How can financial innovation give you a competitive advantage?

1 What is gap analysis?

Gap analysis is a tool that helps you compare your current situation with your desired goals and identify the gaps or discrepancies between them. It can help you assess your strengths, weaknesses, opportunities, and threats (SWOT) and prioritize your actions to close the gaps. Gap analysis can be applied to various aspects of your business, such as your products, services, processes, systems, skills, or resources.

2 How to conduct a gap analysis?

To conduct a gap analysis, you need to define your objectives, analyze your current and desired state, and then identify and prioritize the gaps. Specifically, determine what you are trying to achieve, measure your progress, assess your current capabilities and performance, consider customer needs and industry standards, and determine the size and urgency of the gaps. Additionally, you should consider the causes and effects of the gaps as well as potential solutions to close them.

3 What is financial innovation?

Financial innovation is the process of creating new products, services, or methods that improve the efficiency, effectiveness, or accessibility of the financial system. It can involve the use of new technologies, such as digital platforms, artificial intelligence, blockchain, or biometrics, or the application of existing technologies to new domains, such as peer-to-peer lending, crowdfunding, or robo-advisors. Financial innovation can also involve the development of new business models, strategies, or regulations that change the way financial transactions are conducted, such as microfinance, green finance, or fintech.

4 How to use financial innovation to close the gaps?

Financial innovation can provide you with new ways to meet objectives, address challenges, and satisfy customers that were identified by your gap analysis. For example, you can use automation, analytics, or machine learning to enhance performance and reduce costs. Additionally, mobile apps, chatbots, or biometrics can be used to increase customer satisfaction. Furthermore, peer-to-peer lending, crowdfunding, or microfinance can help you create new market opportunities and access underserved customers.

5 How to evaluate the impact of financial innovation?

Financial innovation can have both positive and negative effects on your business, customers, competitors, and environment. To accurately assess the impact of financial innovation, you should consider its value proposition, competitive advantage, and sustainability. Ask yourself questions such as: How does financial innovation create value for you and your customers? What are the unique features or capabilities that differentiate you from your competitors? How does it align with your vision, mission, or values? What are the social, environmental, or ethical implications of financial innovation? Are there any relevant laws, regulations, or standards that must be followed? Answering these questions will help you evaluate the impact of financial innovation and make informed decisions.

6 How to implement financial innovation?

Implementing financial innovation can be difficult due to the uncertainty, complexity, or resistance involved. Therefore, you should plan your scope, objectives, timeline, resources, stakeholders, and risks. Additionally, research and analyze market, customer, and competitor needs and preferences in order to generate and evaluate ideas and alternatives. After selecting and testing a prototype or pilot for financial innovation, launch and scale it to your target market or segment. Lastly, monitor and measure performance, feedback, and impact while adapting and improving your financial innovation based on learning and results.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?