Despite conflicting priorities and the economic downturn, banks around the world are still increasing their investments in innovation. These key findings are part of Innovation in Retail Banking 2014, the sixth annual study commissioned by Infosys and Efma.
Financial institutions the world over are raising their innovation spend significantly in a desperate attempt to fend off the threat to their established hegemony from technology companies, telcos, and emerging startups, according to fresh data from Efma.
Almost half have set out plans to become ‘innovation leaders’ in their respective markets, says Efma, while 38% are content to be ‘fast followers’.
Channels continues to be the area attracting most investments, with the shift to digital reflected in the importance attached to mobile (88%), big data (67%) and social (63%).
In the mobile realm, payments and services on multiple devices are the principal goal. For the online channel, automated account origination and personalisation of marketing offers are considered important by 70% and 59% of banks respectively.
- Banks in emerging middle income and relatively high growth countries (such as Brazil, India, Malaysia, Russia, South Africa and Turkey) are more likely on average to have an innovation strategy, to be aiming to become innovation leaders, and to be investing in R&D
- Banks are most concerned by the threat from technology companies entering the market (for example Google, Apple and Facebook). The threat from this type of competitor was rated high by 45% of banks and has increased in the last 12 months. After technology companies, the most significant threat is perceived to come from telcos and from start-ups
- As part of their innovation strategies, 26% of banks surveyed are investing in start-ups
- Globally, 84% of banks are increasing investment in innovation as compared to 2009, when only 13% of banks increased investment
- 61% of banks indicated they have an innovation strategy, a significant increase from 37% in 2009
- 49% of banks are aiming to be innovation leaders in their markets, whereas 38% of banks are content to be fast followers
- Channels continues to be the area attracting most investments with 89% of banks increasing their investments in this area
- Many banks organize their innovation activities around specific themes. “Mobility” is currently the most important theme with 88% of banks rating the importance as “high”. Closely following that are the themes of “Big Data” (67%) and “Social Channels” (63%)
- Over 70% of banks perceive mobile payments and services on multiple devices to be important for delivering customer value in the mobile channel
- For the online channel, automated account origination and personalization of marketing offers are considered important by 70% and 59% of banks respectively.