The Long Tail of Banking

Not all innovation is technological October 3, 2009

Technology is an amazing thing. These days, it’s downright hard to keep up with.  In the banking industry, it’s technology advancements that tend to get the majority of the headlines when it comes to innovation.  Attend a well-done event like Finovate 2009 and you’ll see a great deal of financial services innovations, from personal financial management sites like Mint.com, Wesabe.com and Geezeo.com, to others like Silver Tail Systems, Yodlee and Credit.com.  These companies are awesome, and are truly moving the financial industry forward with innovation.

But what we as an industry tend to forget is that not all innovation is necessarily technological in nature.

Merriam-Webster dictionary defines innovation as “an introduction of something new,” and “a new idea, method or device.”  I’m here to evangelize for “new ideas,” that come in the form of new paradigms and ways of thinking…not just in new technology.

Niche banking is an example of this.  Niche banking is a new paradigm in that believes banks can and should serve tiny, tiny segments of customers–and can do so profitably.  Executing on this new paradigm represents a huge change in thinking and business model, but doesn’t necessarily require a huge change in infrastructure, technology or operations.

This is an innovation whose main requirement is guts and entrepreneurial vision…not new technology.