The ATM was the last great financial innovation

On the wholesale side you might also include the creation of the Swift interbank payments network in the 1970s. Ironically, this was a byproduct of communist - rather than capitalist - thinking!

I like the quote from God (I mean Paul Krugman)

"At this point, however, it's hard to think of any major recent financial innovations that actually aided society, as opposed to being new, improved ways to blow bubbles, evade regulations and implement de facto Ponzi schemes."

Obopay deserves its place on the list, if only as a representative of mobile banking and payments, which I'd say is a "great" financial innovation.

Applying Volcker's criteria, it does help people and is useful, particularly for the hundreds of millions of unbanked people in the developing world.

So, I say the former Fed chief and (with all due respect boss!) you are dead wrong.

Are we talking about innovative companies (as per the body of the blog), or innovative technologies (as per the title)? 

Arguing the toss over innovation companies is always controversial, and inevitably gets complicated by considerations of objective measures, like sales growth, profitability, product development lifecycles etc. All good stuff.

But with regards to innovative technologies, it's a bit clearer.  Surely there are many undisputed technology innovations since the time of the ATM?  I'm thinking Internet banking, debit cards, chip-and-PIN, electronic bill presentment, m-commerce, and electronic verification, to name just a few.

Yeah, online banking changed the banking relationship dramaticaly. I mean for the customers who actually use it. 

I'd tend to agree that introduction of plastic cards and ATM/POS services based upon those were about the last real great innovations in banking. Internet banking is not, as it comes with significant risks and knowing about these I've given up on home banking. I do go to the branch instead, and use one of those ATM's that have a keyboard and statement printer integrated. These are also operating 24 by 7 - in a controlled environment, and I do get a printed receipt that enables me to prove exactly what transaction I've intended to do. If something goes wrong, the bank would find it very difficult to put the blame on me.

Mobile banking ? Even worse than home banking (where I can at least produce a local printout to document transactions) ...

I believe some of you are ignoring Matt White's real point about the impact mobile banking will have on the developing world - serving the unbanked and initiatives like micro-loans.

In fact, Deutsche Bank are making mobile banking and remittances a priority strategy within the bank.

Great innovation changes the landscape of whatever environment it affects. Mobile banking will allow areas without broadband, or bank branches, to enter and deal with the first world marketplace.

We aren't talking about buying a latte with your iPhone. Do not confuse online banking in the first world with the soon-to-arrive revolution in mobile banking globally.

I'd readily agree that the use of mobile phone technology can - and in fact, already does - help greatly in third world countries. But at least today, the main aspect in these cases is working around infrastructure deficiencies and not so much banking automation.

Local agents (sometimes called "human ATM's") do carry some money, a mobile phone and do some bookkeeping on behalf of their rural customers ...

That local banking agent inherently provides some level of knowledge and trust between the parties involved.

Good post as usual. I often find myself referring back to you for your take on things and this is no exception. I was with NCR at the time that the early ATM's were going in.

I wouldn't say that innovation was actually the driver for ATM's, reducing queues and cutting staff costs was. But ATM's were innovative for a different reason. They ushered in a period when control would pass from provider to user. ATMs provided the public's first direct contact with bank systems, with PC and then Internet banking to follow.

Interestingly I covered this in a post I wrote this morning...