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Time to make the risk of new product introduction well calculated

Deleting the risk completely is an unrealistic dream of all of us engaged in the new product design and implementations. Profit comes with a factor of risk. And risk should be well managed.

Tomasz Pawlowicz / June 16, 2021

Each product implementation is a risk. We know it. We feel it. Eliminating risk completely is an unrealistic dream of all of us engaged in the new product design and implementations. Nevertheless, profit comes with a factor of risk. And this risk should be well managed.

In new product introduction, the major question we ask is if the new offering will resonate with the client needs. In majority of cases, we use common sense together with our experience from the industry to consciously assess if the new value proposition can be attractive. However, the “devil sits in details”. Although, we know general ideas that support the new product, it usually has number of parameters that decides about its future success or failure.

Thanks to a high number of clients retail banking can apply research tools. We often start from qualitative such as focus groups, to shape the concept that then would be evaluated in quantitative research. The major reason for such an approach is the fact quantitative methodology, by definition, has relatively limited number of parameters that can be evaluated. Using a good qualitative approach in the beginning should limit the list of dimensions to a manageable number. It means we could do valuable validation at the quantitative stage.

The situation, however, is different in corporate banking. Products are often more complex and are customized per client. Though this tailored approach gives wider possibility to address actual needs of the client and their customers, new product market introduction requires more from the product owner.

One such example area, in which TietoEVRY gained wealth of experience, is Virtual Account Management (VAM). Although, the idea of consolidating big corporations’ financial flows is close to the heart of each CFO trying to manage it, there are we see institutions can set up different one from another. They can be all successful, as clients differ, markets give their limitations and regulatory and legislative requirements.

Here, TietoEVRY Business Consulting does not leave its clients to fight the battle alone. We can analyze needs of a representative number of clients on individual interviews basis. This component then is a basis for so called “gap analysis”, which is a result of comparison between best cases coming from benchmarking, and, in this case, new product concepts. “Gaps” are differences, which we either consciously ignore or address. Another benefit is our wide experience in corporate banking product delivery, from which we source deep know how.

An example of such collaboration could be one of TietoEVRY leading several initiatives providing Instant Payment Switch to central banks and entire markets. Access to the functionality provided by individual banks is a part of a customer value proposition and, as such, must answer to a number of principal questions including pricing, branding or UX.

New product implementation is high-risk and high-cost initiative. I would like to recommend investing a small fraction of entire budget (often one digit) to cover a cost of not only the product implementation itself but also making the risk of the introduction well calculated.

For more on our Payments consulting services please see here. 

Tomasz Pawlowicz
Lead Business Consultant

Payment expert and manager with 20 years’ experience in the Financial Services sector. Faceted to address complex client needs and provide tailored product solutions, ensuring first class customer journey management

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