The organisation of product innovation in the financial sector

This article discusses characteristic features and problems of product development processes in the financial services sector and relates these to the models and concepts of the modern new product development literature. It is based on a series of semi-structured interviews with product managers and IT personnel in 14 banks and 25 insurance companies (mostly in the area of life insurance). The interviews showed that most companies have adopted the concept of multi-disciplinary project teams to develop new products. However the creation of such teams has seldom resulted in good communications between the various functional specialists involved. Frequently, problems of communication and collaboration arise between IT-specialists and marketing specialists and between actuaries and the other project team members. The development stages presented in the general literature on new product development can to some extent be discerned in the financial services sector as well. Quite frequently some of these stages are conducted in parallel in the sector Notable is the dominant role played by marketing. However the frequently proclaimed increased consumer orientation appears somewhat ambiguous, as very few companies involve final consumers in the innovation process.