Banks in central and eastern Europe (CEE) are the most innovative in Europe, according to a study by Infosys Technologies and the European Financial Marketing Association (Efma) on innovation in retail banking.
Five key dimensions of banking innovation were evaluated by the study: product, process, channel, customer relationship management and customer experience.
The key findings include:
- Innovation Index: CEE banks, closely followed by those in the Middle East and Africa, are deemed the most innovative. Western European banks emerged the least innovative, and the index shows a decline in their innovation scores from 2009. Sixy-one percent of all surveyed banks have increased their level of investment in innovation in 2010, while only 11% decreased their level of investment.
- Customer focussed innovation: New approaches such as crowdsourcing and customer insight-driven product and service development, are being adopted to bring the customer into the innovation process. Mobile banking and payments is a clear innovation focus area for banks. In addition to the conventional drivers of innovation – technology and competition – user insight is enabling banks to create solutions that promise unique individual experiences.
- IT innovation enabler: 80% of all surveyed banks see IT as a key enabler of innovation. However, less than 50% of the banks say they are leaders in the use of IT for innovation. Banks believe the relationship between business and IT departments is the biggest implementation challenge. On average across regions, two thirds of banks believe that inflexible IT is a barrier to innovation. However, 90% of these are investing to increase their flexibility.
Patrick Desmarès, secretary general, Efma, said: “Innovation has grown as a priority for banks, and this is supported by increasing investments. There are numerous new examples of product, channel and process innovations, as well as cases of banks adopting innovative business models. Bankers across regions agree that innovation is the key to both efficiency and growth.”
