ideanote logomark
Video Courses
AI and Innovation
Financial Innovation and How it Evolved Since the 60's

Financial Innovation and How it Evolved Since the 60's

Financial innovation has evolved significantly since the 1960s. Visa is at the forefront of financial innovation, introducing various experimental activities such as mobile apps for banks and wearable payment technology. Digit, an automated money management platform, has helped millennials save over $350 million since 2015. Other companies like Acorns and Qapital also offer automated money management solutions. Key historical financial innovations include ATMs, debit cards, and interest rate and currency swaps. Financial innovation continues to shape the industry, with companies like Goldman Sachs and Quantopian leading the way.

Financial Innovation and How it Evolved Since the 60's

Financial innovation. Two words that aren’t always taken lightly or rather positively. Some blame it for the financial crisis that has created the global recession, but some nurture it because it makes life pretty convenient.

If we look 5 years back, a lot of the online activities were pretty new back then. So people still went to the bank and stood in the line to pay their bills. Or simply to check their balance. There were some options, but people were sceptic of the online security. Today, the only thing you need to wait for is to download your bank app and that is if your wi-fi is working badly.

Visa at the 2016 Olympics

When it comes to financial innovators, Visa is one of the front runners. Just last year, Visa launched various experimental activities, such as a white label mobile app for banks and real time payments through Visa direct. Another thing that happened in 2016 is the experiment with baking technology into wearables. During the 2016 Olympics , sponsored athletes were handed swipeable rings. Visa also sold a wristband and Swatch watch with the same scan to pay abilities. NFC ring was introduced to public in August 2016. How does the NFC ring function? It let’s consumers to make purchases at near field communications terminals simply by raising a knuckle.

Financial innovation: Automated money management

Digit launched in 2015 as an SMS chatbot that helps millennials save money by automating the process. It connects to a checking account, analyzes spending habits, and then siphons out small amounts of cash every few days, storing them in a zero-interest savings account.”

Since February 2015 till the early 2017, Digit has helped millennials save more than §350 million. Impressive. Digit has contributed to financial innovation by automating money management. When it comes to automated money management, there are several companies on the battlefield. You might have heard of Acorns or Qapital. There is also Tip Yourself. If not, then just wait for it.

What started as an SMS chat boot ended up being an IOS and Watch OS app. Digit has raised §36,3 million in capital and it processes about §20 million per month for its users.

A brief history of financial innovation

If we take a little longer walk to the past, let’s say all the way to the 1060’s, there are several innovations people are thankful for today.

  1. ATM’s: The need for after-hours cash distribution started in Asia. Back in 1966, there was a machine in Japan that could supply you with cash as a 3 month loan, after you’d insert your credit card. However, patent for an envelope deposit machine was filed on 30th of June 1960 by Luther George Simjian. It was called Bankograph and it wasn’t received well in New York where it was first installed. The newest ATM allows customers to withdraw cash up to £100 without a card, by inputting a 6 digit code requested through their phone. It’s placed at Royal Bank of Scotland.
  2. Debit cards have been in use since the late 1960’s. The bank of Delaware piloted the card. Today, consumers use their debit cards frequently. An IBOPE Zogby International survey found that, when making daily purchases, about 55% of consumers say they use their debit card more than half the time.
  3. Interest rate and currency swaps: Interest rate swaps involve exchange interest rate payments. Currency swaps on the either hand, are about exchanging a certain amount from one currency to another. “Currency swaps were originally done to get around exchange control. As most developed economies have eliminated controls, they are done most commonly to hedge long term investments and to change the interest rate exposure of the two parties.”


When it comes to creating and popularising new financial instruments and technologies, financial innovation has come a long way. Financial innovations such as ATM’s and Debit cards do make our lives easier. There is a list on Fast company where you’ll find 10 most innovative companies in finance. Besides above mentioned Visa and Digit, Goldman Sachs made the list for becoming a consumer lender. Quantopian contributed with its crowdsourcing investment algorithms. The future is bright. When it comes to innovation, we can talk and write all day about it. If you liked this post, make sure to click on Health-tech: 5 Startups Changing Healthcare and The Industry.

Ready to Transform Ideas with AI?

If you're looking for an all-in-one solution for your innovation, look no further than Ideanote! With our flexible platform you can do everything from collecting ideas, engaging your crowd and analyzing your innovation performance.

Keep Reading

Was this page helpful?
Ready to unlock innovation with AI?