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August 18, 2016
/   Insights

In the last couple of years, mobile banking has grown from being a fairly niche channel adopted by only the tech-savvy to one of the most common ways for people all across the world...

UK prepares to launch new polymer £5 note

August 4, 2016
/   Insights

Britain will soon become the latest country to release polymer banknotes into circulation, joining nations such as Australia, New Zealand, Canada and Vietnam in the shift to plastic currency.

Cause and Effect: If you build it, will they come?

July 23, 2014
/   Spotlight

Many financial institutions assume that digital banking is lucrative because the most valuable customers happen to bank online. While there is certainly a correlation between online bankers and higher profitability, quantitative evidence suggests that...

Intuit 2020 Report: The Future of Financial Services

April 11, 2011
/   Insights

Today, Intuit released the latest edition of the Intuit 2020 report, Intuit 2020 Report: The Future of Financial Services, which identifies and examines four key trend areas that will  transform the financial services industry...

Fast Facts: Student Loans

January 22, 2013
/   Insights

The Financial Services Roundtable recently released another iteration of its Fast Facts, reliable, bullet-point research about issues facing the financial services industry. Topics span TARP, Dodd-Frank, insurance, lending, retirement savings and more.  Below are some updated Fast...

The Top 10 Trends in the Digital Banking Industry

December 18, 2013
/   Spotlight

2014 is rapidly approaching and as the year wraps, the Digital Insight team has pulled together the top 10 trends in the digital banking industry based on data and trends from studying financial institutions....

Making Banking Fun: Gamification in Financial Services

August 5, 2013
/   Insights

Recently, the Banking.com team sat in on American Banker’s webinar, “Gamification in Financial Services: Five Proven Ways to Get an Edge,” which shared how leading brands in financial services have applied gamification to reach...

Technology M&As: The Beats Go On

May 29, 2014
/   Insights

The ongoing fascination with Apple’s $3 billion purchase of Beats Electronics is entirely understandable, because it’s a cool story. However, it also says a lot about what’s going on between finance and tech.

What We’re Reading

May 5, 2011
/   Spotlight

Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below. Virtual Banking Worlds Provide Tangible Lessons American...

Small Business: Perception vs. Reality

November 21, 2012
/   Insights

In the most recent election cycle, like most others before it, the one sector of the economy that got the most attention was small business.  This is the future, we were told by every...

What We’re Reading: Thanksgiving Edition

November 22, 2012
/   Spotlight

Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below or Tweet @bankingdotcom. Mobile Thursday? Plans for Thanksgiving...

Here’s a question: Which kind of innovation has the most impact? Is it the delivery and broad-scale adoption of a single product, a killer app if you will, that alters user habits, then inevitably gets replaced by a different tool? Or is it a series of technology-driven process changes that take hold incrementally and have long-term ramifications benefiting many aspects of the operation?

This is one area that richly illustrates the difference between the banking and technology industries.  Emphasizing the fin in fintech means taking a longer view than might be popular in the Silicon Valley mindset.

It seems like a relic from another era (and maybe it is) but back in 2000 celebrated author Michel Lewis documented what passed for innovation in that innovation-centric time in “The New New Thing: A Silicon Valley Story.” His primary focus was on entrepreneur Jim Clark and the founding of Healtheon, a bid to revolutionize another industry long on stability and often resistant to change: healthcare. The idea was simultaneously simple and radical—bring together physicians and technologists to create tools that would drastically transform the moribund practices of a vital industry.

So did it work? Well, Healtheon technically doesn’t exist—in the 16 years since its founding, the company has undergone multiple transformations, most recently rebranding itself as Change Healthcare. Some of the old dreams of revolution faded rapidly, as did its initial stock market promise. However, the data-driven advances envisioned at the time have certainly taken place, and Change Healthcare is now “the single largest financial and administrative healthcare network in the United States, reaching approximately 750,000 physicians, 105,000 dentists, 60,000 pharmacies, 5,000 hospitals, 600 vendors, 450 laboratories and 1,200 government and commercial payers.” Services include actionable insights and collaboration on mission-critical information exchange—exactly the solutions dreamed of in the late ’90s.

None of this happened overnight, and none of it was a panacea. But innovation did come, and it did engender transformation.

That might be one way to look at fintech innovation. Consider, as just one example of many, the ING innovation studio’s accelerator program. Ten start-ups pitched their ideas late in July, four are in the final stage, and each shows great promise.

Axyon AI for example, is developing artificial intelligence technologies for multiple business sectors. Gekko offers administration tools for small businesses that hate administration. Startup Insight features a platform for entrepreneurs that eases financial and legal issues. Surance, meanwhile, proposes a blockchain-based app for capital growth.

Each of these concepts is squarely in the zeitgeist, and deserves support. (We’re particularly intrigued by artificial intelligence, a topic we’ve discussed here before—it’s a concept that’s both tantalizing and elusive at the same time.)

But the bigger issue has to do with what fintech innovation truly entails. If it’s the next killer app—a single tool that redefines a given aspect of our industry—then we’re already there.  Thanks to the horde of developers focused on financial services, there’s a steady stream of mobile apps and even platform upgrades that find an audience (or not) and do their part to benefit institution and customer alike. It’s actually refreshing to see institutional openness to technologies that customers embrace, even if it means the bank’s IT department has to scramble to keep up.

So let’s set the bar higher. It’s impractical to set specific parameters, perhaps, but technology-enabled innovation should now be measured in bigger terms. Has a given piece of software not just cut costs but changed the basic nature of operating costs? Has a particular technology effectively mandated a change in regulatory mandates? Is the transformation relevant only till another tool arrives, or will it matter even more in the long run?

We’ll highlight some particular innovations here in the weeks and months ahead. But given the success rate so far, it’s time to think bigger than we have before.

Image Credit: shutterstock_191740682

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James W. Gabberty

Gabberty is a professor of information systems at Pace University in New York City. An alumnus of the Massachusetts Institute of Technology and New York University Polytechnic Institute, he has served as an expert witness in telecommunication and information security at the federal and state levels and holds numerous certifications from SANS & ISACA.

Zachary Ehrlich

25-year-old writer, and as a native San Franciscan, I am unreasonably loyal to Bank of America, if only for their superhero-like origin story, involving the 1906 earthquake and Italian fruit vendors.

Marisa Mann

Marisa Mann brings over 15 years of experience in consulting and financial services industries to the Solstice team, working on large scale enterprise initiatives across many technologies, including specializing in the digital space – Internet and mobile. Mann is passionate about mobile and the endless possibilities for the enterprise, delivering business value through strong brand recognition and driving to excellence in the consumer experience. Prior to Solstice, Mann worked at JP Morgan Chase, Diamond Management and Technology Consultants, Washington Mutual, Inc, and Accenture.

Brad Strothkamp

http://www.forrester.com/rb/analyst/brad_strothkamp