WHAT INNOVATION MEANS TO THE LENDING INDUSTRY

WHAT INNOVATION MEANS TO THE LENDING INDUSTRY 

 

by Philip Naylor Leaders Speak

While much of the publicity and commentary about lenders recently has focused on interest rates and fees, a silent invasion has been taking place behind the scenes in the lending industry.

The costs of loan processing are significant as they inhibit the efficient delivery of loan products from the lender (manufacturer) to the borrower. Accordingly, all the various points in the loan distribution chain, eg lenders, brokers, valuers, lawyers etc, are working to take unnecessary costs and delays out of the process by communicating electronically.

The problem is that unless all these points work together in a common format rather than each attempting to gain a temporary competitive advantage with their own proprietary solutions, a less than optimal process will result and we are likely to finish up with a lending industry version of the Australian multi-rail gauge experience.

This is where LIXI comes in. Established about six years ago by some lenders and mortgage broking groups, the Lending Industry XML Initiative is the standards body for e-processing loans. It is the 'language of lending' and has established several standards for the industry to adopt. While lenders and other players have partially embraced the standards (some lenders report 65 per cent of their loans are now being e-processed), the full benefit will not be achieved until the industry can boast 100 per cent.

The challenge for LIXI is to now convince all operators in the lending distribution chain to ensure their processes comply with LIXI standards. The payoff for the industry is the elimination of costly errors and re-work (endemic with paper-based loan applications in which an estimated 20 per cent need double handing to correct errors) while rapid loan approval is the reward for borrowers.

- Philip Naylor, CEO, Mortgage and Finance Association of Australia

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WHAT INNOVATION MEANS FOR AVIATION

WHAT INNOVATION MEANS FOR AVIATION 

 

Change can be a double edged sword and navigating through change over the last 87 years has been key to the success of Qantas.

Following an accelerated pace of change sine 2000, last year Qantas had each of its businesses profitable and exceeding their cost of capital. This contrasts significantly with 2001 when the industry was experiencing challenges on all fronts with most airlines losing money, and low cost business models were challenging conventional wisdom in legacy carriers.

Using 2001 as a baseline, we now have approximately 20% more planes, 65% more passengers, and less than 10% more staff, so our productivity has improved substantially.

Fleet renewal with larger planes coupled with growth has helped significantly in maximising efficiencies. Other initiatives such as utilisation of staff through establishing overseas bases for cabin crew, and introducing new business models such as Jetstar, have also assisted our performance.

Our Excel Recognition program is designed to recognize employee service excellence. These awards have focused on four streams: customer service; innovation; safety; and the environment. We receive these nominations from both internal employees and external customers like our frequent flyers. Currently we are receiving over 4,500 nominations a year, including over 80 innovative ideas.

Recognition occurs every quarter and once a year we have all nominations put forward judged by staff and frequent flyers before selecting the top 200 winners. These are recognised at a gala dinner event each year.

Critical to adapting to a constantly changing environment is our communication with staff across the globe in as many ways as we can get our messages out. Publications, meetings, newsletters and websites all help, as does the general media.

When you are working with over 37,000 staff, many thousands don't have an office or even one location. Achieving significant change has relied on innovation and adaptation requires constant calibration, and depended the involvement and commitment of our employees.

- Kevin Brown, Executive General Manager, People, Qantas

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WHAT INNOVATION MEANS FOR THE FUTURE

WHAT INNOVATION MEANS FOR THE FUTURE 

 

With the increasing impact of global megatrends such as urbanisation, demographic change, climate change and globalisation in our region of the world, there are many challenges and opportunities to be addressed.

Our organisation was founded on innovation, and today we focus on finding solutions to challenges which lie in the everyday needs of water, energy, environment, healthcare, productivity, mobility, safety and security.

We need to take responsibility and find solutions to the pressing issues faced by communities around the world, and we need people who are innovative and who can think beyond boundaries.

Together, Australia and New Zealand have a choice. We can follow the world or we can be leaders. Leadership and innovation is not restricted to wealth and large countries. Take Denmark, for example, a smaller country which leads the world in wind technology, providing us all with a sustainable energy solution.

