Finance Industry: Evolve or Go Extinct

The times are a-changin' . . . and industries are going to have to please the people if they want to keep up . . .

This is the 21st century: Tough times are driving dinosaur inefficiencies to the brink of extinction, and innovation is the name of the game. We’re living in a new world. For hundreds of years, industries had been evolving into the leanest meanest systems they could be… and then all the rules suddenly changed. Think about it: How great was our newspaper sector? U.S. media was at the top of its game, relying on trusty principles the industry had been tweaking for decades, riding the reputation it had built up over years . . . and then technology happened. Now here you are, reading a blog.

Newspapers will have to face the future and cater to the public.

If journalism is going to survive (and it will, it’s only a question of form) it will have to do some serious reinventing. Instead of looking backward to the past or inward to its strengths, the business of the news will have to face the future and cater to what the masses demand.

That’s true of all institutions. Another example: Today in the library where I work, a woman asked me where to find Mexican recipes. I just happened to know (after hours of shelving) that cookbooks are in the 641s, according to the Dewey decimal system standard to all libraries. Blank stare. Ok, so I walked to the 600 aisle and pointed. But next time she has any other question, she’s back to square one, relying on me for help. Why does my library use Dewey? Because all libraries do and because nobody wants to make new labels.

Unlike the library, bookstores realize they have to make customers feel comfortable. These days you've got to give individuals what they want.

But Barnes and Noble knows that it has to make its customers comfortable with clear signage, or unhappy readers will wander away to satisfy their literary jones at Borders. How can a public book collection flourish in a digital age? By reaching out with new technology, and by focusing on what the public wants. These days, you’ve got to please the people.

Finance was the T-Rex of 20th century industries. (Right down to the bloody teeth and beady little eyes.) But the biggest fall the hardest, and the structure of the banking system has already changed as the economy struggles to get back on its feet again. In this changing world, the industry will need to look to innovation and fresh ideas to win over clients who got burned.

Finance was the T-rex of 20th century industries (right down to the bloody teeth). Time to evolve!

So, what about providing loans that until now were considered too little to be worth the effort? What about branchless banking for the millions of poor people in neighborhoods without banks? Or helping community members back each other up with rotating savings and credit associations ? Or providing financial education? How about banking for the little guy? Time to evolve!

Any other ideas? Leave a comment! I’d love to hear what you’re thinking (innovative economics really floats my boat). Show me what you’ve got.

Tough times call for revolutionary measures.