# Embracing the digital future with co-innovation Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2017-07-28 Category: BANKING Category URL: https://financedigest.com/category/banking Meta Title: How Banks Can Successfully Adapt to Digitalisation and Meta Description: Learn how financial institutions are adapting to digitalisation by integrating new technologies and adopting an omnichannel approach to provide a seamless URL: https://financedigest.com/embracing-the-digital-future-with-co-innovationhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/martin-zahner-1736843636906-compressed.jpg) **Martin Zahner**, Head of Software Exchange, Avaloq ![Martin Zahner](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/martin-zahner-1736843636906-compressed.jpg) Martin Zahner Digitisation is relentlessly permeating all areas of life and business, changing them for ever. Financial institutions too are having to [deal](https://www.financedigest.com/citi-halted-financing-for-trafiguras-nickel-deals-in-october-bloomberg.html "Citi halted financing for Trafigura’s nickel deals in October – Bloomberg") with the consequences and opportunities that come with digitalisation: new technologies, new customer behaviour and the disruptive force of fintechs. Being open to change and new technologies is vital for those organisations that want to successfully tie discerning customers in the [digital future and remain being their preferred bank](https://www.financedigest.com/the-future-for-banks-and-digital-id.html "The Future for Banks and Digital ID"). **Technological integration and the omnichannel approach** Unlike new market participants and fintechs, which have used [digital](https://www.financedigest.com/how-fs-organisations-can-enter-the-new-age-in-digital-banking.html "How FS Organisations Can Enter The New Age in Digital Banking") processes right from the outset to provide their customers with their offerings, it is important for many of the established banks to integrate the new digital banking opportunities into their existing channels. [Banks opting](https://www.financedigest.com/central-banks-opt-for-shock-and-awe-to-tame-inflation.html "Central banks opt for shock and awe to tame inflation") for an omnichannel approach are doing so because they want to offer customers an end-to-end client experience. It does not matter which channel the customer wants to use to interact with their financial service provider, carry out transactions or seek advisory services – the new offering should always be well integrated. However, integration is easier said than done. A number of banks – especially smaller institutions will likely find it too difficult to cope with the [changes in the market](https://www.financedigest.com/cloud-computing-to-change-the-course-of-the-mechanical-ventilators-market.html "Cloud Computing to change the course of the Mechanical Ventilators Market") and all the challenges of digitalisation on their own. [Major banks](https://www.financedigest.com/major-central-banks-renew-rate-hike-push-in-may.html "Major central banks renew rate hike push in May") frequently cooperate with fintech companies, or buy out the ones they find most interesting. In most cases, success is not just determined by the [size of the project](https://www.financedigest.com/automotive-light-bars-market-expanding-at-a-healthy-5-3-cagr-the-market-size-is-projected-to-total-us-1-3-bn-by-2029.html "Automotive Light Bars Market expanding at a healthy 5.3% CAGR, the market size is projected to total US$ 1.3 Bn by 2029") budget, but also by the ability to use the right talents and technologies. **Open innovation and ecosystems** There are ways for smaller institutions too to make their own use of what fintechstartups have achieved. This approach involves working closely together with other market participants to: exchange information about potential innovations and how to realise them or experiment with them, facilitate shorter time-to-market cycles for new ideas, and share project costs and risks. It has been utilised in a wide range of [industries and is generally known as “open innovation”](https://www.financedigest.com/the-industrial-hemp-market-to-sail-through-innovation-based-turbulence.html "The Industrial Hemp Market To Sail Through Innovation-Based Turbulence"). [Functioning clusters of companies that interact using the open innovation](https://www.financedigest.com/innovation-at-periodic-intervals-to-upscale-the-functional-brain-imaging-systems-market.html "Innovation at periodic intervals to upscale the Functional Brain Imaging Systems Market") approach are called ‘ecosystems’. These are places where companies can [network](https://www.financedigest.com/hackers-hit-italian-oil-company-enis-computer-networks.html "Hackers hit Italian oil company Eni’s computer networks") to further and exchange their ideas and developments with other companies. A shared technology platform or a common [market forms](https://www.financedigest.com/linear-digitized-transition-to-form-the-crux-of-digital-dentistry-market.html "Linear Digitized Transition to form the crux of Digital Dentistry Market") the basis for collaboration. Banks are constantly being challenged to respond to [industry changes and to keep apace with technology and consumer demands](https://www.financedigest.com/chemicals-and-consumer-industry-are-expected-to-drive-demand-for-heptaldehyde-market.html "Chemicals And Consumer Industry Are Expected To Drive Demand For Heptaldehyde Market"). However, in the case of banks, the [key question with open innovation is how they can be securely and sensibly integrated into core banking](https://www.financedigest.com/russia-bans-western-investors-from-selling-banking-key-energy-stakes.html "Russia bans Western investors from selling banking, key energy stakes"). One [way is through open application](https://www.financedigest.com/five-ways-bad-bots-are-trying-to-crack-your-virtual-vaults-by-erez-hasson-strategist-application-security-at-imperva.html "Five Ways Bad Bots Are Trying To Crack Your Virtual Vaults") programming interfaces (APIs) such as those available on the Avaloq Banking Suite with open enable banking institutions to access the ecosystem in a neutral environment. This then facilitates meaningful cooperation, but does not force participants to establish close links. [Banks retain their individuality](https://www.financedigest.com/prime-bank-and-agam-spark-lending-revolution-for-individuals-and-business.html "Prime Bank and AGAM spark lending revolution for individuals and business"), but profit from the solutions at the same time. The API then allow visitors to decide for themselves to what extent they play a part in the ecosystem. **The transparent innovation roadmap** By making innovation processes transparent in the ecosystem and inviting banks, [fintech companies and software houses to collaborate there is a continuous](https://www.financedigest.com/the-fintech-digital-revolution-will-continue-in-2022.html "The Fintech Digital Revolution Will Continue in 2022") exchange of information. This has become an ‘ innovation roadmap’ for banks. In [line with the main principle of open innovation](https://www.financedigest.com/the-plant-based-snacks-market-to-move-along-the-lines-of-staunch-advocacy-towards-innovation.html "The Plant Based Snacks Market To Move Along The Lines Of Staunch Advocacy Towards Innovation"), transparency is given great importance within the ecosystem. The status of innovation ideas and how banking institutions can participate in them must always be made [transparent for market](https://www.financedigest.com/cellulite-treatment-market-size-is-set-to-experience-revolutionary-growth-by-2026-transparency-market-research.html "Cellulite Treatment Market Size is Set to Experience Revolutionary Growth by 2026 | Transparency Market Research") participants. **The [digital future](https://www.financedigest.com/staying-ahead-in-the-digital-era-a-cfos-roadmap-to-future-proof-solutions.html "Staying Ahead in the Digital Era: a CFO’s Roadmap to Future-Proof Solutions") of banking: co-innovation** Banking is undergoing major changes as a result of digitalisation. Co-innovation can be an ideal way for a small to medium-sized [bank to keep](https://www.financedigest.com/bank-of-england-keeps-powder-dry-on-crypto-pockets-of-exuberance.html "Bank of England keeps powder dry on crypto ‘pockets of exuberance’") pace with larger competitors. Often smaller institutions might not be able to satisfy the wide variety of rapidly changing requirements over the customer’s entire [life and demand](https://www.financedigest.com/marine-life-rafts-market-trends-growth-future-demand-analysis-and-forecast-by-2027.html "Marine Life Rafts Market Trends, Growth, Future Demand, Analysis and Forecast by 2027") cycles without external assistance – particularly if the new digital offerings and services are to be incorporated into a complex and established core banking system. Open ecosystems could therefore prove to be the ideal approach to digitalisation. They allow for [efficient co-innovation on the basis of a shared technological platform as well as open and transparent](https://www.financedigest.com/factoring-in-fail-safes-five-practical-steps-for-more-efficient-transparent-reporting.html "Factoring in fail-safes: five practical steps for more efficient, transparent reporting") innovation processes – without neglecting the individual needs of institutions. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---