Innovation remains critically important for banks to acquire and retain customers — so why is innovation declining at some of the nation’s largest banks?

The results are in from Bank Innovation’s third annual State of Banking Innovation Study, and they are certainly surprising.

Overall, 63 respondents completed the survey, which drilled down into what is happening on the ground in banking innovation right now.

The results from the survey were enlightening — and, in some cases, shocking. For example, respondents were asked to rate their company’s level of innovation on a scale of 1 to 5, where 1 is “poor” and 5 is “excellent.” The industry graded its innovation at a weighted average score of 3.2, down from 3.4 in 2013.

It is curious to note that the overall level of innovation in the industry is considered by survey respondents to have dropped even as the perceived need for innovation has grown. Perhaps the decline in the level of perceived innovation points to “innovation fatigue” in the industry, and that new approaches should be sought. Or does it mean the bar has been raised and respondents are judging their companies’ efforts more critically in 2014 than in 2013?

A fuller picture of the State of Banking Innovation will be unveiled next week at Bank Innovation 2014 in Seattle.