Tim FitzGerald, EMEA Financial Services Sales Manager, InterSystems
Within the financial services sector, innovation is key to ensure firms can compete in an ever-changing landscape. However, always being at the forefront of innovation isn’t easy, particularly when trying to innovate in multiple business areas, with limited resources and budgets. Consequently, it is time for a mindset shift.
Rather than always striving to be at the cutting edge of innovation across the entire organisation, financial services institutions should recognise the merits of just keeping pace in select areas. In other words, firms should aim to be fast followers if they want to remain competitive.
As firms seek to “fast follow” where others are leading, speed and agility will be essential. This requires financial services organisations to refocus their attentions away from digital transformation and towards digital acceleration and adopt the right approach and technologies.
Why become a fast follower?
Becoming a fast follower doesn’t mean lagging behind. Instead, it allows firms to continue to innovate while having the luxury of learning from the mistakes of others, the so-called ‘first movers’, and leveraging the innovations of others. For instance, incumbents can learn from and leverage the advances that fintechs are bringing to the financial services sector, rather than having to start from scratch themselves. Taking invaluable learnings from the likes of fintechs will enable financial services organisations to adapt and modify when they come to their own innovation efforts, reducing likelihood for failure and often allowing them to speed time to value.
With 45% of financial services organisations globally open to collaborating with fintechs, it is clear the appetite to learn from fintechs is there. Therefore, adopting a fast follow approach to fintech innovations will help to ensure incumbents can keep pace with the competition and developments in the sector and offer their customers the same level of service.
Additionally, by becoming a fast follower in particular business areas, firms can really focus on a handful of innovation initiatives to drive forward themselves. By being able to truly home in on certain areas, whether that’s product development or regulatory imperatives, for instance, the results of those initiatives are likely to be improved. This approach will help to ensure that everything is done well, rather than a more scattergun approach in which resources are spread too thin across a variety of initiatives.
The importance of agility
At the heart of achieving the agility required to become a fast follower lies real-time data. Currently, many firms struggle gaining access to real-time data owing to challenges such as data silos, the growing volume, velocity, and complexity of data, and disjointed processes and technology. As such, it is vital that firms address these issues to be able to leverage data to act quickly and intelligently where others have paved the way and lay the foundations to undertake their own select innovation initiatives.
Using data platform technology to implement a connective tissue, sometimes referred to as a smart data fabric, is becoming an increasingly popular and effective method of gaining access to real-time data and insights.
A new architectural approach, the connective tissue speeds and simplifies access to data assets across the entire institution. It accesses, transforms, and harmonises data from multiple sources, on demand, to make it usable and actionable for a wide variety of business applications.
Leveraging a connective tissue infrastructure also makes it faster and easier for firms to gain new insights and power intelligent predictive and prescriptive services and applications thanks to a range of embedded analytics capabilities, including data exploration, business intelligence, and machine learning. These capabilities allow firms to leverage insights more quickly, shortening shorten time to decision, and give them the agility needed to fast follow.
Additionally, unlike alternative approaches, the connective tissue allows existing legacy applications and data to remain in place. As such, it enables organisations to maximise the value from their previous technology investments, including existing data lakes and data warehouses, without having to “rip-and-replace” any of their existing technology.
A new way to innovate
The rapid change of pace in today’s financial services landscape means that being at the cutting edge of innovation every time isn’t a viable option. Fortunately, more often than not, it is enough to fast follow on the heels of others, learning from their mistakes.
By arming themselves with the right data technology, firms can ensure they have the agility needed to do this. In turn, this will empower financial services organisations to keep pace with the competition and avoid lagging behind, while also focusing on a handful of key innovation initiatives to drive their business forward.
