The Importance Of Innovation In Business

Innovation is applying better solutions to meet new requirements, unarticulated needs, or existing market needs which are accomplished through new and efficient products, processes, services, technologies, or ideas.“An innovation is something original, new, and important in whatever field that breaks in to or obtains a foothold in a market or society” (Lundvall, 2007). It is the process of translating an idea or invention into a good or service that creates value or for which customers will pay. To be called an innovation, an idea must be economic and should satisfy a specific need. Innovation involves deliberate application of information, imagination and initiative in deriving greater or different values from resources, and includes all processes

Prudential norms of international standards to promote and enhance the efficiency of banks have also been implemented along with several measures in the areas of debt recovery, asset reconstruction and securitization, etc to strengthen the process of institution building. But with massive and speedy expansion and diversification of banking, there have been strains where now banks face increasing competition from non-banks not only in the domestic market but in the international markets also. Emerging private and foreign banks have the clout of massive capital, lean personnel component, the expertise in developing sophisticated financial products and use of state-of-the-art technology which would ultimately enhance the quality and content of banking. Above this, the current scenario of increased regulations and a global economic slowdown is challenging the profitability of retail banking operations around the world where regulatory compliance has added to the cost of doing business and is impacting sources of fee income upon which banks have traditionally relied creating enormous pressure on bank interest margins. Thus to survive and flourish, banks will need to renew their operating models and develop innovative services or products that differentiate themselves from the competition by building core strengths and unique characteristics to satisfy existing account holders while attracting the next generation of customers. And with emersion of technology banking is becoming boundary less & virtual with a 24 x 7 model. Banks now have a time tested way of targeting & servicing clients and have also readily embraced Customer Relationship Management (CRM), which is customer centric, facilitated by the availability of superior technology making banks into complex organization, a