Banks in emerging markets display greater ambition on the road to innovation: study

They achieve this by investing more in research and development, as compared to their peers in mature markets, according to the Innovation in Retail Banking 2014 report, commissioned by Infosys and conducted by Efma, which surveyed over 100 retail banks around the world. In addition, banks in emerging middle income and relatively high growth countries (including Brazil, India, Malaysia, Russia, South Africa and Turkey) are more likely on average to have an innovation strategy, to be aiming to become innovation leaders and to be investing in R&D.

The main concern expressed by banks is the threat from technology companies entering the market (for example Google, Apple and Facebook). The threat from this type of competitor was rated high by 45 percent of banks and has increased in the last 12 months. After technology companies, the most significant threat is perceived to come from telcos and from start-ups. Also, 26 percent of banks surveyed are investing in start-ups, as part of their innovation strategies.

Further report highlights include:
• At a global level, 84 percent of banks are increasing investment in innovation as compared to 2009, when only 13 percent of banks increased investment.
• 61 percent of banks indicated they have an innovation strategy, a significant growth from 37 percent in 2009
• 49 percent of banks are aiming to be innovation leaders in their markets, whereas 38 percent of banks are content to be fast followers
• Many banks organize their innovation activities around specific themes. Mobility is currently the most important theme with 88 percent of banks rating the importance as high. Closely following that are the themes of big data (67 percent) and social channels (63 percent).