Innovation has been the name of the game for financial institutions (FIs) large and small in recent years. While the overall pace of innovation has cooled somewhat over the past two years, as FIs have been slower to market with new products, they are increasingly channeling their energies into tried-and-true product lines. For 85 percent of FIs, this means corporate credit products.
In the latest Innovation Readiness Playbook™ series, the Corporate Credit Product Edition, and in collaboration with i2c, PYMNTS surveyed more than 200 FI decision-makers to assess their shifting strategies for innovating this venerable product line. Corporate credit has long been a key part of FIs’ product portfolios, and it remains an innovation priority for FIs now and in the future, particularly for the Top Performers in the Playbook: 86.7 percent of these firms are investing in corporate credit products.
However, the parameters of innovation are shifting from a few years ago, when FIs were more inclined to roll out new products and chase shifting market trends. Today, FIs are focusing on a mix of new products and features to a greater extent, and 53.6 percent said they prefer to observe market trends before quickly unveiling their solutions. Just 34.5 percent of FIs said their innovation strategies are driven by wanting to be first to market.
At the same time, FIs face a familiar set of technological challenges that have hampered innovation in the past. For example, the research found that 60 percent of FIs currently developing corporate credit products consider inflexible core systems a hinderance to their innovation efforts. Moreover, methods for piloting new products and enhanced features have scarcely shifted with the times. Employee pilots, those tested with “friends and family,” are used by 70.2 percent of current innovators, far exceeding more tech-oriented methods like sandbox-to-scale.
To learn more about how FIs are recalibrating their corporate credit products in today’s innovation climate, download the report.