State Bank of India (SBI) plans to set up an Innovation, Incubation and Acceleration Centre (IIAC) at Hyderabad in a bid to build in-house capability to bolster its current performance and drive higher top-line growth through innovation.
The centre will be operational in six to nine months of on-boarding a consultant.
“Over the last few years, the bank has carried out several efforts to improve the stability and resilience of its digital offerings and increase the flexibility of its infrastructure and technology delivery capacity. However, with ever-increasing demand for new and accelerated dynamics and technology-driven innovations in financial services, remaining competitive and relevant in the market has been a challenge,” according to a bank document.
In the document seeking engagement of a consultant, the bank said that it has helped nurture start-ups and fin-techs focused on innovation through its Start-up/Fin-tech engagement initiative.
“It is important to isolate transformational projects from near-term priorities and pressures of operational compulsions. It is felt that innovation projects/initiatives need a different operating model, risk appetite and competency that the bank needs to invest and develop over a period of time,” according to the document.
The bank has already institutionalised a policy of partnering with fin-techs, which is distributed across the organisation.
The role of the IIAC
“A need is being felt to increase synergies and central ownership. Also, the current engagement process is facing a few challenges related to sourcing, conversion and time to market. There is also a need to focus on a theme-based enabling framework for engagement, quick on-boarding time, a requirement of on-site deployment model, related security approval processes and cloud native solution/infrastructure, etc,” per the document.
Some of the objectives of IIAC: To better understand and explore how emerging innovations, market shifts or technologies could impact the bank’s status quo; pursue large-scale initiatives that, once scaled, will redefine the existing business or create a new business unit or division for the bank; and transferring innovation from prototype to project/product that can be monetised by the bank.
The IIAC should help the bank develop a set of technologies, knowledge, and skills to develop new products and services, think and work like fin-techs and remain ahead of the curve.
The centre should orchestrate fin-tech/other external partnerships through focused scouting and outreach, defining a standardised and smooth on-boarding process, and setting up a necessary “lab” infrastructure for experimentation.
The bank said IIAC should act as a central body to govern and drive fin-tech partnerships and implement change across the bank.
“With capital, resources, and expertise on our side, we need to strategically partner with fin-techs. The IIAC should evaluate emerging technologies – to stay ahead of the peers, and lead and build future-ready technology foundations,” according to the document.