Innovation Strategy and Trends in Banking and Financial Services

This document discusses the impact of innovation strategy and trends in the banking and financial services industry. It focuses on Commonwealth Bank's implementation of social robotics to gain a competitive advantage. The document also explores the importance of strategic alignment and how it ensures success in innovation.

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Innovation Strategy

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Executive Summary
Innovation strategy and trends are getting expand in the world. Banking and financial services
providers are also focusing on such trends to get a competitive advantage. Commonwealth bank
has focused this factor and develop social robotics concept. This concept has helped them to get
a competitive advantage and enhance the opportunities which easily derive from the market
world. Moreover, the internal environment has a link with the trend, strategy, and innovation so
that valuable products and services lead to developing. This resulted in a competitive edge and
advantage so that banking customers experience tend to maximize.

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Contents
Introduction......................................................................................................................................4
Discussion........................................................................................................................................4
Selection of business impacted by advances of design thinking.................................................4
Introduction about selected organization and innovation trend...................................................4
Evaluation of different concepts and their relationship...............................................................5
Describe how the creation of an innovation strategy ensures strategic alignment within
organizations and why it is important..........................................................................................7
Impact of the selected innovation trend on the selected organization by using business canvas
model...........................................................................................................................................7
Recommend how the organization's innovation strategy best responds to the innovation trend:
.....................................................................................................................................................9
Recommend how the organization best ensures strategic alignment to address the innovation
trend.............................................................................................................................................9
Conclusion.....................................................................................................................................10
References......................................................................................................................................11

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Introduction
Innovation strategy is a process to adopt new ideation so that business become successful.
Strategic innovation processes a flow diagram through which association implements the new
idea at the workplace. It mainly constitutes when an organization faces some issues and
challenges. Innovation strategy aligns better future for customers to maximize their experience.
The selected aspect of the study is design thinking which focuses on experiment and empathy so
that Commbank become successful. Commonwealth Bank is a leading financial services
providers in Australia. They are using social robotics innovation to provide better solutions for
individual want to start their own business (Commonwealth Bank of Australia, 2019). This study
will be covered the relationship between the environment of an organization, innovation trend,
strategy capabilities, etc. It will be discussing strategic alignment within the organization. Some
recommendations will be provided to maintain the innovation strategy properly.
Discussion
Selection of business impacted by advances of design thinking
Design thinking is a methodology which supports to define a creative solution for problems. It is
helpful to draw an idea which provides assistance to a business so that they can manage
innovation (Liedtka, 2018, July). Design thinking is focusing on empathy and experiment to
proclaim one creative idea to resolve different issues and problems. Commonwealth Bank is
impacted by design thinking as they understand the feelings of their customer for better financial
advice. Thus, it will be resulted in the bank to describe an innovation which enhances sales and
customer satisfaction.
The bank needs to assess design thinking movement from the view of Liedtka (2018), design
thinking methodology is helpful for a business to determine one creative idea to resolve distinct
problems (Liedtka, 2018). Design thinking provides various new opportunities for business, align
stakeholders in the innovation, and anticipate priorities capabilities and potential, etc. All these
aspects are associated with the process of design thinking so that business become
successful.Commbank assessed this factor and implement design thinking methodology in

