There are two issues that always come up when you get a large number of bank executives in the same room – loyalty and profitability. How can you maintain and grow your customer base, and how can you maximize the profitability of the services you offer those customers?

Loyalty and profitability are both underpinned by innovation.

Innovation on the front end of what you deliver to your customers, such as mobile or contactless for example, comes with one particular challenge – it isn’t enough for one bank to launch a new offering. True success will only come with standardization. (Imagine the global card landscape if we didn’t have Visa and MasterCard setting the standards for example). Compatibility mustn’t be allowed to become a barrier to adoption – so we mustn’t fight over the technology, instead we need to agree on standards and then add value to them with customized offerings. (Credit cards that award loyalty points for your favourite football team anyone?)

Innovating for profitability is very different. It is behind the scenes on the back end – taking a fresh look at your technology infrastructure and ensuring it can deliver the highest levels of efficiency. It isn’t enough to rely on siloed, legacy systems – to see real profitability, and reduction in duplication and redundancy, financial institutions have to consolidate systems into one solution that can deliver the processing and scalability it needs.

I know that innovation can be a difficult word in some banks – innovation may be seen as ‘expensive’, ‘risky’, ‘a waste of time and resources’ or ‘delivering no real value’. But I think it is something different. Innovation is simply part of what everyone has to do. It wasn’t that long ago when not all current / checking accounts offered debit cards – now you wouldn’t consider it. Mobile services will be the same. It also wasn’t that long ago when accounts were reconciled manually – again, inconceivable now. Innovation isn’t risky – it is essential.