Innovation at Japanese Financial Services Firms, Part 1: The Management and Initiative Gap

by Eiichiro Yanagawa, September 26, 2014
Industry Trends


Following on the heels of its global innovation survey last year, Celent conducted a survey on innovation in Japan’s financial industry. The survey targeted professionals at 110 of the leading financial industry firms, including solution vendors and the financial institutions they service such as banks, insurers, securities firms, and asset management firms.

Analysis of these results thrust into relief two gaps. The first is a management gap. The Japan survey results show that, in line with the rest of the world, innovation at financial institutions is highly dependent on the existing management structure — and that this tendency is pronounced in Japan.

The second is an initiative gap. A clear gap is evident in the thinking of financial institutions, which require technology-based solutions, and solution vendors to provide them.

The survey indicates a disconnect in the solutions that vendors offer and the solutions that financial institutions desire. Moreover, Celent sees significant scope for advancements in innovation initiatives on both sides.

The survey was designed to shed light on and gauge the level of innovation implementation at financial institutions. The survey included questions from Celent’s global innovation survey about the perceived importance of innovation, corporate initiatives, and barriers to innovation. In addition, it also asked financial institution professionals to assess innovation at their companies to compare the situations in Japan and elsewhere globally.

The Japan survey posed nearly the same questions to vendors. Celent compares the self-assessments of financial institutions with the responses of technology vendors to yield an analysis of the latest in innovation trends

The survey asked respondents an array of questions on innovation, including the perceived importance of innovation, anticipated benefits, barriers, innovation experience, organizational structures, departments that lead innovation, Net Promoter Scores (NPS), effectiveness of innovation tools, and digital financial services initiatives. In addition, the report includes some invaluable opinions Celent received via Twitter.

“In the increasingly diverse and complex worlds of Japanese financial institutions, leaving innovation to its own devices risks not only cannibalization of a company’s core business areas but of new businesses as well. To keep innovators from being ostracized as black sheep, it is important to clearly distinguish between the accumulation of kaizen (improvement) on a daily basis in core operations and disruptive innovation. In particular, it is important to direct management and initiative toward the latter,” says Eiichiro Yanagawa, a senior analyst with Celent’s Asian Financial Services practice and author of the report.

This report also offers innovation models to help companies intentionally induce innovation and to do so in an ongoing manner.

This is the first of a two-report series on innovation in Japan’s financial service sector. The report contains 24 figures.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
Tel: +1 212 345 1366

Europe (London)
Chris Williams
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary





Survey Items



Overview of Survey Participants


Global Results Vs. Japan Results



Perceived Importance of Innovation and Innovation Level at Own Firm



Centers of Excellence



Innovation Net Promoter Scores



Innovation Tweets


Gap Between Financial Institutions and Vendors



Perceived Importance of Innovation



Innovation Levels in Other Industries and at Other Firms



Anticipated Benefits of Innovation



Barriers to Innovation



Innovation Initiative Time Periods



Centers of Excellence



Departments That Drive Innovation



Innovation Net Promoter Score



Effectiveness of Innovation Tools



Digital Financial Services Initiatives



Innovation Tweets


Toward Part 2





Respondent Profile


Leveraging Celent’s Expertise



Support for Financial Institutions



Support for Vendors


Related Celent Research


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