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Accenture explains why retail banks should renew their commitments to technology innovation and how a focused strategy, empowered leaders and targeted investments can transform new ideas into growth.
Low customer loyalty, fierce competition and a continually evolving digital landscape are key challenges facing the banking industry. Leading retail banks are increasingly turning to technology innovation to keep up with consumers and stand out in the market.
According to the Accenture High Performance IT Survey, 22 percent of bank CIOs believe their technology teams already play a proactive role in driving innovation—but 55 percent would like to see that happen. In this report, Accenture examines how retail banks can achieve post-recession growth by renewing their commitment to technology innovation.
Read more Accenture Banking Research and Insights.
Retail banking customers have changed considerably in the past five years. Today’s consumers have higher expectations about the service they will receive from banks. They are less loyal, more likely to shop around for products, and more interested in direct and mobile channels than their predecessors.
At the same time, competition for retail banking business is fierce. New market entrants are attacking the value chain between banks and their customers, while established competitors are responding with new and compelling offerings. Through it all, new technologies, such as smartphones and cloud computing, are shortening the innovation cycle and increasing the pace of change.
In this environment, technology innovation is more important than ever for achieving market differentiation and profitability.
Many banks have difficulty achieving their technology innovation objectives. In particular, they find that:
Innovation is confined to one business line or market.
In most cases, these challenges can be traced back to four root causes: fragmented legacy technology, insufficient customer insight, lack of key skills and the absence of effective governance. The result is an unacceptable cost and pace of innovation.
Accenture suggests that banks can create a robust operating model for technology innovation by:
Executing a focused innovation strategy that encourages speed to market.
Empowering leaders and establishing an organizational culture that supports innovation.
Investing in new capabilities and infrastructure to support the innovation process.
Each organization’s road map will depend on the people, processes and technology in place, but all banks can increase their chances of success by:
March 28, 2012
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