By Andy Mather, European Financial Services Industry Specialist, Telstra
There’s no question that financial services players understand the need to innovate, with recent research showing that innovation ranks among their senior executives’ top priorities.The problem, however, is that most remain cautious about what to do – for example, in not introducing new ways of working despite having assigned executive responsibility and allocated budget for fostering innovation.
It turns out that “ways of working” is precisely where the focus needs to be, based on the particular nature of banking technology. To understand why, we need to start by looking at the challenges that financial services providers face when it comes to moving their business forward.
Put simply, banks have a huge amount of legacy issues to deal with. Some of this may be due to organic growth. Or it could be the result of various acquisitions over the years, each one adding new technological complications (which ultimately become yet more legacy). Or it could stem from a general reluctance to decommission old technology in a timely way, a reluctance borne out of fear of unexpected consequences.
All of that can lead firms to feel that if they are going to make a change, it has to be big. Yet large-scale overhauls – big bang projects – are not what innovation is about. Innovation is about constant improvement.
Taking a new approach
In such an environment, how can firms successfully innovate? The first thing they need to do is think small.