Friday, July 27, 2007
Banks: Innovators or Laggards? Survey Says…
byOpen up a new checking account and get a free toaster. Innovative? Not! Sadly, some banks are still resorting to retro bank marketing tactics with offers of free toasters. Perhaps that is one reason why bank executives see the need to innovate as a both a strategic need and a big weakness. As reported by American Banker, a recent survey of financial services execs by Boston Consulting Group shows that innovation could drive profits, but banks are seen lagging other industries in innovation.
As cited in American Banker, the survey shows that only about half of the respondents (53%) said innovation is a priority, compared with a majority (67%) from all other industries.
Furthermore, the survey reveals that nearly half (48%) of banking executives said failing to innovate is an industry weakness, compared with 40% for all other industries.
The bankers cited in the survey said “not moving quickly enough to change” as one specific weakness. Among bankers, 45% of respondents said their industry’s “risk-averse culture” cramps creativity, compared with 37% from other industries.
Granted, banks do have a host of regulatory, compliance and operational hoops to jump through to bring innovation to customers.
Still, analysts are clear that banks could do better by raising the bar on innovation and keeping the foot on the gas.
Perfect example? Capital One’s de-coupled debit card, recently profiled on this blog. It’s being regarded as highly innovative, and disruptive.
Since Capital One’s marketers are so busy innovating, I doubt “free toasters” will ever see the light of day at that financial services firm.
