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This post reminds me of the question I'd asked in Are Banks Losing Customers Or Shedding Customers? After reading the first few paragraphs of your post, it's quite evident that traditional lenders are NOT aiming to target the SMB segment at all, so I'm not sure if they'd find any business case for migration, automation, etc.

Yet another wannabe-disruptor neobank biting the dust. 

@JonRutter:

TY for your response. In general, I agree that mobile wallet is a problem looking for a solution and have said exactly that in Mobile Wallets: Fix What's Broken - And It Ain't Payments. Which is why, in my comment, mobile wallet was prefixed with the qualification "compelling". I was referring specifically to PayZapp, a mobile wallet from a bank. For reasons highlighted in HDFC Bank's PayZapp Ends My Bill Payment Woes, it's truly innovative and provides compelling value unmatched by any mobile wallet I've tried from neobanks or TELCOs.

While banks won't be the first out of the gate with any new offering, their past track record makes me believe that, even in the future they'll come up with the real innovations that not only solve real problems but drive revenues and profits, which I consider the recipe for the best form of innovation.

Apple took its time to get iPod, iPhone and Apple Pay right and was rewarded with sustained leadership in each product category. So was Google with web search and Facebook with social networking. So why won't banks get the time? Historically, this whole early mover advantage business has been proven to be a bit overrated.

Good post. From personal experience, I can easily agree with #4. Let me add the rise of "open" angel investment platforms like AngelList (USA, India, ...) and LetsVenture (India) to your list of drivers of growing private investments. Earlier "closed" platforms like Indian Angel Network had the feel of elitist cabals. The new breed of open platforms has thrown open the private investment space to the "common man". 

ARM, CDO, CDO2, CDS, MBS, Credit card, ATM, compelling mobile wallets - these are few bank-led innovations I can readily think of. Maybe they are not positioned as disruptors of the status quo or whatever but, IMO, going by their track record of generating greater revenues and profits, they are the most superior form of innovation. 

In which category - SME, Me2, HiPPO - would you place these innovations? Or, does it really matter?

Let me repeat my comment from a previous post titled Card fraud rises across Europe - ECB:  

Does anyone how much extra revenues merchants gained by not being overzealous about security, causing too much friction and suffering from shopping cart abandonment?

Mitigating Fraud Does Not Pay The Bills

Contactless cards and Apple Pay are both based on banking rails. They seek to drive a switch from cash payments, on which a bank earns no interchange revenues, to card payments, on which a bank earns interchange revenues. Cards will be around whether Apple Pay is around or not. But Apple Pay will become pointless if cards are not around. To me, this sounds like the perfect example of a principle-reseller arrangement, with the bank being the principle and Apple Pay, the reseller. Why should banks be worried with this change? The way I see it, banks should be very pleased with it.

Going by my frequent tête-à-têtes with drivers of Ola, Uber's competitor that I use regularly, these loans are the glue that holds this "asset light" model together. Over the past year, Ola has introduced several measures to curtail the initial "honeymoon" phase of drivers e.g. cancel fixed payout, reduce per km rates, adopt a "zero tolerance" policy towards errant drivers, etc. But, drivers tell me that because they have a loan to repay, they have no choice but to continue to operate on the platform.

At least this is one banking IT fiasco that won't be blamed on legacy.

According to this BBC article from BBC, cash is growing, not dying: 

1. In the seven countries ... — Australia, Austria, Canada, France, Germany, the Netherlands and the United States, 46-82% of all transactions in 2012 were conducted using cash.
2. In the United States, cash in circulation grew 42% between 2007 and 2012, and the amount of American money floating around in bills and coins is expected to grow by about 5% each year. The average growth globally is 7% per year.
3. ...card payments in the Netherlands have been growing by about 8% annually over the past few years. And yet, cash is still king. In 2012, there were 2.7 billion card payments, but an estimated 3.5 to four billion payments were made with cash. 

So much for the death of cash - it's not only not dying but it's actually growing. All over the world. Even in Sweden and Denmark - "leaders of cashless crusade" as BBC calls them.