The Future of Innovation During Times of Economic Uncertainty
Innovation has become a critical component of business growth in the banking industry. Beyond creating the ‘next big thing,’ innovation includes the creation of value through new or existing products, services, and processes. It also must incrementally improve customer and employee experiences, back-office efficiency, and revenue opportunities. Most importantly, banks need to innovate continuously and recompose their legacy business models to create new value for their stakeholders.
Traditional and non-traditional banking providers are increasingly responding to evolving customer needs and behaviors by creating new solutions at speed and scale. With a challenger mindset, these organizations are continuously rethinking back-office processes to enhance products and services that build engagement and create better experiences.
These efforts are expanding the set of potential financial partners that consumers and businesses consider using, resulting in shifting loyalties and market share.
Our research shows that while innovation leaders understand the importance of delivering improved experiences and products as quickly as possible, structural challenges continue to impede the speed and scale of innovation. Adding to the challenges of legacy cultures and processes, financial institutions are considering ‘scaling back’ investments in innovation as the industry faces uncertain economic times.
More than ever, those institutions that view the innovation process as a driver of future revenues (as opposed to a cost) will benefit the most as the economy returns to normal growth patterns.
The future of retail banking innovation has the foundation of internal and external data, advanced analytics, digital technologies, and new delivery
alternatives. This will require them to modernize their technology landscape and lead with transformation initiatives that will enable them to fight for a share of “new-age banking”, conducted as digital-first, embedded finance, marketplace banking, and BaaS, among others.
