Banks create different services for the fulfillment of customer needs. The banker must be able to provide these services as and when demanded by the customer. Services are separately identifiable, essentially intangible activities. Services involve transfer of some intangible benefits that result from the activities of a service provider.  The perception of the standard of the service is influenced by the satisfaction or dissatisfaction derived from the bank service. So, customer satisfaction is influenced by the perception towards the bank service. Perception is influenced by the standard, price, individual’s personal spirit and also the opinions of the members of the family. In the Retail Banking innovation is one among the most sources of competitive advantage and essential for the bank’s growth. Innovation is about finding an improved way of doing something. An innovation must add value to customers to motivate them to buy or use the service or perceive an improvement. Innovation in banks is concentrated on service delivery instead of products enabling banks to strengthen and sustain long-term relationship with customers. Banks must recognize the necessity to eliminate transaction related problems and be told ways to sort these problems. Customers are awake to the convenience of innovative retail banking services but less number of them has enrolled in internet banking due to security issues. So, there's a desire for banks to know customer behavior patterns before they will introduce effective innovations. Innovations must be targeted to attend to customer behavioral issues and not just add on channel to conduct business.

KEYWORDS: Banking, Economy, Efficiency, Technology, Impact, Communication.