A service innovation is a service product or service process that is based on some technology or systematic method. In services however, the innovation does not necessarily relate to the novelty of the technology itself but the innovation often lies in the non-technological areas.

Why is service innovation important?
A service innovation changes the way customers are served to create value for customers and revenue for the company. Through a new service innovation, a company may increase its revenue due to existing customers spending more, improved positive company image, referrals, etc.

Innovative Financial Services: Robotic Process Automation (RPA)

"One area of innovation helping FIs to become more efficient and effective is robotic process automation (RPA). Technological advances in conversational AI, for example, are allowing FIs to deliver high-quality digital experiences to customers at scale, empowering users to control their finances without human support. Chatbots offer instant responses and quick complaint resolution, boosting the personal banking experience. Conversational interfaces also provide an easy and economical way for FIs to receive customer feedback."
RPA can streamline key banking functions, including customer onboarding, verification, risk assessment, security checks, data analysis and reporting, compliance processes and other administrative activities. Automating these processes not only benefits consumers, it also frees up FI employees to perform more complex, value-adding activities.

Customer Preferences

While there is still a place for traditional banking and financial services, customer expectations and preferences are evolving. According to VMware, almost half of UK consumers prefer to engage with banks via apps rather than in person, while two-fifths believe their smartphone is more important than their wallet in powering financial transactions.

The availability of mobile applications and online experiences is increasingly important to customers. They want to access their accounts through mobile and connected devices and to pay for goods with a tap on their wearables.

Furthermore, over half of consumers would switch to a competitor if their digital experience does not live up to expectations – only 10 percent of those surveyed would remain loyal to their existing FIs, according to VMware.

Given the direction of travel in the industry, financial institutions (FIs) need to have a clear roadmap for technology and innovation. It is not enough to simply devise a digital strategy; instead, financial services firms need to have a business strategy focused on thriving in a fully digital world.