Former Fed chairman Paul Volcker was half right when he told a conference last month that the ATM was the pinnacle of financial innovation, and that nothing useful has been developed since. He was probably thinking about CDOs, but there are plenty of other products that compare unfavourably to ATMs.
The wonderful thing about hole-in-the-wall machines, as they are called in the UK, is not just, as Volcker pointed out, that they meet a real need. They are also simple devices that use open standards.
The tragedy is that innovation in the retail and corporate banking world seems to have stopped in 1968 with the development of the ATM. Nothing else in the world of payments – especially in the US – is simple or designed with the customer in mind. US banks are incapable of making electronic payments (at least not to publishing companies in the UK) and still insist on issuing cheques. In all countries, payments take days to settle and require a bewildering array of references.
Original Article: Newsletter - CreditFlux.com
