Creating and Sustaining Competitive Advantage through Innovation

By Unkles, John | Journal of Banking and Financial Services, February-March 2005 | Go to article overview
Save to active project

Creating and Sustaining Competitive Advantage through Innovation


Unkles, John, Journal of Banking and Financial Services


Why financial institutions must innovate or die

In the past two decades, financial institutions in Australasia have overhauled their business models and infrastructure and revamped their service offerings in response to: intense international competition; rapidly changing technologies and business and regulatory environments; increasingly sophisticated customers; and growing information management, risk management and reporting requirements.

Operating as part of a service industry within global markets, where change and competitive pressures are constant, financial institutions have become very aware of the importance of generating new ideas to achieve sustainable growth. To a large extent, this explains the leadership role that financial institutions have taken in adopting emerging technologies.

Broadly reflecting trends in overseas markets, innovation in Australia's financial services sector has been driven by rapid technological change and increased competition following deregulation. This, in turn has produced dramatic changes to the face of banking, in particular.

One of the leading commentators on global trends in banking, Lloyd Darlington (1) has noted that:

   'Banking is transforming itself at a pace and on a scale that
   has no historical precedent ... Banking has to make the leap
   from a transaction-based business into a sales-and-marketing
   culture where a bank will be defined by its ability to add
   value to the customer relationship ... Those banks that refuse
   to adapt will very likely die.'

To date, Australia's financial services sector has been highly successful in leveraging its people, ideas and technology to harness growth opportunities by developing a culture of innovation and entrepreneurship.

Employing over 350,000 people, financial services firms recognise that the one of the keys to competitive advantage and sustained business success is attracting and retaining talented people. As a result, executive development, particularly leadership development, is becoming an important element of corporate strategies within this sector. There is also growing cooperation between education institutions and financial institutions to develop leaders capable of driving innovation and generating new value for businesses in this highly competitive field.

Innovation is now more important than ever

Both the business community and governments around the world are devoting increasing resources to innovation. This is occurring at a time when, on the one hand, companies are redirecting their strategic focus from cost-cutting to revenue growth, while, on the other hand, the ageing of the population is placing constraints on the overall level of growth within the economy.

A recent Victorian Government submission to the Productivity Commission indicated that due to population ageing 'Over the next 40 years ... without significant increases in productivity or labour force growth, economic growth could be reduced to around one-half that of the past 40 years'.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Creating and Sustaining Competitive Advantage through Innovation
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?