Innovation is as much about creating new institutions and smart collaborations to advance common goals, as it is about inventing a new product. We see this in the notion of “co-opetition”, where competing firms have found benefits in coming together to build shared infrastructure, or to facilitate the exchange of information for the purpose of preventing criminal activity and guarding against cyber threats, all the while remaining fierce competitors in their product and service offerings. Innovation is also about constantly finding better ways to do things within an organisation in order to deliver a better customer experience and to keep organisations interesting and fresh. It is about changing mindsets and culture to ensure that institutions never become tired or irrelevant. It is about re-thinking our approach to developing the workforce so that we are at our most agile to deal with new challenges and risks. These are all important aspects of innovation and I am reminded that in Malaysia’s own journey to transform the MSB industry, we benefitted from charting new and sometimes, untested paths to solve the problems that we faced. For example, we learnt from and then re-defined the principal-agent model to meet the dual objectives of maintaining broad access to money services while raising compliance and operational standards. We departed from conventional regulatory and supervisory approaches, on the conviction that we could not achieve our objectives through enforcement alone.
Whyconsumers prefer your competitors has also become an important factor. It matters to more consumers today whether companies are conducting business with integrity and ethically. Ultimately, consumers will almost always prefer to deal with companies that they trust. However, what customers look for to identify with companies that they can trust is changing. Advertising campaigns of some of the largest companies that are households names today, centre on universal values of charity towards our fellow mankind, honesty, and respect for one another. These are some of the clearest signs of businesses that understand the shifting preference of a fast growing, new generation of consumers, and are seeking to connect with customers on a deeper level. Innovation and its many faces As we contemplate these developments, the power and potential of innovation quickly shifts into sharp focus. Nowadays, we often hear innovation and disruption mentioned in the same breath. The flipside to that is really innovation and sustainability which are the themes of this conference. It used to be that if a business offered a decent product or service, and managed its costs reasonably well, prospects of survival were generally good. Today, survival – whether you are in the business of driving taxis, running a hotel, or offering a financial product or service – depends on the ability of companies to continuouslyharness and convert innovative ideas, however big or small, to serve customers better and multiply productivity gains. This is the challenge before the MSB industry.