The innovation debate

In one of my recent Financial Sector bulletins, I initiated a discussion on whether innovation is a good strategy for current market conditions. The debate on our FS Think Tank LinkedIn group - a new and growing discussion group set up with a number of alliance partners - was particularly active and practical.  For example, I was glad to read that all participants to date agree strongly that a single strategy - whether based on innovation or not - would NOT fit all organisations. There was strong support for the need to analyse and understand an individual organisation and its market, in order to devise and evaluate the correct strategic approach. It made interesting reading which I thought was worth sharing with the Finextra community as I am sure you have views which you want to contribute.

The discussion has also drawn out several various types of innovation, which will help our continuing analysis, in particular:

§   innovation in financial products, for which I think there is little current appetite in the wholesale markets, unless maybe you are a bank like Goldmans? However, more combination products such as the newer offset mortgages may work in the retail market?

§      innovation in client engagement, which is where we see the potential for external facing interactive portals, extranets, e-invoicing, m-commerce, social networks, wikis etc. There are examples of their use in the financial sector (e.g. Wells Fargo, ING ) by early adopters. It would be useful to hear about any case studies or examples you know of.

§      innovation in product and service delivery, e.g. legacy application migration, web delivery, process re-engineering. These tend to be more internally focussed - but none the less can deliver significant cost and efficiency benefits.

As with any analysis structure there are things in the real world which do not perfectly fit into a neat set of categories - e.g. Software as a Service is both an innovation in service delivery, but also is an innovation in client engagement due to the storing of clients' data centrally. In terms of responses to the LinkedIn discussions, there has been a strong emphasis on using the web as a source of less expensive innovation, e.g. portals, social networks, wikis & search engines for finding information inside organisations - although this is potentially slightly biased because the discussion forum is on a social network. It would be interesting to get your further comments either directly here or via the LinkedIn discussion group.