What the Experts Are Saying about Innovation in Financial Services in 2023

The rise in innovation in finance, banking, and the rest of the sector shows that companies are recognizing the need to adapt and grow to forge their way through a downturn. McKinsey research shows that innovating throughout tough periods is necessary in order to accelerate growth in the 5 years after a recession.

In this blog, we share with you the latest insights from Financial Services experts about how innovation is driving the industry forward. There are three key ways that leading thinkers predict will drive the impacts of the future: keeping up with customer demand, addressing security and risk, and connecting to the right talent.

Keeping up with customer demand in a looming recession

Many stores and organizations abide by the old phrase, “the customer is always right”. In tightening financial times, it’s important to also recognize that – without customers and their goodwill – many companies simply would not exist for much longer.

While that may seem obvious, it holds especially true for financial services institutions. With the rise of digital banking and ecommerce, any slight interruption or dissatisfaction within a customer journey can lead to someone opting out of your product. It is also important to remain competitive in a downturn, with offers about better interest rates on savings or switch bonuses providing an easy ‘pull factor’ for your customer base to move elsewhere.

Mobile-first approaches, championed in the UK by apps like Monzo and Starling, can provide the convenience of setting up an account with an always-on digital strategy.

Addressing security and risk

The leading consulting group Ernest Young (EY) have conducted a joint survey with the Institute of International Finance (IIF), discovering that cybersecurity is the top risk for 2023. Chief Revenue Officers of global banking and finance firms see a number of competing risks as other priorities. Climate risk, digitization-instigated change, and data integrity are seen as the ‘top emerging risk priorities’ in the next half decade.

Whether it’s protecting data or addressing the risk in M&As, financial services institutions are naturally cautious. Trust in this sector goes a long way, so keeping up with the latest regulations and requirements is a must amid incredible global uncertainty: politically, economically, and otherwise.

In digital transformation cases in the insurance industry, frauds cost organizations around $6bn USD – reported in Deloitte India’s latest survey. Preventing loss, reducing risk, and improving cybersecurity measures is therefore a key goal for financial services institutions of any type.

Connecting to the right talent and networks

In lean times, even as organizations shrink their workforce and slow their growth in people, there is still an arms race for talent. It is almost more important, as firms are competing to hire the best of the best to fill the fewer slots, where making the right hire can be critical.

Quoted in a PwC workplace report, Peter Harrison (Group Chief Executive of Schroders Plc) said: “As technology in the workplace increases, it will have a big impact on both people and culture. It’ll change the type of people you employ. It’ll change the culture of delivery within the organization.”

It is therefore crucial to connect to a world of start-ups, the right network of future employees, and even bolstering your capabilities with open talent. Even more important is to connect with them in an area where you can control the security, permissions, and own any IP that emerges from a collaboration. Co-creation requires trust, but it also requires a solid foundation of security – usually provided by a platform with in-built agreements.

Throughout the financial sector, innovation isn’t always about the next big thing. Optimizing the way that firms find value across the board is vital, from putting customer experience as a priority to addressing risk and retention. Wazoku can help enable organizations of any size and scope in the financial services industry to reduce costs, mitigate risk, and unlock the networks to power growth – even in a downturn.

Want to learn more? Read our latest playbook about the 5 key ways to accelerate innovation in a recession!