Report
337
Number
Nov 11 2014

A Road Map for Worldwide Financial Services Innovation

In financial services, innovation works best when it can deliver increased benefits to members. The Filene approach was designed to help innovators optimize their abilities to ideate, test, and implement cutting edge solutions.

George Hofheimer
George Hofheimer
EVP + Chief Research + Development Officer
Filene Research Institute
Andrew Downin
Andrew Downin
Innovation Director
Filene Research Institute
Linda Young
Linda Young
Research and Planning Consultant
Report Number 337

Executive Summary

In a recent blog post on innovation, Joseph E. Stiglitz, who is, among other things, a Nobel laureate in economics and a professor at Columbia University, discussed what he described as “the innovation enigma.” In short, he says there isn’t always a clear link between innovation and GDP statistics, which he equates with improved living standards. Stiglitz goes on to discuss the fact that innovation in the financial services sector—especially as illustrated by innovations popular before the 2008 economic collapse—often meant “devising better ways of scamming others, manipulating markets without getting caught (at least for a long time), and exploiting market power.”

Not exactly the rosy glow that “innovation” usually engenders, huh? Is it possible for innovation in the financial services sector to create positive results for the “little guy?” Or is financial services innovation, by its very nature, just about creating profits?