• Banks have by and large woken up to the need to innovate, but many are neglecting one important factor — culture. Several elements typically found in banking culture are proving hindrances to innovation. Some are the result of their size, while others stem from the age of the organization, and the lack of a pressing need to change until very recently.  
  • There is mounting evidence that a failure to consider operating culture is already hurting banks' innovation projects. Just 17% of the industry majority have managed to launch five or more digitally driven products since the start of their innovation efforts, and only 16% have implemented five or more digital mid- or back-office solutions. That suggests the initial willingness of a bank to innovate and deploy resources is not enough to promote innovation.
  • A few banks managed to identify the problems posed by their operating culture early on, started to implement changes to combat it, and are already seeing positive results. Citi, DBS, and ING are viewed as leaders when it comes to innovation in banking. We spoke to all three to find out what's worked, and what hasn't, when it comes to creating a culture that promotes innovation. Their insights are compiled into a set of case studies in this report.
  • Based on our conversations, we've put together a list of best practices banks should adopt in order to update their operating cultures. These include changing up organizational structures, adopting new design processes, rethinking how employees are incentivized, modernizing working environments, and ring-fencing innovation resources. 


From their inception until the late 2000s, most banks across Western Europe and the US were highly profitable organizations, with many facing little meaningful competition. The lack of challengers largely came down to prohibitive capital requirements or protectionist governmental policies, and meant banks had little impetus to change the way they did things. However, a perfect storm of conditions created in the last 10 years has upset this status quo. As the most recent financial crash took a hammer to the system, a rapid advancement in technology also began to take hold, putting pressure on banks' income and leading to competition from new quarters. 

Most banks have now realized they need to innovate, and keep innovating, if they want to succeed in the financial services ecosystem of the future. In fact, many have instituted significant technology budgets, accelerator programs, and chief digital officers. However, the majority [...]