On November 17, Citigroup announced 52,000 layoffs; by the end of the week, its stock had plunged 60 percent. The industry's troubles are widespread: Twenty-two banks have failed so far this year, the most recent of which are Downey Savings and PFF Bank & Trust. So it was reassuring to hear The Bank of New York Mellon CIO Kurt Woetzel and Citi CIO Marty Lippert offer their takes on how innovation and integration will lead the industry out of its current crisis.

Woetzel and Lippert each took the stage at Hard Rock Live in Orlando last month as honorees in BTN's 7th annual ranking of The Innovators. Woetzel was named this year's #1 Innovator; Lippert was on hand to receive the Peter J. Kight Lifetime Achievement Award. Both men made strong arguments for why innovation is crucial now, why it doesn't matter that technology budgets are being slashed and staff cut, and why the innovation that saves institutions won't be the next iPod, but will involve existing technology and making incremental advances that break down silos and leverage systems across disparate areas of the organization.

For Woetzel, innovation now is a do or die challenge. "We will soon see more innovation coming from financial services companies in the coming years than we have seen in the past couple of years. The reason? It's going to be a matter of survival." Institutions such as Goldman Sachs and Morgan Stanley-newly minted bank holding companies-must "innovate like crazy," Woetzel predicts, as they invent ways to gather the necessary deposits to fund their businesses going forward.

But as most CIOs and technologists in the room knew-and Woetzel and Lippert articulated-2009 will be a year when already-reduced budgets are likely to shrink further. However, they say, don't be deterred from the imperative. "Innovation has nothing to do with how many R&D dollars you have to spend, it's about the people you have, how they are led, and how much they 'get it,'" Woetzel said in quoting Apple chief executive Steve Jobs. But he also added his own mantra, "Innovation is not an event that is monopolized by any one individual; it's about groups of people that are highly diverse, have a strong culture, good process and excellent leadership."

In the end, the role CIOs and bank technologists play in guiding their institutions through these tumultuous times may come down to how each institution defines innovation. "Innovation doesn't have to be transformational or disruptive; those changes sometimes only come about once in a lifetime," Lippert says. "More often than not, it's incremental improvements that drive improvements in the customer experience that ultimately fuel the ongoing growth within our industry."

Sage advice during sobering times.

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