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business so that association can provide effective solutions to customers. It benefits the
stakeholder's group and enhances the potential and capability of an organization.
Introduction about selected organization and innovation trend
Commbank is also known as the Commonwealth Bank of Australia which provides services in
New Zealand, Asia, and Australia. There are more than 60000 employees work with this
financial institution with operations in more than 1100 locations. It was listed as a public bank in
the year 1991 with different financial services. Their services are mainly for small business
providers or for personal assistance so that customers can depict a wise decision about
investment. For a better wealth management concept, it brings different group funds platform
including master funds, superannuation, and insurance and financial advice business support.
They are also providing a net banking facility to enhance the level of satisfaction of
users(Commonwealth Bank of Australia, 2019). Commbank also provides some more facilities
include loans, credit card, savings account, financial advice, etc. All these are major services
provided by the bank so that they can maintain a clientele base for a longer duration. They are
focusing on some innovative trends as well to develop their services.
One of a major innovation which leads to defining by the Commbank is Social Robotics. This
service provides a different level of service to the user under which clients can interact with
robots in order to take financial advice. A special function is devised in the robots so that they
can facilitate communication with a human in order to understand their values and problems. It
will be going to work as financial service providers which provide the best financing advice.
Many entrepreneurs are using this service of Commbank so that they can gain better results with
an understanding of each financial aspect and market situation.
Evaluation of different concepts and their relationship
A business is not a single unit but constitutes various factors. It is really essential to identify
these factors so that business become successful. Various factors which are associated with
business include the organizational environment, the trend of innovation and strategy with
capabilities. All these factors are interlinked with each other (Rajapathirana andHui, 2018).
Commbank managers are required to assess every single factor and evaluate their relationship. It
is helpful to implement the changes at the bank so that business become successful and take a

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competitive edge with social robotics concept. A basic evaluation of each factor is discussed as
follow:
 Organizational environment: A factor which influences any innovation in the
workplace is the organization environment (Alexiev, et. al., 2016). The internal
environment at the workplace needs to be appropriate so that workforce contributes best
in their work (Khripko, 2016). Thus, a clear assessment of the environment is required to
facilitate Commbank so that they can implement innovation properly. It is associated
with the trend, strategy, the capability of innovation. With an effective environment at
Commbank, a business can implement innovation with efforts of employees.
 Innovation trend:It is referred to the modern world frame which supports the business to
grow and diversified its operations (Avelino, et. al., 2017). Commbank provides a new
innovation trend in the market of social robotics for financial advice which further assists
the association to grow and become a leader in the financial service providers. It is
related to the environment of workplace, strategy, and ability with value. A relationship
has been drafted because only effective environment implements trend properly with
supportive strategy. Social robotics provide some value as well which save the time of
the user.
 Innovation strategy: Innovation strategy refers to the plan through which association
implements advance technology into business with research and development activities
(Laukkanen, 2016). Commbank is using innovation strategy into an organization with the
development of social robotics for financial advisers. It is related to the environment of
business as a positive environment provide more efforts in research and development. It
also develops an innovative trend in the market which provides a competitive advantage
to Commbank. Moreover, it is related to the ability of a business as it provides assistance
to Commbank to strengthen the business and create valuable advice environment to
customers.
 Innovation capabilities: This element describes the business ability to develop an
innovation (Beck and Müller-Bloch, 2017). Commbank has a good and educated
workforce with efficient research and development department. Thus, their capability is
indicated with the creation of robotics so that their users get effective information about
an investment. It is related to other elements like environment, strategy, and trend and

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value creation. Commbank has good staff which assists in the development of strategy,
innovate the trend and create valuable services for users.
 Innovation value creation:Value creation of a product and service is really essential in
the context of innovation. Commbank has created an innovative aspect in the financing
industry with Social Robots. This created valuable services for users in which users get
better services by assessing the present situation of the market, the best area of
investment, profitable frames in the bank, etc. It is associated with strategy, trends, and
capability. Commonwealth Bank has a good workforce which develops the ability of a
business to facilitate trend and implement it by relevant strategy.
Describe how the creation of an innovation strategy ensures strategic alignment within
organizations and why it is important.
Innovation strategy refers to the process when a business uses an appropriate framework to
enhance sales and customer satisfaction (Li, et. al., 2016). Innovation strategy creation is helpful
to grow the business in a prosperous manner to determine future benefits. Strategic alignment is
helpful for a business to maintain consistency in operations with the completion of the task
effectively (Turel, et. al., 2017). Strategic alignment assists to manage a link between culture and
strategy of a business. Thus, the creation of innovation strategy ensure strategic alignment in the
Commonwealth Bank with the following elements:
 Supportive culture development which promotes innovation strategy so that business can
enhance their sales (Richards, 2019). Commonwealth bank leads to facilitate a positive
work environment where all employees corporate each other. This will be resulted in
them to launch social robots properly without any disruption.
 A business needs to develop and modify the factors which affect organizational strategic
alignment(Richards, 2019). The elements which influence the strategic alignment of
business include trust, communication, transparency, etc. Thus, Commonwealth bank is
required to assess such factors with competitor’s information and government
intervention so that they can maintain feasibility in the strategic alignment. Clear
communication is helpful to implement innovation strategy like Social robotics so that
customer gets better services and financial advice to them about efficient investment
strategy.

