Innovation has become a swear word in the financial world. It was a desire for innovation that led to the ever more complex financial products that caused the downfall of our economy. But is this bad reputation justified? Should we avoid innovation, to recover from this crisis?

Ben S. Bernanke, chairman of the US federal reserve, opened a recent speech with the following words: “The concept of financial innovation, it seems, has fallen on hard times. Subprime mortgage loans, credit default swaps, structured investment vehicles, and other more-recently developed financial products have become emblematic of our present financial crisis. Indeed, innovation, once held up as the solution, is now more often than not perceived as the problem.”

True innovation
Indeed, when I mentioned recently to a guest that Disruptive Banking is looking to innovate, she almost winced. Later on I was able to clarify my point: in my view, innovation can just as well lead to a simplification of financial products. Innovation is, quite simply, a new way of doing something. If the trend has been to cover loans and credits in ever more blankets of complexity, it is hardly innovative to continue along that path. To be truly innovative, one has to have the guts to completely break with past traditions and conventions and design something entirely new. Something that is good not just for profits, but also for the customers, and for society at large.

In the words of Ben S. Bernanke: “I think that innovation, at its best, has been and will continue to be a tool for making our financial system more efficient and more inclusive.”

And now that the financial crisis has hit us with full force, now that we have found that the way we have been doing things all along might not have been the best way, now that the chips are in the air, now is the time to really innovate. Disruptive Banking presents you a clean slate, and invites you to join us and design the bank of tomorrow.