An innovation development model was created for banks. A new approach was developed to reduce a credit risk. The theory and developed innovations are applied in practice to determine the level of innovation and to reduce the losses from bad loans at the BIGBANK. If the company will realize the proposed decision making process, the bank can increase net profits by an average of 20% during five years. The most important benefit will be reduction of bank losses of bad loans of 10%. Consequently, the new approach will help managers to reduce the time, administrative costs and increase productivity. Companies take a market leadership positions if they can introduce and successfully implement innovative processes more quickly than competitors. Innovative thinking, employee creativity, professionalism, experience, skill are the key to success, if a company wants to innovate, develop and ensure competitiveness.