Open Innovation in the Financial Services
The transformation of the financial services implies new forms of innovation. There was a slow uptake of open innovation after we introduced the concept to financial services in 2009. Meanwhile banks recovered from the financial crisis, and with the simultaneous arrival of multiple disruptive trends, they took up innovation as a route to grow, differentiate, and survive. The banking, wealth, and asset management industry is facing competition from new market entrants that embrace open innovation from the beginning. We explain open innovation as a facilitator to create value for clients and businesses as it fits perfectly into the era of sharing, collaborating, and digitalization. Knowledge on how to manage the transition to open innovation and on how to provide a culture based on openness improved. Open innovation is all about learning and collaborating with firms – both inside and outside the traditional financial services industry – to capitalize opportunities arising out of the disruptive trends. We discuss the amalgamation of products, services, and processes. Value derives from efficiency gains for the provider along the opportunity to collect and analyse vast amount of data. Open innovation is the prerequisite for future value streams and must be realized in the business models of incumbents as well as fintechs and non-banks. Basic understanding is essential before defining new strategies, also because it is the enabler for further engagements in innovation ecosystems.