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THE GLOBAL INNOVATION
REPORT 2023 - NON-FINANCIAL
BUSINESSES
The world’s connected, digitized marketplaces are maturing, unlocking more seamless, omnichannel-user experiences, a proliferation of marketing innovations and a deeper integration of services.
But how are these impacting businesses in everyday industries like retail, restaurants, travel, digital, entertainment, gaming and technology? And how do those businesses ensure that they can harness these innovations for growth?
We surveyed 1,125 senior executives to provide insights into some of the most important innovations impacting businesses today.
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A STRUCTURAL SHIFT
It’s clear that innovation is having a fundamental impact on businesses around the world. Over the next 12 months, at least three-quarters of respondents expect a major or moderate impact from three key innovations: embedded finance, cryptocurrencies and the metaverse.
Looking three years ahead, expectations rise above 80% for each of these trends.
These are not passing fads. They are innovations that businesses need to understand and adapt to, sooner rather than later.
Innovations expected to impact businesses
What impact do you expect the following trends to have on your organization over the next 12 months? Also, looking to the future, what impact do you expect these trends to have on your organization in three years’ time?
0
%
0
%
Embedded finance
0
%
0
%
Cryptocurrencies
(Including stablecoins)
(Including stablecoins)
0
%
0
%
The metaverse
In 12 months
In 3 years
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ANTICIPATING CHANGE
Each innovation will have a range of effects, according to those expecting an impact on their business. For instance, many of these respondents believe that all three trends will change their business models, which can represent a serious challenge for businesses without sufficient agility.
But there are some clear positives too. For example, far more of these respondents expect the metaverse to strengthen, rather than weaken, customer relationships. This makes sense for a technology that offers a new way to reach and interact with customers.
Today at least, none of these trends are strong drivers of revenue. But once related applications and ecosystems mature, businesses may well find ways to boost turnover by weaving these new trends into growth strategies. For the time being, there are other reasons driving adoption.
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HOW INNOVATION WILL AFFECT MY ORGANIZATION
You indicated that these trends would have some degree of impact on your organization, but what specific effects will they have on your organization?
Embedded finance
Embedded finance
Cryptocurrencies
The metaverse
0
%
Change sales and/or distribution models
0
%
Increase risk
0
%
Increase competition
0
%
Increase operating costs
0
%
Decrease competition
0
%
Reduce risk
0
%
Strengthen customer relationships
0
%
Drive revenue
0
%
Decrease operating costs
0
%
Weaken customer relationships costs
Cryptocurrencies
Embedded finance
Cryptocurrencies
The metaverse
0
%
Change sales and/or distribution models
0
%
Increase risk
0
%
Increase competition
0
%
Increase operating costs
0
%
Decrease competition
0
%
Reduce risk
0
%
Strengthen customer relationships
0
%
Drive revenue
0
%
Decrease operating costs
0
%
Weaken customer relationships costs
The metaverse
The metaverse
Embedded finance
Cryptocurrencies
0
%
Change sales and/or distribution models
0
%
Increase risk
0
%
Increase competition
0
%
Increase operating costs
0
%
Decrease competition
0
%
Reduce risk
0
%
Strengthen customer relationships
0
%
Drive revenue
0
%
Decrease operating costs
0
%
Weaken customer relationships costs
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“Whatever sector you’re in, you need a plan to help you turn each innovation into an opportunity to grow – instead of a threat to your business model.”
Himal Makwana SVPHead of Strategy and New Initiatives, FIS
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EMBEDDED FINANCE
Embedded finance takes products or processes that are typically delivered by banks and integrates them into non-bank services or experiences through the power of APIs. Having financial services embedded within familiar platforms can save you and your customers considerable time and effort, reduce errors and delays and increase security.
With such clear benefits and relatively mature technologies, embedded finance is gaining ground fast, making it particularly urgent to understand.
0
%
offer embedded finance services to customers now
0
%
are building embedded finance services that aren’t yet operational
0
%
are actively exploring the possibility of providing embedded finance services but have not made a final decision
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CRYPTOCURRENCIES
Cryptocurrencies evoke polarized opinions, but many businesses believe they need to adapt to a not-too-distant future where they become mainstream. Indeed, the customer demand is growing.
