Service Innovation In Banking

Service Innovation

Customer care through service innovation enhances the customer experience, addresses grievances and facilitates customer retention. Service innovation makes necessary changes to a product line to attract more customers as well as consumers. For innovation in service sometimes the existing products that are likely to be in demand of the customers or the introduction of new products to an existing line that allows the company to move into newer consumer niche markets are enhanced which gives an edge to the company over their competition and it also increases the efficiency of the company in their operational structure by changing the internal structure so that waste is eliminated, production is increased, and customer orders

It results in lowering the operating costs as well as delivering the goods quickly and reliably which increases the revenue of the banking institution. Further, through service innovation, mechanisms are created to allow easy communication between customers and those in the bank that can assist with questions or concerns. When done with caution, service innovation increases the general operation of the company increasing customer loyalty and demand for the products offered in the marketplace by the banks (Schumpeter, 2006). The most important aim to achieve through service innovation is customer satisfaction which is based on service delivery level and it is very crucial for product differentiation and developing strong relationship with customers based on different aspect like economy or psychology. In the context of the service sector, relationship marketing has been defined as attracting, maintaining and enhancing customer satisfaction either to achieve increased loyalty of profitable customers

NEFT- National Electronic Funds Transfer (NEFT) is a nation-wide payment system to facilitate one-to-one funds transfer where individuals, firms and corporate can electronically transfer funds from any bank branch to any individual, firm or corporate having an account with any other bank branch in the country if they are participating in the Scheme. Even individuals without a bank account can deposit cash at the NEFT-enabled branches with instructions to transfer funds using NEFT where the cash remittances will have upper limit restriction of Rs. 50, 000/- for one transaction. Also such customers have to furnish full details including complete address, telephone number, etc. This is a very simple, secure, safe, fast and cost effective way to transfer funds (especially for Retail remittances).

3. RTGS - Real Time Gross Settlement system (RTGS) is a system through which electronics instructions can be given by banks to transfer funds from their account to the account of another bank. The RTGS system is maintained and operated by the RBI and provides a means of efficient and faster funds transfer among banks facilitating their financial operations. Here the funds transfer between banks takes place on a 'Real Time' basis. Therefore, money can reach the beneficiary instantaneously and the beneficiary's bank has the responsibility to credit the beneficiary's account within two