The State of Innovation in Financial Services

The State of Innovation in Financial Services

Christopher Monaco

Content Marketing Manager, Financial Services at Seismic

Views 1012

The State of Innovation in Financial Services

13.02.2017 07:00 am

As we are now deep into Q1 2017, analyst firm Celent recently released the results of a survey on the state of innovation within financial services. The findings, compiled and authored by Mike Fitzgerald, show that while the industry overall has been slow to adopt and promote innovation, firms understand that clients have come to expect a higher level of technological integration and service; therefore, progress to meet that demand is underway.

Imperative to the adoption and practice of innovation is the presence of an influential individual or team within an organization that can promote and champion technologies. More often than not such persons reside with a firm’s C-suite, and this survey shows which titles are currently most aligned with the pursuit of innovation and which ones have become increasingly so over the past three years.

The survey was completed by nearly 200 financial services professionals and can be accessed by Celent clients here. For those who are unaffiliated, the following bullets are highlights from the report.

Industry Assessment:

  • Eighty-two percent of respondents said customer expectations are changing rapidly, so firms are under pressure to keep up.
  • During the 2013 survey, 26 percent of respondents saw innovation as critical to their firm’s strategy. That figure doubled to 52 percent in 2016.
  • While 92 respondents (roughly half) believed that their respective firm innovated the same as peers, 100 said that financial services on the whole innovated worse than other industries.

Organizational Assessment:

  • In terms of a formal program to spearhead innovation, 28 percent of respondents said their firm had no such entity. Surprisingly, of those without a program, almost one-fourth earned more than $5B in annual revenue.
  • Of firms with formal programs, 75 percent of respondents said innovation occurs at an 80/20 (incremental/disruptive) or greater effort allocation ratio.
  • What might be the most disconcerting finding is that 28 percent of those with no formal program were satisfied with their firm’s management of innovation.
  • In terms of YoY (2013 to 2016) C-suite net promoter scores—those executive leadership roles that publicly support a company’s innovation efforts—CIOs rose from nine to 44 percent, COOs -17 to 24 percent and CEOs 12 to 40 percent. Chief Innovation Officers have continued to stay at the top, inherently so; however, only 36 percent of those with innovation efforts currently in place had such a title in their C-suite.

But What Does It All Mean, Basil?

Two conclusions can be drawn from this survey’s data: The full adoption of innovation within a firm seems to occur over the course of three stages; and the existence of those stages allows for the careful, incremental introduction of technology.

Initially, the market dictates a need for innovation. Firms can ignore this directive for only so long before realizing they should and must embrace the promise of innovation if for no other reason than to remain competitive. Lastly, in order for an organization to achieve success in managing innovation, they need to construct an effective internal support network and allocate the appropriate level of resources. Based on this latest survey, it’s clear that the leaders of innovation within financial services have already entered this third stage.

This gradual approach to fostering innovation is not exclusive to financial services. As one UI executive recently noted, individuals will more often than not only embrace change if it doesn’t drastically disrupt their normal day-to-day movements and activities. Thus, only those technologies that can be broadly implemented but individually tailored to the behavioral norms of employees will achieve success both in terms of operational ease and user adoption. It will be very interesting to see how this innovation momentum plays out amongst financial services leaders and laggards in 2017.

Latest blogs

Nish Kotecha and Noslen Suárez PhD Finboot

How blockchain can help us have trust in the food we eat

Today’s food supply chains are global, connected and generally efficient, but the COVID-19 pandemic has shone a spotlight on areas of weakness. The urgent need for robust and resilient systems and processes has been brought sharply into focus, and Read more »

Chris Miller RSA Security

Back to Normality: Five Steps to Stay Resilient After Disruption

The financial services sector has lived through many global disruptions, but the nature of recent events has put an unprecedented strain on operational resilience; from needing to ensure critical functions could continue with skeleton staff and Read more »

TYRON JONES n/a

How Technology Has Disrupted the Used Car Buying Experience

We’ve seen many fields change rapidly as a result of the integration of modern technological advancements over the last couple of decades. And it looks like more is coming on the horizon as well, judging by current trends. One of the markets that Read more »

Shuvo G. Roy Mphasis

Reboot 1.0: How financial services technology can enable the supply chain to support a post-lockdown boom

Ground control and Captain Tom When veteran Captain Tom Moore decided to walk one hundred laps of his garden before his 100th birthday to raise funds to support NHS heroes battling Covid-19 from the frontline, he never imagined that he would Read more »

Lisa Gutu Salt Edge

Building a PSD2 compliant channel: challenges and opportunities for financial institutions

PSD2 obliges ASPSPs including banks, e-wallets, prepaid cards and other companies that offer payment accounts to provide at least one channel for secure communication with third party providers (TPP). Even neobanks or e-money institutions, including Read more »

Related Blogs

Rachael Gore Insurance Nexus

Innovation Beyond The Lab: How To Drive Company-Wide Change That Guarantees To Impact The Core Business (Webinar)

Reports are mounting of a widespread epidemic afflicting insurance companies worldwide. Symptoms include fledgling pilots, corporate inertia, and in the worst cases, a never-ending trajectory of business as usual. If you are experiencing any of the Read more »

Andrew Fray Interxion

A History of Transformation: Accelerating Innovation

In 2006, at a conference in San Jose, Google CEO Eric Schmidt marked the beginning of a new era with some prophetic words: “there is an emergent new model… I don’t think people have really understood how big this opportunity really is. It starts Read more »

Milos Dunjic TD Bank Group

Enabling the Pay-Per-Use Model

There is a fierce debate out there, about what’s better – subscription or pay-per-use/view model of services? Digital content providers, telcos and TV broadcasters mainly prefer subscription or licensing model as it allows them to better predict Read more »

Jürg Truniger Appway

The Future of Banking: Adopting Innovative Technology

In today’s world, nearly all financial institutions are in some stage of digital transformation. Technology, which has always been a part of every industry, also plays a big part in the banking industry’s ongoing digital transformation. When we look Read more »

Will Humphrey PSONA – part of the Communisis group

Virtual Reality and Augmented Reality: Form vs Function?

With technology rapidly evolving, different sectors are interested in understanding just what tech can do for them. Take Virtual Reality and Augmented Reality; as more and more VR headsets are sold worldwide – BI Business Intelligence predicts sales Read more »

Magazine
ALL
Free Newsletter Sign-up
+44 (0) 208 819 32 53 +44 (0) 173 261 71 47
Download Our Mobile App
Financial It Youtube channel