Introducing Successful Financial Innovations: Rewriting the Rules in Light of the Global Financial Crisis
Since the 1980s, banks and financial service institutions have been running in an endless race of innovation to cope with the advancing technology, the fierce competition, and the more sophisticated and demanding customers. In order to guide their innovation efforts, several researches were conducted to identify the success and failure factors of new financial services. These mainly included organizational factors, marketplace factors and new service development process factors. They almost all emphasized the importance of customer and market orientation as a response to the highly perceptual and intangible characteristics of financial services. However, they deemphasized the critical characteristics of high involvement of risk and close correlation with the economic conditions, a factor that heavily contributed to the Global financial Crisis of 2008. This paper reviews the success and failure factors of new financial services. It then adds new perspectives emerging from the analysis of the role of innovation in the global financial crisis.
[1] Frame, W. Scott & White, Lawrance J. (2002). "Empirical studies of
financial innovation: lots of talks, little action?" Federal Reserve Bank
of Atlanta. Working Paper 2002-12.
[2] Gardner, Edward, Howcroft, Barry & Williams, Jonathan (1999). "The
new retail banking revolution". The Service Industries Journal, Vol. 19,
No. 2, 83-100.
[3] Oldenboom, Nicola & Abratt, Russell (2000). "Success and failure
factors in developing new banking and insurance services in South
Africa". International Journal of Bank Marketing. 18/5: 233-245.
[4] Spitler, Rick (2005). "The new survival skills". ABA Banking Journal,
Vol. 97, Issue 2, 58-61.
[5] Alam, Ian & Perry, Chad (2002). "A customer oriented new service
development process". Journal of Services Marketing, Vol. 16, 515-534.
[6] Shah, Anup (2009). "Global financial crisis 2008". Retrieved on January
2009 from http://www.globalissues.org/article/768/global-financialcrisis
[7] Global financial crisis: responding today, securing tomorrow (2008).
Background Paper: The World Bank Group
[8] Voss, C.A. (1992). "Measurement of innovation and first mover
advantage". Journal of Applied Corporate Finance, Vol. 5, No. 1, pp. 83-
7.
[9] Johne, Axel & Storey, Chris (1998). "New Service Development: a
review of the Literature and Annotated Bibliography". European Journal
of Marketing. Vol. 32, No. 3/4, 184-251.
[10] Edgett, Scott & Snow, Kim (1997). "Benchmarking measures of
customer satisfaction, quality and performance for new financial service
products". Journal of Product and Brand Management, Vol. 6, No. 4,
250-259.
[11] Storey, Christopher & Easingwood, Christopher (1996). "Determinants
of new product performance, a study in the financial services sector".
International Journal of Service Industry Management. Vol. 7 no. 1: 32-
55.
[12] Meidan, Arthur (1996). Marketing financial services. Great Britain:
Antony Rowe Ltd.
[13] McGoldrick, Peter J. and Greenland, S.J. (1994). Retailing of financial
services. McGraw Hill book Co, London.
[14] Cowell, Donald W (1988). "New service development". Journal of
Marketing Management. Vol. 3, No. 3: 296-312.
[15] Martin JR, Claude R & Horne, David A. (1995). "Level of success
inputs for service innovation in the same firm". International Journal of
Service Industry Management, Vol. 6, No. 4: 40-56.
[16] Laurino, John A (1993). "Developing your own niche". Bank Marketing.
Vol. 25, Issue 7, p.2.
[17] Lasheen, Abdel Aaty (1992). "Tasweek al khadamat al masrefia".
Unpublished Masters Thesis. Cairo University. Egypt (in Arabic).
[18] Costanzo L.A., Keasey, K. & Short, H. (2003). "A strategic approach to
the study of innovation in the financial services industry: the case of
telephone banking". Journal of Marketing Management. Vol. 19: 259-
281.
[19] Andrew, Kenneth (1986). The Bank Marketing Handbook. Woodhead-
Faulkner Ltd. England.
[20] Demoranville, Carol W., Kaminski, Peter, Ridnour, Rick E. & Young,
Tom (1999). "How Sandwich State Bank took a market orientation to
face the changes in traditional community banking". Journal of Retail
Banking Services. Vol. 21 Issue 2.
