Fintechs, FIs top ACI, Ovum innovation study

The Culture of Innovation index, published Sept. 10, 2019 by ACI Worldwide and Ovum, maps approaches to innovation by different business sectors, including fintechs, merchants, corporates and financial institutions. Fintechs and retail banks that leverage real-time payments and transformative technologies scored highest in the study, researchers found.

“We wanted to understand what drives our audience of fintechs, merchants and corporates on the innovation front and what inputs and outputs put them ahead of the curve, from organic alignment of embracing technology to digitally-led businesses that foster innovation,” said Michael Grillo, vice president, merchant segment and solution marketing at ACI Worldwide.

The 1,200 companies studied represent the diversely layered global innovation spectrum, Grillo noted. All embrace technology, but some are doing it in silos without sharing feedback or using their example to foster new ways of doing business in other areas of the organization, he added.

Three pillars of success

Grillo identified the following three pillars of success among the survey’s digitally led businesses:

1. Culture of innovation: Business transformation and innovation were integral to the culture and sponsored from the top of the organization.
2. Technology-driven: Companies execute on top of modern technology infrastructure, uninhibited by legacy systems that require multiple iterations of integrations.
3. People-focused: As more companies move from tech-enabled to tech-driven, people become more important to the organization.

“While technology is – and will remain – an important part of the answer, it is people that truly change organizations,” researchers wrote. “The banks that ally cultural change with technology leadership place themselves in the best position to thrive in the future.”

Laggards and trailblazers

Regarding the survey’s trailblazer, emerging and laggard segments, Grillo was surprised by the high number of laggard merchants and said he’d expected to see more in the trailblazer category. While merchants are mostly concerned with moving goods and services and technology is not their expertise, Grillo observed that many are actively looking at outsourcing certain functions or moving to the cloud.

“I think there’s an opportunity to look at several areas of concern, such as, are business owners focused more on short-term priorities versus long-term success that innovation brings?” he said. “Merchants will continue to look at ways to meet customer expectations with new payment options and facilitating the mobile, omnichannel payments experience.”

Banks, on the other hand, are benefiting from fewer regulations and APIs that are driving competition and innovation, Grillo observed. Trailblazing financial institutions are using digital assistants and connected devices; more than three quarters of respondents prioritize security. Others in the emerging category are focused on innovation, with a clear technology strategy and effective execution, he noted.

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