A combination of Government policy and the consumerisation of technology are the main drivers of innovation in financial services organisations, according to several AIIA speakers.Speakers at the Australian Information Industry Association's financial services briefing, held in Sydney on Friday, said the advent of the Government's SuperStream superannuation reforms, which come into force in July, and APRA's cloud computing directive regarding retention of data in Australia were just two policies influencing bank innovation today.Meanwhile, consumer demand for access to financial services from smart phones and tablet computers was forcing banks to innovate in order to compete.John Brogden, chief executive officer of the Financial Services Council, said the advent of the SuperStream changes, which start in July, with the introduction of the tax file number as the key superannuation identifier, would require significant investment in ICT from the sector because, at present, "super remains extraordinarily paper-based." SuperStream also calls for a move to electronic superannuation processing. Brogden said that at present "thousands of employers who have electronic payroll systems hand-write cheques each quarter for superannuation." However, he predicted that "within five years, 90 per cent of employers will be transacting electronically and require fortnightly payments to be made." He said that meant both funds managers and employers paying employee superannuation would have to update their computer systems to comply with the policy.Another example of policy forcing innovation came from Paul Ventura, head of architecture for BT Financial Group, who said that challenges such as APRA's cloud concerns are "forcing us to be innovative. To say 'yes' the information has to be secure - but what if it's encrypted and can't ever be touched? The policy has yet to address that."The alternative to innovation seems to be special treatment. RaboDirect project manager Joep Berben acknowledged that the online bank had sought a special exception from APRA to allow it to operate in Australia as all its data processing is conducted overseas. While RaboDirect was not using a cloud service as such, all its processing is conducted using third-party computing facilities in the Netherlands."All the data is held there - we got a special exception from the government for that," said Berben. He went on to explain that its online banking model, where a third party provides computing services, means it has no IT developers of its own available to innovate. "We focus on banking. Our innovation team focuses on product innovation and works with (third party) developers."Ventura said this was one of the problems with offloading all computing to a third party. BT believed it was important to maintain some internal IT skills, such as security and architecture, in order to drive innovation, he said.The impact of policy on financial services' innovation has been reinforced by IT analyst Gartner, which published a report this month warning that banks and financial services' organisations across Asia-Pacific were having their innovation programmes steered by government policy. In Australia, the advent of a carbon tax and bank account portability were two areas that could demand ICT investment.But