Results tagged “innovation”

Lessons from Big Brother: Banks can teach FinTech

The rise of financial startups has taken bank bashing to new levels. FinTech has become a metaphor for all that banks should but could never be. Enough and more has been said about what banks need to learn, not to mention fear, from their new rivals.

But there is always another side to every story, and the spate of FinTech-bank collaborations is proof of that. Why else would FinTech companies do a U-turn to partner with the same banks they were supposed to slay? The truth is that while financial startups are doing some things right, they still have a lot to learn and gain from their traditional banking rivals.

Niche services in banking - It's the icing that matters

For years together, any product innovation in the banking world was focused around same or similar segment of customers. A significant shift in the target segment for financial services was brought about by the advent of mobile money in the developing world, about a decade back. Telcos used mobile wallets to target a segment of users, hitherto considered as an unviable segment by the traditional banking industry. Nevertheless, the user segment targeted by wallet services bring in inherent roadblocks like choice of UI, distribution channel, customer education etc.

Innovating to serve

Digital banking opens up pathways for traditional banks to pursue new opportunities within new ecosystems, markets and communities. Access can now be taken for granted. Rising mobile penetration, and freedom from the limitations, or need, for a physical presence, means that banks can now expand into areas that previously did not meet the cost-benefit cutoff. And it is not merely about access. Given the innate flexibility and versatility of the digital model, banks can even purpose-design and deliver products and services to fit the needs and circumstances of even the smallest of communities.

Tracking Mobile Banking Innovation - II

The emerging markets have the numbers and the ambition, but innovation is not necessarily or innately indigenous. That was where I signed off in my last post, so let me pick it up from there.

What works for the developing can also work for the developed. Emerging markets typically innovate around constraints - like weak infrastructure or low literacy for example - that may not be applicable to more mature markets. The innovation process in emerging markets is often defined by a search for fundamental utility rather than indisputable excellence, which has driven frugal innovation in many of these countries.

Innovating for Omnichannel

Channels were at the frontline of digital disruption in the banking industry and continue to be hugely influential in banking transformation. Channel experience is a critical factor in how customers rate their overall banking experience. Also, for an entire generation, the value of a bank's product and service offerings is only as good as its mobile channel. Channel innovation, therefore, still represents a huge opportunity for banks to deliver a differentiated and personalized experience to their customers. Little wonder then that it tops the innovation and investment agenda at a large number of banks.

Software Product Documentation - Less is More

Here is a quick question to begin with. When was the last time you referred to a bulky user manual for a consumer product? Chances are that you haven't done that in a while. There was a time when a manual was often larger than the product it described, such as a scientific calculator. But when I checked the documentation that came with my iPad mini, smartphone, and Acer Tablet, in each case it was minimal. Of course, there was plenty of electronic content online.

Is innovation all about managing change?

I did an Internet search on "most innovative companies in the world". Predictably, the search engine that I used, Google was in the list along with several other new-age organizations. There was a clear pattern though - none of the lists featured top-notch business or management consulting organizations at the top. Isn't it surprising that reputed management consulting firms that drive innovation at several client organizations are not considered innovators themselves? They have the ideas and the expertise, so where do they falter?

Is innovation in your DNA?

The emphasis on innovation has never been more acute; that has been clearly established based on the findings of this year's Efma-Infosys Innovation in Retail Banking study. But the study has also found that the innovation effort in most banks is not supported by a designated central resource or by an organizational framework that brings together employees from across functions and business lines.

The appification of banking

Even as traditional banks concentrate on strengthening their online and mobile channels as a viable alternative to their core brick & mortar proposition, a new breed of direct-only competitors are making their presence felt among retail banking customers. A new study reveals that direct-only is the only category in banking to gain market share amongst customers establishing or shifting their financial loyalties. It is estimated that over the past five years, deposits in this emerging category have grown three times the industry average. 

Shifting the boundaries of innovation

Open innovation, the process of encouraging ideation across all stakeholders to drive enterprise innovation, is gaining traction in a diverse range of business applications - from automotive design to drug discovery. Two banks that are harnessing the power of Open Innovation to drive organization change were featured in the most recent edition of the Efma-Infosys Innovation in Retail Banking study.

Personalize this

Can personalization deliver sustainable competitive advantage for retail banks? It would seem so if one references a study in which up to 70% of global banking customers expressed willingness to even offer up personal data if it could positively influence personalization and service. 

Making innovation a culture

Between risk management, regulation and compliance, innovation in banking is essentially an iterated combination of the possible, the practical and the permissible. But then those are the ground rules. And yet 'Culture' trumped 'Regulation' in a bankers' list of the biggest barriers to innovation  compiled by the Efma-Infosys Innovation in Retail Banking Study 2013.

Making IT innovation-friendly

Current legacy IT systems have emerged as the most significant barrier for innovation, across banks of all sizes, according to the Efma-Infosys Innovation in Retail Banking Study 2013. Well, not all banks; IT systems ranked either 5th or 6th as problem areas at around 20% of large and medium sized banks that participated in the study. Nonetheless, they are still the exceptions - either because they have up-to-date systems or are focused on non-IT dependent innovation - that prove the rule.

When IT inhibits innovation

The 2013 Efma-Infosys study on Innovation in Retail Banking clearly establishes that banks are increasing investments in innovation, drawing up detailed strategies to make those investments work, and defining metrics to determine if outcomes are delivering business value.

Taking innovation mainstream

The intent is definitely there and so are the strategies and investments to realize it. The metrics are in place to assess performance and over three-quarters of the respondents indicate that they are getting better at it. That, in short, is the current status of banking innovation according to the 5th edition of the annual Efma-Infosys Innovation in Retail Banking Study.

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