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 the banking industry will be found to be quite general. If so, this will be an important matter: perhaps 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.