A bank product is a blend of either current, savings, or fixed deposits accounts. When creating this product those engaged do so following a process. More so, they must consider some factors when developing one. In this article, we discussed eight of them.
1. Bank strategy
When creating a banking product, those involved must consider the bank’s strategy. The product must align with this for it to succeed. If the institution is focused on investment as their core strategy business, then the products must be built around it.
2. The bank financial viability
Establishing a new product involves research and development. This involves huge capital expenditure in many cases. Such expenditure cannot be recouped within a short period of time. Therefore, the board members of the bank must consider the financial viability of the product as well as the ability of the institution to carry out the product development without affecting depositors’ funds.
3. Effective customers service team
Product success is directly related to a bank’s customer service team. Therefore, this factor must be given good thoughts before embarking on a new bank product. When customer service staff are effective, the likelihood of the new product’s success will be high.
4. Marketing ability of employees
If the bank has its strength in the marketing team, then launching a new product will be viable and successful. There must be a good feedback loop to help the team improve their marketing strategy, improve the bank product to satisfy clients needs. Also, instead of establishing a new product every time the product life cycle of the current bank product is in the decline stage, the marketing team can work on enhancing the product as if it is a new product.
5. Regulatory limit
In creating a product for a financial institution, considering regulation cannot be overemphasized. Only areas of concentrations allowed by the central bank can be utilized in creating a product. If a bank has a national license for example, it can provide products within the country alone. While microfinance banks are not allowed to create products relating to foreign exchange.
6. Bank's culture for innovationÂ
The spirit of innovation on the part of the board of directors and employees alike are important factors to consider before embarking product development. All members of the bank must be willing to embrace change. Innovative culture is one of the bedrock to growth and development.
7. Staff turnoverÂ
Rate of staff turnover tells more about a business. A high turnover rate of employees is a weakness to a bank. It simply implies that there are very few or no quality employees who understand the bank’s business. Therefore, it is not advisable for financial intermediaries to pursue new product development if they are faced with high staff turnover.
8. Flexible bank software
All banks have either an in-house management information system or an enterprise resource planning (ERP) software. ERPs are software purchased from a vendor such as the Bank One software used by many banks as well as microfinance institutions.Â
When developing a new bank product, the development team must ensure that the software can accommodate the product. Failing to find a right model that fits the software will lead to incorrect reporting of such products and this can affect both clients and management.
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