Banks across the globe have been driving for innovation at-scale for some years now, but progress sometimes seems glacially slow. Delivering significant growth and results from new processes, products, services, experiences and business models has been a challenge. A 2019 report indicated that 41% of banks said their digital transformation was only partially deployed with an additional 38% indicating that they were either still in the design phase or had achieved limited deployment.
This hasn’t discouraged banking leaders from their vision for banking innovation. In fact, more believe investment in innovation to be more important this year than in 2019. A focus on innovation correlates with digital transformation maturity, and the continuation and growth of this trend bodes well for the banking sector as a whole.
Process and execution hold the key to innovation at speed and scale
The disconnect between the vision of banking leadership and the commercial benefits currently being realised by digital transformation lies in the processes and execution underpinning that drive for innovation. 65% of banking CEOs recognise that they need to work on innovation processes and execution to achieve the growth they’re targeting.
Part of the challenge in achieving this process and execution improvement is the fact that when banks are striving for digital transformation, they are working in a space outside their core competencies. They are frequently required to work in a way that is anathema to their organisational cultures in order to achieve agility and drive progress.
Banking innovation doesn’t have to happen within the bank
Banks don’t have to build all of their innovation capabilities internally. Once a bank has defined a clear strategy and distinct goals, they can set about sourcing quality fintech partners to realise those ambitions for them. And this route is becoming ever more popular with 80% of the top 100 banks globally reporting that they have at least one fintech partnership. Partnerships offer a quick and easy route to realising value from innovation, but a word of caution, they must be done correctly.
The key to perfect partnerships
Partnerships will enable banks to boost innovation capabilities and scale, but in order to function to their highest capacity they must have certain key features:
- The purpose of the partnership must be clear and bought into by both parties from the outset
- The fintech partner must be able to equip the bank with enhanced capabilities
- There must be the prospect of delivering measurable returns for the investment, ideally into a core part of the bank’s business
What will the right partner deliver?
- A good choice of fintech partner will instantly give a bank more agility and enable it to respond quickly to market demand.
- They will also be able to seamlessly integrate with existing systems and products so that there’s no requirement for substantial change to core infrastructure and systems which would have both a time and monetary cost.
- They’ll provide active collaboration and help the bank overcome the risk-averse, innovation-stifling impulses associated with legacy culture.
- They will be flexible and willing to adjust to changes in a fast evolving market landscape.
We’re confident that we meet all the criteria of a great partner for your bank, so if you’d like to explore how we can provide you with a fast-track on at-scale banking innovation, let’s start the conversation.