BANKING STRATEGIES
Case Study: Product Innovation at Bank of America
By Cindy Murray
What financial institutions can learn from inventions and innovations in other industries.
owhere is innovation more essential to survival than in the banking industry. In the payments domain, for example, nonbank competitors less constrained by bank regulations and therefore more agile are changing the banking industry’s grip on the public perception of banks as the only trusted brand for holding and moving money. However, innovation is challenging for banks. Many products, like payments, are a commodity. A vast number of products and a complex infrastructure require continual upgrades to keep apace with technology advancements and comply with
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We every stage of the product innovation process. There incorporated an electronic sticky note with email capaare a number of ways in which we directly engage bility in CashPro, so that clients could maintain their our customers throughout product development. work-flow process in the online environment. We use a range of formal techniques for idea generation. Formal techniques focus on gaining deepened client insight and are important when Amplify the we have limited information about an opportunity Voice of the Customer and the related customer need. Formal idea mining typically requires expertise through our internal innovation group or external specialized vendors. CashPro is a great example both of innovating in Ethnographic research is an important tool for increments to improve a product over time and of engenerating innovation ideas. Observation provides gaging clients in an evolutionary innovation process. insight into customer behavior and needs. ReturnWith CashPro, we established a customer advisory ing to the Oreo example, the idea for a bite-sized board, which has been closely involved in the prodcookie began to germinate when Nabisco researchers uct’s development. With CashPro, the innovation watched young children grapple with dunking the process becomes part of the client experience, thereby full-sized cookie in smaller cups.
Most new entrants are technology firms of all sizes that are looking revolutionize the banking industry as they revolutionized almost all major industries in the past 15 years. These firms apply concepts such as artificial intelligence and 24/7 connectivity to create innovative ways of performing tailored banking operations at lower cost and with greater convenience for the consumer. Retail banks however have an opportunity to maintain relevancy over the upcoming decade, but in order to do so they must harness technology either through in house innovation or partnerships to accentuate they’re current competitive advantages such as personalized
This is the first case study report for the course ED5317: Strategies for Managing Innovation that is based on the Harvard Business School case titled ‘Design Thinking and Innovation at Apple’. The report consists of the following question:
Introduction: The following business paper will conduct a SWOT analysis, VIRN analysis, a determination of an generic strategy, and finish with a recommendation for the Canadian Imperial Bank of Canada. When determining the analysis of the above statements, internal and external factors are considered when making conclusions. This paper will answer the questions of what the company should focus on, where the strengths currently are, if opportunity is available, and what the organization should focus on in order to compete more effectively against its competitors. This paper will also underline the key threats that the organization must be aware of, and the reasoning to why remaining innovation and the providing differentiated products is essential for the bank.
The change and advancement in technology are a significant factor in the banking business. Technology has led to tremendous improvements in this industry. Since the commencement of this millennium, people have shown great love for their mobile phones (Ozaki 1992). It necessitated the invention of mobile applications (APPs). From the introduction of the mobile banking, APP people rarely go to the banks. All their transactions get done simply by the stroke of a finger. Businesses face a challenge of adapting to changes in the technology sector. Mobile banking either through actual investing or any other means is on the rise.
Bank of America believes successful global leadership development is a mix of three essentials: global consistencies, cultural distinctive and individual ownership. Aligning, teaching and developing key leaders from across the enterprise are main facts of their consistent approach. According tone of the articles of Carter (founder and CEO of Best Practice Institute and the author of several books, including Best Practices in Leadership Development) at Talent Management’s web site, “Participants of their Accelerated Development Program include 80 to
With the smallest footprint of their three biggest competitors, the bank chose to differentiate their services based on mobile banking channels. These channels were more cost effective for both the bank and the customer which fit well with the bank’s philosophy of being the cheapest bank in South Africa and offered the opportunity for more margin absorption if they could change the customer’s behaviour towards these channels. By consequence, the choice to differentiate on mobile channels required competencies that relate to technology. Both of these choices required innovation; to make switching less cumbersome, exploitation of existing processes and technology was required, and to enhance their value proposition they required radical innovation. Over time, FNB’s strategic agility led to the deliberate incentivisation of customers to use mobile channels and the subsequent development of the “customer ecosystem” strategy.
