“Banking products and services have been getting more and more commoditized, with price becoming the prime differentiator between banks.” (Top 10 trends in banking in 2016) In this competitive market, a bank needs to provide “new” products and services to attracting new customers. The new technology has a huge impact on the working style of the bank industry. Customers are no longer satisfied with the old services and products they used to have. “This situation has denied the banks the much-needed information regarding this important area of financial innovations sometimes leading to reverse causality in the innovation-financial performance relationship.” (Blohm, Ivo, et al.) In this article, it will describe two excellent examples of banking innovation.
Product and services innovation
Basically, every bank is providing digital services to its customers. To win this game, a bank is focusing on providing better services. A good example is Fidor Bank. “A free bank account built around an Application Programming Interface (API), the Fidor Smart Current Account supplements classic account services with internet payments and innovative banking products. The integrated API platform allows customers and partners to directly connect their computer systems with those of Fidor Bank. The open financial ecosystem provides app partners with the ability to continuously increase the range of products and service that enable customers to select products and services they want from either Fidor Bank or third party providers. “(Skinner) Fidor Bank provides the innovative platform to access their personal account efficiency and a bigger market which include the products and services from Fidor Bank and its partners for its customers. “As of February 2015, Fidor Bank has achieved more than 75,000 fully legitimate banking customers, up from 25,000 three years prior and approximately 270,000 German users on its Fidor online community up from 160,000 at the beginning of 2013. It is extraordinary growth for a digital bank that focuses on social banking with no branch network or internal advisers.” (Skinner)
The channels innovation
In the global banking innovation awards in 2015, the Bank of East Asia(BEA) won the channel award. They provided highly flexible and digital branches services to its customers. Those branches located in the most famous commercial centre in Hong Kong. They simplify their service processes and implement paperless operation using the innovative digital technology. They have I-counter, I-window, I-Kit, I-zone, and I-panel services in the physical branches. For instance, the I-counter is operated by operating assistants during regular business hours and converted to I-Teller mode after hours of operation. Customers can process daily banking transactions through video telephone after business hours.
With those technologies, customers can open an account in BEA within 15 minutes and 5 minutes to finish their application of credit cards.
This 24 hours opening business model is welcomed by the customers. The degree of this services is more than 95%. The average of monthly new customer increases 17%.
Amit, Kumar. Avinash, Saxxena. Vamshi, Suvarna. Varun, Rawat. “Top 10 Trends in Banking In 2016.” Capgemini. (2016).
Blohm, Ivo, et al. « Managing Disruptive Innovation through Service Systems–The Case of Crowdlending in the Banking Industry. » (2016).
Skinner, Chris. “The most innovative banks of 2015. » BankNXT. N.p., 20 Sept. 2016. Web. 30 Jan. 2017. banknxt.com
picture 1: https://www.fidorbank.uk/personal-banking/smart-account