Unlocking the Black Box of Financial Innovation: A Case Study of Banking Institutions in the Eastern Region of Ghana

Abstract

Ghanaian business owners and clients are of the view that the use of innovation, especially technology could influence the growth of financial institutions in Ghana, and one of the key focus of the study has been how the use of innovation could serve as a means to ensure business sustainability. Interestingly, most qualitative respondents concurred the use of innovation as a means to ensure business sustainability. The study, “Unlocking the Black Box of Financial Innovation: A Case Study of Banking Institutions in the Eastern Region of Ghana” could help identify action plans through existing frameworks to optimize performance among financial institutions in the Eastern Region of Ghana. The study is based on secondary data sources with qualitative research, observing and describing events as they occur, with the goal of capturing all of the richness of everyday behavior. The intricacies of financial innovation remain shrouded in mystery, with limited understanding of its drivers, mechanisms, and risk management strategies, a knowledge gap that hinders policymakers, regulators, and industry stakeholders from optimizing financial innovation’s potentials. The study establishes the following key findings: 1). Majority of customers and clients of financial services are of the view that technology influences the growth of institutions in Ghana. 2). Innovativeness has led to improvement of the financial services and improved payment systems 3). The fear of unknown and lack of awareness creation are the key triggers of resistance to innovativeness in organization. The study provided the following as key recommendations: Business leaders should see innovation as the key element to reach customer satisfaction, Organizations should focus on products, types of product, stages and features and also pay more attention on the role it plays in realizing competitive advantage, Banking institutions should consider speed and simplicity as their priorities, leading to the focus on clients in their operations to ensure they are maintained, Financial institutions should have policies that seek to reward Innovation ideas at every leve to encourage employees to come up with new ideas all the time, Business leaders should forge strategies including stakeholder-engagement, brainstorming and awareness creation, and idea cascaded down to get others behind a change. The study argues that within the context of the rapidly changing operating environment, simplification, stringent risk management, and innovative mindset should be considered as tools for adaptive capabilities.