AUGUST - 20229There's no right or wrong answer to this question, but it will help define the goals of your `innovation' function.One of the biggest challenges for attaining innovation and seeing ideas through from ideation to scaled implementation and adoption is competing for business priorities. On the flip side, the number one enabler is business prioritization and a supporting funding mechanism. To allow adequate resources to drive the end-to-end innovation process, financial services institutions need to create a funding mechanism that provides a continuous flow of earmarked investment, a portfolio of innovation priorities, and a plan to keep collaborations and partnerships alive and thriving. This is essential to prevent the constant struggle of being upstaged by pressing regulatory and compliance priorities.1. Ongoing customer-centric design thinkingWhile most financial institutions adopt and provide products and services in response to customer demands, the most compelling factors of fintech's are their deep understanding of the customer's needs, focus on customer value, and speed to market.The recent pandemic's unprecedented changes in customer behavior and accelerated digital adoption have helped advance most banks' digital agendas to win customer relationships and trust. Leading financial institutions are focusing on creating integrated services and adopting the concept of "thinking like a fintech" to bring ease of use, convenience, and an optimized user interface to their products and services across larger parts of the value chain.The competitive advantage is no longer just about personalizing the customer experience. It's also about being able to predict what the customer will need when they will need it, and ultimately affect and influence their buying decision. This requires significant efforts to identify customers' behaviors across the full customer lifecycle and enable predictive analysis and innovative design thinking across the development process for products, services, and features as foresight before the customer starts looking for them.2. Accountable business partners and buy-in or sponsorship for product adoptionA handful of innovation projects see the light of the day in terms of scale and adoption by the target businesses. The reasons are many, but common factors limiting the chances of success include business ownership, accountability, and buy-in for the product.Many innovation functions are run `technology first', testing or building products with limited collaboration, problem definition, or ideation for potential solutions together with the business. As a result, the products tested or developed are not proven to solve a defined problem or have limited buy-in from the business function; leading to minimal adoption.Driving innovation with a business-led technology-enabled mindset, articulating the goals and challenges you want to solve together with the business, enables buy-in for the solution from ideation to implementation with joint accountability for success, and business sponsorship for long-term adoption.3. Enable environment designed to embrace innovationThere are fundamental differences in how financial institutions and fintech's approach product development, service provisioning, and operations. Financial institutions are bound to adhere to regulatory mandates and safe and sound practices, while fintech's primary focus is on solving a specific customer problem and faster time to market.The cultural differences and processes applied across the two are sometimes miles apart. As part of a collaboration or partnership opportunity, many financial institutions value the fintech's ability to be nimble and act fast to meet customer demands. A common mistake is to onboard a fintech and molds it to fit with old operational and regulatory proven processes. The result is a technologically advanced product disadvantaged by legacy process and operational restriction.If the goal is to harness the power of innovative solutions and create something truly ground-breaking in the marketplace, financial institutions need to enable equally innovative processes that support the end-to-end product development, scale, and adoption.To re-invent and transform decades worth of proven concepts, systems, and processes across financial institutions isn't an overnight thing-it's incremental efforts of innovation adding upto something big.The option of quickly testing and onboarding fintechs (with business buy-in) is a good solution for many financial institutions to check the box of `fintech collaboration' while achieving strategic or technology modernization goals.To create something truly ground-breaking in the marketplace and drive new innovative ideas from ideation to scale and adoption, takes commitment. To do the same in a true collaboration or co-creation partnership with a fintech, requires dedication, purpose, and commitment from all parties. BCThe question to ask is, is the goal of your innovation function to provide a quick fix to an existing process or product, or to reinvent it to better serve your customers across their journey? There's no right or wrong answer to this question, but it will help define the goals of your `innovation' function
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