In fact, we can trace the true origins of the most recent surge of technological developments as far back as thirty five years ago when the Atari 2600 was released and the impact that it had on game programming. In the early 1990’s we saw pagers take off and the birth of computer games as well with the success of computers. However, it wasn’t until the mid to late 1990’s when the Internet took off that the changes in technology were happening more in succession. For example, the flip phone was only about a decade ago and in the past eight years, the iPhone changed everything as technology started merging to include Internet, GPS, camera and video capabilities on the smartphones. Network of computers and the Internet that connects them to each other from the basic technological structure that underlies virtually all-electronic commerce (Schneider, 2015, p. 61). Technology has changed the way the world does business and the way we now communicate and interact with each other. Technology’s growth has translated into a shift from traditional business and the way it is conducted. The role of technology has allowed a leading bank such as JPMorgan Chase to implement innovative use of new technology to increase revenue. For example, JPMorgan Chase reported that 41 percent of its customers that used mobile banking in 2013 alone to make their deposits. JPMorgan Chase views technology as an opportunity to improve their relationship
The cost is identified as an investment concern. Customers will often opt for an option that is viable which refers to that ventures that which offers a strong performance-to-price advantage. Fenu &Pau (2015) analyze the tendencies and features of mobile banking applications. The journal establishes that banks invest more on mobility through enhancing mobile applications by offering mobile payment services that are new. The feature of the device being used also play a role. In some cases, certain mobile may have limited capability of inputting data or displaying it making implementations of mobile banking applications more
The banking industry is ripe for innovation. We need to grow through value creation and excellent service that is appreciated by customers as opposed to price alone. — Milton Jones, president, Georgia Banking Group “I wonder if we’re being ‘overrewarded’!” exclaimed Warren Butler to Amy Brady, the executive responsible for Bank of America’s Innovation & Development (I&D) Team in Atlanta, Georgia. As an executive in the consumer bank’s quality and productivity group, Butler led innovation and process change in Brady’s group, which was responsible for testing new product and service concepts for the th bank’s branches. In the company’s elegant 55 floor conference room
Many modern nations have pursued a path to greater and greater deregulation over the last decades in an effort to make their countries more competitive in the global market (Janow, 1996). This level of competitiveness has undoubtedly led to significant advances in product innovations from the private sector. Examples some innovations that occurred in the last ten years through deregulation of the financial sector include such items as debit cards, interest
An overview of the principal types of deposits offered by TD Bank personal, small business, commercial banking and investing and competitiveness of these offerings are the strategic weapons or differentiating product features (quality, price, service), which allow some companies within an industry to perform better than others. Industry standards and regulation often set minimum requirements for the industry an as key inputs to the industry, plays a significant role in determining the success of individual companies within the industry. It is not divergent to the use and adoption of rapidly technological advances, which are keys to every firm’s competitive positioning. In fact TD Bank indicates competitiveness of these offerings is terms of price, quality and service, tracking the competitor’s strengths and weakness. By comparing their strengths to its own clearly see where the threats future business may lie. By examining weaknesses, find direct opportunities capitalize on.
Technological advancement has had a gigantic effect in the banking industry. Over the past few decades, the financial services industry has changed considerably with banking transforming from the pen and paper method to the computers and internet method. The pen and paper method took weeks or even months for the transaction to be eventually completed, and then the dramatic introduction of the computer and internet method which changed that time frame to only a matter of seconds to be completed, which reduced the amount of time and labor needed to complete a transaction significantly. Banking is considered one of the most important economic sectors with it being severely influential and responsive to any little change, whether it is domestic or international. Some extreme changes that were brought about by the development of this new technology turned into a globalized nature for the financial services industry. One stroke of a key on a computer could and would change a person 's life extensively or even have a global impact. The new technologies that were created and introduced changed how the consumers managed their money from that time on. Technology has helped to protect peoples’ hard earned money and make it much more impossible for people to be able to write out bad checks or even holding up a bank. The advancement in technology however, also came with some security risks as most things do, that could affect the money that people trusted with the bank and
o Technology: In a technology driven world, it is important that banks in the industry ‘move with the time’. With respect to the big four, these banks have now introduced internet and cell phone banking as well as banking from the ATM; making the industry highly competitive. This technology aims to make banking for the client simple and accessible from anywhere. This new technology is aimed, once again, at the medium to high-income earning clients, who have access to these technologies.
The release of new products for the industry proved to have a neutral effect for the KHMJ Company. While the company managed to mirror the market share upgrades of competitors, the firm unanimously agreed on being less than pleased with the lack of relative movement along the industry performance standings. The industry as a whole did a poor job at researching the marketplace and its needs as all companies decided to enter the youth segment rather than diversifying and satisfying the road bike segment. This left an entire market untapped and free for the taking. KHMJ could have capitalized on this opportunity by communicating better with competitors and securing more accurate data. The best indicator for to show the
We have mention Branch and ATM network, Customer Service and Innovation as one of the key success factors for a bank, but all these will be unfruitful if there is no proper ICT platform to support them. To be able to take full advantage of the opportunities in the market and combat threats a bank must have an up to date strategically planned and implemented ICT infrastructure. In 2010 CRDB and NBC made entire bank systems upgrades, announcements were made on Radio, TV, Newspapers of the changes and their implication to the services offered. This is an example of organizations that have