Can innovation be certified?

By Winston Yong, Chief Architect, Industry Platform at IBM
Innovation is everywhere. Creativity and Transformation are celebrated virtues in our connected digital world. It is the constant drumbeat that drives digital start-up companies to create new solutions to replace inefficient incumbents. In the FinTech world, the challenge is especially stark as the incumbent financial institutions are built on Trust and Resilience. Who wins when Innovation meets Robustness?

Recently, Innovate Finance published the final report on the Industry Sandbox consultation. It concluded that Industry Sandboxes are a viable way to have a ‘shared off market development environment to validate innovative ideas’. Certification was outlined as one of the Sandbox’s feature — providing FinTech solutions the option to be certified and hence achieve a level of industry assurance for quality and robustness.

The concept of a neutral and industry recognised FinTech certification programme has its merits and few would argue against it. The complications for such an aspirational programme is in its implementation. To be successful, it would have to tread a fine line between sophistication and ease of use. In addition, it would have to have the following characteristics to ensure its acceptance, to both the FinTechs and the parties it seeks to assure.

Adopt and adapt. We have over 70 technology standards which are relevant to the development of new financial technology. It would be prudent to allow FinTechs the freedom to have their choice of tools to innovate with and also to choose the relevant standards to use in their development. The re-use of relevant existing standards in certification allows both flexibility and evolution, ensuring the programme’s currency. For example, adopting specialised cybersecurity standards would allow the certification programme to keep pace with the fast changing battlefronts of the cybersecurity war. It would be redundant to establish a new FinTech cybersecurity standard.

Discipline. Trust is built on the assurance that rigour and discipline is present. The role of certification is to ensure that relevant discipline has been applied in the creation of the FinTech solution. This would apply to all stages of innovation development; regardless of speciality or domain. The breadth and range of services provided by the UK Accreditation Services (UKAS) in providing assurances across new services and multiple industries provides both precedent and insights from other industries. Learnings from the Pharmaceutical and Renewable Energies are very relevant and encouraging for this approach in the Fintech sphere.

Room for milk. My barista hands over my morning coffee with room for milk, giving me that chance and choice to finish off my coffee to my personal taste. Similarly, certification should be based on providing assurance that the fundamentals are sound; leaving room for the final gold plating to be done and the next stage for creativity innovation to be set.

Do you think FinTech certification would introduce some balance between innovation and robustness at your organisation? Reactions and questions to this blog will be addressed in a 20 June webinar.

Winston Yong is Chief Architect, Industry Platform, at IBM

Learn more in the upcoming IBM webinar: How Can Banks Thrive In The Cognitive Era?