Digital transformation, the rise of fintech, a greater emphasis on the customer experience, more regulation, and social and environmental responsibility are a few of the banking challenges to have emerged in the last few years.

These challenges, and the general economic instability brought on by high inflation and the forecast of recession in major economies, are pushing banks to put a new focus on innovation as a means of improving returns and staying competitive.

Innovation is often associated with creating new products or services in a business. But it can also be about changing the way you do business. Your business competitiveness and survival are directly linked to your ability to innovate.

Innovation embraces:

• New technologies and their uses
• Improved industry methods
• Meeting changing customer demands or needs
• Better systems and processes

An innovative business culture ensures that everyone is working towards improving business practices, efficiency, and performance. Here are some benefits of an innovative culture:

• Increased competitiveness
• Improved staff retention
• Proactive approaches to business
• More customers
• More efficient use of resources

Some individuals are naturally more innovative than others, but there are proven habits an individual can form to create an innovative mindset:

• Seek opportunity
• Be constantly curious
• Look ahead
• Embrace failure
• Seek answers
• Practice innovation exercises
• Leverage natural innovative strengths

Encourage your employees to practice these habits and offer opportunities to practice them. There are ways in which an organization can encourage innovation in its staff:

• Offer training
• Make innovation a core value
• Hire people with different perspectives
• Reward employees for their ideas (even if they are not carried out)
• Implement ideas as quickly as possible
• Have a process for feedback
• Encourage collaboration

Innovation is an investment in the future of your business — not an everyday expense. It might not seem like a priority, but having an innovative business will help you:

• Keep up with customer demand and industry best practices
• Grow your business and increase profits
• Motivate your employees