[Dave Birch] In my review of James Gardner's Innovation and the Future Proof Bank, I focused on James' core observation about transforming innovation from a function into a process. The payment sector is no difference and payment organisations must somehow develop along these lines, whether by building an internal process or by combining or connecting to some other one. Within the incumbents, though, there is a still a long way to go.
Half of banks will still lack a formal innovation programme and budget in three years time, severely restricting their growth potential, according to research from Gartner.
[From Finextra: Cost-cutting banks wide open to disruptive IT innovation - Gartner ]
If there is an innovation programme, what should it do? It has to create some backdrop and shared language for thinking about the future (I rather like James' "futurecasting" approach), it has to try and understand the big picture, and it has to look for new ways to make money (frankly). It also has to develop a fruitful mutual relationship with strategy. Looking from the outside, I can see that in some organisations the boundary between strategy and innovation is hazy and they become confused.
In many ways this is because innovation and strategy share much common territory; they both look into the future, look outside the business, try to make sense of the confluence of known trends and anticipate the emerging ones. Where they most obviously separate is that part of the company's strategy that looks as maintaining "business as usual", though even here there is often an assumption of product/ service evolution.
[From Innovaro Blog - Future of Innovation]
Actually, James has also observed another problem (from the inside: he was Lloyds TSB) in the specific relationship between innovation and IT.
CIOs have such vastly different priorities to innovators that they are fundamentally unable to embrace innovation and keep on keeping on.
[From BankerVision: Future leaders, and IT contradicts]
It's undeniable in the case of banking: the majority of IT budgets are swallowed up in the "business as usual" integration, migration, compliance and other basic functions. There's not always the money to deliver the great new Internet identity management system, the new micropayment system or the experimental social lending platform. But there's something else that has occurred to me listening to stories and case studies in and around the CSFI's roundtable lunches, and that is that the role of chance in turning innovation into