Commonwealth Bank of Australia has become the latest member of the big four banks to open a dedicated innovation space, launching a new lab in Sydney where it hopes customers and staff will work together on disruptive ideas.
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Designed as an "idea incubator", the lab was unveiled in Sydney's CBD on Thursday and will occupy a 690 square metre space in Commonwealth Bank Place.
"The competitive environment is more serious than ever," chief executive Ian Narev said at the launch of the lab.
"This is life or death. Sometimes you don't need to be a market leader but a fast follower."
The launch of the centre comes just months after rival National Australia Bank opened a Melbourne-based open plan workspace for small business customers called The Village.
Westpac opened an innovation space in Sydney in September.
A growing number of potentially disruptive technologies are focused on grabbing a slice of the huge profits inside Australia's banking sector. Banks including CBA are hurrying to put in place processes to stay on top of the rush of applications and products trying to lure consumers away from the products and services banks have traditionally provided.
There is even a threat from overseas non-banking sector players such as Alibaba and Google, who are bringing their own forms of payment systems to the Australian market.
"[We need to] replicate a lot of the conditions and opportunities that create that innovation," Mr Narev said.
Reports suggest the lab has cost about $4 million to set up, although the bank would not comment other than to say it was "not a significant spend in the grand scheme of the Commonwealth Bank".
On entering the hub, visitors are handed a tablet which connects to the different areas of the lab. The tablet acts almost like a remote which interacts with digital whiteboards and screens.
There are three Oculus Rift zones, where virtual reality headsets are set up to allow the user to experience life as a CBA employee or customer although, as Mr Narev pointed out, a real innovation would be to develop a way these headsets did not incite intense motion sickness and nausea.
Chief information officer David Whiteing said the leadership team had garnered a lot from its recent trip to Silicon Valley.
"It's a good thing to make mistakes. It's a good thing to learn from them.
"Part of this process is to make the mistakes quicker rather than spending a lot of money and then realising we don't have something to go forward with."
One of CBA's innovations stems from its involvement in the Opal contract in May 2010.
Kelly Bayer Rosmarin, group executive of institutional banking and markets, said the vision was to develop technology enabling commuters to swipe credit cards rather than have specialised cards issued. However, NSW Finance Minister Dominic Perrottet, who attended the launch, would not commit to a timeline.
"I wouldn't want to announce anything that would embarrass the transport minister tomorrow," he said.
