Retail tech innovation highlights from the 2023 Global Innovation Report
THE STATE OF
INNOVATION IN RETAIL
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TECH INNOVATION FOR COMPETITIVE ADVANTAGE
How does this all help me?
The impact is widespread and long-term
Tech innovation for competitive advantage
Keep costs down
SWIFT gpi
THE IMPACT IS WIDESPREAD AND LONG-TERM
achieved their ROI technology targets on risk mitigation within their payments initiatives
Contact us today to learn more about The Global Innovation Report
or explore the full findings to assess your strategy.
Respondents who expect these innovations to impact their business over the next 12 months foresee a variety of effects, including a mix of positives and negatives. But all these trends have the potential to disrupt business models and pose real challenges.
Can your organization harness these innovations to drive revenue and strengthen customer relationships?
THE IMPACT IS FUNDAMENTAL
EMBEDDED FINANCE
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Let's solve global payments
Embedded finance takes products or processes that are typically delivered by banks and integrates them into non-bank services or experiences.
Having financial services embedded within familiar platforms can save you and your customers considerable time and effort, reduce errors and delays, and increase security. It’s no wonder retailers are enthusiastically embracing opportunities such as embedded payments, embedded lending and more. However, building successful embedded finance services will require new capabilities and changes to your digital tools and platforms.
The impact is fundamental
ARE YOU EMBRACING INNOVATION?
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Source: FIS Readiness Report 2021
Central bank digital currencies
ROI achievements on payment initiatives
%
0
Source: FIS Readiness Report 2021
SWIFT gpi allows banks to track the status of cross-border payments end-to-end. What’s more, banks can also enable customers to track payments in real-time from their treasury and payment systems – meaning there’s no need to spend hours trying to pin down the status of individual payments.
SWIFT gpi
Benefits of real-time payments
35%
Improved liquidity management
Real-time view of cash position
32%
Access to transaction data
30%
Reduce costs
39%
Improve control and visibility
42%
Reduce fraud risk
44%
Drivers for increasing investment in digital tech
of retailers are offering or developing embedded finance services
Source: FIS Readiness Report 2021
indicate they are taking advantage of real-time payments
ROI achievements on key drivers
Are you embracing innovation?
Consumer spending decisions are increasingly driven by engaging shopping experiences, the price/value equation, flexible payment options and speed to fulfillment. To achieve success in a period of economic disruption, retailers must be able to keep pace with consumer expectations, delivering innovative ways for customers to browse, buy and save.
From virtual shopping to buy now, pay later (BNPL), FIS® took an extensive look at how retailers plan to invest in innovation and leverage technology for strategic growth — both in revenue and brand loyalty — in 2023.
Our 2023 Global Innovation Report includes survey results from 351 retailers in nine countries, revealing the innovations you should be considering and the strategies to help you turn them to your advantage. It answers the following important questions to prepare you for what’s next:
• How will innovation impact your business?
• How are early adopters responding?
• What’s holding others back from embracing these innovations?
• Which strategies can you deploy to turn innovation to your advantage?
While the payments space is rich in innovation, it isn’t always obvious how specific initiatives can actually help your organization. Before you can identify the benefits of different initiatives and developments, it’s important to pinpoint the challenges you’re facing, and ask yourself whether different initiatives can solve these challenges in a way that suits your firm. In today’s market, companies’ top priorities include gaining visibility over payments, preventing fraud and reducing costs.
Our 2023 Global Innovation Report includes survey results from 351 retailers in nine countries, revealing the innovations you should be considering and the strategies to help you turn them to your advantage. It answers the following important questions to prepare you for what’s next:
• How will innovation impact your business?
• How are early adopters responding?
• What’s holding others back from embracing these innovations?
• Which strategies can you deploy to turn innovation to your advantage?
More than 70% of retailers say innovations such as embedded finance, cryptocurrency, the metaverse, and BNPL will affect their business in the coming 12 months. And the impact of cryptocurrency and the metaverse is expected to continue to grow over the next three years.
SWIFT gpi offers a pre-validation service that allows banks to validate the beneficiary’s account information with the beneficiary bank. It also includes a Stop & Recall service that allows corporate customers to ask their banks to stop fraudulent or erroneous payments.
Q: Which innovations will have an impact on your organization in the next 12 months? In the next three years?
%
0
FIS is a leading provider of technology solutions for merchants, banks and capital markets firms globally. Our more than 55,000 people are dedicated to advancing the way the world pays, banks and invests by applying our scale, deep expertise and data-driven insights. We help our clients use technology in innovative ways to solve business-critical challenges
and deliver superior experiences for their customers. Headquartered in Jacksonville, Florida, FIS is a Fortune 500® company and is a member of Standard & Poor’s 500® Index.
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“While these technologies will require industry participation and regulatory clarity to move to the mainstream, the seeds of innovation have already been sown. So, you need to understand the implications of these technologies now to avoid being left behind.”
Tony Warren
Executive vice president and head of Strategy and Solutions Management, FIS
Next 12 months
70%
Next 12 months
85%
87%
Next 12 months
80%
Positives
Create growth opportunities
Strengthen brands and relationships
Help retain and attract customers
Strengthen competition
Increase cost
Negatives
Change sales and/or distribution models
Neutral
Himal Makwana
Senior vice president, Product Strategy, FIS
“While the initial impact may be uncertain or even negative, there’s also a clear positive potential, especially for those who are already adjusting their strategies and investments. So, you need a plan to help you turn each innovation into an opportunity to grow – instead of a threat to your business model.”
