The Quality of Execution for New Financial Product Development Activities and Its Performance─An Investigation of Banking and Insurance Industries in Taiwan

Abstract

Facing deregulation, blurring of industry boundaries, increasing competition, rapidly advancing information technology, and increased customer sophistication, financial institutions attempting to survive and grow will need continuously to create new ideas and launch new services. Sadly, although much has been written about new product development in manufacturing industries, the literature on new service development (NSD) in financial service industry has remained sparse and is largely normative in nature. This study investigates the quality of execution for new service development activities in financial service industries and the relationship between quality of execution for NSD and its performance. Sixty-two NSD projects from banking and insurance industries in Taiwan were sampled as subjects. Statistical analysis shows that most NSD activities have moderately strong quality of execution, concept testing has moderately weak quality of execution, service testing-pilot run and test marketing have the most weak quality of execution. The findings also indicate that the top third performers do significantly higher in the quality of execution for the NSD activities than the bottom third. Finally, suggestions for NSD management and recommendations for future research are presented.