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The Smart Techie was renamed Siliconindia India Edition starting Feb 2012 to continue the nearly two decade track record of excellence of our US edition.

Delivering Return on Capital (ROC)Through Banking Innovation

Chandramouli Kundagrami
Friday, February 4, 2011
Chandramouli Kundagrami
Innovation and Return on Capital (ROC)
In a research report on the innovation strategy and practices of European banks, the European Financial Management Association defines innovation as “a new idea or method, which creates value for the customer or the company itself.” On another note, for a bank, ROC is arguably the most important measure of business value. Aside from being a key expectation of investors, a healthy ROC is usually a sign of efficiency, productivity and customer retention. ROC is indeed a proxy indicator of the value created by an innovation project.

How Meaningful Innovation Can Strengthen ROC
The realization of ROC and other secondary business drivers like efficiency and productivity, among others has become elusive on account of tough environmental conditions characterized by:
l Slow recovery from the global financial crisis for banks running in the ‘normal’ business mode
l Low customer confidence, resulting in lower retail business and investment
l Accelerated change and stringency in regulatory requirements
l Rapid escalation in the expectations of Gen-Next consumers


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