Transformational developments are swirling around the banking industry — as they are in nearly everyhbr_130x130 industry. Companies like Citigroup are reimagining bank branches. Startups like Simple are suggesting that it’s time to get rid of branches altogether. Square, Swiff, Silver, and PayPal want to bring payments processing to smaller merchants. Mobile phone companies are getting into financial services. Microlending has exploded. Companies like Facebook and Tencent make hundreds of millions through microtransactions. The mobile wallet is coming, with Apple and Google lurking in the background.

Many of these trends seem to fit historical patterns of transformation, which means banks need to up their innovation game. Yet, here are some of the questions that audience members asked me at a talk I gave at a recent banking conference (courtesy of Pigeonhole, one of my favorite Singaporean startups):

    • “There are often education costs and risks of losing business among the technology laggards. Are the majority of our banking customers ready for change?”
    • “The first innovators in the market are often too early in the technology curve. Do the panelists agree?”
    • “How do you pace yourself?”

All good questions. Here’s one of the biggest that would-be innovators should ask: Should I lead or follow? Does the “early bird catch the worm” or can you “identify the pioneers — they have arrows in their back”? Is the advantage to the “first mover” or should you be a “fast follower”?

Read the full article at Harvard Business Review

Scott D. Anthony is managing director of Innosight Asia-Pacific.

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