Working with the European Financial Management & Marketing Association (Efma), Infosys surveyed senior managers from 89 banks in 26 countries across the continent.

Over three quarters of those polled think the importance of innovation is high or very high for both growth and efficiency, yet just 37% say they have a clear strategy. In Western Europe less than 15% have a department responsible for coordinating innovation.

More than 80% of banks think IT is either important or very important for innovation but it is also seen as the biggest barrier. Inflexible systems and IT bottlenecks were cited as the biggest barrier, ahead of regulation and compliance and investment concerns.

However, Infosys say banks in Western Europe have a slightly different view to those in Central and Easter Europe and Russia and CIS because they recognise that innovation needs to be more than just IT related, and that technology should be seen as a means to an end and not the end itself.

Asked if they consider their bank to be a leader in the use of IT for innovation, respondents from Western Europe were cautious, with only 30% concurring, compared to 40% of those questioned in Central and Eastern Europe.

Patrick Desmarès, secretary general, Efma, says: "In this time of crisis, there is a danger that banks will allow other priorities to slow down the pace of innovation, but this is precisely the time when innovation can lay the platform for future growth and efficiency."

In a separate survey conducted with the Bank Administration Institute (BAI), Infosys polled 116 bankers from over 100 financial institutions in the US.

Around four in five respondents rate innovation initiatives as extremely or very important for growth and efficiencies with nine out of ten believing that IT will be extremely or very important for this.

The importance attached to innovation is confirmed by the fact that 94% of respondents say their investment in this field has been maintained or increased despite the financial crisis.

IT is a vital component, with nearly 40% of respondents say they are working on core technology and systems redesigns and replacements to improve efficiency.

Asked about the impact of IT on innovation in different areas, 31% of respondents say it is most important for customer experience, 19% for cost cutting and 16% for product innovation and delivery.

Debbie Bianucci, CEO, BAI, says: "The recent turbulent times have resulted in shifts in the banking landscape as well as priorities and key initiatives of financial institutions' executives. Innovation will play a key role as the financial services industry focuses on efforts to rebuild consumer trust and confidence, drive growth, reduce costs and enhance the customer experience."