[21] Bortree, William H (1991). "Consumer input: the key to new product
success". Bankers Magazine. Vol. 174, Issue 2, 14-20.
[22] El Khodeiry, Mohsen Ahmed (1999). El Tasweek al Masrafy. Cairo:
Itrac Publishing and Distribution Company (in Arabic).
[23] Lievens, Annoul; Moenaert, Rudy K; & S'Jegers, Rosette (1999)."
Linking communication to innovation success in the financial service
industry: A case study analysis". International Journal of Service
Industry Management. Vol. 10, No.1: 23-47.
[24] Gentle, Chris & Contri, Bob (2005) "Glittering Prize: How Financial
Institutions Can Drive Growth through Process and Service Innovation",
Deloitte Research.
[25] BAI, UNISYS & Wharton Financial Institutions Center (2001).
Competition, innovation and strategy in the financial services industry.
http// www.ai.org/competition (2004).
[26] Harris, Lisa (2002). "The learning organization - myth or reality.
Examples from the UK retail banking industry" . The Learning
Organization, Vol. 9, No. 2 pp. 78-88.
[27] Stuart, F. Ian (1998). "The influence of organizational culture and
internal politics on new service design and introduction". International
Journal of Service Industry Management. Vol. 9 No. 5: 469-489.
[28] Sciulli, Lisa M. (1998). "How organizational structure influences
success in various types of innovation". Journal of Retail Banking
Services. Vol. 20 Issue 1.
[29] Edgett, Scott (1994). "The traits of successful new service
development". Journal of Service Marketing, Vol. 8 No. 3: 40-49.
[30] Edgett, Scott & Parkison, Steven (1994). "The development of new
financial services: identifying determinants of success and failure".
International Journal of Service Industry Management. Vol. 5 No. 4: 24-
38.
[31] Frei, Frances X., Harket, Patrick T. & Hunter, Larry W. (1998).
"Innovation in retail banking". http//
fic.wharton.upenn.edu/fic/forumpapers.html
[32] Harborne, Paul & Johne, Axel (2002). "Many leaders make light work in
banking innovation projects". Journal of Financial Services Marketing.
Vol. 6 issue 3: 267-280.
[33] Cooper, Robert G. & Edgett, Scott J. (1996). "Critical success factors for
new financial services". Marketing Management. Fall 1996 : 26-37.
[34] Avlonitis, George J. & Papastathopoulou, Paulina (2001). "The
development activities of innovative and non innovative new retail
financial products: implications for success" Journal of Marketing
Management. Vol. 17: 705-738.
[35] Abdel Aziz, Hadia H. (2008). Factors Affecting Customers-- Decisions
to buy New Retail Banking Services: Their Implications on the New
Service Development Process, Pertelang GmbH, Frankfurt.
[36] Zahn, E, Foschiani, F. Lienhard, P. & Meyer, S. (2003).
"Kundenorientierte servicestrategien f├╝r hybride produkte". in: Kersten,
W. (Hrsgj: E-Collaboration ÔÇö Prozessoptimierung in der
WertschUpfungs kette, Wiesbaden, 2003, S. 133-157.
[37] Scheuing, Eberhard E. & Johnson, Eugene M (1989). "A proposed
model for new service development". The Journal of Services
Marketing. Vol. 3, No. 2: 25-34.
[38] "The global financial crisis" (2008). Edited Text of an address by Angel
Gurria. New Zealand International Review. pp. 17-20.
[39] "It started like 1929" (2008). Societe Generale Cross Assets Research.
The Societe Generale Group.
[40] Foo, Check-Teck (2008). "Conceptual lessons on financial strategy
following the US sub-prime crisis". The Journal of Risk Finance, Vol. 9,
No. 3, pp 292-302.
[41] Orlowski, Lucjan T. (2008). "Stages of the 2007/2008 global financial
crisis: Is there a wandering asset- price bubble?" Discussion Paper in:
Economicshttp://www.economics-ejournal.org/economics/
discussionpapers/2008-43
[42] Stiglitz, Joseph (2008), "The fruit of hypocrisy: Dishonesty in the
finance sector dragged us here, and Washington looks ill-equipped to
guide us out", The Guardian, September 16, 2008.
[1] Frame, W. Scott & White, Lawrance J. (2002). "Empirical studies of
financial innovation: lots of talks, little action?" Federal Reserve Bank
of Atlanta. Working Paper 2002-12.
