Importance Of Innovation In Banking Sector

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Customer services and customer satisfaction are the prime objective of any service organization. Information and communication technology has furnished go-up to new innovations in the product designing and their delivery in the banking and finance industries. The transformation has been very productive for banks bringing in an increase in productivity and organizational efficiency to be more competitive. Banks have no alternative but to employ wireless solutions in device-independent and network-agnostic ways in responding to the customers demanding ‘anytime and anywhere’ access to their money and financial information. With a view to providing a better and quality customer services with the help of new technologies modern banking sector…show more content…
In general, the word innovation refers to the creation of new products and/or services. According to Michael Vance “Innovation is the creation of the new or the re-arranging of the old in a new way”. Peter Drucker defined Innovation “as change that creates a new dimension of performance”. From organizational perspective, it is said that innovation fosters an organization to grow, prosper & transform in synchronization with the changes in the environment, both internal & external. Banking is no exception to this. In fact, this sector has witnessed radical transformation of late, based on many innovations in products, processes, services, systems, business models, technology, governance & regulation. Therefore, innovation in banking sector may be referred as a process for introducing new ideas, workflows, methodologies, services or products in banking activities. In banking sector, the term innovation may refer to both radical and incremental changes to products, processes or services of a bank. Innovation is a catalyst for the growth and success of banking sector and it can help a bank adapt and grow in the marketplace. Being innovative does not refer to inventing: innovation can refer to changing the model of banking activities and adapting to changes in its environment to deliver better products or services. While a novel device is often described as an innovation, in banking sector innovation is generally considered to be a…show more content…
This paradigm shift in banking operations is well-known as modern banking. For the past two decades, the banking sector has chosen a new service channel based on the progress of information technology-electronic devices to respond to the changes in customer preferences and needs, increasing competition from non-banks, changes in demographic and social trends, and government deregulations of the financial service sector (Byers and Lederer, 2001). This new way of performing banking activities is called modern
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