Skip to main content
SpringerLink
Log in

Technology-Driven Service Innovation in the Banking Industry

  • Chapter
  • First Online:
The Handbook of Service Innovation

Abstract

Business-to-business and consumer-to-business transactions in the banking industry have witnessed a dramatic shift in the method of payment over the last two decades. This rapid growth had been initially fuelled by the early adoption of electronic payments such as credit and debit cards but now with the advent of mobile and internet technologies, non-cash transactions have grown even more rapidly. These technological developments have spurred a range of service innovations within the banking industry that has not only improved consumer convenience and reduced staffing and bank operating costs, but also increased the need for greater vigilance around security and fraud detection. This rapidly changing technology is also facilitating the entry of new payment providers in the financial sector with innovative products to meet the changing needs of consumers and businesses. The consequence is a rapidly changing banking industry.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 109.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 139.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 199.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Notes

  1. 1.

    EFTPOS in Australia is owned by the major financial initiations that are members of the Australian payments system.

References

  • ABA (2011) History of banking. Australian Bankers Association Inc. http://www.bankers.asn.au/Banks-of-Australia/History-of-Banks

  • ABA (2013) Economics contribution of the finance and insurance industry. http://www.bankers.asn.au/ArticleDocuments/148/ABA116850v1Website_Economic_Contribution_July_2013.pdf.aspx

  • Abbott M, Wu S, Wang WC (2013) The productivity and performance of Australia’s major banks since deregulation. J Econ Finance 37:122–135

    Article  Google Scholar 

  • ABS (2013) Australian Bureau of Statistics cat no. 5206.0—Australian National Accounts: National Income, Expenditure and Product, Dec 2013, Table 6, Gross Value Added by Industry, chain volume measured. Accessed 5 Mar 2014

    Google Scholar 

  • Adamson I, Chan KM, Handford D (2003) Relationship marketing: customer commitment and trust as a strategy for the smaller Hong Kong corporate banking sector. Int J Bank Mark 21(6/7):347–358

    Article  Google Scholar 

  • Aghion P, Bloom N, Blundell R, Griffith R, Howitt P (2005) Competition and innovation: an inverted-U relationship. Quart J Econ 120(2):701–728

    Google Scholar 

  • Aghion P, Griffith R (2005) Competition and growth: reconciling theory and evidence. MIT Press, Cambridge

    Google Scholar 

  • Aghion P, Harris C, Howitt P, Vickers J (2001) Competition, imitation and growth with step-by-step innovation. Rev Econ Stud 68(3):467–492

    Article  MathSciNet  MATH  Google Scholar 

  • Akinci S, Aksoy S, Atilgan E (2004) Adoption of internet banking among sophisticated consumer segments in an advanced developing country. Int J Bank Mark 22(3):212–232

    Article  Google Scholar 

  • Aladwani AM (2001) Online banking: a field study of drivers, development challenges, and expectations. Int J Inf Manage 21(3):213–225

    Article  Google Scholar 

  • ASX (2014) Australian securities exchange, ASX 200 list/market capitalisation. http://www.asx200list.com/. Accessed Feb 2014

  • Banking Act (1949) [Cth] Commonwealth Govenrment Canberra Australia

    Google Scholar 

  • Bauer K, Hein SE (2006) The effect of heterogeneous risk on the early adoption of internet banking technologies. J Bank Finance 30(6):1713–1725

    Article  Google Scholar 

  • Bejou D, Ennew C (1997) Can customer assessment of organisational excellence predict performance: the case of retail banking. J Financ Serv Mark 2(1):55–64

    Google Scholar 

  • Berger AN (2010) Small business lending. In: Berger A, Molyneux P, Wilson J (eds) The Oxford handbook of banking. Oxford University Press, New York, pp 531–549

    Google Scholar 

  • Berger AN, Mester LJ (2003) Explaining the dramatic changes in performance of us banks: technological change, deregulation, and dynamic changes in competition. J Financ Intermed 12:57–95

    Article  Google Scholar 

  • Berger AN, Mester LJ (1997) Efficiency and productivity change in the US commercial banking industry: a comparison of the 1980s and 1990s. Federal Reserve Bank of Philadelphia Working Paper 97-5

    Google Scholar 

  • Bhattacharyya S, Nanda V (2000) Client discretion, switching costs, and financial innovation. Rev Financ Stud 13(4):1101–1127

    Article  Google Scholar 

  • Bos JWB, Kolari JW, van Lamoen RCR (2013) Competition and innovation: evidence from financial services. J Bank Finance 37(5):1590–1601

    Article  Google Scholar 

  • Boyte T (2014) Kiwis Bring home the banking, ACNielsen 2014. Retrieved from World Wide Web. http://www.nielsen.com/au/en/insights/news/2014/kiwis-bring-home-the-banking.html. Accessed 3 May 2014

