In the banking industry innovation is usually limited to printing customised pictures on credit cards. The most significant paradigm change in the industry in the last few years has come not from the mainstream banks, but from Zopa.

However The Royal Bank of Canada has started a fascinating competition called “The Next Great Innovator Challenge.” It is offering a CAN$20,000 purse for teams of Canadian students to tell the bank how teens will influence the banking environment in the next few years.

It’s interesting on several fronts. Firstly it taps into crowdsourcing – it’s likely that a plethora of ideas will flood into the organisation as a result of the competition. Even if the ideas will not fly, they will start people thinking in whole new directions. When you are encouraging innovation, divergent thinking is a necessary base for the process. From a company point of view, exploring ideas submitted via the competition also gives people in the organisation permission to explore thoughts that would otherwise be considered too fringe and therefore ‘off limits.’

Secondly the competition acknowledges that there’s a generation gap in technology use, and that teens now technology multi-task without a second thought. Contrast this approach to most C-level executives in the banking world who have yet to come to grips with T9 dictionaries to speed up texting.

Lastly because of the conservative nature of banks, and speaking from personal experience, getting a competition of this nature off the ground is damn hard, so I have to tip my hat to the Applied Innovation Team at RBC.

I’ll be watching the competition with interest.