From left, Declan Denehan, managing director of strategic growth initiatives at BNY Mellon; Bank Director Publisher Kelsey Weaver; President Al Dominick; and Olivia Bajaio, BNY Mellon vice president of strategic growth initiatives, in New York City earlier this week.

Editor’s note: This article has been corrected from an earlier version.

Conventional wisdom holds that banks are not very good at innovation—and large banks, with their entrenched bureaucracies and clumsy legacy systems, are probably worst of all. It might then come as a surprise that Bank of New York Mellon Corp. has run a highly successful innovation program that has made a meaningful contribution to the bank’s profitability, and also manages to get most of the company’s 50,000 employees involved in the process.

Declan Denehan, BNY Mellon’s managing director for strategy and innovation, offered a look into the unusual program during the inaugural FinTech Day sponsored jointly by Bank Director and NASDAQ OMX. The event was held at NASDAQ’s MarketSite in New York’s Times Square and attracted over 40 participants from 30 financial technology companies.

Headquartered in New York, BNY Mellon is the 5th largest U.S. bank with approximately $370 billion in assets. Unlike most banks, however, it does relatively little lending but instead focuses on two core businesses: investment management, with $1.7 trillion assets under management, which makes it one of the 10 largest managers in the world; and investor services, a broad category that includes a variety of back office functions that banks, insurance companies and investment managers rely on to handle their customers’ accounts.

BNY Mellon’s innovation program began in 2009 when the bank’s senior leadership decided they wanted to encourage creativity and out-of-the-box thinking among the bank’s employees, Denehen said on-stage during an interview with Bank Director President Al Dominick. BNY Mellon places tremendous importance on the use of technology in all of its investment management and servicing businesses and is constantly looking for ideas that will lead to improvements in efficiency, profitability and the customer experience. After spending some time talking with senior managers in BNY Mellon’s six major business units to get their thoughts on innovation, Denehan established a pilot program to review ideas submitted by approximately 10,000 employees throughout the company.

“We found out that there was a pent up desire in those employees to get their voices heard,” he said.

The pilot generated a lot of suggestions that weren’t necessarily aimed at improving the company’s profitability, so Denehan realized pretty quickly that going forward he would have to provide the bank’s employees with more guidance in terms of what he was looking for. “You know the old saying that’s there’s no such thing as a bad idea? Not true!” he laughed. Denehan ended up receiving some 1,000 ideas and it took some time to review them all and select those with merit. The program found enough winners that it generated about $165 million in pretax profit for the bank that first year.

The innovation program has expanded steadily since the 2009—all BNY Mellon employees are encouraged to participate—and looks for ideas that are capable of becoming large scale projects and make a significant contribution to the bank’s bottom line. It culminates in an eight-week contest called “ACE” that proceeds throughout several elimination rounds, with the finalists giving a five minute pitch to a panel of judges in New York. The winning team is selected at this final judging and its members receive what Denehan described as a substantial cash award and are given the opportunity to leave their current positions and join a company-run incubator where they will develop their idea and make it operational. The program also provides for feedback so employees who do not win will not lose motivation to participate. Since its inception in 2009, the program has generated over 13,000 innovation ideas.

Denehan cautioned the audience that the search for innovation in a corporate setting is an evolutionary process. To be successful, it requires the engagement of senior management so that everyone understands that the undertaking is important. The ideas also need to be things that fit comfortably with the culture of your company, which is why it’s so important the ideas come from employees who understand that culture and have been shaped by it. And whatever process you establish to foster innovation in your company has to respect that imperative.

“You have to build [a process] that can create ideas that can survive in the DNA of your organization,” said Denehan. “You have to build for your culture. Culture is everything.”