The pressure is on to innovate in financial services
Heightened regulation, margin compression, declining use of branch networks, competition from internet start-ups – those responsible for innovation in financial service know that they need to embrace new ways of thinking. But where should financial institutions head?
Too often, innovation in financial service has remained within product silos that reflect how firms are typically structured, and experimentation with valuable brands and legacy products is viewed as risky. This approach is unlikely to yield sustained, meaningful growth.
CAPABILITIES IN FINANCIAL SERVICES
As much as they can benefit from new ideas to grow their markets, many firms can also utilize a disciplined process that makes innovation reliable without extinguishing creative sparks. Our approach to financial services consulting helps our clients bring proven, rigorous processes to innovation in financial service realms, while still being mindful of the unique regulatory and risk-related constraints of the industry.
For instance, a credit card issuer embraces a different model -- one that is cross-functional, scientific, and highly transparent to monitoring by senior management. This model is used in countless other industries to nurture and test new ideas at speed:
Based on this calibrated data, card issuers can judge within months which propositions are most likely to succeed or fail, and then gear up for national launches of new products.
FINANCIAL SERVICES CASE STUDY
One of the largest banks in Africa was losing its small business customers to regional competitors. These competitors did not offer a large range of services, but the offerings they did have were inexpensive and intuitive. The bank wanted to engage a financial services consulting firm to help them redefine how small businesses interacted with financial services, perhaps serving them in ways that banks traditionally had not done before.
To determine what that relationship might look like, New Markets Advisors used Jobs to be Done research to deeply understand small business owners -- what they spent too much time on, what kept them up at night, and what made them happiest at work.
Then we connected these insights into business plans where the bank had a right to win. The Jobs to be Done of small business owners include:
Result: A New Approach to Small Business Banking
The research found that many small business owners struggled with the same basic tasks, such as finding capital, keeping up with their accounting, and handling repetitive administrative chores. This was different from what the bank had previously thought small businesses wanted -- over the last decade, the bank had built out extensive financial advisory programs and other high-end offerings, instead of focusing on the nuts and bolts.
Drawing upon these research insights, New Markets Advisors helped the bank build strong and dependable offerings that were unique to its market and which made small business owners’ lives easier, such as assisted payroll plans for employees and financing programs designed for small businesses.