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Innovation - A new world for banking or A new bank for the world?

The word innovate was first recorded in 1540.
Somewhat surprising, to hear people banging on about it like it’s a revolution. What does innovation mean? And is innovation really ‘a new world for banking’ or should it be ‘a new bank for the world?’ Are fancy interfaces an imperative or is there a bigger picture that bears far more valuable fruit?

Innovation has existed for decades and is the essence behind the world we live in today. There is a lot to discuss when considering how financial institutions need to ‘innovate’ in order to attract and retain customers.  It should not be taken for granted the leaps forward we have witnessed so far and how the banking industry has transformed to date. Last Christmas, I attended an event and listened to the head of the British Bankers Association speak about how the focus for 2017 was to continue to increase the availability of banking services to everyone. It’s very easy to forget that even in the UK not everyone has access to basic banking facilities and whilst we’re worrying about facial recognition on our apps, The World’s Bank states that 2 Billion people still do not have a bank account – that’s around 30% of the global population!

Financial inclusion is key to reducing poverty and banks not only have a responsibility, but this untapped market is a golden source. If banks can make transactions more efficient, offer secure and transparent savings facilities and digitise more of their services, then they not only become more attractive, but they become more accessible. India is home to some 21% of the worlds unbanked population and China 12%. These countries have the logistics, but the disparities are too wide – in 2017 this should not be the case.

So, what is ‘innovation’ and what do we really need from it? For me, it’s about striving to be better. Whether that be reflected on the balance sheet or in your reputation I think by helping conquer some of the world’s issues you can nail both objectives.

The well-known ‘World’s Local Bank’ appears to be on this path and whilst yes, we all we want the latest gadgets, how many of us have the time or patience to implement them into our everyday lives? Do we in our city suits, with our iPhones glued to our palms actually realise that some people are scared of banks, they don’t trust them, and we need to not only give them digital access, but they need support and education to allow them to live in our world.

It would be ignorant to think that just the banks can solve the problem of getting everyone globally to have a bank account but it’s certainly a goal which has far reaping advantages. There are numerous factors, most importantly culture but even by onboarding 5% of the unbanked we start to gain a more accurate picture of the world’s economy.

Innovation encompasses every aspect of trying to improve something and nobody should get left behind. 



Comments: (1)

João Bohner
João Bohner - Independent Consultant - Carapicuiba 02 November, 2017, 20:50Be the first to give this comment the thumbs up 0 likes


Yes, "there a bigger picture that bears far more valuable fruit".

And it must be reflected on the balance sheet!

See an impressive excerpt of Brett King's blog - 14 August 2013 - on Finextra:

"Despite a bigger IT spend than any other industry sector, the revenue or profits generated per employee are telling.

Bank of America, JP Morgan Chase, Wells Fargo and Citi between them employee 1.051 Million people to deliver that $51Bn in profitability, or roughly $48,517 per employee.

Google, Apple Computer, Microsoft and Oracle have between them 341,777 employees that delivered $85.2Bn in profitability in 2012, or roughly $249,285 per employee.

More than five times the margin than their FI equivalents!".

IT costs per user per year in USD (From banking-reloaded, Linkedin, 2013):

Google: 3.4
Facebook: 3.8
eBay: 7.4
Tier1/2 Bank 200.0

There is ONLY one way to drop that cost 30/40fold to allow banking service to un/underbanked people:

It is processing of the financial business in a 'Corporate way' - Single Source of Knowledge - rather than processing by 'Lines-of-business'- Silos and DWs.

This approach drastically streamlines processes and eliminates silos and DWs, providing a single source of knowledge for all of the Corporation's business.

It is not to 'think-out-of-the-box' but it is to forget the 'box'.

Stacey Small

Stacey Small

Business Development

The Glue

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10 Nov 2016


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This post is from a series of posts in the group:

Financial Inclusion

The financial services industry has much to contribute to the UN and World Bank goal of full financial inclusion by 2020. This group will focus on industry contributions, ideas, barriers and enablers.

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