Until recently, before the effects of the financial crisis provoked the rapid growth of the global fintech movement, banking activity showed very limited development.
"We are in the habitual business, so we do not need to develop a structured approach to innovation" - this was a common idea of the industry leaders. Today, banks are more scrupulous about any innovation, carefully assess their effectiveness.
When it comes to the quality of innovation, many industry professionals are still trying to understand what the real impact of business is on the idea they are working on. In his work "Change by Design" (2010) Tim Brown proposed an easy way to classify innovations and understand their impact on the existing business. In their studies of portfolio management innovation, Bansi Naji and Jeff Tuff have shown that companies that have allocated about 70% of their innovation activity to additional initiatives, 20% to evolutionary, and 10% to revolutionary ones, have surpassed their competitors.
But when more direct revenue from innovation is considered, the return rate is roughly equal to the reverse distribution: incremental innovation efforts usually contribute 10% of the long-term, cumulative investment returns to innovation, evolutionary initiatives contribute 20%, and transformational efforts make 70%.