50% banks will lack innovation programme by 2013: Gartner

Half of the banks in the world will lack an innovation programme to improve services by 2013, severely restricting growth, as pressure from governments and regulators make them risk-averse and inflexible, a study by IT research firm Gartner Inc says.

"By 2013, 50 per cent of banks will still lack a formal innovation programme and budget, severely restricting growth potential," Gartner said while making IT predictions for banking and investment services.

The US-based IT research and advisory firm said non-banking competitors like retailers, online companies and telecom operators are making inroads into the banking industry, thereby leading the way with customer-oriented service improvements, which customers will seek as economies of access improve.

 

Meanwhile, banks will hike their fees to help offset this customer attrition.

"Pressure from governments, regulators and consumers is making some banks risk-averse and creating a culture of introversion and inflexibility," the US-based IT advisory firm's Principal Research Analyst Richard De Lotto said.

Gartner suggested that banking and investment services firms should focus on innovation initiatives to improve services as opposed to pure product development.

Banks also need to ensure that personalisation remains a critical component in innovation initiatives.