Fifth Third Goes Outside the Box

By Karen M. Kroll

What happens when a bank looks outside the financial services industry for a source of fresh ideas?

You could find out from Steve D’Amico, who recently joined Fifth Third Bank as senior vice president and head of innovation. He comes with a background in consumer packaged goods, rather than financial services. But both he and his new company see that as an asset.

During the hiring process, D’Amico told his potential new boss he knew little about financial services. The response? “All the better,” D’Amico said. Organizations that are looking for perspective from outside the usual sources typically are open to new ideas, he added. That’s critical to making innovation possible.

“We are excited to add a world-class product innovator and design expert to the Fifth Third team,” Greg D. Carmichael, Fifth Third president and chief executive officer, said of D’Amico’s hiring. On its website, Fifth Third dubs itself “the curious bank,” declaring a commitment to ask questions and listen to the answers. This new addition to its team seems to demonstrate that commitment.

As the bank interviewed people for the position, it became clear the perspective it was looking for would come from someone familiar with financial services, but outside of it. Tim Spence, executive vice president and chief strategy officer with Fifth Third added, “Steve came with a strong record for delivering innovation in a company that’s recognized around the world for its product development and innovation.”

D’Amico studied environmental design at the University of Colorado at Boulder, and holds a master’s degree from the University of Cincinnati’s renowned school of design. In 2015, after 24 years at Procter & Gamble, he left his position as design director and took a sabbatical. “I felt I’d done as much as I could at P&G, and wanted to decide where to go next,” he said.

The innovation process: some things are the same everywhere.

While the results of innovation naturally vary from one industry to the next, most innovation processes share common traits, D’Amico explained. “Teams get stuck in the same place and in the same way.” Often team members are so close to a problem they lose the ability to step back and look at it from a different perspective. Some may focus so intently on their current product offering, they neglect to look for ideas from outside that universe.

Similarly, an environment that nurtures innovation requires several key conditions, no matter the organization or industry. One is acceptance of the idea that “you need to slow down to go fast,” D’Amico said. That is, innovators often need to step back, assess their progress, and correct any mistakes before they can move forward.

Another is the ability to “make the invisible visible,” according to D’Amico. This means acknowledging any barriers to innovation, including those that aren’t immediately apparent. For instance, are teams provided the resources they need to experiment and innovate? Are they being allowed to fail?

Can you speak “innovation nerd talk”?

While D’Amico was on sabbatical, Mike Crawford, Fifth Third’s vice president and senior manager of corporate strategy contacted him via LinkedIn. “My assumption was we’d be having some ‘innovation nerd talk,’” he said. That contact led to a conversation with Spence, and then to a job offer.

D’Amico appreciates Spence’s belief that financial services extends beyond checking and savings accounts; that money is fundamentally important in how people are able to run their lives. The two discussed challenges around serving the unbanked or underbanked. While acknowledging no easy solutions exist, D’Amico said it likely will be one area on which the bank will continue to focus. In February, Fifth Third launched Express Banking check cashing, direct deposit, and other services geared to these households. Express Banking products have no monthly fee or minimum deposits, and no overdrafts. (Read more.)

Another focus will be assessing how millennials are both different and similar to baby boomers and Gen X’ers. Innovation, D’Amico said, doesn’t consider just technology, but takes account of broader social and cultural trends.

Fifth Third’s position as a regional bank means it can make investments that might be out of reach of, say, a local credit union, yet still can move with some agility. “It’s an interesting in-between territory,” D’Amico said.

Of course, employees with all financial services organizations must spend a great deal of time complying with regulations. It’s critical work, D’Amico noted. “But you still have to think about what could be. Otherwise, you’re just doing the same things.”

Gaining perspective from distance.

While D’Amico comes with a background in consumer goods, he recognizes the need to understand how Fifth Third runs. Still, maintaining some distance helps to lend perspective. D’Amico and his team can then work with innovators embedded within the bank’s lines of business. “We ask the uncommon, even naïve questions,” he said.

D’Amico’s focus is “the innovation pipeline,” which looks about three to ten years out. The results of these efforts then feed the commercial pipeline. This is also known as the “FEI” or “front end of innovation.” The goal is to experiment, fail early, learn, and move forward.

One of D’Amico’s first charges is to create a center of excellence and innovation within Fifth Third. “My approach isn’t to create a SWAT team” that parachutes in at the last minute to solve problems, he said.

Instead, D’Amico is developing an “embedded innovation capability” that focuses on building innovation capabilities throughout the organization. The goal is to create the conditions that “reveal the genius in people.”

Several factors contribute to an embedded innovation capability. One is a small, central “center of excellence,” which is responsible for capability building and governance. Another is a network of internal innovators, including those who are part of the lines of business. If innovation occurs too far away from the lines of business, relevance can become an issue, D’Amico warns.

“We want innovation to be a part of the way leaders think about their businesses day in and day out,” Spence noted.

It’s also important to acknowledge that not all the smart, innovative people will work at a single company. D’Amico will also develop external networks of startups, entrepreneurs, and other parties with whom Fifth Third can share ideas and knowledge.

D’Amico says his longer-term goal is to work himself out of a job. That will happen once “innovation is so much a part of the culture that I’m no longer needed,” he said.

Karen M. Kroll is a business and financial services writer and content marketer based in Minneapolis-St. Paul. Email: [email protected].