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Innovation strategy needs to ensure strategic alignment so that business can implement
innovation effectively. It is really essential for a business organization to adopt proper innovation
strategy and strategic alignment to complete the task on time. Commonwealth Bank provides a
social robotic facility which enhance their ability to manage a wide number of clients in
minimum time duration. They can assign some other work to their financial advisors so that their
efficacy get improvise for the attainment of more and more opportunities. (Reypens, Lievens &
Blazevic, 2016)
Impact of the selected innovation trend on the selected organization by using the business
canvas model
(Sources: Author)
Sources: Self-Created
Key partners:
 New
Zealand
banks
 Airtasker
 Governme
nt
Key
activities:
 Financ
ial
advice
 Saving
accoun
t
Valuable
proposition:
 Integr
ated
 Innov
ative
soluti
on for
invest
ment
Customer
relationship:
 Trade
shows
 Word of
mouth
generatio
n
Customer
segmentation:
 Regular
customer
 Entreprene
urs
 Loan
demand
Key
resources:
 Workf
orce
depart
ment
 R&D
Channels:
 Direct
interacti
on with
custome
rs
Cost structure:
 Social robotics for financial advise
 Employees to maintain the regular
working aspect of bank
Revenue stream:
 Licensing of using robots
 Sale out valuable services

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This business canvas model represents the Commonwealth bank ability to develop an innovation
strategy. The selected trend can be implemented by the bank as they have a good workforce
department and research and development unit which make attractive products and services.
Associated work with Airtasker so that they can manage the authenticity of net banking and
maintain its reliability for a longer duration (Gill, 2019). There is no other channel proclaim by
Commbank for their services which synthesis their ability of effective services. This business
canvas model represents the feasibility of trend on business performance in the future context.
Thus, it defines various opportunities in terms of competitive edge and advantage. (Akter,
Wamba, Gunasekaran, Dubey & Childe, 2016)
Recommend how the organization's innovation strategy best responds to the innovation
trend:
How should the organization organize its innovation activities?
Commonwealth bank is able to organize their innovation activities with the educated and
cooperative workforce. Their research and development department is also helpful to organize
the innovation properly so that business can ascertain a competitive edge for future
determination.
What additional innovation capabilities should the organization develop?
Commonwealth bank can add some more abilities which make them different from others and
enhance their level of competency. This will be included the use of artificial intelligence,
Neobank innovation, product offering innovation, etc.
What innovation initiatives should they pursue?
Currently, the Commonwealth bank is pursuing internet banking innovation, blockchain
technology innovation, etc. They are trying to enter into artificial intelligence as well so that
business can enhance its ability.
How should the organization ensure that it creates and captures value from the
innovation?
Commonwealth bank neither harms the environment nor its employees. This statement is proved
with the assistance of social robotics which enhances customer level of satisfaction. Thus, it

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clearly stated that Commbank provides assistance of value from the innovation to get better and
efficient results in the future concept.
Recommend how the organization best ensures strategic alignment to address the
innovation trend
Following are some recommendations for the Commonwealth bank which propose their ability
to address innovative trend:
 Provide information to employees so that they can help in shaping the business and
reduce the chances of resistance to change.
 Aware customers about the concept of social robotics so that they can take advice from
robots without any hesitation and problem.
Conclusion
It gets identified from the report that innovation strategy needed at every workplace. Design
thinking has helped to identify the best solution to problems so that business can gain a
competitive edge. All aspect has a relationship with each other include the environment of
business, innovation trend, strategy, etc. All of these has supported a business to grow and
develop its strength. Business can anticipate different opportunities with the launch of social
robotics include high revenue, powerful customer base, etc.

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