Government & Public

Winning innovation in a regulated industry

Moving fast in a regulated environment
  • In a high-regulated environment, red tape with long and complex processes prevents organisations from moving fast while innovating.
  • However, we continue to see impactful innovations happening in some of the most regulated industries such as financial services and healthcare.
  • Through fostering a culture of innovation and investing in future-forward technologies, organisations can find ways to achieve a 'just right' approach for radical and incremental innovation within a regulated environment.
5 minutes to read

From innovation labs to corporate incubators and new venture builders, a startup innovation culture is igniting across the world, and accelerating the development of disruptive ideas in this global competition.

Many thinks regulation inhibits innovation. Yet the world continues to see some of the most impactful innovations — such as digital banks, AI-enabled healthcare and digital therapeutics, coming from some of the most regulated industries.

These organisations have found ways to harness agility, not only to drive innovation but also to transform their approach to security and compliance.

So, what success patterns is needed for innovation to flourish?

Speed & compliance can co-exist with agile ways of working

Even in less regulated industries, innovation is often a challenging and messy process. Highly-regulated industries have the added challenge of well-meaning yet sometimes misguided processes adding red tape and drawing out timelines — a serious impediment when successful innovation depends so much on moving quickly.

Innovation in these industries is as much about finding ways to move fast without sacrificing security or compliance as it is about developing new products, services and solutions.

The NHS COVID App is a prime example of such an approach.

Innovation & digital transformation in UK's National Health Service (NHS)

Developed as a vital part of the pandemic response in 2021, the test and trace solution illustrates how major policy changes and health requirements can be embedded into patient-centric digital solutions within a short timeframe.

Designed and built with a secure, privacy-first approach, the digital service monitors possible exposure to COVID-19. It is estimated to have prevented up to 600,000 infections and accelerated medical app innovation in the country.

The digital service also brought about a culture change within the Department of Health and Social Care (DHSC) — a ministerial department that aims to lead the nation's health and social care. A way for them to transform into an agile organisation leading public health through digital innovation.

As the delivery partner working with DHSC, Zühlke established a multi-disciplinary working group including policymakers, researchers, designers, engineers, and experts in security, ethics, accessibility and other areas, collaborating closely to launch the app in 12 weeks to serve over 22 million users.

The joint team operated in a highly incremental, agile way. Policy, compliance, user research and design were embedded in the weekly development build cycle. In addition, the use of native cloud services and automation of every aspect of the build, test and deployment process enabled the delivery of this class-1 medical device.

The Zühlke team was named "Development Team of the Year", receiving the UK IT Industry Award 2021 for its delivery of the COVID-19 app.

NHS Test and Trace: The development behind the Covid-19 app

The day after the release of the NHS England and Wales COVID-19 contact tracing app, Wolfgang Emmerich, CEO, Zühlke Engineering spoke to Ian Bolland from Med-Tech News about the development behind the app.

Covid-19 Virus

A culture of innovation driven by talents

A culture conducive to innovation does not happen overnight. When asked to describe such cultures, employees often named expressions like willingness to experiment, psychological safety, open collaboration and communication.

Culture is only as strong as the people who bring it to life. Beyond hiring diverse talents, flexible-enough structures in organisations can help to bridge silos and create open lines of communication and collaboration between teams.

One simple yet powerful approach is to speak a shared, inclusive language. This can be in the way team goals are defined and communicated, with the goal of bringing people together and aligning their objectives.

Investing in future-forward sustainable technologies

Most breakthrough innovations are, in some ways, driven by new technology. Businesses are always on the search for the next big technology that can help them move ahead of the competition.

In doing so, these organisations must be well-equipped to operate in any regulatory environment. This means that the systems powering a company should be flexible and adaptable enough to scale such changes.

Think of data and the way organisations use it. Enterprise data tends to reflect the organisational structure that created it. In many highly-regulated sectors, it is often siloed, internally focused and structured to report based on the current regulatory landscape. As a result, organisations often find themselves at a disadvantage when forces outside the business require them to make changes rapidly.

Digital banks are an excellent example of this dynamic, where regulatory requirements vary by region.

Heavily regulated companies like banks spend millions of dollars on maintaining their core systems, which usually interface with hundreds of other systems and handle a massive amount of secured data. Core banking systems, for example, are designed to handle a high volume of transactions, be available 24x7 for customers worldwide, and be scalable to support the bank's strategy.

As digital banks take flight, they boast the advantages of their technology-first approach, with the ability to go lean and deliver features aimed at better customer experience.

Here is where streamlining back-end systems and data strategies can make a real difference down the line as these digital banks enter new markets. A modern, data-driven approach that can scale dynamically to meet performance or regulatory requirements.

Balancing a 'just right' approach for radical and incremental innovation

Radical innovation — in the form of large, ambitious projects, often takes time to build momentum and deliver value in the regulated sectors.

Incremental innovations in the form of tactical projects or pilots mostly build on existing and well-understood products or services and improve on them incrementally. But they sometimes never take off or take too long to scale.

A lean project team working on an innovation initiative with executive sponsorship is one of the most effective setups for innovation to flourish. A single lighthouse project can pave the way for large-scale innovation to happen, while reassuring those responsible for complicated processes like legal and regulatory to understand both risks and benefits for the organisation.

This article was originally published in Issue 87 of the Orient Magazine, Official Magazine of the British Chamber of Commerce in Singapore.

Contact person for Singapore

William Dew

Managing Director Markets

William Dew leads Business Development for Zühlke in Singapore. He has over 20 years of experience working with diverse organisations across Asia, Europe, and the Middle East to solve complex business and technology challenges. Prior to joining Zühlke, William was the founder and CEO of a PropTech business in Hong Kong and has held various APAC leadership roles within companies in the FinTech and Communications industries.

Armando Paz Zühlke
Contact person for Switzerland

Armando Paz

Senior Business Development Manager

Armando Paz joined Zühlke 2020 as Senior Business Development Manager in the Financial Services Unit in Switzerland. He has worked for more than 17 years within the financial sector with a strong knowledge of financial markets and finance software products and services. In addition, he loves to make data-driven decisions that will help improve the services for the clients in the future.

Jan-Philipp Koch
Contact person for Germany

Jan-Philipp Koch

Head of Banking Sector

As an innovation partner, Jan-Philipp supports banks and other financial services companies in the development of data-driven business models and digital solutions and processes. He brings experience as a consultant from a technology and management consulting firm and thus extensive knowledge in the areas of Data, Machine Learning and Blockchain.

Helmut Taumberger
Contact person for Austria

Helmut Taumberger

Managing Director Market Units

Helmut Taumberger is committed to digital transformation – and has many years of experience and the innovative skills to support this commitment. The qualified engineer has been working in the IT sector since 2003 and has put his comprehensive expertise at the service of a range of international companies. He loves creating practical strategies and aims to ignite people’s interest in technological change. He has been with Zühlke since 2022, where he is responsible for go-to-market strategies in Austria as Managing Director and steers the strategic direction and development of business relationships and partnerships.

Myles Davidson
Contact person for United Kingdom

Myles Davidson

Director Business Development

Myles Davidson is an experienced leader for the digital transformation of companies and product innovation. Significant experience in driving business initiatives on a local and international level in a complex and rapidly changing environment. Myles is known as trusted advisor for clients at C- and board-level for strategic questions around business innovation and technology.