With stifling bureaucracy being a big deterrent, banks have tried to cut the red tape so staff can get direct access to management, speeding up the process of taking an idea to market.
Standard Chartered Bank has set up an online portal where employees from all around the world can propose ideas to improve various banking processes.
Employees are also given 100 "innovation dollars" to invest in ideas they like. The ideas that attract the most innovation dollars are presented directly to management, with some eventually getting developed at the "global ideation hub" - known as SC Innovate - which is based in Singapore.
Maxime de Guillebon, head of digital platforms and transaction banking at Standard Chartered Bank, said: "We have adopted a gamification approach in crowd voting and crowd sourcing ideas from employees."
SC Innovate has worked with teams in Singapore on two ideas so far, both of which were generated by employees in other markets.
The first is a mobile token that enables banking clients to access real-time information and execute transactions. The idea was conceptualised by staff in Kenya and UAE. Clients will be able to use that mobile token to scan the encrypted QR code into their mobile phone to access the Straight2Bank (S2B) platform securely; this means they can use the service even if their mobile phone is offline.
The second is the S2B PrePay app, which was an idea from one of the bank's sales employees in India.
The employee came up with a quicker way to digitise information of supplier financing flows, speeding up the time it takes for invoice payments to reach clients. The app is now in the pilot phase and is being rolled out to vendor and suppliers based in China and India first, with other markets planned for next year.
Meanwhile, OCBC has used its innovation lab, The Open Vault, to bridge the bureaucracy gap between staff and management. Some bankers have slipped into the lab after office hours to try out ideas, going so far as to experiment despite their direct managers' resistance.
One OCBC home loans manager saw the potential to work with chatbots to bring in mortgages, and used The Open Vault to test his ideas. Today, the bank uses its home-loan chatbot Emma, which has helped to close more than S$70 million in home loans since its official launch in January this year.
The bank's head of group transaction surveillance Alex Ng urged the bank to try out artificial intelligence for transaction monitoring. He helped to test projects with two compliance-related fintechs that were part of Open Vault's accelerator programme, with the bank eventually picking up a commercialisation partnership with ThetaRay in November.
Early tests with ThetaRay showed that the fintech's technology was able to reduce by 35 per cent the number of alerts that did not require further review. By categorising more effectively the flagged transactions by their risk levels, the accuracy rate of identifying suspicious transactions also rose by more than four times.
Banks have also pumped money directly into their employees' side startup projects. DBS senior vice-president Jeffrey Sung started mortgage platform HugProperty in July 2016. After participating in the DBS Hotspot Pre-Accelerator programme that year, his startup received S$25,000 in seed grant from the bank.
With his connections as a private banker, he managed to secure funding from Brunei royalty, with Prince Abdul Qawi agreeing to provide "a few hundred thousand" in funding through the prince's family office, Mr Sung told The Business Times.
"As a private banker, I get to learn from successful entrepreneurs. When it comes to buying properties, these folks rarely walk into a showroom and write a cheque because 'it felt right'. They would simply give their requirements to a good, established property agent and wait for the expert data-driven analysis before making a purchase," said Mr Sung, who is still with DBS.
HugProperty recently started offering mortgage packages to its clients. The startup is also led by veteran property analyst Ku Swee Yong, whose expertise has helped to build the startup's databank on properties in District 9, 10 and 11, said Mr Sung.