“I don’t think any organisation can innovate at the pace our current environment demands by relying on internal ideas,” says Jeremy Anderson, Global Chair of Financial Services for KPMG. “Innovation that will truly advance an organisation— that is, improve its customer focus, lower costs, and become more agile—requires tapping into external experts and technologies.”
We are seeing more financial institutions engage in external partnerships with academic institutions, technology experts, government agencies, industry innovators (e.g. FinTech companies), high value consultants, researchers, and customers, as well as each other. financial institutions are creating an ecosystem that brings certain elements in-house: the expertise, experience, and technology, as well as the facilities they need to leapfrog ahead to more current ideas, products, business models, and, in some cases, even talent.
By pursuing external ideation, financial institutions also benefit from the unique, customer-focused perspectives their collaborators offer. This enables companies to leverage research and data to understand evolving customer demands— both corporate customers and consumers—and the impact of megatrends.
External ideation also affords opportunities to understand how corporate customers and others within the industry are innovating change to their business models to capture market opportunity and increase operational efficiencies.
The nature of each relationship is unique to the organisation and partnership involved. Each one begins with having to understand the key objectives of the partnership and to consider the individual factors and desired outcomes. These factors lead to a variety of options, such as formalised collaborations, supply arrangements, joint ventures, and outright acquisitions.
To support this ecosystem, financial institutions will need to put in place internal structures, capabilities, and culture that encourage the fast-paced, ongoing cycle of experimentation and the “safe-failure” needed to hone breakthrough innovations that can truly differentiate an organisation on the market.
How will you architect your innovation ecosystem?
There are plenty of factors to consider in developing an innovation ecosystem that will support long-term growth for your organisation. To help you get started, we have developed the Innovation Ecosystem series. Over the next nine weeks, we will explore some of the third-party partners financial institutions should consider for their innovation network. The series will review the benefits these institutions could offer your organisation and how best to partner with them.
We look forward to engaging in discussions with you about innovation and the opportunities external partners can provide in transforming and growing your company.