Innovation is a key issue for financial institutions and a highly complex topic that demands attention when considering the business operations of tomorrow.
In light of its importance in the financial industry, Celent has planned two events in Tokyo focusing on innovation at financial institutions. The first was an innovation roundtable that was held last month. This and similar roundtables have been extremely well received in money market centers worldwide.
For the recent Tokyo event, a number of opinion leaders from Japan’s financial industry gathered to discuss and share two things: insights on effective approaches to promote innovation; perspectives of other leaders. Participants represented an array of sectors, including banks, insurers, leading brokers, dedicated online businesses, and foreign-capitalized companies. However, this diversity of participants from entities with differing business scale, history, format, and market size, shared a uniform passion when it came to their comments on innovation.
Prior to the roundtable discussion, Celent set the stage with two presentations.
The first, titled “The Search for Disruptive Innovation," took up “promoting innovation” as a theme. Specifically, it covered the reality and expectations of innovation among global financial institutions based on a Celent survey on innovation. The presentation put forth the following three points:
1) The use of ubiquitous data and breaking through traditional practices
2) Service strategies to respond to changing user expectations
3) Innovation-creating ecosystems and revision of internal rules
The second presentation, "Virtual Case Studies on Disruptive Forces," framed the technological changes and evolution witnessed since the 1970s as a new industrial revolution in a SoLoMo (social, local, and mobile) era. For the purposes of this discussion, the technologies driving disruptive innovation were categorized into three trend areas:
Noted as common to these categories were that efforts to “respond to changing customer expectations” would drive innovation, which would be “led by firms willing to take risk.”
The subsequent lively roundtable discussion highlighted participant opinions including a range of expectations for “responding to changes the social environment,” “creating new frontiers in business,” and “shifting from continuous creation to discontinuous one.”
On the other hand, a number of factors that inhibit innovation were also mentioned, including the following: management placing priority on ROE, corporate culture that is averse to change, and enormous legacy assets. We learned two important things from some success stories introduced there: the effectiveness of initiatives by subsidiary firms which have a clear purpose and an unrelenting approach; and the importance of management that has taken innovation to heart and “made it part of the corporate DNA” to enable these initiatives to take root.
The scope of the discussion significantly transcended the prepared agenda, driving home the high expectations observers have and the vast potential see when it comes to financial innovation in Tokyo. Celent hopes that opportunities such as this that cut across the financial industry will act as a catalyst to drive the innovation at these respective firms.
Celent is committed to working with financial innovation leaders to explore the ideas that will shape financial industry of tomorrow. This discussion will be carried over and continued at events in March in Singapore and Chicago in April in New York. These will be followed by a June gathering in Tokyo that will focus further on innovation. We hope that you will continue to expect insightful things from Celent.