0
%
say customers ask to pay with cryptocurrencies
This creates a significant opportunity for those who can accept crypto payments today.
However, businesses are currently using cryptocurrencies more for investments or returns than for payments. In fact, retailers and technology firms are most likely to be using crypto as an investment.
Using crypto to pay suppliers is significantly less likely among retailers, but they are relatively open to accepting crypto as payment from clients in cross-border transactions as are technology and travel services businesses.
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THE METAVERSE
In the coming years, many of the ways we collaborate, network, socialize, learn, compete and play may well take place in 3D virtual worlds that are collectively known as the metaverse. Businesses follow customers, and today businesses are beginning to think about how to adapt.
The early leaders in metaverse adoption are likely to be in the technology industry and other digitally advanced sectors that already provide online platforms where customers can interact with each other – such as internet services, online casinos, entertainment platforms, video games, education providers and online retailers.
Indeed, technology businesses are most likely to believe that the metaverse will have a sustained impact.
0
%
of tech providers say it will be strategically important to have a presence in the metaverse within the next three years
In contrast, less than half of those in the travel (46%) or restaurant (43%) sectors feel the same.
Overall, 61% say it will be strategically important to have a metaverse presence in three years, far more than today (38%).
This suggests that the metaverse is close to a tipping point.
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CONCLUSION
The impact of these innovations will unfold over several years with most having a greater impact in three years’ time than in 12 months. But it’s clear that they will disrupt the competitive landscape for businesses across a variety of sectors.
Now is the time to address the major barriers and to equip your organization with the skills, technologies and leadership required to remain competitive – and harness the major innovations of our time.
Recommendations:
- Continually listen to your customers to understand their preferences now and in the future. Make sure your strategy and investments are client-centric. And don’t forget to incorporate the nuances of each of the sectors you serve.
- Seek out opportunities to invite clients and partners into co-creation and ideation sessions to chart the next horizon of business.
- Ensure you’re investing in your teams. Consider the skills you have in-house and where you may need to augment.
- Partner with an expert that has the technology and expertise to navigate the entire ecosystem. With open fintech, streamlined solutions and the as-a-service model, you can embrace these innovations with confidence and speed up your time to market.
Take our learnings with you
Our infographic summarizes the key findings – grab it now and keep it for your reference or to share with a colleague.
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“To succeed, you need to create greater value for your customers and markets in new, highly contextualized and differentiated ways.”
Taira Hall SVPStrategic Innovation Executive, FIS
ESC
EMBEDDED SERVICES ON OFFER OR IN DEVELOPMENT
The range of embedded finance services on offer is diverse. The most popular options are banking as a service, payment services and consumer credit cards – reflecting the relative maturity of those types of embedded finance services.
What embedded finance services are you developing or offering today?
0
%
Bank accounts
(banking-as-a-service)
0
%
Payment services
0
%
Business and/or consumer
insurance
0
%
Cash flow forecasting and
insights
0
%
Interest-earning (savings)
account
0
%
Services for the “unbanked”
0
%
Consumer credit cards
0
%
Payroll management
0
%
Invoicing/bill pay
0
%
Debit cards
0
%
Buy now pay later (BNPL)
services
0
%
Loans
BRIDGING THE GAPS
Building successful embedded finance services will require new capabilities and changes to your digital tools and platforms. And those who believe embedded finance will have a major impact on their businesses are responding in a variety of ways.
Responses to the impact of embedded finance
You indicated that the following trends would have a major impact on your organization over the next 12 months. What activities is your organization currently involved with to respond to these trends?
Increase technology budget
0
%
Build new technology
0
%
Seek partners to add skills/knowledge
0
%
Hire people to add skills/knowledge
0
%
Purchase new technology
0
%
Launch new products/services
0
%
Increase R&D budget
0
%
Pursue related M&A opportunities
0
%
Seek partners to add technology capabilities
capabilities
0
%
BARRIERS REMAIN
Risks, not costs, are top of mind when businesses consider the barriers to adoption. That said, respondents from gaming and digital media firms are more worried about the maturity of services.
Meanwhile, technology providers are significantly more concerned about cybersecurity than the other sectors, perhaps because they have a deeper awareness of potential vulnerabilities.