  • Camarero C (2007) Relationship orientation or service quality? What is the trigger of performance in financial and insurance services. Int J Bank Mark 25(6):406–426

    Article  Google Scholar 

  • Canhoto A (2004) Portuguese banking: a structural model of competition in the deposits market. Rev Financ Econ 13:41–63

    Article  Google Scholar 

  • Cetorelli N, Angelini P (2003) The effects of regulatory reform on competition in the banking industry. J Money Credit Bank 35(5):663–684

    Article  Google Scholar 

  • Chase (2011) Chase Paymentech launches SafetechSM Fraud and Security Solutions. Media release. https://www.chasepaymentech.com/news2011_safetech_launch_jan18.html. Accessed May 2014

  • Chava S, Oettl A, Subramanian A, Subramanian K (2013) Banking deregulation and innovation. J Financ Econ 109:759–774

    Article  Google Scholar 

  • Claessens S (2009) Competition in the financial sector: overview of competition policies. World Bank Res Observer 24(1):83–118

    Article  Google Scholar 

  • Daugaard D, Valentine TJ (1993) The Banks. In: Lewis MK, Wallis RH (eds) The Australian financial system. Longman Cheshire, South Melbourne

    Google Scholar 

  • EFTPOS (2013) EFTPOS hub to revitalise network and boost payments competition in Australia. Media release 2nd October 2013. http://www.eftposaustralia.com.au/docs/media-releases/eftpos-hub-to-revitalise-network-and-boost-payments-competition-in-australia.pdf. Accessed May 2014

  • Elyasiani E, Mehdian SM (1990) A nonparametric approach to measurement of efficiency and technological change: the case of large US commercial banks. J Financ Serv Res 4(2):157–168

    Article  Google Scholar 

  • Ettlie JE, Reza EM (1992) Organizational integration and process innovation. Acad Manag J 35:795–827

    Article  Google Scholar 

  • FDR (2012) The Financial Development Report 2012. World Economic Forum USA Inc

    Google Scholar 

  • Forbes (2014) World’s 100 biggest banks: China’s ICBC #1, No U.S. Banks In top 5. http://www.forbes.com/sites/halahtouryalai/2014/02/12/worlds-100-biggest-banks-chinas-icbc-1-no-u-s-banks-in-top-5/. Accessed May 2014

  • Frame WS, White LJ (2004) Empirical studies of financial innovation: lots of talk, little action? J Econ Lit 42(1):116–144

    Article  Google Scholar 

  • Gerrard P, Cunningham JB, Devlin JF (2006) Why consumers are not using internet banking: a qualitative study. J Serv Mark 20(3):160–168

    Article  Google Scholar 

  • Grossman SJ, Hart OD (1986) The costs and benefits of ownership: a theory of vertical and lateral integration. J Polit Econ 94:691–719

    Article  Google Scholar 

  • Hanratty P (1997) The Wallis Report on the Australian Financial System: Summary and Critique. Research Paper 16 1996-97 Economics, Commerce and Industrial Relations Group 23 June 1997

    Google Scholar 

  • Hart O (1995) Firms, contracts, and financial structure. Oxford University Press, New York

    Book  Google Scholar 

  • Hart O, Moore J (1990) Property rights and the nature of the firm. J Polit Econ 98:1119–1158

    Article  Google Scholar 

  • Hauswald R, Marquez R (2003) Information technology and financial services competition. Rev Financ Stud 16(3):921–948

    Article  Google Scholar 

  • Ho CY (2010) Deregulation, competition and consumer welfare in a banking market: evidence from Hong Kong. J Regul Econ 37:70–97

    Article  Google Scholar 

  • Humphrey DB (1993) Cost and technical change: effects from bank deregulation. J Prod Anal 4(1–2):9–34

    Article  Google Scholar 

  • Hunter WC, Timme SG (1991) Technological change in large US commercial banks. J Bus 64(3):339–362

    Article  Google Scholar 

  • IBIS World (2014) IBIS World. Company research reports: IBIS Business Information Pty. Ltd., Melbourne

    Google Scholar 

  • King RG, Levine R (1993) Finance and growth: Schumpeter might be right. Quart J Econ 108(3):717–737

    Article  Google Scholar 

  • Levine R (1997) Financial development and economic growth: views and agenda. J Econ Lit 35(2):688–726

    Google Scholar 

  • Lichtenstein S, Williamson K (2006) Understanding consumer adoption of internet banking: an interpretive study in the Australian banking context. J Electron Commer Res 7(2):50–66

    Google Scholar 

  • Merton RC, Bodie Z (2005) Design of financial systems: towards a synthesis of function and structure. J Invest Manage 3(1):1–23

