71% of Banking Innovation Leaders Say Risk-Averse Culture is Killing Innovation

SaaScada research reveals widening gap between innovation ambitions and delivery reality – with IT’s hands tied by testing delays, compliance demands, and restrictive core banking systems.

London, 28th May 2025 – NextGen data-driven core banking engine, SaaScada, has released a new report, Test More, Fear Less: The Case for Safer, Smarter Banking Innovation, revealing the key barriers slowing UK banks’ innovation. A new survey of 150 UK bank innovation leaders uncovers a stark divide between strategic ambition and operational delivery – as testing bottlenecks, risk averse leadership, compliance red tape and restrictive core banking platforms stall progress.  

Key findings include:

• Pressure is rising, but banks are stuck in the slow lane: 69% of innovation leaders say pressure to innovate has intensified in the past year, driven by customer demands, fierce competition and the need to diversify to grow. But 9-in-10 admit they’re being held back from moving at speed.
• Sprinting through quicksand: Testing delays, such as issues with sandbox environments, are the top blocker to fast innovation; 71% say risk-averse culture and red tape kill experimentation, making innovation impossible. Meanwhile, 62% say legacy core banking has a chokehold on their business and they’re running out of air.  
• Leaders vs laggards: A stark divide is emerging. More than one-in-five UK banks (22%) can make basic changes like adjusting base rates in under a day, but for most, it takes months. A third of banks can roll out new features (33%) or products (29%) in weeks, yet 1-in-10 still take more than six months.
• Disconnect between strategists and practitioners:  Those directly involved with product development and delivery (e.g., Product Owners) say it takes 176 days on average to launch a new product or service, while strategy leaders (e.g., CEOs) optimistically think a launch can be achieved in just 70 days.
• Slow innovation is strangling growth: 80% say sluggish innovation is hurting their business – fuelling talent shortages, resource wastage and eroding their competitive edge. Almost three-quarters (73%) say the industry will never be a destination for talent if it can’t get its act together on innovation.

“The last few months have shown what a difference a day can make. In a world of tariff shocks, geopolitical turmoil and volatile rates, months-long innovation cycles are no longer acceptable,” comments Steve Round, Co-Founder and President at SaaScada. “Slow movers don’t just risk falling behind – they risk being dropped by customers and losing wallet share to more agile players.”  

The report underscores the need for a new approach to core banking technology that empowers engineers to innovate, without increasing risk. With 63% of banking innovation leaders expressing concern that ripping out their core banking platform is too costly and risky, it’s clear that a new way forward is needed – one that balances the need for stability and continuity with the need for agility.  

• More than three quarters of (79%) banking innovation leaders say the industry must make core banking migrations less risky or accept falling behind. 
• 82% want a safe and cost-effective way to experiment and test products.  
• 61% agree that a shift to a pay-by-the-hour consumption-based model of core banking is long overdue. 

“In every other facet of the financial services industry, solutions follow a consumption-based model, letting users test new products before diving in headfirst. It’s time that core banking followed suit,” adds Nelson Wootton, Co-Founder and CEO at SaaScada. “By plugging in a truly cloud-native core that runs parallel to existing systems, banks can begin experimenting from day one, without committing to pointless RFPs or enduring months of delays from legacy technology. Without this shift, banks will quickly find themselves out of touch, out of time, and out of business.” 

You can download the full report here.  

About the research 

The data was gathered in March 2025 from 150 UK-based business heads/C-Suite staff at retail and business banks who are responsible for product innovation (e.g. Heads of Digital Transformation/CTOs/Chief Innovation Officers/Heads of Innovation/CEO). The banks had a balance sheet size of £0.5Bn – £100Bn. 

About SaaScada 

SaaScada is a data-driven core banking engine built using cloud-native technology to deliver lightning-fast data speeds and flexibility. SaaScada’s unified product hub makes it easier, cheaper, and faster to build a range of feature-rich products to deliver great customer outcomes via open APIs to the partner ecosystem.