BARRIERS TO GREATER EMBEDDED FINANCE ADOPTION BY MY ORGANIZATION
What do you think are the biggest barriers to greater embedded finance adoption by your organization today?
All businesses
All businesses
Retail
Travel
Gaming
Restaurants
Digital media
Major tech
0
%
Uncertainty about maturity
or readiness of embedded finance services
0
%
Risks are unfamiliar and/or
difficult to mitigate
0
%
Lack of clear benefit to
our organization
0
%
Lack of demand from
customers
0
%
Lack of in-house
development skills
0
%
Cybersecurity concerns
0
%
Lack of awareness
internally
0
%
Lack of budget
Retail
All businesses
Retail
Travel
Gaming
Restaurants
Digital media
Major tech
0
%
Uncertainty about maturity
or readiness of embedded finance services
0
%
Risks are unfamiliar and/or
difficult to mitigate
0
%
Lack of clear benefit to
our organization
0
%
Lack of demand from
customers
0
%
Lack of in-house
development skills
0
%
Cybersecurity concerns
0
%
Lack of awareness
internally
0
%
Lack of budget
Travel
All businesses
Retail
Travel
Gaming
Restaurants
Digital media
Major tech
0
%
Uncertainty about maturity
or readiness of embedded finance services
0
%
Risks are unfamiliar and/or
difficult to mitigate
0
%
Lack of clear benefit to
our organization
0
%
Lack of demand from
customers
0
%
Lack of in-house
development skills
0
%
Cybersecurity concerns
0
%
Lack of awareness
internally
0
%
Lack of budget
Gaming
All businesses
Retail
Travel
Gaming
Restaurants
Digital media
Major tech
0
%
Uncertainty about maturity
or readiness of embedded finance services
0
%
Risks are unfamiliar and/or
difficult to mitigate
0
%
Lack of clear benefit to
our organization
0
%
Lack of demand from
customers
0
%
Lack of in-house
development skills
0
%
Cybersecurity concerns
0
%
Lack of awareness
internally
0
%
Lack of budget
Restaurants
All businesses
Retail
Travel
Gaming
Restaurants
Digital media
Major tech
0
%
Uncertainty about maturity
or readiness of embedded finance services
0
%
Risks are unfamiliar and/or
difficult to mitigate
0
%
Lack of clear benefit to
our organization
0
%
Lack of demand from
customers
0
%
Lack of in-house
development skills
0
%
Cybersecurity concerns
0
%
Lack of awareness
internally
0
%
Lack of budget
Digital media
All businesses
Retail
Travel
Gaming
Restaurants
Digital media
Major tech
0
%
Uncertainty about maturity
or readiness of embedded finance services
0
%
Risks are unfamiliar and/or
difficult to mitigate
0
%
Lack of clear benefit to
our organization
0
%
Lack of demand from
customers
0
%
Lack of in-house
development skills
0
%
Cybersecurity concerns
0
%
Lack of awareness
internally
0
%
Lack of budget
Major tech
All businesses
Retail
Travel
Gaming
Restaurants
Digital media
Major tech
0
%
Uncertainty about maturity
or readiness of embedded finance services
0
%
Risks are unfamiliar and/or
difficult to mitigate
0
%
Lack of clear benefit to
our organization
0
%
Lack of demand from
customers
0
%
Lack of in-house
development skills
0
%
Cybersecurity concerns
0
%
Lack of awareness
internally
0
%
Lack of budget
“The next wave of value creation will be around providing a single pane of financial services.”
Taira Hall SVPStrategic Innovation Executive, FIS
ESC
HOW BUSINESSES ARE USING CRYPTOCURRENCY TODAY
Which cryptocurrency applications do you currently use?