[2] Gardner, Edward, Howcroft, Barry & Williams, Jonathan (1999). "The
new retail banking revolution". The Service Industries Journal, Vol. 19,
No. 2, 83-100.
[3] Oldenboom, Nicola & Abratt, Russell (2000). "Success and failure
factors in developing new banking and insurance services in South
Africa". International Journal of Bank Marketing. 18/5: 233-245.
[4] Spitler, Rick (2005). "The new survival skills". ABA Banking Journal,
Vol. 97, Issue 2, 58-61.
[5] Alam, Ian & Perry, Chad (2002). "A customer oriented new service
development process". Journal of Services Marketing, Vol. 16, 515-534.
[6] Shah, Anup (2009). "Global financial crisis 2008". Retrieved on January
2009 from http://www.globalissues.org/article/768/global-financialcrisis
[7] Global financial crisis: responding today, securing tomorrow (2008).
Background Paper: The World Bank Group
[8] Voss, C.A. (1992). "Measurement of innovation and first mover
advantage". Journal of Applied Corporate Finance, Vol. 5, No. 1, pp. 83-
7.
[9] Johne, Axel & Storey, Chris (1998). "New Service Development: a
review of the Literature and Annotated Bibliography". European Journal
of Marketing. Vol. 32, No. 3/4, 184-251.
[10] Edgett, Scott & Snow, Kim (1997). "Benchmarking measures of
customer satisfaction, quality and performance for new financial service
products". Journal of Product and Brand Management, Vol. 6, No. 4,
250-259.
[11] Storey, Christopher & Easingwood, Christopher (1996). "Determinants
of new product performance, a study in the financial services sector".
International Journal of Service Industry Management. Vol. 7 no. 1: 32-
55.
[12] Meidan, Arthur (1996). Marketing financial services. Great Britain:
Antony Rowe Ltd.
[13] McGoldrick, Peter J. and Greenland, S.J. (1994). Retailing of financial
services. McGraw Hill book Co, London.
[14] Cowell, Donald W (1988). "New service development". Journal of
Marketing Management. Vol. 3, No. 3: 296-312.
[15] Martin JR, Claude R & Horne, David A. (1995). "Level of success
inputs for service innovation in the same firm". International Journal of
Service Industry Management, Vol. 6, No. 4: 40-56.
[16] Laurino, John A (1993). "Developing your own niche". Bank Marketing.
Vol. 25, Issue 7, p.2.
[17] Lasheen, Abdel Aaty (1992). "Tasweek al khadamat al masrefia".
Unpublished Masters Thesis. Cairo University. Egypt (in Arabic).
[18] Costanzo L.A., Keasey, K. & Short, H. (2003). "A strategic approach to
the study of innovation in the financial services industry: the case of
telephone banking". Journal of Marketing Management. Vol. 19: 259-
281.
[19] Andrew, Kenneth (1986). The Bank Marketing Handbook. Woodhead-
Faulkner Ltd. England.
[20] Demoranville, Carol W., Kaminski, Peter, Ridnour, Rick E. & Young,
Tom (1999). "How Sandwich State Bank took a market orientation to
face the changes in traditional community banking". Journal of Retail
Banking Services. Vol. 21 Issue 2.
[21] Bortree, William H (1991). "Consumer input: the key to new product
success". Bankers Magazine. Vol. 174, Issue 2, 14-20.
[22] El Khodeiry, Mohsen Ahmed (1999). El Tasweek al Masrafy. Cairo:
Itrac Publishing and Distribution Company (in Arabic).
[23] Lievens, Annoul; Moenaert, Rudy K; & S'Jegers, Rosette (1999)."
Linking communication to innovation success in the financial service
industry: A case study analysis". International Journal of Service
Industry Management. Vol. 10, No.1: 23-47.
[24] Gentle, Chris & Contri, Bob (2005) "Glittering Prize: How Financial
Institutions Can Drive Growth through Process and Service Innovation",
Deloitte Research.
[25] BAI, UNISYS & Wharton Financial Institutions Center (2001).
Competition, innovation and strategy in the financial services industry.
http// www.ai.org/competition (2004).
[26] Harris, Lisa (2002). "The learning organization - myth or reality.
