American Express' recent announcement that it would purchase Revolution Money, an alternative PIN-based credit card and online person-to-person payments network that promises greater security, tells you much of what you need to know about innovation in retail banking these days: It's mostly about payments and safety, and the hits that banks have taken to their financials and reputations during the last two years have left many institutions working quietly on incremental advances while the leaps and bounds are engineered on the fringes and outside the gates.
This fits neatly into the current banking mantra, prodded by regulatory threats and promulgations, of "back to basics." The silver lining for banks is these sources of external innovation - firms like Mint.com, mFoundry, Azigo, Revolution Money, even PayPal - are frequently happy to play ball, whether that means an outright sale or partnership agreements.
There are bright spots within banks, to be sure. Wells Fargo continues to pave the way on both the retail and commercial side with proprietary developments in payments and online banking. PNC has taken a leadership position in offering its customers personal financial management tools, again with well-integrated proprietary development that beats what many other banks have acquired via outside partnerships. Small banks and credit unions haven't been left out; William Azaroff of Vancity credit union in Vancouver has been a thought leader in Web 2.0 technologies and Fiserv is leveling the playing field by bringing rewards options to small banks that had previously been the province of the top tier.
On the commercial and back office sides of the house, this year's best innovations are exactly where the industry needs them: security and risk management. The headline-generating growth in fraud against corporate online banking accounts makes IBM's Ztick security device particularly relevant this year. When it comes to risk management, Conexxus offers a solution for banks looking to manage still-tanking commercial real estate portfolios and Oracle's update to its Revelus Risk Manager brings much-needed enterprise risk and stress-testing scenarios tools.
This year's Innovators issue diverges from years' past, ranking 10 people in an order that weighs both their accomplishments and the importance of their area of expertise in financial services in 2009. BTN also selected 10 companies/technologies for recognition, focusing on the innovations that rose to meet the demands of this year's market conditions.
With budgets and motivation still restricted, it's easy to see the innovation glass as half empty. This year's honorees are what make it half full.