Innovation Centers Become Part of Finserv Culture
Regardless of huge investments, 80% of businesses struggle to encourage an innovative culture. However financial services now grades among the top three sectors for new innovation centers, according to a new Capgemini study.
Capgemini surveyed 1,700 executives, including leaders, middle-management, and junior executives—from 340 organizations in eight countries, to study to what extent organizations are becoming more innovative as a result of their investments; and what is holding organizations back from achieving innovation maturity and turning investment into results.
Capgemini’s Digital Transformation Institute exploration revealed Innovation centers are now part of the business mainstream, with 87% of companies allocating workspace to innovation. “While this enthusiasm for innovation centers is encouraging, it is results that count. It is important to understand the value delivered and establish whether innovation centers are critical strategic priorities, or whether some are more of a PR exercise designed to showcase the company’s commitment to ‘innovation,’” the study suggested.
Capgemini maintained innovation centers have been a staple of organizations across industries for the past few years. It found the number of innovation centers grew from 456 to 580 between October 2016 and October 2017.
The electronics and infotech segment added the most innovation centers, taking over the number one spot from manufacturing. The sector-wise breakdown showed electronics and IT, automotive, and business and financial services-occupying the top three places.
Another interesting tidbit: one out of every two new innovation centers added now focus on artificial intelligence.
Worldwide, the U.S. is still the dominant host country but the research revealed, Silicon Valley continued to see a decline as the primary American innovation center location choice. In mid-2015, its share in the U.S. stood at 58%, but today it positions itself at 38%. Capgemini does see innovation centers spreading across the U.S., especially in the East Coast, where a pool of talent is available. Atlanta, Boston, and New York added 11 centers among them in the past year.
Worldwide Silicon Valley accounts for 13% of innovation centers compared to 18% in 2015. Capgemini acknowledged observers attribute the decline to several factors such as the high cost of living and tough competition for hiring from that local talent pool.
Meanwhile, more than 400 fintech enterprises, along with more than 30 innovation centers and research labs of multinational companies, have set up shop in Singapore, for example, according to Institutional Investor.
Reuters also described how regulators in the U.S. are taking a different method when it comes to financial technology innovation than their global counterparts by using a sandbox tactic. Sandbox refers to an environment where developers test their proofs of concept before a full-scale release. This involves tech innovators cooperating and interconnecting in a safe space to try and ultimately cross into the finserv market with some reg supervision and backing.
U.S. regulators, up to now, have not formed official sandboxes. However, some have stimulated fintech invention through other initiatives, such as LabCFTC.
Last May, the U.S. Commodity Futures Trading Commission approved LabCFTC, aimed at promoting responsible fintech innovation by improving the quality, resiliency, and competitiveness of the markets the CFTC supervises. The goal of LabCFTC, located in New York, is to enhance fintech innovation and fast-track CFTC’s involvement with fintech and regtech solutions.
For Banks that want a lab experience to uncover their strategy for the future, CCG Catalyst Consulting Group can help define your strategy through our 4D Design Thinking process.
For more articles like, “Innovation Centers Become Part of Finserv Culture,” subscribe to CCG Insights.