technology but in banking however it takes on additional dimension and that of the process. The processes surrounding a new product or technology are as important as their features and could add significant value by way of cost saving, improved productivity and so on. Most of these process innovation come through technological advancement, just see the face of banking today, Internet has been the forefront of channel Innovation heralding first online and then direct banking. The graph clearly shows the cost effectiveness achieved by technological advancement in banking channel. Courtesy: KPMG’s study on technology enabled banking transformation. ZOPA: a disruptive innovation In 2005 first of its kind a peer to peer lending company ZOPA was launched. Which acts as ‘Man in the middle’ and facilitates to loan process? Here borrower’s credibility is graded by a reference agency called Equifax and background checks for lenders are also done to ensure that they are bonafide. And a loan ranging from 2000-15000 pounds can be availed. In case of defaults lender’s detail are handed over to a third party agency which follows the same processes as typical High street banks for recovery. ZOPA has expanded its operations from UK to Italy and Japan as well. In the United States, several Credit Unions have tied up with similar online lending platforms. While the jury is still out on whether social lending is a serious threat to conventional banking, there is no doubt that its simple and cost effective proposition holds much appeal.
Global Recession and present Post the fall of Lehman Brothers and subprime crisis banks have been taking very conservative approach over the last two years as many have been consolidating their portfolio and innovating products had lost its importance and has taken a back seat. We have not seen many innovative products designed for customers during the consolidation phase, and rightly so, as the primary focus of Banks has been in cleansing their portfolio and tightening credit extension apart from being extremely guarded in getting only credit worthy customers in their books. Below diagram (Fig -3, Source – Asian Banker Research) shows sustainability of types of bank post subprime crisis. As per the current trend the Force of change in the banking industry is the rapid evolution of consumer wants and desires. Consumers are demanding anytime-anywhere delivery of financial services along with an increased variety in deposit and investment products. There are institutions which are investing on innovation. A survey was done by Infosys and the Asian Banker Research to gauge the change in investment done on innovation by banks. The graph (Fig-4) shows that in Southeast Asia around 59% banks have increased investment on innovation. Like the Singapore based Overseas Chinese Banking Corporation Limited (OCBC) was awarded as the most Innovative Bank in Asia Pacific Region at Banking & Payment Asia (BPA) Trailblazer Awards 2012 for their efforts in autom ?????????????????????????????????????????????????????????????
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