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Accelerating New Product Innovation in Banking

Earnix Team

October 28, 2021

  • Pricing
“Digital acceleration.” “Digital transformation.” “Business acceleration.” 

The banking world is abuzz with talk of how traditional banks can best compete with digital-only banks and financial services newcomers such as Google, Apple and Amazon. 

Traditional banks struggle with several key aspects of this race, but one that has proven particularly stubborn is the time required to bring new products to market. By some estimates, the average bank takes one to two years to introduce a new product, while agile, digitally-focused competitors can take as little as three months between recognizing a consumer need and addressing it with new products, features, or redesigned customer journeys. 

If banks hope to turn the tables on their nimbler competitors, they need to begin with one key move – to stop thinking like banks 

Traditionally, banks have relied on a product development cycle steeped in extensive market research, working with existing technology, and the traditional “waterfall” product development methodology. In other words, the exact opposite of the software companies they’re now competing against. 

In order to bring products and enhancements to market sooner, banks need to focus on five key things, and to do it now: 

  1. Build a Dedicated Digital Product Development Team


Nearly every bank today has someone with a title such as Vice President for Innovation or Head of Digital Transformation. Often brought in from the outside, this person is charged with making the bank “more digital,” and with accelerating time to market. 

Unfortunately, the rest of the product development team is often assigned from more traditional areas of the bank, or even worse, are merely on loan to the digital transformation team. While good-intentioned, they may be ill-suited for the task at hand. 

Step One – build a dedicated digital product development team, stocked with people whose resumes include a track record of successful digital product development, quick time to market, and smooth, well-coordinated product introductions.  

2. Adopt Agile Development Practices 

This will come naturally to the team, if you’ve hired the right people, because they likely have grown up in an agile development world. When you hear the team using terms such as “fail early” and “start that feature over on the next sprint,” try not to panic, and let them do their jobs. 

There is no doubt that the right people will ensure you will get to market sooner thanks to a sounder process. 

3. Don’t Over-Research the Market 

Again, this is something that will come naturally to product managers and to a product development team that is used to working in an agile development environment. The focus in an agile environment is to plunge ahead at various points, without the extensive market research banks are used to gathering. 

You and the market research team can help by being able to move quickly to test new features with the target market, even with the development process moving forward at high speed. If this proves a bottleneck to progress, assign a research person full-time to the team, or “fence off” that person to work exclusively with the development team. 

4. Employ Only Modern Technology 

Speed to market is seldom an end in and of itself. The products or services needed to address the market are likely being developed to address improvements in the customer experience (CX), such as delivering faster decisions in lending. 

For example, consumer decisioning has traditionally been based on credit scoring and statistical modeling of large groups of consumers. Avoid the temptation to assign the team the task of “improving” these 30-year-plus-old approaches. At best, you’ll be “nibbling around the edges” of existing methodologies, and reach a point of diminishing returns quite quickly. 

Instead, leapfrog to a solution that provides a full 360-degree view of individual customers whenever you want it. An advanced technological solution that allows for the development of precise, granular decisioning, with integrated simulation and optimization capabilities. 

You don’t need to know all the ins and outs of technologies such as artificial intelligence (AI) and machine learning (ML). The innovation team will know that this is the right approach – go with it. 

5. Take an Incremental Approach in One Area – Implementation 



The technology infrastructure found in most banks today has been stitched together from disparate systems and multiple vendors, some of it dating back 20 years or more. The product development team may be tempted to recommend “blowing it up,” and building new from the ground up. 

Nothing strikes fear in the hearts of IT people more than this sort of “rip and replace” philosophy, as they view it as prohibitively expensive, time-consuming, and disruptive. 

The practical, cost-effective alternative is a hybrid approach, one that allows for selectively replacing components of the technology stack as needed, but allowing those new components to work productively with existing infrastructure through the use of open application programming interfaces (APIs). In this way, modern technology can be leveraged to maximum effect, while older and cumbersome technologies are phased out and replaced over time. 

As a banking professional, you may have spent your entire career thinking like a banker – it’s only natural, and it’s not a bad thing, the vast majority of the time. Your focus on customer service, safety and security, and return on capital have stood you in good stead, and provided steady returns for your stakeholders. 

But when it comes to new product development (NPD), you need to begin to think more like your competitors, and not like a banker. It will pay massive dividends, and will propel the bank, your team, and your career to the next level. 

Earnix enables banks to accelerate the introduction of new products and innovate at speed. Proactively serving customers is now easier and faster, thanks to Earnix’s ability to deliver personalized banking packages through one single end-to-end platform. 


Check out this eBook to discover how to succeed in your Digital Transformation journey. Read Now.
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Earnix Team