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Innovation in Financial Services

Innovation in Financial Services

A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.

Mobile apps? Forget ROI and start to innovate

02 March 2012  |  4769 views  |  0

Everyone is searching for that elusive ROI – the mobile banking app which will bring money in and directly improve revenues. Some projects must be out there somewhere, but according to the people I have spoken with, no one is making money with mobile and they are all struggling to identify initiatives which will provide an acceptable return on investment. Everyone is asking "is developing a mobile app worth the cost?"

Our partner, IESE, the international business school, has had the same experience with respect to social networking. In their studies, they have found that companies across all sectors are not making money with their internal or external projects.

However, that misses the point. The benefits of enterprise social networking and mobility are not tangible. Companies shouldn’t look for ROI but instead for return on productivity. By working more effectively, companies should be able to make better use of its employees, find expertise more quickly, and innovate more readily; improved communication and collaboration are obvious measures of improved productivity. Putting better tools in the hands of your staff can only improve their productivity and the value they bring to the organisation.

Beyond productivity improvements, social networking and mobile applications are simply becoming a necessity. As „millennials“ (the Facebook generation) enter the work force, they are demanding tools which provide open and fluid discussion and full-time connectivity. So companies need to start adapting, changing the culture of their organizations and learning how to use the new technologies available to them. Those that do so best will have an advantage in recruiting and staff retention.

For the same reasons, providing social networking and mobile banking solutions to customers is not an option, but a necessity. Many banks are letting others take the lead and accepting to play catch up. They do so at their own risk. Those that innovate now will not only have the advantage of being first, but will have gained valuable experience which will let them maintain their advantage going forward.

In my blog in December, I asked “Will banks lose out to tech companies on P2P?”. With Barclays’ recent release of “Pingit”, its novel mobile P2P money transfer application for UK customers and non-customers alike, we can now answer this question. This is a clear example of a bank that has made the investment to get out in front of its competition. I am sure they will reap benefits for years to come.

Forget ROI and start to innovate. Get in the game.

Karl Rieder, Delivery Manager, GFT

TagsMobile & online

Comments: (1)

A Finextra member
A Finextra member | 05 March, 2012, 20:36

I totally agree that banks should push forward with investment in innovative areas without a complete focus on ROI. However I do think that social and mobile benefits can and should be tracked. At the moment the issue is that they can't be tracked, but more so, it can't be done well.  This is a result of the tools in place and that traditional metrics are not applicable. It will be great to see which banks are quick to identify new metrics and tracking approaches over the next few years that help move them above the pack.  I am hoping that Barclays did this with Pingit rather than just hope for the best.

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