Aussie banks climb onto hackathon bandwagon

Hackathons, where software coders are invited to come up with innovations, are being embraced by financial services companies and banks keen to identify the 'next big thing' - and they are staking the phenomenon with hundreds of thousands of dollars in prize money.

This weekend software developers from around Australia are being invited to participate in the first of ten international hackathons organised by MasterCard. This first event is being held in Sydney with the eventual winners of the international event sharing in $US125,000 of prize money.

Last Sunday the Melbourne BattleHack 2015, organized by PayPal and Braintree, was won by a group of developers who proposed creating a cycling jacket featuring brake and indicator lights that could be bought and activated using a PayPal app. That team will be flown by the company to the international BattleHack finals in California later this year for a chance to win $US100,000.

Visa meanwhile sponsored its first international hackathon last year, with a much more miserly prize of $US5,000 (won  by Voutche) for a proposal for a system to score how much personal data internet users were providing to websites, allowing them to better assess their privacy and security.

Australia's banks are also climbing onto the hackathon bandwagon. NAB ran a weekend hackathon in December, with a $10,000 prize; Westpac ran its first internal hackathon last year looking to promote collaboration and innovation; while Commonwealth Bank has run a series of internal and external events, including a hackathon at Cebit last year to encourage developers to write apps to work in the bank's payments ecosystem.

All are looking to promote innovation, but also to seed interest in and understanding of the technology platforms promoted by each organisation. Software coders attending the hackathons generally receive a crash course in the technology and applications programming interfaces used by banks or payments companies, in the hope they might in the future also build that functionality into new products.

But organisations have been warned not to cynically exploit software coders, the best of whom can pick and choose which international hackathons to participate in.

Deloitte Digital partner Steve Hallam, who has organised hackathons internally and for third party clients, said that while they were a great way to access step change innovations, it was important that organisers did not just allow winning entries to "wither on the vine."

"You get one or two shots at a hackathon, or people become disenfranchised and less willing to give freely of their time," he said.

Vanessa Beggs, general manager of organisational development and innovation initiatives at Commonwealth Bank, said that internal hackathons provided a "great opportunity to bring together team members that ordinarily wouldn't work together," and also provided people with exposure to senior leaders of the bank who acted as hackathon judges.

Participants are steered toward proposing innovations that tackled an area of customer need, said Beggs, and prizes weren't lavish - iPads or laptops for example.

"If there ever is any cash reward it's for them to test the product," said Beggs.

She said CBA organized hackathons at least annually and occasionally more frequently. Some hacks were purely internal, some external and some a mixture of the two.
 
Beggs said that a CBA hackathon organized last year at Cebit had been designed to create greater awareness of CBA products while internal hacks were generally focused on an identified bank need.

"It's one of many ways you can build an innovative culture," she said.