National Australia Bank is using data from the accounting software and online bookkeeping company Xero to generate leads in its small business customer base.NAB chief executive Andrew Thorburn said the bank was an early investor in Xero and the two companies had developed an ongoing partnership.Speaking at an Australia-Israel Chamber of Commerce lunch in Sydney yesterday, Thorburn said: "We are connecting Xero's cloud to our platform. "We get the latest accounting data and that allows us to think about new services for our small business clients. That might involve initiating a lending lead."Thorburn cited the Xero partnership as an example of the innovation work the bank was doing. Other examples included Ubank's new property app UrHome, and the online financial advice service Prosper."I don't think we have told our story as well as we could have or should have," Thorburn said.Prosper is offering personalised financial advice online and has been designed to be a cost-effective alternative for customers who don't have a financial planner.Thorburn said the bank planned to extend the service to cover estate planning, debt and cash flow.The bank is also starting to see the benefits of its investment in a new core banking system. A new personal banking origination system is in the pilot stage and will be rolled out next year. The new system incorporates a number of improvements, including electronic identity verification.Thorburn said he looked at the way the bank went about innovation and found it was a random affair. He wanted to make it more part of the bank's culture. In response, the bank set up NAB Labs, where it builds and tests prototype products. It established a partnership with the business incubator Fishburners and it invested A$50 million in NAB Ventures, a venture fund.NAB Labs has a team of 30 and has worked with 600 bank staff on 18 prototypes. Five of those have been implemented and four more will be implemented over the next few months.Thorburn said: "We are innovating because our customers' preferences are changing. Sixty per cent of our customers access their banking via mobiles. These days our busiest branches are trains, buses and trams."Change is underway but we need to do more and we need to do it faster. It is not the big versus the small; it is the fast versus the slow."