Paula O’Reilly, a managing director in Accenture’s financial services practice, explains that “Innovation DNA is the unique underlying roadmap a bank has that will help it keep the business operational during times of challenge, as with the global pandemic, and will also help the bank grow.”
This speaks to the dual nature of innovation DNA: While baking this approach into banking practices at scale is critical for sustainability, it also forms the fundamental framework of growth. According to O’Reilly, “Banks with an innovation DNA culture will continue to be positioned to meet the ever-changing needs of both customers and employees, and to build and launch new capabilities faster and at scale.”
How Does Innovation DNA Impact Operations?
In principle, innovation DNA serves as a digital guideline for banks to improve service at scale. In practice, O’Reilly highlights two key approaches:
- Decoupling applications from legacy infrastructure. As discovered by Accenture in a recent survey, more than 90 percent of banks now have at least a moderate number of workloads operating in the cloud, but only 45 percent are satisfied with current cloud results. Improving outcomes means deploying innovation DNA to decouple applications from their legacy infrastructure when moving to the cloud. “This enables banks to build a platform that is flexible and can run new technologies like APIs and microservices alongside their legacy systems using agile methodologies,” Accenture notes.
- Deploying DARQ. Banks must also embrace the uptick of DARQ technologies — distributed ledger (better known as blockchain), artificial intelligence, extended reality (which includes augmented and virtual reality) and quantum computing — to maximize the impact of innovation DNA. With 60 percent of firms prioritizing AI investment and 37 percent looking to adopt quantum computing solutions, these technologies are now critical for success in a world driven by remote work and the digital customer experience.
“These emerging technologies are an area where banks can carve out their DNA roadmap by experimenting and determining where best to implement solutions such as blockchain technology, applied intelligence and others to create unique business solutions that can set them apart from the competition,” O’Reilly says.
Why Do Financial Firms Need Innovation DNA?
Falling costs and growing adoption of cloud frameworks across financial markets mean technologies are no longer the driving factor in differentiation. Customer experience now delivers the critical competitive edge, and banks that offer a customized and connected consumer experience will stand out from the crowd.
This is the fundamental feature of innovation DNA. By decoupling key services from old architecture and deploying cutting-edge technologies, firms can navigate current COVID-19 markets, adapt to emerging experience expectations and create a culture that drives digital transformation.
“Innovation DNA will be critical as financial firms chart their course in a post-pandemic world,” O’Reilly says. “By combining technology and human ingenuity, using things like sentiment analysis, building a digital personality for chatbots and digital interfaces, and, most important, knowing when to direct the customer to a human being, innovation DNA provides the foundation to create compelling customer experiences — and get them right.”