All respondents
All respondents
Retail
Travel
Gaming
Restaurants
Digital media
Major tech
0
%
Investment
0
%
Yield generation
0
%
Supply chain payments
0
%
Domestic consumer payments
0
%
Cross-border payments
0
%
A cryptocurrency loyalty
program
0
%
P2P loans
0
%
Employee salaries and/or
incentives
Retail
All respondents
Retail
Travel
Gaming
Restaurants
Digital media
Major tech
0
%
Investment
0
%
Yield generation
0
%
Supply chain payments
0
%
Domestic consumer payments
0
%
Cross-border payments
0
%
A cryptocurrency loyalty
program
0
%
P2P loans
0
%
Employee salaries and/or
incentives
Travel
All respondents
Retail
Travel
Gaming
Restaurants
Digital media
Major tech
0
%
Investment
0
%
Yield generation
0
%
Supply chain payments
0
%
Domestic consumer payments
0
%
Cross-border payments
0
%
A cryptocurrency loyalty
program
0
%
P2P loans
0
%
Employee salaries and/or
incentives
Gaming
All respondents
Retail
Travel
Gaming
Restaurants
Digital media
Major tech
0
%
Investment
0
%
Yield generation
0
%
Supply chain payments
0
%
Domestic consumer payments
0
%
Cross-border payments
0
%
A cryptocurrency loyalty
program
0
%
P2P loans
0
%
Employee salaries and/or
incentives
Restaurants
All respondents
Retail
Travel
Gaming
Restaurants
Digital media
Major tech
0
%
Investment
0
%
Yield generation
0
%
Supply chain payments
0
%
Domestic consumer payments
0
%
Cross-border payments
0
%
A cryptocurrency loyalty
program
0
%
P2P loans
0
%
Employee salaries and/or
incentives
Digital media
All respondents
Retail
Travel
Gaming
Restaurants
Digital media
Major tech
0
%
Investment
0
%
Yield generation
0
%
Supply chain payments
0
%
Domestic consumer payments
0
%
Cross-border payments
0
%
A cryptocurrency loyalty
program
0
%
P2P loans
0
%
Employee salaries and/or
incentives
Major tech
All respondents
Retail
Travel
Gaming
Restaurants
Digital media
Major tech
0
%
Investment
0
%
Yield generation
0
%
Supply chain payments
0
%
Domestic consumer payments
0
%
Cross-border payments
0
%
A cryptocurrency loyalty
program
0
%
P2P loans
0
%
Employee salaries and/or
incentives
WHERE TO START
Those who understand the impact on their organizations are already building new technology, acquiring skills through new hires or partnerships and launching new services.
Comparatively few are pursuing new M&A opportunities or increasing their R&D budget, suggesting businesses know what they need to do.
Responses to the impact of cryptocurrency
You indicated that the following trends would have a major impact on your organization over the next 12 months. What activities is your organization currently involved with to respond to these trends?
Build new technology
0
%
Hire people to add skills/knowledge
0
%
Seek partners to add skills/knowledge
0
%
Launch new products/services
0
%
Increase technology budget
0
%
Purchase new technology
0
%
Increase R&D budget
0
%
Pursue related M&A opportunities
0
%
Seek partners to add technology capabilities
0
%
WHAT’S HOLDING
CRYPTO BACK?
The barriers to greater adoption of crypto are primarily around infrastructure. Many businesses – especially retailers, travel businesses and restaurants – struggle to fit crypto into their systems and processes. However, as adoption increases, network effects could lead to quite rapid elimination of these barriers.
There are also some differences by sector. Gaming respondents appear to have a bigger unmet need for internal technical skills to handle cryptocurrencies. Indeed, hiring to fill skills gaps is the top response to the emergence of crypto for the sector. Technology providers, meanwhile, are more likely to see regulations as a barrier.
BARRIERS TO GREATER
CRYPTO
ADOPTION WITHIN MY
ORGANIZATION
What do you think are the biggest barriers to greater crypto adoption within your organization today?
