Open Innovation to lead the banking transformation race (2/3)
3 november 2014. In the last post we discussed how innovation plays an important role in the digital transformation of the banking sector. According to the report “Innovation in Retail Banking” presented by financial association Efma and consultancy firm Infosys, 87% of banking firms (defined as leaders, fast followers or followers) would like to adopt, in varying degrees, some kind of innovation practice and only 13% do not know how to define their role or accept being relegated to a lesser role in this area (see figure).
But beyond these good intentions, what is the reality in the sector?
The banking sector is aware of the irruption of a new profile of digital consumer that is already a reality and that is here to stay, demanding more and more services through technological channels.
But even so, the same report shows that innovation is still a weak link in banking, for two reasons: lack of a culture of acceptance of errors, something essential and inherent to any innovative process, and the low permeability of participation processes among employees.
Although 61% of banks have an innovation strategy, compared to 37% in 2009, most resign themselves to being fast followers in the digital race, because they think of innovation as something risky, which requires long maturation processes.
In the face of this, it is becoming increasingly common for banks to turn to outside companies (very often technology-related, and a growing number of startups) to develop their innovation policy or to bring the concept of open innovation to their companies through participation, thanks to–for example–ideas social networks for internal use, or open to clients. That is the case for Banco Sabadell, who entrusted the implementation of their BS Ideas, their ideas social network for employees, to Innovation Agora.
Except for concrete examples such as Banco Sabadell, the report clearly describes a global banking sector where there still is a reluctance to build bridges with external resources and create internal collaborative processes that can be enriching and provide added value.
You can access the complete Efma and Infosys report here.
You can also read the first post of this series on innovation in banking here.