Community banks will need to consider how to leverage real-time and instant payments to meet customer needs. So, speak with your technology partners now about how you can tap into these new rails, and how they support your bank’s digital transformation goals.

3. Explore fintech partnerships to support innovation goals. As community banks become more granular in their innovation approach, many are seeking technology solutions to address specific business segments. Agricultural technology is one such area in which ICBA is primed to explore further, given the fact that community banks fund roughly 80 percent of agriculture loans under $1 million.

   Yet fintech engagement extends far beyond ag tech, with developments in age tech; wealth management involving financial health, wellness, and inclusion; and deposit gathering as chief areas of focus. With these novel solutions, community banks will have the opportunity to prioritize offerings in a variety of areas based on their individual needs.

4. Keep an eye on embedded payments. I’d label this as “one-to-watch” in 2023, as embedded payments grow in importance to financial institutions of all sizes. The frictionless payment approach they deliver—a singular peruse-to-purchase-to-payment experience—has been raising customer expectations. In the coming months, community banks will have more tools and capabilities to take advantage of the opportunities embedded payments create, and we plan to leverage our ThinkTECH program to help highlight and identify solutions germane to your needs.

5. Contemplate your staffing requirements. As you move down your digital transformation path, your teams will need to navigate a more technology-focused environment and the cultural refinement that goes along with it. This is the time to invest in bolstering your talent, so that it reflects the mix of skillsets that best align with the strategies you’re putting forth.

These technology trends lend themselves to supporting how an innovation funnel approach applies in your bank, and ICBA will be by your side throughout the year to navigate next steps.

In fact, we’re taking a hand-in-glove approach where education programs—like our webinar series—give way to identifying the right solutions—through programs like the all-star ThinkTECH Accelerator showcase at ICBA LIVE and our recently revamped Solutions Directory. It’s our goal to marry big-picture thinking with applied solutions to ensure that 2023 brings forward continuous innovation, no matter where you are in your journey.