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Innovation in banking and financial services

07 July, 2022Paul Stallard

FintechMany banking and financial services (FS) product managers are hugely frustrated at not being able to get new products to market quickly enough. The main reason for this is often not having software developers available to do the coding new products require. However, says Paul Stallard, the key is to invest in training to upskill product management teams.

Recently, a large global bank admitted that they’d not invested in product management training for over ten years. One wonders how many other banks this applies to?

Of course, learning on the job is still massively important. But – given the complicated nature of markets today and the highly advanced level of technology surrounding our sector – this admission is worrying.

Maybe this didn’t matter much before the digital revolution and the arrival of all the new banking formats and fintechs.

But the banking sector is now the most competitive it’s ever been. The total level of advertising spend in the UK is the highest ever at £31.9bn in 2021 and set to increase further by 10% in 2022.

Such intense competition is a huge catalyst for all players, from all sectors to create the best products and services in the quickest possible time.

Innovating to meet customer needs

To those of us in the sector, it’s pretty clear product management, especially at incumbent banks is being held back. This is mainly because IT and other resources are committed to updating legacy systems and operational processing issues to reduce costs and save money.

Among incumbent banks, innovation is largely yet to reach customers through products or services. But you’ll find it in back or middle office process improvements, where the effort to reduce costs is an important objective.

The benefits of being first to market matter. What matters more, however, is innovating to meet clearly identified customer needs. This is where – and why – neo banks and fintechs are currently benefiting at the expense of incumbents.

Some may say it’s not crucial to be first to market. Many great brands and products have followed, and learned from, competitors who got there first. But I’d argue it makes a huge difference to a bank’s performance.

Five reasons to be first to market

Firstly, being first strengthens brand recognition – especially when there are so many new players entering the market.

In addition, getting products to market quickly makes the whole business buzz. It makes everyone working in an organisation – and everyone associated with it – feel good. That encourages people to contribute more because positivity is infectious, expectations are high and everyone is driving forward. All this serves to lift the spirits, create enthusiasm and make all stakeholders feel like winners.

Being first – or one of the first to market – also affects perceptions of your brand as well as its influence. It positions your organisation as completely up to speed, if not ahead of the rest. That helps an organisation survive the rigours of intense competition and considerable change.

Launching brand new smart products makes stakeholders, especially customers, identify with innovation. They’ll feel ahead of the crowd their and that this is a reflection of themselves and everything they do. Think of brands like Apple, Facebook and Amazon. They all began by doing one thing better than anyone else.

Being smart – and fast – with new products that immediately satisfy a customer problem is good for recruitment. People want to work for winning businesses.

We’re living at a time when competition to find and keep the right talent is at an all-time high. We know the best and the brightest will want to work with market leaders, because they get things done. They’re successful. And with such success comes fame, fortune and prosperity.

Being first also positively addresses a key requirement of your brand – memorability. Just to prove the point, let me ask you this: who currently holds the world record for running 100 metres?

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