Banking innovation is rare because finance development has only been accelerating recently with the growth of the technology and economy. Many have criticized that banking has not done much. But I disagree. ATM is not the only meaningful innovation in banking (according to Ex Fed Chairman Volker). Online banking and increased security measures have made banking better. Bundling financial products also has brought more flexibility except that well, it is not done well, and most of the times, it is pushed for fees.

Anyhow, despite the criticisms of banks being dinosaur, here is some good banking innovation. Indonesian banks are paying for trash and giving banking services to the poor. They do not only help the poor, create a new market, and clean the environment. A hat-trick! A triple crown! Lovely. This is how finance can be more useful and effective. Of course, this practice is not sustainable because it cannot scale up (there is limited trash and buying trash is not the most efficient way to clean up). However, this is an excellent start! Helping the poor to financial services will help the get out of poverty faster and also help the bank’s bottom line as the poor become wealthier. I hope that other developing world banks will implement a similar program and help the poor and its profits.