Market Sentiment Forces Banks to Cut Failing Innovation

Phil Bruno, chief strategy and growth officer at ACI Worldwide, spoke at Payments Unleashed in London and outlined how current market sentiment is forcing banks to reassess innovation plans.

He described investor pressure through depressed valuations and cited price-to-book ratios as a clear indicator of confidence in banks’ future earnings. He said lower valuations shorten the window for experimental projects and require tighter selection of initiatives and partners.

Bruno warned: “Markets are currently negative on banks, particularly on price-to-book ratios. Banks need to be more willing to cut losses and learn from failures rather than continue with plans and partners that are not working.”

He recommended that banks define explicit stop-loss criteria for pilots and investments so failing efforts can be wound down and lessons recorded. Clear exit rules would allow institutions to reallocate capital to initiatives with stronger expected returns.

Bruno explained that the price-to-book ratio compares a company’s market value with its accounting book value and is used by investors to judge expectations for future earnings. He linked that metric to the need for banks to meet predefined milestones or end projects that fall short.

His remarks were delivered during a conference session on balancing experimentation with discipline, where executives discussed how market signals should shape product roadmaps, partnership choices and capital allocation for digital initiatives.