    Google Scholar 

  • Miles I (1993) Services in the new industrial economy. Futures 25(6):653–672

    Article  Google Scholar 

  • Neven D, Roller LH (1999) An aggregate structural model of competition in the European banking industry. Int J Ind Organ 17:1059–1074

    Article  Google Scholar 

  • Petersen M, Rajan RG (1995) The effect of credit market competition on lending relationships. Quart J Econ 110:407–444

    Article  Google Scholar 

  • Petersen M, Rajan RG (1994) The benefits of lending relationships: evidence from small business data. J Finance 49:3–37

    Article  Google Scholar 

  • Pikkarainen T, Pikkarainen K, Karjaluoto H, Pahnila S (2004) Consumer acceptance of online banking: an extension of the technology acceptance model. Internet Res 14(3):224–235

    Article  Google Scholar 

  • RBA (2011) Strategic review of innovation in the payments system: results of the reserve bank of Australia’s 2010 consumer payments use study. June 2011

    Google Scholar 

  • Roy Morgan (2013) The rise of internet banking. http://www.roymorgan.com/findings/5203-internet-banking-on-rise-201309200624. Accessed May 2014

  • Saeidipour B, Ranjbar H, Ranjbar S (2013) Adoption of internet banking. J Bus Manage 11(2):46–51

    Google Scholar 

  • Sathye M (1999) Adoption of Internet banking by Australian consumers: an empirical investigation. Int J Bank Mark 17(7):324–334

    Article  Google Scholar 

  • Schumpeter JA (1942) Capitalism, socialism and democracy. Harper and Row, New York

    Google Scholar 

  • S&P (2014) S&P Dow Jones Indices, S&P Asia Pacific BMI Index Fact sheet. http://au.spindices.com/indices/equity/sp-asia-pacific-bmi-us-dollar. Accessed May 2014

  • Teixeira D, Ziskin J (1992) The bank technology tidal wave. Bank Monthly Nov 109(11):34–36

    Google Scholar 

  • Utterback JM (1995) Mastering the dynamics of innovation. Harvard Business School Press, Boston

    Google Scholar 

  • van Ark B, Broersma L, den Hertog P (2003) Services innovation, performance and policy: a review. Synthesis report in the framework of the SID project (structural information provision on innovation in services). Directorate-General for Innovation, Ministry of Economic Affairs, The Hague

    Google Scholar 

  • Wheelock DC, Wilson PW (1999) Technical progress, inefficiency, and productivity change in US banking, 1984–1993. J Money Credit Bank 31(2):212–234

    Article  Google Scholar 

  • Wilhelm WJJ (2001) The internet and financial market structure. Oxford Rev Econ Policy 17(2):235–247

    Article  MathSciNet  Google Scholar 

  • WPR (2011) World Payments Report 2011. Capgemini and The Royal Bank of Scotland (RBS). http://www.capgemini.com/resources/world-payments-report-2011. Accessed April 2014

  • WPR (2012) World Payments Report 2011. Capgemini and The Royal Bank of Scotland (RBS). http://www.capgemini.com/resource-file-access/resource/pdf/The_8th_Annual_World_Payments_Report_2012.pdf. Accessed April 2014

  • WPR (2013) World Payments Report 2013. Capgemini and The Royal Bank of Scotland (RBS). http://www.capgemini.com/wpr13. Accessed April 2014

  • Wright S (1999) The development of Australian banking industry. Aust Bank 113(4):18–21

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. University of Technology Sydney, UTS Business School, Ultimo, NSW, 2007, Australia

    Christopher Bajada & Rowan Trayler

Authors
  1. Christopher Bajada
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Rowan Trayler
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Christopher Bajada .

Editor information

Editors and Affiliations

  1. UTS Business School, University of Technology Sydney, Broadway, Australia

    Renu Agarwal

  2. University of the Sunshine Coast, Queensland, Australia

    Willem Selen

  3. UTS Business School, University of Technology, Sydney, Australia

    Göran Roos

  4. UTS Business School, University of Technology Sydney, Sydney, Australia

    Roy Green

Rights and permissions

Reprints and permissions

Copyright information

© 2015 Springer-Verlag London

About this chapter

Cite this chapter

Bajada, C., Trayler, R. (2015). Technology-Driven Service Innovation in the Banking Industry. In: Agarwal, R., Selen, W., Roos, G., Green, R. (eds) The Handbook of Service Innovation. Springer, London. https://doi.org/10.1007/978-1-4471-6590-3_16

Download citation

  • DOI: https://doi.org/10.1007/978-1-4471-6590-3_16

  • Published:

  • Publisher Name: Springer, London

  • Print ISBN: 978-1-4471-6589-7

  • Online ISBN: 978-1-4471-6590-3

  • eBook Packages: EngineeringEngineering (R0)

Publish with us

Policies and ethics

Search

Navigation