Canadian findings show financial institutions view innovation as important but are missing opportunities for growth
Toronto, ON (Dec. 2, 2013) – The Canadian financial services industry is lagging behind its global counterparts when it comes to innovation, with nearly a third (28%) of board-level respondents indicating it’s “very challenging” to build an innovative culture.
According to the Global Innovation Survey released by PwC today, even though innovation is viewed as an important driver of success by 83% of banks, insurers, wealth managers and other financial services leaders, they see a number of unique challenges in getting innovation right.
Respondents indicated that retaining talent (22%), measuring innovation success (17%) and developing and implementing support structures that drive and sustain innovation initiatives (28%) are the most prominent problems overall. In all of these categories, Canada is significantly behind the global trend.
“The challenges faced by Canadian FIs in driving innovation are grounded in culture, organization structure and process-related issues,” says John MacKinlay, Financial Services Consulting and Deals Leader at PwC. “These issues can be addressed in part by doing three things: firstly, clearly defining what opportunities and benefits are achieved by driving innovation into the organization, secondly, taking a long-term view to implementing the vision as innovation does not materialize overnight, and finally, building an innovation support framework that turns ideas into reality.”
Currently, Canadian executives are focused on near-term innovations in technology (33%) and systems/process improvements (22%). This may be because innovation continues to be driven out of the IT function exclusively. But this approach may mean that financial institutions are missing critical opportunities and input in areas of customer experience, business model and product innovation.
“While technology advancements are certainly important, there’s considerable competition in Canada to create the ultimate customer experience,” says Karen Forward, Director, Financial Services at PwC. “That’s why it’s critical for companies to make innovation a part of their fabric and to consider ways to help teams across the organization shape ideas and implement them.”
Forward continues, “Tools such as social technologies have given rise to crowdsourcing to develop new products and organizations need to remember that front line employees are key idea generators as they see opportunities every day to drive a more personal level of customer service.”
The study also shows that leading innovators are taking a much more structured approach with 79% of the top performers indicating they have a well-defined innovation strategy in place. This isn’t the case for Canadian financial services companies, as most indicated they don’t have formal structures in place to drive and sustain innovation.
MacKinlay concludes, “Innovation is essential to staying relevant and competitive in today’s global market. More than ever, Canadian executives need to find new ways to cultivate ideas that drive an extraordinary customer experience and an agile business model to stay ahead.”
About the Global Innovation Survey
The largest and most comprehensive study of its kind, PwC’s Global Innovation Survey gathered insights from 1,757 C-suite and board-level executives from more than 25 countries across more than 30 sectors. For the first time, Canadian executives shared their experiences in this study to explore three key areas: how they’re using innovation to drive growth; how approaches to innovation are changing; and how they’re delivering tangible results. A large segment of Canadian respondents included members of the financial services industry, with representatives from five of the “Big Six” banks, asset managers, insurance providers and researchers.
Findings from the Global Innovation Survey are included in the global report – Breakthrough Innovation and Growth and a Canadian report with sector-specific results, both available online or from the media contacts.
About PwC Canada
PwC Canada helps organizations and individuals create the value they’re looking for. More than 5,700 partners and staff in offices across the country are committed to delivering quality in assurance, tax, consulting and deals services. PwC Canada is a member of the PwC network of firms with more than 180,000 people in 158 countries. Find out more by visiting us at www.pwc.com/ca.
SOURCE: PwC Canada
PwC refers to the Canadian member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity.