Purpose - The paper examines a financial service innovation process, which is referred to as financial product innovation: improvements to existing services. This study conducts a critical analysis of the operational process of opening a Lloyds TSB Student Account at a local branch. Design/methodology/approach - The process of opening a student bank account is documented in a flowchart/flow network, which highlights operational steps and the visibility line between front-end and backroom staff. This process mapping technique/flowchart allows for the diagnosis and identification of both potential and actual bottlenecks in the existing process, which prevented a quality service encounter for the customer. After outlining these problematic areas/non-value added activities, the adopted qualitative triangulated methodological approach yields a redesigned flowchart illustrating these changes. Furthermore, this paper proposes a re-engineered process (i.e. e-process or virtual process), which removes these bottlenecks systematically. Findings - The results show the increased efficiency, productivity and customer satisfaction levels that are the key to innovation process performance. The study concludes with evidence of non-financial performance results of this type of financial service innovation. Research limitations/implications - The study does not quantify the performance of e-process operations, and it does not examine customer concerns related to complexity, trust security and safety issues. However, it provides useful managerial recommendations for improving the process of opening a student account. Numerous key learning points and invaluable insights gathered during this project are practical contributions both to managers involved in innovation process and researchers interested in this domain. Practical implications - This paper provides a re-engineered process which is simpler, more economical and faster than the original process. It presents principles to diagnose appropriate service operation processes for re-engineering using action mapping programmes and review their innovation performances. Managers will learn new frameworks, diagnostic tools and analysis techniques to better understand and improve their firm's service operations. This study is designed to give service innovation managers and e-marketers instantaneous and continuous improvement in the quality of their e-service designs. Originality/value - One of its contributions lies in increasing the ability of managers to improve their knowledge and skills for responding to the e-service innovation process. It adds to the growing literature on the innovation process for financial services. While the study answers a number of salient questions, it also produces a stimulus for further investigation of service innovation through the provision of future research directions in this area.
