Blue Paper
Open Innovation in the Financial Services Sector Why and how to take action Dr. Ignasi Barri, Thibaut Loilier, Menno van Rijn, Anneke Stolk, Harilaos Vasiliadis
Table of Contents Executive summary ........................................................................................................................... 4 1
Introduction ......................................................................................................................... 5
2
Towards Open Innovation in Financial Services ............................................................. 7
2.1
Disruptive changes in the banking industry .......................................................................... 7
2.1.1
New technologies accelerate disruptive change in banking ................................................. 8
2.2
Need for innovation to address the challenges faced by the financial services sector ........ 9
2.2.1
Slow uptake of Open Innovation in banking and financial services ...................................... 9
3
The growing need for Open Innovation ..........................................................................11
3.1
Why Open Innovation? .......................................................................................................11
3.1.1
Innovation as a competitive advantage ..............................................................................11
3.1.2
Incremental innovation is not enough .................................................................................11
3.1.3
Using Open Innovation to achieve disruptive advances .....................................................12
3.1.4
The relevance of Open Innovation for banking ...................................................................13
3.2
Key Open Innovation activities ...........................................................................................14
3.3
Towards an Open Innovation ecosystem ...........................................................................15
3.4
Benefits of the Open Innovation model ...............................................................................16
3.4.1
Adoption of Open Innovation in other industries .................................................................18
3.4.2
Bringing Open Innovation to service industries ..................................................................19
4
Exploring Opportunities for Open Innovation in the Financial Services Sector ........21
4.1
Open Innovation in financial services today .......................................................................22
4.2
Getting started with Open Innovation .................................................................................24
4.3
Choosing partners for Open Innovation ..............................................................................28
4.4
Where do I start with an Open Innovation initiative? ..........................................................29
5
Innovation House from GFT and Bax & Willems ...........................................................31
About the authors ............................................................................................................................32
2
The intention of this report is to make trends transparent and understandable within their context and give readers direction for their business. This report has been produced in collaboration with Bax & Willems, a specialised consultancy firm dedicated to helping clients bring new technologies and innovative business ideas to market. The content has been created with the utmost diligence. Therefore, GFT Technologies is not liable for any possible errors. GFT Technologies AG Executive Board: Ulrich Dietz (CEO), Jean-François Bodin, Marika Lulay, Dr. Jochen Ruetz. Chairman of the Supervisory Board: Dr. Paul Lerbinger Commercial Register of the local court (Amtsgericht): Stuttgart, Register number: HRB 727178 Copyright Š 2014 GFT Technologies AG. All rights reserved.
3
Executive summary This report reviews the current state of innovation in the financial services industries and the need for banks to embrace innovation as a key element in addressing the challenge of continuing disruptive change in technology and consumer habits. The document also introduces the concept of Open Innovation and its most common practices and discusses opportunities for financial services organisations to adopt innovation in the corporate environment. To put open innovation practices in context for financial services organisations, relevant open innovation examples from around the world are reviewed and the benefits of such initiatives highlighted, not only in the financial sector but also across other industries. GFT and Bax & Willems have joined forces to provide assistance for financial services organisations in addressing Open Innovation under the banner “Innovation House�. This venture is described in more detail at the end of this document, along with additional information on how this methodology can help companies achieve their innovation goals.
4