Innovation is do-or-die for financial services

by CDW Financial Services|Nov 16, 2016

Innovation has become a do-or-die proposition for financial services organizations. Institutions must innovate consistently and add functionality to improve the customer experience and defend against new competitors. This week’s FIN List takes a look at how the industry is approaching innovation, including the use of new technology tools and outside partnerships.

  1. Hitting the right innovation note. According to a new report from Capgemini, more than 60% of finserv execs say their institutions are pursuing innovation projects. But only 10% reported achieving tangible results. These findings suggest that many banks are still trying to figure out the best method for innovation.
  2. Customer-centric innovation is a must for retail banks. Recently published research from Everest Group outlines which technology strategies today’s leading banks are investing in to boost customer loyalty and gain a competitive edge. Digital innovation and customer experience is the only way forward for retail banks, notes Everest Group, which is why retail banks are aggressively investing in digital technology.
  3. Beyond the blockchain hype. Now that the hype is starting to wane, technologists and bankers seem to be settling on a narrower range of use cases for blockchain technology. It’s most viable use is the common architecture built cooperatively by banks that replaces the functions performed by existing clearinghouse and payment settlement entities.
  4. Strengthen data security from the inside. About 70% of data breaches involve a compromised user at a given firm, according to industry experts. This internal threat makes it even more critical that financial advisors treat cybersecurity as a problem to tackle from the inside. Providing user awareness training frequently is key to stopping many cyberattacks from occurring.
  5. AI pushes quants to new highs. Access to new data sets and greater computing power delivered via cloud computing and graphical processing units has fueled interest in machine learning-based strategies, accord to panelists who spoke at this week’s STAC Summit. Access to this new wealth of data has changed the mindset of many quantitative traders, eschewing the back-testing of potential trading signals for running various simulations instead.

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