Banks increasingly feel the need to innovate, according to a new survey, and they're looking to mobile to lead those efforts.

The fifth annual "Innovation in Retail Banking" report — commissioned by the consulting, technology and outsourcing firm Infosys and conducted by Efma — investigates how banks can overcome barriers to innovation and improve their innovation capabilities.

This year's study surveyed 148 banks in 66 countries and found that as the global economy recovers, retail banks are increasingly investing in innovation as a means of generating revenue and controlling costs, Infosys said in a news release.

The number of banks with an innovation strategy has grown markedly, to 60 percent this year, compared to 37 percent when the first report was issued.

The study also found that to overcome the main barriers to innovation — legacy systems and organizational silos — banks are looking to technologies that can simplify operations and deliver a richer customer experience.

Mobile innovation is beginning to gather pace, Infosys said, with 77 percent of banks saying they have deployed or will deploy a mobile wallet solution.

Other key findings:

• 76 percent of banks believe they are becoming more innovative, with the biggest increase being seen in customer channels.
• 77 percent of banks surveyed are increasing investment in innovation. In 2009, that figure was only 13 percent.
• More than half of banks (58 percent) surveyed believe deploying new systems in components would help them innovate.
• Mobile location-based offerings were cited as another area of innovation for banks, with 69 percent deploying or planning to make deployments.
• To enhance their product and service offerings, 45 percent of banks are already using or planning to invest in gamification, and 61 percent currently allow or plan to allow customers to do some form of product personalization.
• Large and medium sized banks rated the top three barriers to innovation as legacy IT systems, culture and organizational silos.

"It is good to see innovation agendas taking the center stage at banks, with many focusing on increasing business process speed, agility and efficiency," M. Haragopal, global head, Finacle (at Infosys), said in the release. "The report also reiterates that retail banks across the world have recognized that simplification and innovation can go hand-in-hand to help grow business and deliver excellent customer service."

Efma Secretary General Patrick Desmares said this year's study indicates a global convergence of innovation practices around overcoming the barriers presented by legacy technology and ensuring that customer experience channels are optimized. "Many retail banks are now creating innovation strategies and underpinning them with investment, which tells us that global economies are beginning to recover," he said in the release. "As banks once again target growth process, channel and operational innovation, this will only increase in importance."

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