The Banking sector, often seen as stable and conservative, is continuously changing under the influence of innovations. As financial technologies emerge and develop, banks should adapt not to remain competitive but to survive.
In this post, you will learn more about how innovations impact different stages of the banking product lifecycle – from introduction to decline.
What is Banking Product Lifecycle
Banking product lifecycle is the term that describes the stages that a product comes through – from appearing on paper to decline. The stages of the banking product lifecycle include introduction, growth, maturity, and decline. They help banks manage strategies at each stage to reach optimal performance and customer engagement.
Innovation and the Product Life Cycle in Banking
Innovation in the product lifecycle in the banking sector is the integration and implementation of new technologies, processes, and ideas on different stages of digital banking solutions. In this section, we’ll take a look at the role of innovation at each step of the product life cycle in the banking industry.
Introduction Stage
Innovation is most visible at the introduction stage of the banking product life cycle. Here, banks introduce new financial products or services to the market. Recent examples include blockchain-based products, peer-to-peer lending platforms, and advanced digital wallets.
For instance, the adoption of AI for personalized banking experiences represents a significant innovation, enhancing customer interaction without the need for physical branches. Banks that capitalize on such technologies can differentiate themselves early from competitors.
Growth Stage
As products gain acceptance and begin to see wider adoption, they enter the growth stage. Innovations such as mobile banking apps were once a novelty but now represent a standard offering across the sector. In this stage, banks focus on scaling up their technologies to accommodate growing customer numbers and transactions while ensuring security and regulatory compliance.
Banks also start optimizing and refining their offerings based on customer data and feedback, which can lead to incremental innovations that improve functionality and user experience.
Maturity Stage
At maturity stage, a product reaches a wide adoption and stable customer demand. However, during this stage, banks face significant challenges due to fierce competition and market saturation. Innovation at maturity stage are often about differentiation and the rise of effectiveness.
For instance, banks can implement tiered interest rates for savings accounts or enhanced customer service features in their apps to retain customers and attract new ones
Decline Stage
Eventually, every product faces a decline as customer interests shift and newer technologies render older offerings obsolete. Innovative banks often preemptively address declines through re-innovation—revamping existing products or launching entirely new ones that reflect the latest technological advancements and consumer expectations.
An example can be seen in how traditional banking services are increasingly being replaced with comprehensive, all-in-one financial platforms that integrate budgeting, investing, and crypto transactions.
To sum up, just like any other sector banking is under the wave of innovation. New technologies and services appear making banks and financial institutions adapt in order to survive on the financial scene.
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Article and permission to publish here provided by Oleksandr Kryvotsiuk. Originally written for Supply Chain Game Changer and published on April 22, 2024.
Cover image by Qubes Pictures from Pixabay.