When Interac was founded over 35 years ago, it came to market with a simple idea: that Canadians should be able to access their own money through a single shared network. Its most enduring products are Interac Debit and its digital money transfer platform, or ‘Interac e-Transfer.’ Now, Interac is looking to disrupt the payments industry once more, this time with the help of a new team.
Interac has learned that innovation is as much about the process behind it as it is the creativity within.
The financial services corporation recently founded its Innovation Lab and New Ventures team with a mandate to look at the company’s three-to-five-year horizon for new payments innovations. Headed by Chief Innovation Labs & New Ventures Officer Debbie Gamble, the team looks at how Interac can develop and test new ideas before they go to market.
BetaKit spoke with Gamble alongside Tricia Gruetzmacher, the Director of the Interac Innovation Lab at Communitech in Kitchener, Ontario, about the Interac innovation journey. As an organization that has reinvented itself for three decades, Gamble and Gruetzmacher shared lessons on how to innovate successfully and integrate new ideas into the business.
The bedrock of innovation
‘Innovation’ often calls to mind new technologies the world has never seen before. But Interac has learned that innovation is as much about the process behind it as it is the creativity within it.
Gruetzmacher knows this well, as building a sustainable process for funnelling innovative ideas through the Interac Innovation Lab is her full-time job.
“We start the process by doing as much research as we can,” said Gruetzmacher. “Then we have a team come – including the team from Interac [HQ] – and we do a design thinking session.”
Take, for example, the marketplace problem of splitting bills among high-frequency groups, such as students living in shared accommodations. During the design thinking session, the Interac team would meet with students to learn how they split bills today and user-test proposed solutions. This allows Interac to iterate on solutions with real feedback.
In these sessions, Gruetzmacher said the team is looking to solve a few key questions: identify stakeholders, identify early adopters, and outline the planned customer journey.
This seemingly rigid process of design thinking sessions actually sets Interac up for innovation down the road by putting everyone on the same page from the start. While the Innovation Lab and New Ventures team wants to push as much forward as possible, Interac has learned that it requires managing scope.
For Gruetzmacher, managing scope means the Interac Lab does not take on “moonshot” ideas, instead prioritizing proof of concept and rapid prototyping projects that are deeply connected with the organization’s business goals.
For Gamble, managing scope requires stakeholders from every department to be successful, not just executives.
After doing some initial research to validate an idea, Gamble said her team “will typically engage a squad approach. That means that we will get representatives from each of the key departments across the company to make sure that we’ve got a broad perspective… Product, Technology, it may [also] be Operations, Legal, Finance, or HR.”
The point of including everyone from the start is to ensure that ideas can actually integrate back into the core business at Interac and be taken to market successfully.
The power of partnerships
“Our goal is to rapidly ideate so we can use some of the technology, tools, and methodologies we have so that we can explore the idea, identify the friction points, and identify the potential partners we can collaborate with,” said Gamble.
Collaboration, in particular, is a “big theme” for Interac. Initially launched as a cooperative venture between five Canadian financial institutions in 1984, Interac knows that collaboration is required to innovate in a highly-regulated and close-knit banking environment. In the 21st century, Gamble said that industry relationships open the business to completely new opportunities.
As an example, Gamble shared a recent project with IBM and Alectra Utilities using blockchain.
The premise was simple: Alectra wanted to incentivize people to be more climate-friendly – to contribute solar energy back to the grid or to defer electric vehicle charging to a non-peak period. While Alectra had the data on customer energy usage, it had no way to incentivize people to manage their energy usage better.
Interac e-Transfer capabilities, combined with IBM’s blockchain technology services, offered the solution.
“[Interac] sits in the middle between the consumers and businesses,” said Gamble. “We have connectivity to financial institutions across Canada and many Canadians know who we are. We took on the role of a [behavioural] exchange. When Alectra wanted you to reduce your air conditioning, you could be immediately incented through their relationship with Interac.”
“We would end up understanding who’s actually adjusted the meter accordingly, vetted through [IBM’s] blockchain,” Gamble continued. “And we could incent you through a direct deposit into your account using our Interac e-Transfer platform.”
Gamble said the project would not have happened without pre-existing relationships with IBM.
“People probably wouldn’t associate us with Alectra, a utility company, but our work with IBM allowed us to think about this idea of a behavioural exchange,” said Gamble. “Our relationships… allow us to prove out some ideas very quickly.”
Innovation requires vision
The frameworks, partnerships, and processes Interac has put into place would not amount to much if the focus on innovation did not also serve the organization’s mission.
While a blockchain-based behavioural exchange sounds really cool, it would not be valuable to Interac if it did not fit into with the company’s broader vision of creating new methods of secure payment and being socially responsible. Similarly, having multiple stakeholders around the table could easily turn into a strategic nightmare if the company was not working in service of connecting new ideas to the primary business.
With everyone aware of the mission before innovation projects even start, Gamble said Interac is much more efficient than if it simply chased cool-sounding projects with no singular goal in mind.
“Like running every business, we’ve got to be fiscally responsible,” said Gamble. “We have to ensure that we can give the idea the focus and attention that it needs. But probably the most important thing to us is making sure that we are in tune with what’s going on in the broader landscape – the Canadian marketplace and broader international ecosystem.”