Users as service innovators: The case of banking services

Abstract

Many services can be self-provided. An individual user or a user firm can, for example, choose to do its own accounting -choose to self-provide that service -instead of hiring an accounting firm to provide it. Since users can 'serve themselves' in many cases, it is also possible for users to innovate with respect to the services they self-provide. In this paper, we explore the histories of 47 functionally novel and important commercial and retail banking services. We find that, in 85% of these cases, users self-provided the service before any bank offered it.Our empirical findings differ significantly from prevalent producer-centered views of service development. We speculate that the patterns we have observed in banking with respect to the dominant role of users in service development will prove to be quite general.If so, this will be an important matter: on the order of 75% of GDP in advanced economies today is derived from services. We discuss the implications of our findings for research and practice in service development.

Service Systems Engineering

“…Recent studies underline the potential of involving customers, as this can result in more innovative service that has greater user value (Magnusson 2003). Additionally, as requirements of actors in a service system are often "sticky" information, significant costs are involved in eliciting these requirements in nonparticipatory design settings (Oliveira and von Hippel 2009). Hence, participatory design and prototyping approaches are also paramount for understanding successful engineering of highly accepted service systems.…”

An integrated model of innovation drivers for smaller software firms

“…Involving users to stimulate innovation (Athaide et al, 1996;Compeau et al, 2007;Franke & Von Hippel, 2003;Kristensson et al, 2002;Leimeister et al, 2009;Martin, 2011;Oliveira & Von Hippel, 2011;Raasch, 2011) Customisation Involving users in customisation of standard products and services (Athaide et al, 1996) User-Driven/Lead User Facilitating expert users with specialist competences in directing software innovation (Franke & Von Hippel, 2003;Kristensson et al, 2002;Morrison et al, 2000;Nambisan et al, 1999;Napier et al, 2011;Oliveira & Von Hippel, 2011) …”

Influence of Shadow IT on Innovation in Organizations

“…Sometimes, this user innovation can be source of a successful commercial product. Sports equipment such as the rodeo kayak [1], mountain bike [2], snowboard [3], and surfboard [4], medical equipment [5], juvenile products such as the baby jogger [6], services such as computerized commercial banking services [7], computer games [8], and films in the animation genre [9] are few examples where user innovations was a success.…”