BNP Paribas held its Innovation Days in Paris at the end of June, an annual event during which the bank’s various units and technology partners display and discuss their latest innovative initiatives. This usually purely internal event was open to reporters for the first time, with genial chief executive Baudouin Prot himself giving a tour of the exhibition.

Prot explained innovation was essential in the banking industry to cope with a triple pressure: the growing importance of technology in financial services, intensifying competition, and new expectations from clients. However, he also said that innovation should be envisaged under all business aspects, not just technology.

Indeed, the projects presented at the event ranged from mobile payment services offered by BNP Paribas’ Turkish subsidiary, to a new loan offering for solar panel implementation, to a training facility replicating a real branch environment, to 3D web browsing developed by the bank’s IT think tank L’Atelier.

BNP Paribas boasts a higher-than-average percentage of its IT budget devoted to new developments (see our interview with CIO Alain Marbach in the June issue of Banking Technology) and management reckons technological advances are one of the reasons the bank is gaining new clients.

There is no doubt technology can constitute a serious competitive advantage for financial institutions, especially in fields like trading platforms or risk modelling. But when it comes to transactional capabilities, be it in retail banking or cash management, technological innovations quickly become must-haves. These days, clients probably won’t join you because you offer online banking, but they will leave if you don’t.

Innovation really becomes a differentiating factor and gives an institution an edge when a large number of customers start changing banks not for better rates, but for the sheer convenience of being able to use a particular institution’s high-tech killer app. Come to think of it, I did switch banks in the early 90s just to be able to check my balance at an ATM. But I’m weird that way…

Filed under: Technology