Finovate: Searching for the elusive 'proven innovation'...

The inaugural Finovate Europe that took place in London a week ago certainly sparked a lot of opinions, both online and on the conference floor. Regardless of how innovative or otherwise you considered the demoing-companies to be, there were a few very relevant themes raised during the day. Some of the more exciting demos were the ones that attempted to bridge the gap between the traditional role of financial institutions and the world of web 2.0 and social networking. Providing customers with a more personalised experience of banking including tailored products adds real value to the services that are currently available today.

However one point in particular that the chair, Chris Skinner, raised was that banks may be interested in the latest innovation but they need a proven business case before they will consider investing in an implementation. Surely a ‘proven innovation’ is a contradiction in terms? And if banks continue to take this attitude, isn’t there a very real threat that they will be the left behind newer and more entrepreneurial players that are entering the market?

Perhaps the banks aren’t even worried by this, but as I’ve previously blogged on here, I think there is an exciting opportunity for traditional financial institutions to work with the new wave of entrepreneurs to deliver really meaningful innovation and reduce reputational risk. Banks, for instance, are crucial to ensuring the integrity of financial systems, to underwriting transaction risk and to providing reliable and timely settlements. On the other hand, many non-financial players are more agile and better equipped to respond to new market demands. Perhaps only by bridging the gap between the ‘old’ and the ‘new’ will we see some truly significant innovation that could be game-changing for the industry.