Abstract
To survive in the ever-increasing competition in the financial market, commercial banks need successful innovative strategies. However, there is insufficient information on appropriate innovative strategies required by banks. Primary data were obtained through a structured questionnaire. It was distributed among 1,200 bank employees and 300 bank customers of all eight systematically important banks (Access, Diamond, Eco, First, GTB, Polaris, UBA and Zenith) out of 21 deposit money banks in Nigeria as of December 31, 2016 by random sampling and stratified sampling techniques. The data were fitted to the regression-based model. The identified marketing innovation adopted by banks include innovative service provision (4.02), generation of new product with quality (3.65), entrance into new markets (3.60) and adoption of technological tools (3.57). Performance indicators considered are customer satisfaction and customer retention. Results showed that marketing innovation strategies of the banks significantly (p < 0.05) improve customer satisfaction. Improved service and product quality, introduction of new products and entrance to new market exert a positive and significant effect on outcomes of the banks. The estimated regression on customer retention showed that in a competitive environment, improved service exerts positive and significant (p < 0.05) influence. Furthermore, the impact of reduction in service cost is also positive and significant (p < 0.05), which is similar to the effect development of new banking products. The findings suggest that the pathway to raising performance of financial institutions in a competitive environment is diverse. There is a need for deployment of a modern banking technology, innovations around banking products and associated services.
Highlights
The development of the economy of any nation largely depends on the strength of its banking sector (Driga, 2006)
(2008) concluded that Strategic marketing inno- observed that capital adequacy, asset quality, vation’s utmost relevance depends on the under- management, earnings, liquidity, and sensitivity standing of consumer demand, to the extent that (CAMELS) model is one of the most widely-used a new product or service is developed for a par- models for bank performance evaluation because ticular market, where potential value and growth it considers both profitability and risk factors in of that market determine the success of product representing bank performance
0.530 to the market (β = 0.154, t = 3.850, p < 0.05) Note: R = 0.793, Adjusted R = 0.537, Adjusted R2 = 0.530 showed a positive and significant effect on customer satisfaction, which suggest a direct When evaluating the significance of the parameeffect of the introduction of new generation prod- ters, the results showed a positive and significant
Summary
The development of the economy of any nation largely depends on the strength of its banking sector (Driga, 2006). (2008) concluded that Strategic marketing inno- observed that capital adequacy, asset quality, vation’s utmost relevance depends on the under- management, earnings, liquidity, and sensitivity standing of consumer demand, to the extent that (CAMELS) model is one of the most widely-used a new product or service is developed for a par- models for bank performance evaluation because ticular market, where potential value and growth it considers both profitability and risk factors in of that market determine the success of product representing bank performance. There is a exploitative innovation (improvement of existing need to combine them with non-financial measproduct quality, service flexibility and reduced ser- urement in order to adapt to the changes of intervice cost) This aligns with the perspectives of Cao nal and external environments (Krager & Parnell, et al (2009) Greve (2007), Popadic and Carne (2016) 1996).
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