Innovation & Banking Sector?

In late 90's and till 2004, Banking industry jobs were seen to be one of the most sought after jobs. Since 2008, ever since bankruptcy of Lehman Brothers, banking industry has seen the worst crisis and has not been able to stabilize till 2012. Every now and then, one or another financial institution has been in news. Let it be JP Morgan, UBS, or any other big giants..

The reason may be linked to economic crisis, but that is not the only one in my view. Banking sector has limited or no innovation since electronic banking / internet banking. Initially there was a rush to provide internet services, and one way or another, old back offices / systems were used or upgraded to provide the new technology. The main focus of technology within banks has been to make the processing efficient, cut costs of technology etc..So the focus was and has been on cost cutting. But has there been any other real innovation since Internet banking?..I am wondering..... Mobile banking has come up in last 2 years. But still, i consider it just an add on to the existing internet banking..It is not a breakthrough / revolutionary innovative product that can bring profits that can please the investors or the markets.

Not only is the technical innovation within Banks behind, but also Banking Product innovation itself. Once Cash pool / Notional pooling etc were drafted as Liquidity management solutions for the major clients, there has not been new Banking products innovated, that make a bank different than others on the street. All banks are offering the same solution. Only difference that attracts a customer from one bank to another, is probably the relationship.

There is no breakthrough difference between one bank than another. Neither are they working to innovate. Rather cut costs and cut margins, rates etc...

Unless banking sector focuses on providing a unique solution, a new product to its clients, which makes them see something revolutionary in the sector, nothing is going to change, and only fixes / firefighting within banks will continue. Not only this, the society will not respect the bankers. If bankers need to excel, they need to leave the rather bureaucratic focus of cost cutting, fixing issues, but rather focus on Innovation.

Innovation in my view is the only thing that can save the Banking industry.