Can your organization harness these innovations to drive revenue and strengthen customer relationships?
%
0
of retailers that say embedded finance will have a major impact on their organization will respond by increasing their tech or R&D budget in the next 12 months
Taira Hall
Senior vice president, Strategic Innovation Executive, FIS
"The next wave of value creation will be around providing a single pane of financial services. It’s time to activate that journey for your customers."
%
0
say BNPL will strengthen
customer relationships
As consumers evaluate their discretionary spending, payment options such as BNPL are gaining traction by enabling shoppers to extend their spending power.
It’s no surprise that 85% of the retailers surveyed indicated this innovation will impact their business over the next 12 months.
BNPL
%
0
say offering BNPL will help
drive revenue
Retail executives who say BNPL will have a major impact on their organization in the coming year are taking action.
%
0
will launch new products or services in the next 12 months
%
0
are hiring people to
add skills or knowledge
%
0
are increasing their technology budget
The necessity of providing an engaging online shopping experience is becoming more apparent. With sophisticated technology now readily available, retailers have greater potential to connect with customers in the metaverse.
THE METAVERSE
%
0
of respondents say it will be strategically important to have a presence there within three years
%
0
are already incorporating
it into their offerings
CRYPTOCURRENCY
%
0
A lack of ecosystem services to
support cryptos
%
0
A lack of interoperability between different crypto platforms/protocols
Embedded finance, BNPL, the metaverse and crypto are significant industry transformations, and they’re developing faster than prior innovations. Those who make smart selections from the plethora of new technologies, innovations and trends at their disposal will dominate the markets of the future.
MARKETS OF THE FUTURE
* All data is based on a survey of 351 worldwide retail firms. The survey was conducted by Longitude Partners on FIS’ behalf between July and September 2022.
EMBEDDED FINANCE
%
0
As consumers evaluate their discretionary spending, payment options such as BNPL are gaining traction by enabling shoppers to extend their spending power. It’s no surprise that 85% of the retailers surveyed indicated this innovation will impact their business over the next 12 months.
BNPL
Next 12 months
Embedded finance
Next 12 months
BNPL
Next 3 years
84%
The metaverse
Next 3 years
84%
Cryptocurrency
Next 3 years
77%
Next 3 years
Next 3 years
83%
%
0
of executives believe the metaverse only has small or limited value today
Himal Makwana
Senior vice president, Product Strategy, FIS
"The industry understands the enormous opportunities that the metaverse represents."
%
0
A lack of crypto services from banks and other financial services providers
%
0
A lack of internal technology infrastructure to handle cryptocurrencies
%
0
A lack of internal technical skills to handle cryptocurrencies
87%
Embedded finance
83%
85%
84%
BNPL
80%
84%
The metaverse
70%
77%
Cryptocurrency
Add risk
30%
A lack of ecosystem services
to support cryptos
25%
A lack of interoperability between different crypto platforms/protocols
24%
A lack of crypto services from banks and other financial services providers
24%
A lack of internal technology infrastructure to handle cryptocurrencies
24%
A lack of internal technical skills to handle cryptocurrencies
CRYPTOCURRENCY
46
%
52
%
30
%
24
%
48
%
39
%
28
%
44
%
64
%
56
%
Next 12 months
Next 3 years
Brands such as Overstock, Microsoft and NewEgg are just a few notable retailers in the crypto game. And while nearly half of retail executives – 46% – have no interest today in any cryptocurrency opportunities, only 15% say they won’t be using any crypto applications in three years’ time. Yet there are concerns that are slowing down adoption. As with many innovations, respondents are particularly concerned about the ecosystem, as well as internal capabilities. What's preventing retailers from greater adoption of cryptocurrency services within their organization?
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Increase cost Add risk
of retailers that say embedded finance will have a major impact on their organization will respond by increasing their tech or R&D budget in the next 12 months
Retail executives who say BNPL will have a major impact on their organization in the coming year are taking action.
The necessity of providing an engaging online shopping experience is becoming more apparent. With sophisticated technology now readily available, retailers have greater potential to connect with customers in the metaverse.
THE METAVERSE
Himal Makwana
Senior vice president, Product Strategy, FIS
"The industry understands the enormous opportunities that the metaverse represents."
Brands such as Overstock, Microsoft and NewEgg are just a few notable retailers in the crypto game. And while nearly half of retail executives – 46% – have no interest today in any cryptocurrency opportunities, only 15% say they won’t be using any crypto applications in three years’ time. Yet there are concerns that are slowing down adoption. As with many innovations, respondents are particularly concerned about the ecosystem, as well as internal capabilities. What's preventing retailers from greater adoption of cryptocurrency services within their organization?
CRYPTOCURRENCY
30%
A lack of ecosystem services to support cryptos
25%
A lack of interoperability between different crypto platforms/protocols
24%
A lack of crypto services from banks and other financial services providers
24%
A lack of internal technology infrastructure to handle cryptocurrencies
24%
A lack of internal technical skills to handle cryptocurrencies
CRYPTOCURRENCY
When we innovate, it moves economies. And with our clients as partners,
we have the power to transform industries together.
Contact us today to learn more about The Global Innovation Report
or explore the full findings to assess your strategy.