Here's why Wall Street hasn't innovated anything since the ATM


sallie krawcheck ellevest

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Sallie Krawcheck launches her digital investing platform, Ellevest, at TechCrunch Disrupt NY 2016.

Wall Street has a serious innovation problem. Row upon row of constantly glowing Bloomberg terminals aside, it's become an industry synonymous with creaking technology and a general stuffiness.

On an episode of Hard Pass, a podcast I do with my BI colleague Josh Barro, Sallie Krawcheck explained why. She's the CEO of Ellevest, an investing platform for women, and the former CFO of Citigroup, to name just one job she's had on Wall Street.

"Now I would argue to you... the last real innovation that came out of a big bank was the ATM," Krawcheck said.


Forget collateralized debt this or structured security that. The boring, everyday innovations in banking that normal people use - like depositing a check by taking a picture on your phone, for example - have come from outside the industry.

"I remember that after Citi had gotten through its latest round of regulatory issues, I remember the CEO at the time saying 'now it's time to innovate.' Cool... how do you do that? Just because you say it... doesn't mean it's easy."

To solve this problem, banks have increasingly started partnering with startups. Suresh Kumar, CIO at BNY Mellon told Business Insider that those partnerships would be "the most impactful force on our industry over the next decade."


Krawcheck called it "essentially... outsourcing innovation." Bank money gives lifeblood to start ups, and in exchange, banks get a seat at the tech table. 

Working with startups also is helping to change Wall Street's culture. The "disruptive" ethos of Silicon Valley is about making complex things simple. For finance, that means simplifying processes like buying a mortgage and making banking more inclusive and approachable (not really a Wall Street thing).

Listen to more of Krawcheck on Hard Pass below:




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