Posts tagged: stakeholders

Mapping out the financial innovation Landscape

complexity

Where do most financial innovations occur? What are the processes followed for financial innovation? Who are the stakeholders involved in the financial innovation process? These are some of the questions I have been investigating recently in order to describe and map out the financial innovation landscape. My findings from reviewing the secondary literature seem to show that complexity and reconfiguration are emerging themes in the financial innovation process. It is no shock therefore that financial innovations especially in the 20th and 21st century have mainly been about using already existing instruments, practices and technologies in new ways. The unbundling of risks and characteristics of already existing products to form new combinations has also been another major approach that has contributed thousands of financial innovations to society today.

Financial innovations are not confined to just one quadrant of Francis and Bessant’s 4Ps framework (product, process, position and paradigm) for exploring innovation space. ¬†However it seems most financial innovations are sat at the product and process quadrants. To this end, ¬†organizations seem to use aspects of new product/process development approaches coupled with stage gating techniques when creating financial innovations. With regard to stakeholders, a complex interactive web has been identified to exist. This is because, most stakeholders (individuals, financial institutions, non-financial institutions, technology-related institutions, governments etc.) play multiple roles (e.g. innovators, end-users, intermediaries etc.) at different times and at the same time. In summary it can be said that the financial innovation landscape is poorly characterized as no formal model for financial innovation exists.

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