Australia is one of our planet's biggest miners of iron and coal. How can we look beyond what we do every day and consider the impacts of our actions on future generations? Again, innovation is the key to finding solutions to the problems we face. Innovation is not just about products and services but ultimately the right mix of people, processes and technology. This is what drives the Siemens organisation in Australia and New Zealand.

Collectively, we need to desire global leadership, take some risks and move beyond fear of the future. Our future is not about the next technology. Our future relies on looking 100 years ahead and ensuring we can improve life for coming generations.

- Albert Goller, chairman & managing director, Siemens Australia & New Zealand

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WHAT INNOVATION MEANS TO THE AUTO INDUSTRY

WHAT INNOVATION MEANS TO THE AUTO INDUSTRY 

 

What's clapping got to do with innovation in the car industry? And why can't I drive a truly zero-emission car from production right through to recycling, today?

Second question first. Innovation in the automotive industry is a given. Every year engineers, designers and importantly the boffins who imagine safer, greener, more practical and enjoyable cars of the future, toil away on the latest automotive innovations.

Tyres which save you from driving off the road if you have a blow-out, lights which bend around corners, engines which produce more power yet use less fuel, jet-fighter pilot style head-up display so you can keep your eyes on the road, the ability to see like an owl with night vision technology, sun reflective leather to keep your bottom cool.

These, along with all manner of high tech infotainment gadgets, are just some of the latest BMW developments enjoyed by customers right now.

But what innovations will be required for the future when we run out of oil? Can, or should, a company like BMW invest in a future technology for over 60 years before earning a return? This is precisely what is happening at BMW Group right now.

With EfficientDynamics, engineers in Bavaria are progressing on a three-pronged attack. Right now over one-third of all cars sold in Europe emit less than 140 grams of CO2 per kilometre thanks to a suite of fuel saving technologies. In most cases, these cars perform better than current hybrid technology. For example the BMW 320i has 23 per cent less fuel consumption and 95 per cent less exhaust emissions while delivering 20 per cent more power than its equivalent of 15 years ago.

In the medium term, further inroads with ongoing electrification of the drivetrain will be made, all the way to hybridisation.

However, for the long term, the company is investing in the use of hydrogen in the combustion engine since hydrogen can be recovered almost entirely free of CO2 from a large number of regenerative energy sources.

Each year, the BMW Group spends over three billion Euros in researching and developing new innovations, like the Hydrogen 7, over and above its usual product development efforts.

Here's where the clapping comes in. BMW Group is urging partners in politics, science, research and industry, including the ideally-placed Australia, to continue establishing infrastructure and technologies revolving around hydrogen as a source of renewable energy. It's often said it takes two hands to clap. Working together, we'll ensure we can innovate to answer the second question above.

- Guenther Seemann, managing director, BMW Group Australia

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WHAT INNOVATION MEANS TO THE PHARMACEUTICAL INDUSTRY

WHAT INNOVATION MEANS TO THE PHARMACEUTICAL INDUSTRY 

 

There is an old saying in business - possibly attributed to marketing and management guru Phillip Kotler from about 30 years ago - that there are three types of companies: those that make things happen; those that watch what's happening, and those that wonder what happened.

Still true today, and innovative companies and those with aspirations for innovation know which type they should belong to.

But innovation cannot be imposed on an organisation and its people. The "command and control" approach to management, so redolent of 19th and 20th century almost-militaristic management style, is counter to innovation.

We now operate in a very different world, with responsibility for success shared across the entire organisation, a differently-skilled and motivated workforce, widespread access to information, and mobile technologies that allow us to communicate 24/7 in all time zones. Hierarchical structures are out, with organisations now using more of a matrix set-up with often two or three reporting lines.

The type of organisation that I believe has the best chance of succeeding in this environment is one that has a culture of adaptability, flexibility and resilience, and one where everyone is valued, heard and feels they can make a contribution to the direction of the organisation, and where customer focus is absolutely critical.

In this context, innovation and creativity can flourish. Innovation must be sponsored from the top, and CEOs must challenge business models, defy collaboration limits and force an outside look.

In the last five years, our own company has signed upward of 50 collaborative deals globally per year with external organisations like biotech companies, research institutes and other pharmaceutical companies. It is this sort of activity, and this sort of attitude, that will allow us to stay at the cutting edge of scientific innovation.

- Will Delaat, managing director, Merck Sharp & Dohme (Australia)

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