Dan O'Malley, head of the innovation lab at Eastern Bank, is blazing a path towards product innovation that should be the model for other community banks. In just 14 months, Eastern implemented a SMB lending product that rivals the new online lenders.
"I know it's kind of audacious and maybe ludicrous when you see a bank that tries to operate faster than a fintech company," O'Malley said at Celent Innovation and Insight Day in New York this spring. But he insists that's exactly what his Eastern Labs unit is doing. The team in the innovation lab accounts for about 7% of the bank's workforce, and consists of 50% developers and designers, 25% data scientists and 25% bankers. The budget for research and development grows as long as the bank does well, because "we decided to take 1% of the revenue from the bank and invest that into R&D," said O'Malley, who is the chief digital officer.