All respondents
All respondents
Retail
Travel
Gaming
Restaurants
Digital media
Major tech
0
%
Lack of ecosystem services
0
%
Lack of interoperability
between different platforms/
protocols
protocols
0
%
Lack of services from banks
and other financial services
0
%
Lack of internal technology
infrastructure
0
%
Lack of internal technical
skills
0
%
Cybersecurity concerns
0
%
Limited customer demand
0
%
General distrust of
cryptocurrencies
0
%
Lack of clarity around
regulations
0
%
Lack of clear benefit to
our organization
0
%
Volatility of
cryptocurrencies
Retail
All respondents
Retail
Travel
Gaming
Restaurants
Digital media
Major tech
0
%
Lack of ecosystem services
0
%
Lack of interoperability
between different platforms/
protocols
protocols
0
%
Lack of services from banks
and other financial services
0
%
Lack of internal technology
infrastructure
0
%
Lack of internal technical
skills
0
%
Cybersecurity concerns
0
%
Limited customer demand
0
%
General distrust of
cryptocurrencies
0
%
Lack of clarity around
regulations
0
%
Lack of clear benefit to
our organization
0
%
Volatility of
cryptocurrencies
Travel
All respondents
Retail
Travel
Gaming
Restaurants
Digital media
Major tech
0
%
Lack of ecosystem services
0
%
Lack of interoperability
between different platforms/
protocols
protocols
0
%
Lack of services from banks
and other financial services
0
%
Lack of internal technology
infrastructure
0
%
Lack of internal technical
skills
0
%
Cybersecurity concerns
0
%
Limited customer demand
0
%
General distrust of
cryptocurrencies
0
%
Lack of clarity around
regulations
0
%
Lack of clear benefit to
our organization
0
%
Volatility of
cryptocurrencies
Gaming
All respondents
Retail
Travel
Gaming
Restaurants
Digital media
Major tech
0
%
Lack of ecosystem services
0
%
Lack of interoperability
between different platforms/
protocols
protocols
0
%
Lack of services from banks
and other financial services
0
%
Lack of internal technology
infrastructure
0
%
Lack of internal technical
skills
0
%
Cybersecurity concerns
0
%
Limited customer demand
0
%
General distrust of
cryptocurrencies
0
%
Lack of clarity around
regulations
0
%
Lack of clear benefit to
our organization
0
%
Volatility of
cryptocurrencies
Restaurants
All respondents
Retail
Travel
Gaming
Restaurants
Digital media
Major tech
0
%
Lack of ecosystem services
0
%
Lack of interoperability
between different platforms/
protocols
protocols
0
%
Lack of services from banks
and other financial services
0
%
Lack of internal technology
infrastructure
0
%
Lack of internal technical
skills
0
%
Cybersecurity concerns
0
%
Limited customer demand
0
%
General distrust of
cryptocurrencies
0
%
Lack of clarity around
regulations
0
%
Lack of clear benefit to
our organization
0
%
Volatility of
cryptocurrencies
Digital media
All respondents
Retail
Travel
Gaming
Restaurants
Digital media
Major tech
0
%
Lack of ecosystem services
0
%
Lack of interoperability
between different platforms/
protocols
protocols
0
%
Lack of services from banks
and other financial services
0
%
Lack of internal technology
infrastructure
0
%
Lack of internal technical
skills
0
%
Cybersecurity concerns
0
%
Limited customer demand
0
%
General distrust of
cryptocurrencies
0
%
Lack of clarity around
regulations
0
%
Lack of clear benefit to
our organization
0
%
Volatility of
cryptocurrencies
Major tech
All respondents
Retail
Travel
Gaming
Restaurants
Digital media
Major tech
0
%
Lack of ecosystem services
0
%
Lack of interoperability
between different platforms/
protocols
protocols
0
%
Lack of services from banks
and other financial services
0
%
Lack of internal technology
infrastructure
0
%
Lack of internal technical
skills
0
%
Cybersecurity concerns
0
%
Limited customer demand
0
%
General distrust of
cryptocurrencies
0
%
Lack of clarity around
regulations
0
%
Lack of clear benefit to
our organization
0
%
Volatility of
cryptocurrencies
“Crypto is a critical tool for engaging with your customers and generating new revenue.”
Himal Makwana SVPHead of Strategy and New Initiatives
ESC
THE METAVERSE
Respondents are exploring a wide range of activities in the metaverse, though most are currently focused on customer engagement and customer services. These and the other leading areas suggest that firms are initially treating the metaverse like an additional channel to add to the marketing and engagement mix.
But the metaverse has considerable disruptive potential, and over the coming years we are likely to see more innovative activities grow in prominence.
Relative ranking of metaverse activities
Which metaverse activities are you currently involved in or considering?
