The value that banks deliver to customers is changing – that is one of the main currents that runs through Joseph DiVanna’s excellent Redefining Financial Services. I’ve been reading this book (and a few others of DiVanna’s) to better understand where my own company, Zafin Labs, fits into the value proposition of banking services in general.

Historically speaking, banks have come a long way. At the dawn of modern banking, individuals existed to reduce risk and make international trading possible. In its most basic form, these individuals were proto-bankers – entrepreneurs who saw a need in the marketplace and solved it through valuable networks and early foreign exchange contracts. What has happened since is that this traditional value proposition in banking has literally decreased in value, as now such technology can be licensed or purchased – for example we can see this in the rise of online only banks. 

One way that banks can redefine and thereby increase the actual value of the services they deliver is through dynamic or relationship pricing. While this kind of technology is less exciting than say NFC, one thing that is true is that it can increase the value of the relationship between bank and customer. One problem banks often face is that they want to innovate quickly, for example by offering new products and bundles to newly identified segments, but they lack an innovation layer in their core systems. 

“…small businesses – especially one- or two-person shops or home-based freelancers – are not always well suited to a bank’s product and service offerings, which are laden with fees designed for larger retail and corporate clients.”

~ Joseph DiVanna, Redefining Financial Services, page 94.

This kind of problem is what drove us to create pricing and billing solutions for banks. We thought, what if a bank could innovate quickly? What if they could design the right products for the right customers? We built systems like these so that banks could increase the value they deliver to customers through their ongoing relationship.

What do you think? Is new product development, bundling and packaging an exciting area for banks to innovate within? What other IT innovations will we see in the coming years?