The recent Finextra webcast on retail banking innovation caused some a debate from various industry experts. The general consensus seemed to be that banks are severely constrained in terms of how much information they can share about innovation: 

The mania to protect intellectual property and reputation means that innovation teams are constrained from sharing anything at all. (James Gardner, Bankervision). 

But without a more open approach, banks will continue to struggle to achieve truly groundbreaking innovation. For instance across the online payments industry, some players are in the process of, or have already opened up their platforms to third-party application (app) developers. This empowers developers and entrepreneurs to create and introduce payment applications in niches that they understand better than the banks ever can.  

There is an important role for banks to ensure the integrity of financial systems, to underwrite transaction risk and to provide reliable and timely settlements, while many non-financial players are better equipped to understand the needs of specialised market segments.  Therefore, there is a huge opportunity for a symbiotic relationship between banks and entrepreneurs to deliver really meaningful innovation.  Some financial institutions are starting to open up their systems, notably in the prepaid and e-commerce sectors, and it is fascinating to watch the impact of this opening up on financial services innovation.