“It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change”
– Charles Darwin

Almost all consumers have been affected in some way by the recent financial crisis and, as a result, the intrinsic trust and loyalty they felt for their bank has been tested to breaking point. At the same time, banks are facing fierce competition from new market players. Against this backdrop, traditional financial institutions still have to compete for new customers, and keep the ones they already have by building lasting and sustainable customer relationships.

To retain and attract customers, financial institutions must ensure they are marketing to their individual customers based on attitude and habits, as much as pure demographics. The resulting products and offers should be closely aligned to those individuals and include built-in incentives to drive use and loyalty. Keeping the product competitive and up-to-date is also important.

Innovation remains important but must be accompanied by customer acceptance and adoption to be successful. However, the biggest innovation a bank should make is to equip itself with a stable, reliable and flexible platform to drive its current payments products and to facilitate smaller scale innovation, where new products are configured, rather than coded, and then tested on selected customer segments.

The best way to invest in innovation is not to create a single “killer product”, but to build the agility required to create sustainable competitive advantage. By building in the flexibility required, banks will have an agile solution that will allow them to move quickly and maintain a competitive position in the market, as well as benefiting from operational cost savings.