Major tech
Gaming
Digital media
Retail
Travel
Restaurants
6
2
1
7
5
2
2
9
10
7
Customer engagement and
customer services
Advertising, marketing,
endorsements
New customer acquisition
Selling traditional
products and services
Employee training/education
Selling virtual
services/products
Co-creation of products
with customers
Customer research
Gamification of services
and processes
Internal communications
6
3
1
9
2
7
5
4
7
9
Customer engagement and
customer services
Advertising, marketing,
endorsements
New customer acquisition
Selling traditional
products and services
Employee training/education
Selling virtual
services/products
Co-creation of products
with customers
Customer research
Gamification of services
and processes
Internal communications
1
7
6
4
7
3
4
2
7
7
Customer engagement and
customer services
Advertising, marketing,
endorsements
New customer acquisition
Selling traditional
products and services
Employee training/education
Selling virtual
services/products
Co-creation of products
with customers
Customer research
Gamification of services
and processes
Internal communications
1
3
2
4
6
5
8
8
6
10
Customer engagement and
customer services
Advertising, marketing,
endorsements
New customer acquisition
Selling traditional
products and services
Employee training/education
Selling virtual
services/products
Co-creation of products
with customers
Customer research
Gamification of services
and processes
Internal communications
3
2
5
1
4
7
7
7
5
10
Customer engagement and
customer services
Advertising, marketing,
endorsements
New customer acquisition
Selling traditional
products and services
Employee training/education
Selling virtual
services/products
Co-creation of products
with customers
Customer research
Gamification of services
and processes
Internal communications
4
1
7
1
3
7
7
10
6
4
Customer engagement and
customer services
Advertising, marketing,
endorsements
New customer acquisition
Selling traditional
products and services
Employee training/education
Selling virtual
services/products
Co-creation of products
with customers
Customer research
Gamification of services
and processes
Internal communications
NEW SKILLS FOR A
NEW WORLD
Joining the metaverse requires an understanding of new technologies and user experiences. And respondents who say the metaverse will have a major impact on their organization are most commonly increasing their R&D budgets. They recognize the potential in metaverse applications, but it isn’t obvious what path they should take.
Other top responses are to boost metaverse-related skills (either through new hires or by seeking partners) and to build new technology.
RESPONSES TO THE IMPACT
OF
THE METAVERSE
You indicated that the following trends would have a major impact on your organization over the next 12 months. What activities is your organization currently involved with to respond to these trends?
Increase R&D budget
0
%
Hire people to add
skills/knowledge
0
%
Build new technology
0
%
Seek partners to add
skills/knowledge
0
%
Seek partners to add technology
capabilities
0
%
Launch new products/services
0
%
Purchase new technology
0
%
RISKS AND CONTROLS
A key barrier for metaverse adoption is that it’s new, rapidly evolving and quite different from today’s familiar platforms, channels or communities.
However, respondents’ top concern has more to do with reputational risk, control and customer and staff protections. As with internet services, this is a problem that can be addressed with governance and controls – so it shouldn’t be a significant barrier as the metaverse matures.
Barriers to greater metaverse adoption in my organization
What do you think are the biggest barriers to greater metaverse adoption in your organization today?
Blank
All businesses
Major tech
Gaming
Digital media
Retail
Travel
Restaurants
Concerns about content moderation
and behavioral standards
0
%
0
%
0
%
0
%
0
%
0
%
0
%
The metaverse is a passing fad
(i.e., not a lasting, impactful trend)
0
%
0
%
0
%
0
%
0
%
0
%
0
%
Risks are unfamiliar and/or
difficult to mitigate
0
%
0
%
0
%
0
%
0
%
0
%
0
%
General distrust/fear of the unknown
0
%
0
%
0
%
0
%
0
%
0
%
0
%
Insufficient users on platforms
0
%
0
%
0
%
0
%
0
%
0
%
0
%
Lack of in-house development skills
0
%
0
%
0
%
0
%
0
%
0
%
0
%
Cybersecurity concerns
0
%
0
%
0
%
0
%
0
%
0
%
0
%
Lack of awareness internally
0
%
0
%
0
%
0
%
0
%
0
%
0
%
Lack of clear benefit to our
organization
0
%
0
%
0
%
0
%
0
%
0
%
0
%
Lack of success stories
0
%
0
%
0
%
0
%
0
%
0
%
0
%
Concerns about KYC/AML
0
%
0
%
0
%
0
%
0
%
0
%
0
%
“The industry understands the enormous opportunities that the metaverse represents.”
Himal Makwana SVPHead of Strategy and New Initiatives, FIS
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2023
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