Examples from the UK retail banking industry" . The Learning
Organization, Vol. 9, No. 2 pp. 78-88.
[27] Stuart, F. Ian (1998). "The influence of organizational culture and
internal politics on new service design and introduction". International
Journal of Service Industry Management. Vol. 9 No. 5: 469-489.
[28] Sciulli, Lisa M. (1998). "How organizational structure influences
success in various types of innovation". Journal of Retail Banking
Services. Vol. 20 Issue 1.
[29] Edgett, Scott (1994). "The traits of successful new service
development". Journal of Service Marketing, Vol. 8 No. 3: 40-49.
[30] Edgett, Scott & Parkison, Steven (1994). "The development of new
financial services: identifying determinants of success and failure".
International Journal of Service Industry Management. Vol. 5 No. 4: 24-
38.
[31] Frei, Frances X., Harket, Patrick T. & Hunter, Larry W. (1998).
"Innovation in retail banking". http//
fic.wharton.upenn.edu/fic/forumpapers.html
[32] Harborne, Paul & Johne, Axel (2002). "Many leaders make light work in
banking innovation projects". Journal of Financial Services Marketing.
Vol. 6 issue 3: 267-280.
[33] Cooper, Robert G. & Edgett, Scott J. (1996). "Critical success factors for
new financial services". Marketing Management. Fall 1996 : 26-37.
[34] Avlonitis, George J. & Papastathopoulou, Paulina (2001). "The
development activities of innovative and non innovative new retail
financial products: implications for success" Journal of Marketing
Management. Vol. 17: 705-738.
[35] Abdel Aziz, Hadia H. (2008). Factors Affecting Customers-- Decisions
to buy New Retail Banking Services: Their Implications on the New
Service Development Process, Pertelang GmbH, Frankfurt.
[36] Zahn, E, Foschiani, F. Lienhard, P. & Meyer, S. (2003).
"Kundenorientierte servicestrategien f├╝r hybride produkte". in: Kersten,
W. (Hrsgj: E-Collaboration ÔÇö Prozessoptimierung in der
WertschUpfungs kette, Wiesbaden, 2003, S. 133-157.
[37] Scheuing, Eberhard E. & Johnson, Eugene M (1989). "A proposed
model for new service development". The Journal of Services
Marketing. Vol. 3, No. 2: 25-34.
[38] "The global financial crisis" (2008). Edited Text of an address by Angel
Gurria. New Zealand International Review. pp. 17-20.
[39] "It started like 1929" (2008). Societe Generale Cross Assets Research.
The Societe Generale Group.
[40] Foo, Check-Teck (2008). "Conceptual lessons on financial strategy
following the US sub-prime crisis". The Journal of Risk Finance, Vol. 9,
No. 3, pp 292-302.
[41] Orlowski, Lucjan T. (2008). "Stages of the 2007/2008 global financial
crisis: Is there a wandering asset- price bubble?" Discussion Paper in:
Economicshttp://www.economics-ejournal.org/economics/
discussionpapers/2008-43
[42] Stiglitz, Joseph (2008), "The fruit of hypocrisy: Dishonesty in the
finance sector dragged us here, and Washington looks ill-equipped to
guide us out", The Guardian, September 16, 2008.
@article{"International Journal of Business, Human and Social Sciences:56572", author = "Abdel Aziz and Hadia H.", title = "Introducing Successful Financial Innovations: Rewriting the Rules in Light of the Global Financial Crisis", abstract = "Since the 1980s, banks and financial service institutions have been running in an endless race of innovation to cope with the advancing technology, the fierce competition, and the more sophisticated and demanding customers. In order to guide their innovation efforts, several researches were conducted to identify the success and failure factors of new financial services. These mainly included organizational factors, marketplace factors and new service development process factors. They almost all emphasized the importance of customer and market orientation as a response to the highly perceptual and intangible characteristics of financial services. However, they deemphasized the critical characteristics of high involvement of risk and close correlation with the economic conditions, a factor that heavily contributed to the Global financial Crisis of 2008. This paper reviews the success and failure factors of new financial services. It then adds new perspectives emerging from the analysis of the role of innovation in the global financial crisis.
", keywords = "Financial innovation, global financial crisis, lessons learned from global financial crisis, success factors in financial innovation.", volume = "3", number = "6", pages = "894-7", }
