This year’s FST Media Technology & Innovation – the Future of Banking & Financial Services event subtly brought to light an interesting point around people and the human resources required for innovation in business. All of the tech in the world is useless if you don’t have the right people in place behind it.
The lack of technology literacy within institutions and especially board members is a hurdle that needs to be overcome rapidly if an organization wants to improve innovation. The brave presenters admitted to it but were quick to point out that their boards were conscious of the issue and taking steps to address it. It might also have been a cry out and warming to those directors and senior executives that still believe that tight regulations will shield them from new entrants into the market.
Existing institutions are holding on to core values and stressing that trust and reputation with customers is more important than ever and above anything else including innovation. But are they clutching straws? In some areas of the industry, like payment systems, consumers are willing to try new things (non-traditional players), and the adoption of PayPal over the last few years is a good example. We now see some retailers accepting Bitcoin; is that just a fad or the beginnings of a new era?
Statistics tell us that 85 percent of defectors are satisfied customers. However, customer satisfaction alone is not enough to earn their loyalty and advocacy. Businesses need innovation. While banking remains a sticky business where reputation is important, the industry could see some erosion in those areas where reputation and history is less important and convenience, speed and fast results are more valued.
It’s not all doom and gloom for the prevailing players; their pre-existing diverse channels, from digital to actual branches and extensive customer-service capabilities, are a significant edge. The biggest threat might not come from outside but from within the industry itself, where a more nimble player will succeed in developing a start-up culture and leveraging technology and excellent customer services to create the most innovative products and services the consumers haven’t even dreamed of such as “insurance should no longer be driven by fear” suggested by Lean-Ann Walker from AMP.
Another emerging people issue that was raised was the lack of a pipeline of people in the Gen Y/Millennial group. Neither the industry nor the technology sector is appealing to them, especially to women who are not enrolling in technology degrees. Yet the industry is crying out for people who are capable of adapting to change and learning fast.
Tacit knowledge and transferring that into the digital age is another important human resources issue that innovating businesses should be aware of.