The Effect of Risk Management on the New Products Development in the Banking Industry

The process of developing a new product is always associated with a high degree of uncertainty and complexity. Therefore, identifying and evaluating risks in the development process in order to adopt an appropriate development strategy will be of great importance. The purpose of this study is to investigate the impact of risk management in the process of developing new products in the banking industry. The present research is applied in terms of purpose and descriptive-survey based on the meta-positivist paradigm. The statistical population includes managers and employees of public and private banks in Ardabil, 2037 people, of which 284 people were selected as the final sample using quota sampling method. The data collection tool was a questionnaire and the construct validity and reliability of each variable were confirmed. In order to analyze the data, the structural equation modeling method based on LISREL software was used. The results showed that risk management of all risk indicators including technology, market, environment, finance, organizational resources and commercialization on the development of new products in the banking industry is positive and significant.

Most organizations today realize more than ever that relying solely on traditional competitive levers such as increasing quality and reducing costs in providing products and services is not enough and the tendency to introduce new products to the market has increased. The purpose of new product development can be to respond to customer needs, adapt to market conditions, environmental changes, increase profits, customer satisfaction and counter competitors' policies. In recent years, the banking industry has seen fierce competition with many opportunities and threats. Today, due to rapid and unpredictable changes in the field of banking, the need to use marketing techniques to expand the market and introduce new banking services in the current competitive environment is inevitable.

The statistical population of this study was the managers and employees of public and private banks in Ardabil, which includes 31 types of banks, including specialized and development government banks, commercial government, non-governmental Gharz al-Hasna and non-governmental commercial banks. This number of banks has a total of 193 branches with about 2037 active employees in Ardabil.

The method of data collection in this study is a standard questionnaire from previous studies that has a 5-point Likert scale (strongly disagree, disagree, undecided, agree and strongly agree). According to Krejcie and Morgan table, 322 people can be a good representative for 2037 people in the statistical population. In the present study, in order to obtain reliable data and return the appropriate number of questionnaires, 368 people were randomly selected. The quota was distributed among the respondents in person. After re-referral to collect the questionnaires, 300 questionnaires were delivered. By reviewing the collected questionnaires and accuracy in how to answer, 16 questionnaires did not have the required quality and finally 284 questionnaires were identified for appropriate analysis.

The country's banking industry in the investment sector is dealing with funds that are not guaranteed, resulting in very high financial leverage and potential losses due to market conditions, and ultimately puts these companies in a situation of greater instability. Designing and developing new products is a way to expand market share and influence new market segments. However, product design and development in this industry requires certain subtleties that failure to pay attention to it imposes many risks on banks. Among other things, the type of product will be different with the great variety that is in demand among customers, especially in different provinces, as well as due to the ethnic and religious characteristics that exist. For example, religious characteristics create the demand that products be designed at a rate of zero to four percent in the field of facilities, or that the process of obtaining facilities is based on the actual exchange of goods, which if not considered can lead to environmental and market risk.

In the field of organizational resource risk, it is suggested that managers, by recognizing all employees and establishing good relationships with each of them, lead to creating a strong bond between them. In relation to financial risk, it is suggested that managers take appropriate steps by accessing the necessary working capital, providing sufficient financial resources, as well as employing experts for proper financial planning and budgeting in the field of service development projects. Regarding technology risk, it is recommended that managers use external consultants or experts in the field of new service design and apply the feedback from the evaluation and design of the services provided in customer acquisition activities and in coordination Services provided by market demand can reduce technical risk. To manage market risk, it is essential that managers manage relationships with external stakeholders, especially customers, well and offer a wide variety of new services to meet the needs and wants of different market segments.