How differently? A lot according to Rob Shelton, Global Innovation Strategy Lead at PwC. Based on a global survey of over 1700 C-suite interviews in 23 countries, innovation leaders are almost twice as optimistic about future revenue growth as their “average” counterparts; are much more inclined to use innovation strategies as a “North Star” for design and execution of business goals; understand how to weave an intrapreneurial spirit into the broader corporate culture; and use collaboration as the centerpiece of the company’s core competency. Rob shared these and other PwC innovation survey highlights at Boston Financial’s recent Client Forum held in San Francisco.
The reality is that unlike other industries such as technology, health sciences, pharmaceuticals, and energy, financial services have not been overly dependent upon innovation as a life line for growth. Particularly in the fund industry, asset growth until recently has largely been a function of a growing secular demand for asset investments. Baby Boomers, for example, have contributed significantly to a growing asset base as has the expanding global capital marketplace. This is not to say that innovation has been absent from the equation (witness for example alternative investment strategies and ETFs), but in our opinion innovation has not played the central role in financial services that it has in other industries. The Social Economy: Unlocking Value and Productivity Through Technology, a recent report from the McKinsey Global Institute, lends support to this point of view: In general, the financial services industry lags behind other sectors in adoption of social technologies. …. Only 64% of financial services firms reported using at least one social technology tool, compared with 86% in high technology.
We believe this is changing and that in the future, product and service innovation will play a critical role in who succeeds in the financial services industry. This indeed will require “thinking differently” in terms of redesigning service models to meet the individual needs of a more diverse investor base; or designing more cost-effective e-services and social technologies; or providing greater leadership and operational support in meeting a more demanding regulatory and compliance environment; or utilizing data analytics and social technologies to enable more efficient and effective shareholder servicing.
These are the kinds of questions that are driving our focus on “thinking differently” at Boston Financial. In a prior blog post, Creating an Innovation Capable Organization, we spelled out some of the key elements we believe to be critical in building this capability. Things like core processing, alignment of resources and goals, and client collaboration. We are making good progress on each of these items as part of our Product Development Group. Today we are expanding that initiative to include a broader perspective on what key mega-trends will likely impact our business over the next 3-5 years. These trends include a growing millennial investor base and the need to develop delivery models that utilize social technology tools and devices.
No one, of course, can predict with accuracy the future. But what we can and are doing at Boston Financial is not only to begin to think differently but to build a readiness for succeeding in that future environment. In the coming months ahead you will be hearing more about this initiative. In the interim we encourage your response to this blog to register your own views on how we might best shape this effort in meeting your own views and needs for the future.