A Customer-Driven Evaluation Method for Service Innovation in Banking

Abstract

In the era of fierce competition under the evolution of advanced technologies, service innovation plays a decisive role in the survival of organizations. The service innovation evaluation problem becomes necessary for organizations to review their innovation performances for making according policies to develop innovative services to satisfy customer needs. This paper addresses the problem by developing a new methodology for evaluation of service innovation in banking organizations from the customer perspective. As service innovation is typically characterised by multiple indicators that are qualitative in nature with their performance being assessed subjectively by customers, we first formulate the evaluation problem of service innovation using customer surveys as that of multi-criteria decision making under uncertainty and then develop an evaluation model based on the evidential reasoning approach by means of Dempster-Shafer theory of evidence for solving it. We conducted an empirical study of three banks in Vietnam to illustrate the effectiveness and applicability of the proposed methodology. It has been shown that the evaluation outcome could provide banks with their competitive advantages compared with competitors in terms of service innovation.

Keywords

• Service innovation
• banking
• customer-driven evaluation
• evidential reasoning
• multi-criteria analysis