Challenges in Digital Product Development at Latvian Commercial Banks

Abstract

The purpose of the article is to determine what digital banking products are currently available to the clients in Latvia, to find out how clients assess the usefulness of these products, and to consider potential challenges commercial banks have to face while launching new digital products.

Methodology/methods The research is based on the analysis of the theoretical literature, synthesis and comparison of the Latvian banking sector data and the information included in the financial statements of particular commercial banks. Quantitative analysis based on two structured questionnaires was used to obtain empirical data. 150 completed client questionnaires and 43 expert assessments were used in the present study. Empirical data processing and analysis were performed with the help of Microsoft Office Excel software.

Scientific aim is to determine the most significant factors that have an impact on digital product launch and development in the financial sector. The current study contributes to the existing body of research on the challenges faced by the Latvian banking sector.

Findings Based on the research results, the challenges the banks may face introducing digital solutions have been identified. Insufficient level of client proficiency has a major influence on the application of digital solutions. Other essential factors that influence digital solution launch include client age differences and personal habits. These factors determine the differences in service use in definite client groups, as well as client opinions about service security.

Conclusions (limitations, implications, etc.) Remote client services will become more widespread and they will not be limited solely to the traditional internet banking; there will be a constant search for new methods to ensure more convenient and more efficient client service. However, to make sure the banks are able to successfully develop service channels, it is recommended to adjust them to client needs. In turn, insufficient client readiness for the application of digital solutions may both impede adoption of new digital solutions and limit client opportunities in service use.