Tuesday, August 7, 2007

Current Thought on Innovation Management in Banks

James Gardner, Head of Innovation and Research in Group IT at Lloyds TSB, has posted a great article in his Bankervision blog on current experiences in innovation management within the banking industry.

Gardner canvasses a range of issues, including different approaches to awards / incentives structures, approaches to managing innovation, and the use of vendors.

For example,
. . . the second part of the discussion really focussed on the process banks used to get their great ideas into the market . . . If you have a formal innovation programme, you probably won't know what is going to come out the end of it, and so driving a decent business case for such activity is quite difficult. It speaks volumes for the maturity of some banks' innovation processes that they are able to measure the returns of their programmes sufficiently to make these kind of investments sensibly.
On the use of vendors:
Some of the group expressed the view that using vendors was a great way to de-risk the whole innovation thing. The idea is that vendors should be spreading the risk of their propositions across many customers and, therefore, that the incremental risk to a particular bank should be less. An alternate view was expressed however: that vendors, by virtue of this risk sharing behaviour, would not be able to drive specific competitive advantage for an individual bank, and that the process of innovation was best left as an internal one with pieces being bought in as necessary.
Overall, an interesting and thought-provoking window into one industry wrestling with the challenges of innovation.

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