How will the massive US bank failures impact innovation? A lot. Banking news isn’t typically important in our isolated world of innovation, but the reality is that bank failures will impact innovation budgets and consumer preference.
JPMorgan Chase & Co have just become the biggest U.S. bank by deposits with 5,410 branches in 23 USs states after acquiring Washington Mutual Inc.’s branch network for $1.9 billion. Following its closure by the US government, the Washington Mutual financial woes are being labeled as the "largest U.S. bank failure in history".
Washington Mutual, WaMu, is the latest victim of the credit crisis which recently drove Lehman Brothers Holdings Inc. and IndyMac Bancorp out of business.
Washington Mutual was shut out by the US government’s federal Office of Thrift Supervision after the withdrawal of more than $16.7 billion since September 16 by WaMu customers.
The federal Office of Thrift Supervision explained their decision, "With insufficient liquidity to meet its obligations, WaMu was in an unsafe and unsound condition to transact business."
Business is expected to be back to normal on Friday September 26.
Financial Despair
WaMu and Mega US Bank Failures Will Impact Innovation and Consumer Mindset
Trend Themes
1. Bank Failures - Opportunity for disruptive innovation in offering alternative financial services and improving banking stability.
2. Credit Crisis - Opportunity for disruptive innovation in creating more efficient credit assessment and risk management solutions.
3. Consumer Mindset Shift - Opportunity for disruptive innovation in developing new consumer-focused financial products and services.
Industry Implications
1. Financial Technology (fintech) - Opportunity for disruptive innovation by leveraging technology to revolutionize banking and financial services.
2. Risk Management - Opportunity for disruptive innovation in developing advanced risk management solutions for the financial industry.
3. Alternative Financial Services - Opportunity for disruptive innovation in providing alternative financial services to cater to the changing consumer mindset.