Gartner Says Financial Institutions Must Focus on IT Innovation or Hibernate to Weather the Economic Downturn

Analysts to Discuss Steps for Survival for Financial Services Organisations in the Downturn during Gartner Symposium/ITxpo 2008, 3-7 November, in Cannes, France

(PresseBox) ( Cannes, France, )
Financial services institutions must focus on IT innovation for radical change or hibernate to minimise cost and prepare for later action to survive the economic downturn, according to Gartner, Inc. Organisations that choose the middle ground risk wasting their IT budget on incremental modernisation for little gain.

"Far from being fast followers, companies in-between the two options will be ditherers or laggards who waste their IT budget on incremental modernisation, which will have little or no consequence for their business," said Alistair Newton, research vice president at Gartner.

Mr Newton provided an outlook on how financial services organisations can innovate during Gartner Symposium/ITxpo 2008, which is taking place in Cannes through November 3-7.

Organisations that hibernate are making a conscious decision to prepare for survival by avoiding IT change until absolutely necessary. They take a short- to medium-term approach, keeping their systems running for the absolute minimum cost while building up a war-chest of savings for later use on , smart, innovative activities as and when market conditions improve.

Gartner defines companies that innovate as at the leading edge of technology and embrace the big bang approach. They develop accurate cost-benefit models that link IT changes to business metrics so that they can quantify benefits and justify the radical transformations they encourage.

Mr Newton added: "Financial Services companies need to continually assess the external market, especially in today's current turbulent market. Many new competitors - including non-banks looking to enter the financial services market - see the confusion and uncertainty generated by the current problems as the ideal opportunity to attack the banks and steal their customers. Banks need to be aware of this threat and adopt the appropriate response, taking into account their own capabilities and desires to defend their customers from acquisitive aggressors."

Mr Newton outlined four examples of how companies can embed innovation in their corporate culture and agenda:

- Re-design branches to sell and advise - Banks must re-learn how to engage customers after pushing many away from branches through telephone and internet banking. With the help of branch automation and solid multi-channel integration banks can engage customers for transactions that add value to the relationship and make the purchase of new products and services streamlined.

- Extreme but not complex innovation - Use technology to deliver a new level of personalisation for the customer. For example, one Spanish bank allows its customers to calculate exactly how much the bank profits from their custom and enables them to donate a portion of those profits to a designated charity. In India, another bank provides easy access to a 'Do Not Call' register on the front page of its internet banking home page.

- Treat customers as innovators via social networks - Customers can answer most of what organisations want to know about them, whether it's where they shop, how they feel and what and when they want to purchase. Some new financial services entrants such as the social networking start-ups, are trying to leverage customers more effectively using this technology and customers' increasing acceptance and use of it. The next innovation step will be to bridge the gap between pure social networks and financial social networks (FSNs). FSNs are leveraging social networks to initiate a new form of financial transaction, allowing members to not only share information but to actually start lending and borrowing to each other, cutting out the middle man - in this case the bank.

- Innovation in payments - Financial services companies are gradually recognising the role they need to take to transform their approach to payments if they are to maintain a payments franchise, as well as the role that payments can play in their customer propositions. Some of the innovations around payments are focused at the payment applications themselves and result in the deployment of multi-application cards and the use of loyalty applications. However, many innovations in payments will be invisible to customers, focusing instead on the more effective use of payment data and the re-architecting of bank payment infrastructures to support the deployment of organisation-wide payment hubs

Follow news, photos and video coming from Symposium/ITxpo 2008 on FriendFeed at, on YouTube at and on Twitter at

Gartner analysts are discussing the key issues facing the IT industry during Gartner Symposium/ITxpo 2008. Taking place in Cannes, France, on 3-7 November, Gartner Symposium/ITxpo is the IT industry's largest and most strategic conference, providing business leaders with a look at the future of IT. More than 3,000 senior business and IT strategists will gather for the insights, tools and solutions they need to ensure their IT initiatives are key contributors to and drivers of their company's success. Gartner's annual Symposium/ITxpo events are key components of attendees' annual planning efforts. They rely on Gartner Symposium/ITxpo to gain insight into how their organisations can use IT to address business challenges and improve operational efficiency. Additional information is available at
Für die oben stehenden Pressemitteilungen, das angezeigte Event bzw. das Stellenangebot sowie für das angezeigte Bild- und Tonmaterial ist allein der jeweils angegebene Herausgeber (siehe Firmeninfo bei Klick auf Bild/Meldungstitel oder Firmeninfo rechte Spalte) verantwortlich. Dieser ist in der Regel auch Urheber der Pressetexte sowie der angehängten Bild-, Ton- und Informationsmaterialien.
Die Nutzung von hier veröffentlichten Informationen zur Eigeninformation und redaktionellen Weiterverarbeitung ist in der Regel kostenfrei. Bitte klären Sie vor einer Weiterverwendung urheberrechtliche Fragen mit dem angegebenen Herausgeber. Bei Veröffentlichung senden Sie bitte ein Belegexemplar an