Firms need to harness technology
and keep innovating to retain
the loyalty of customers and
prevent reputational damage to
their brand,
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.
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.
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