- 70% of all FSI
organizations in Asia Pacific say innovation is now a ‘must’, and over 6 in 10
FSI organizations (66%) are accelerating digitization in response to the crisis
- FSI Leaders, with the most mature culture of innovation, are more
resilient and expect growth despite the pandemic:
- – 68% of FSI Leaders expect
that their organizations will recover from the COVID-19 crisis in six months or
less– More than 1 in 2 FSI
Leaders (53%) expect to increase their market share despite the pandemic
- – More than 1 in 2 FSI
Leaders (53%) expect to increase their market share despite the pandemic
SINGAPORE – Media OutReach – 7 December 2020 – Despite the challenges and disruptions of COVID-19, the
regional Financial Services Industry (FSI) has continued to forge ahead and
accelerate the pace of digitization in response to the pandemic, according to
Microsoft-IDC’s latest findings.
Unveiling the FSI findings of the culture of innovation study in
conjunction with Singapore Fintech Festival 2020, the Microsoft and IDC’s study
found that more than 6 in 10 (66%) FSI organizations are accelerating
digitization of their businesses. This figure rises to 86% amongst FSI Leaders,
organizations who have the most mature culture of innovation, defining their
ability to drive sustained innovation.
Based on the survey of 597 regional business decision makers in FSI across
15 markets in Asia, within a 6-month period, before and since COVID-19, the
sector was found to be ahead in its ability to innovate in response to
challenges. Specifically, 70% of all FSI organizations in Asia Pacific say that
innovation is now a “must” and almost all FSI Leaders (96%) agree and are
actively putting this into practice.
“One thing is clear: the industry’s rapid response, reflected in the
increase of maturity in adopting a culture of innovation, across people,
process, technology and data practices, has paid dividends,” explained Connie
Leung, Regional Business Lead, Financial Services, Microsoft Asia.
“FSI Leaders, in particular, expect to thrive amid the crisis, with 53%
of them expecting to increase their market share despite the pandemic and 86% further
accelerating digitization in response to the crisis. We are definitely seeing
this take shape within the industry, with organizations like Bankwest, investing in self-service solutions to
improve the customer experience at a time where customers are expecting meaningful connection despite
social distancing,” continued Leung.
Apart from relying on innovation, the study also revealed that FSI
organizations are deriving high revenue shares from digital products and
services — this stands at 39% currently and is forecasted to rise to 52% in three
years. This is much more so for FSI
leaders, where this stands at 47% today and expected to rise to 57% in three
This is evident in the examples of Indian fintech start-up, Paisabazaar, which introduced a new digital service to digitally overhaul the
personal loan application and approval process amid the pandemic, as well as banking groups like Standard Chartered
Bank and National Australia
Bank which have taken steps toward a cloud-first digital
strategy, to make virtual banking, next-generation banking and payment services
a reality for customers.
Assessing the Innovation Maturity of FSI Organizations
During COVID-19, FSI organizations matured in their approach toward
innovation. This has included the swift pivot of business processes to raise
customer experience and centricity and embracing data management insights to
enhance the speed and quality of decision making. In addition to that, FSI
organizations have integrated cloud technologies to ensure business continuity
during a time of remote working and living.
The study confirmed this, and found that in the span of six months, Asia
Pacific’s FSI organizations have matured in the culture of innovation by 12%,
which indicates an increased ability to drive sustained innovation.
Fig 1: Growth
in Culture of Innovation Maturity (%)
FSI organizations have improved their sentiments on innovation with 61%
of FSI leaders agreeing that innovation is easier since COVID-19. Other FSI
organizations have also embraced a more positive stance, with 52% agreeing with
“FSI has maintained its lead, based on our findings,
and was assessed to be the most innovative vertical,
with the highest culture of innovation maturity score, and the highest
proportion of leaders and verticals,” said Michael Araneta, Head of IDC
Financial Insights, Asia Pacific.
“What has been most interesting is that large FSI organizations — the
incumbents — are not necessarily laggards in the space but on occasion, credible
leaders with a mature culture of innovation. On the flipside, the prospects of some
challenger banks are already dimming in some markets, as they have not been
able to address sources of funding despite previously having good prospects
when it came to their services in payments, and lending,” continued Araneta.
Putting a Culture of Innovation into practice — best practices from FSI
Leaders for the new year
The study revealed the best practices that organizations can adopt,
referencing the culture of innovation framework, for progress across people, process,
data, and technology.
Specifically, organizations are encouraged to:
to drive transformation
As FSI organizations continue to forge ahead and integrate technology in
their operations as well as products and services, moving mission-critical
business processes and workloads onto cloud platforms will be key to ensure
that innovation scales. Technology architecture will also need to be
well-integrated to effectively enable transformation, which will be a key
measure of technology Return on Investment (ROI).
2. Enhance People’s capabilities through enterprise-wide
A diverse cross-industry, multicultural and multi-generational talent
will be key in generating new and disruptive ideas. Beyond that, FSIs need to
champion a culture that embraces collaboration, especially with third parties,
to create new value.
3. Utilize Data for extreme personalization and rapid
Investing in data will not only enable FSIs to enhance and differentiate
products and services, but with trust, privacy, and security paramount for
their businesses, a well-integrated data architecture will enable the building
of accurate, trusted and secure data sources for reliable decision-making when
it is needed most. This will enable personalization and real-time insights.
4. Integrate automation within Processes to empower
Automation will be key especially for business processes that have high
implications to customer experience, to accelerate the enablement of
enterprise-wide collaboration and knowledge sharing. Processes will also need
to account for a way to ensure a formal and systematic approach to driving innovation
and incorporating this within operations for sustained impact.
“As FSIs continue to forge ahead in a post-pandemic world, lasting
transformation will only take place if FSIs alongside investments in
technology, prioritize people and culture, as they are key to ensuring greater
collaboration and continuous transformation. At Microsoft, we are committed to
working with the regional FSI ecosystem to unlock the value of innovation, and
reimagine the industry for the future, together,” concluded Leung.
Stages of Culture of Innovation
B: Culture of Innovation Framework
Appendix C: Innovation Capability as a Key Theme in Post-Pandemic
 FSI Leaders, or leading organizations, fall into the most mature stage
(Stage 4) of the culture of innovation model comprising the areas of people, process,
data, and technology
background for Culture of Innovation: Foundation for business
resilience and economic recovery in Asia Pacific:
The study was conducted in two phases —
Phase 1 (Pre-COVID; Dec 2019-Jan 2020) and Phase 2 (Since COVID-19; July 2020)
Phase 1 – 257 business leaders; Phase 2 – 340 business leaders. Participants
from organizations with more than 250 staff were polled. 15 Asia Pacific
markets were involved: Australia, China, Hong Kong, Indonesia, India, Japan,
Korea, Malaysia, New Zealand, Philippines, Singapore, Sri Lanka, Taiwan,
Thailand, and Vietnam.
 The Culture of Innovation study covers 5 key verticals in Asia: FSI, Manufacturing,
Education, Retail and Healthcare.
Microsoft (Nasdaq “MSFT” @microsoft) enables digital transformation for
the era of an intelligent cloud and an intelligent edge. Its mission is to
empower every person and every organization on the planet to achieve more.