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Innovation culture – moving towards agility

We are living in an era of hyper convergence and instant gratification; everything needs to be fast and free. Fintech has become the new buzzword, yet Financial Institutions (FIs) have built their systems and processes on technology for decades.

Stakeholder clients demand is changing rapidly. The introduction of disruptive technology means firms must embrace business agility, by changing the way they think and operate to keep up and avoid disintermediation.

The proliferation of fintech startups, digital assets and data opportunities are increasingly grabbing FI’s attention. The banking industry is maturing in its appreciation and adoption of the potential of technology and the efficiencies and changes in business models that it enables.

The divergence in focus of large at-scale technology players is accelerating that focus. Tech giants such as Facebook, Amazon and Alibaba are increasingly leveraging their client bases to offer basic financial products. The additional competition and choice that this brings to investors seems to have regulatory support in some jurisdictions. As an example, Ant Financial, Tencent and Xiaomi have been awarded virtual banking licenses in Hong Kong.

Tech firms have already embraced or been built with a culture of innovation and change, making them generally more agile than FIs. How can we as FIs keep up with this wave of technology and stay competitive to deliver the solutions that meet client expectations and enhance their experience?

The answer is to change the way we work and shift towards an innovation culture within the industry. This starts with a new mindset – from how we hire, engage and train staff – and carries through to the way we interact with our clients. Client engagement is shifting to a partnership-centred approach that focuses on fully understanding client needs and concerns, with co-creation to requirements are met. One way to do this is via workshops focused on collaboration and understanding client pain-points.

Many FIs are working to streamline their internal processes and are looking at self-disruption through in-house innovation teams. For this to work, hiring strategies need to be rethought. As data matures as an enabler, we are seeing a greater requirement for data scientists. Our industry must train our staff to ensure they have adequate exposure to new technologies and understand how deployment can help clients.

A mindset change to future-proof FIs

It should no longer be the job of specific teams to come up with new business solutions. Everyone has a role to play in ideating new solutions that leverage technology. By cultivating an innovative spirit and entrepreneurship among staff, we increase our chances of remaining relevant in the years to come.

An ‘agile’ change environment takes these elements and shift in culture and brings them together in a methodology that allows companies to deliver solutions that adapt as they are being implemented. For a business this means accurately identifying the unique needs of clients and building an agile organisation that can reorient itself towards valuable opportunities as clients, technology and regulations change.

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