Innovation in Financial Services Firms: The Leadership Gap

by Craig Weber,  Michael Fitzgerald, December 10, 2013
Industry Trends
Global

Abstract

Over the past 18 months, Celent has been researching what practical steps financial services firms are taking to increase their innovation capabilities. Overwhelmingly, survey respondents reported that innovation is important or critical to achieving company strategy. However, innovation efforts are not receiving the management attention or investment required for success.

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Celent defines innovation as fundamental changes to products, services, or business models that break existing tradeoffs and results in value to the customer. In the report Innovation in Financial Services Firms: The Leadership Gap, Celent extends this research by examining current efforts in innovation in banks, insurers, and securities firms in detail. The report analyzes responses to a global survey of 110 financial services professionals conducted in October 2013. The objectives of the survey were to: 1) gauge the importance of innovation to business strategy, 2) identify key benefits from innovation, and 3) detail the common barriers to implementation.

“Financial services firms are generally relying on existing organizational structures and current management hierarchies to drive innovation,” says Craig Weber, CEO of Celent and coauthor of the report. “We conducted a Net Promoter Score analysis, which demonstrated wide variations in the perceived support for innovation by the various C-level roles.”

“The status quo would be an acceptable approach. However, those surveyed are dissatisfied with the results of innovation efforts to date,” says Mike Fitzgerald, Senior Analyst with Celent’s Insurance Group and coauthor of the report, “There is a leadership gap in most financial services firms which, when addressed, will open opportunities for the firms investing in innovation.”

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Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

Introduction

3

 

Background

3

The Business Case for Innovation

4

Competitive Analysis

7

 

Comparison with Other Industries and Other Financial Services Firms

7

Innovation Execution

9

 

Tools and Techniques

9

 

Organizational Adjustments

9

 

Promoters (and Detractors) of Innovation

10

 

Results (A Report Card)

12

Moving Forward with Innovation

14

 

Breaking Through the Barriers

14

 

Recommendations

15

Conclusion

16

Appendix

17

 

Survey Demographics

17

Leveraging Celent’s Expertise

19

 

Support for Financial Institutions

19

 

Support for Vendors

19

Related Celent Research

20

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