New study from Infosys and Efma recognises customer focused innovation, especially in the area of mobile and payments, as a clear focus for banks.
Infosys Technologies Ltd and the European Financial Marketing Association (Efma) have announced the release of its second annual study on Innovation in Retail Banking.
Five key dimensions of banking innovation were evaluated by the study – product, process, channel, customer relationship management and customer experience.
The key findings include:
- Innovation Index: Banks in Central & Eastern Europe, closely followed by those in the Middle East and Africa, are deemed the most innovative. Western European banks emerged the least innovative, and the index shows a decline in their innovation scores from 2009.
61 per cent of all surveyed banks have increased their level of investment in innovation in 2010, while only 11 per cent decreased their level of investment.
- Customer Focused Innovation: New approaches such as crowdsourcing and customer insight-driven product and service development, are being adopted to bring the customer into the innovation process. Mobile banking and payments is a clear innovation focus area for banks.
In addition to the conventional drivers of innovation - technology and competition, user insight is enabling banks to create solutions that promise unique individual experiences.
- IT Innovation Enabler: 80 per cent of all surveyed banks see IT as a key enabler of innovation. However, less than 50 per cent of the banks say they are leaders in the use of IT for innovation. Banks believe the relationship between business and IT departments is the biggest implementation challenge.
On average across regions, two thirds of banks believe that inflexible IT is a barrier to innovation; however, 90 per cent of these are investing to increase their flexibility.
Haragopal Mangipudi, Global Head - Finacle, Infosys Technologies said: “While the strategic importance of innovation for banks has been established, a clear vision and approach for strategic innovation are still quite rare. The study has also shed light on new approaches to co-creation of products with customers. Finacle is committed to the task of partnering banks – all the way - to drive their innovation priorities.”
Patrick Desmarès, Secretary General, Efma, added: “Innovation has grown as a priority for banks, and this is supported by increasing investments. There are numerous new examples of product, channel and process innovations, as well as cases of banks adopting innovative business models. Bankers across regions agree that innovation is the key to both efficiency and growth.”
