The term incremental innovation doesn’t begin to do justice to its potential. Yes! Incremental innovation is about gradual improvement rather than earth-shattering change, but that doesn’t make it any less effective as a weapon of competitive differentiation.

Here’s how, by making simple and quick changes to products and processes or the usage of existing technology, banks can make their offerings appear more alluring than that of their rivals.

Go direct; beat them on their own turf. By extending Internet banking into direct banking, financial institutions can make a quick and inexpensive entry into new markets to either challenge incumbents on their own turf or raise entry barriers for future entrants. What’s more, since a single technical environment can be repeatedly exported to different parts of the globe, this innovation offers sustained competitive advantage.

Do more online.  When overloaded, a call centre helpdesk becomes part of the problem, rather than the solution.  Hence, most banks have found it necessary to expand customer service capability through other means such as a web chat facility.  With unified communications technology, a bank can upgrade a routine audio-visual web chat into a remote advisory facility using which, its agents can share screens with callers and walk them through the discussion. So while the competition is still fighting problems, this bank is offering valuable advice to customers.

Make the right bundles. Although product bundling is not a new idea, its delivery can be improved through innovative right-selling, which means pitching the right product to the right customer at the right time.  In this age of commoditisation, a bank can taste greater success with an identical product combo simply by selling it smarter than the competition.

Get social, get closer. While the rest of the world has jumped on to the social networking bandwagon, banks are still sitting on the fence. Could there be a better opportunity to interact one-on-one with customers and feel their heartbeat? By being out there in the middle, listening to people as they speak, resolving their problems, seeking their opinion and even co-creating with them, a bank can get closer to customers and start to regain their trust, which is the ultimate competitive advantage.

Also read:
Competitive Advantage from Innovative Management Strategies