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It has been observed that banks in fast growing developing markets, such as in Malaysia, Turkey, and Brazil, are more ambitious with their innovation objectives and believe they are more innovative than banks in slower growing developed markets.
According to a research report from Efma and Infosys, further, they are also more likely to have an innovation strategy and invest in R&D activities.
These observations were noted in the Innovation in Retail Banking 2014 report, the sixth annual study commissioned by Infosys and conducted by Efma, which surveyed over 100 retail banks around the world.
The latest report has revealed that more banks in fast growing and rapidly developing markets display greater ambition for becoming innovation leaders in delivering superior customer value.
They do this by investing more in research and development, compared to their peers in mature markets.
Here's more from Efma and Infosys:
The study also revealed that banks across the globe, especially from more mature economies, are increasing their innovation investments in 2014 compared to 2013 to keep pace with increasing customer expectations and respond to new market entrants.
While new competitors include established technology companies and telcos, there is increasing collaboration with start-up companies to help drive innovation in banks.
Patrick Desmarès, Secretary General at Efma: "This year's global retail banking study indicates more banks are adopting formal innovation practices and developing their approach to open innovation. However, there are still a large number of banks which do not seem to have good basic practices, so there is plenty of room for improvement.
Working closely with start-ups is becoming more common and we believe this is a positive trend. Interestingly, it is the banks in fast growing and rapidly developing markets that are still leading the way and showing more ambition."
Sunil Gupta, Vice President and Unit Operating Officer, Infosys Finacle: "In times of continued volatility and cost pressure, there is no letup in the demand from customers for innovative products and services.
One interesting finding of this year's report is that many banks in rapidly growing emerging markets, who are used to generating profits from customers with smaller transaction values, are at the forefront of innovation in retail banking. Lessons on innovation from these banks could be extremely valuable to financial institutions around the world as they compete with new players in the market."
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