1.0 Introduction''Financial innovation can be defined as positive changes in financial intermediation or the financial system: in financial institutions (commercial banks, insurance companies, investment and pension funds and banks investment) and in financial institutions markets (stock market, debt instruments market and derivatives market). ''I think it is essential to have innovation in the financial services sector for financial companies to continue moving forward, continue to improve their services and increase competition between companies. In this article I will mainly talk about banks and their innovations and will leave out all other companies in the financial services sector to keep the topic simple. Over the last 50 years there have been a couple of major innovations in the financial services industry such as internet banking, ATMs and debit cards. These major innovations were much simpler and less time consuming for the bank and customers. We can say that these changes were positive changes in the financial system that corresponds to the definition given above. Traditionally, a bank was established so that people could stash their money in a safe place and for people who needed a place to get a loan for any type of purpose. Nowadays a bank offers many more services than it did traditionally, which I believe is the result of increasing knowledge and above all the result of technology. Modern technology such as the Internet, debit cards (smartphones), and computers have completely changed the way banks could provide their services. These modern technologies have allowed banks to innovate their traditional way of banking and develop effective and efficient tools to improve service and save money at the same time. Some examples of this are check… half of the document… becoming a community where different financial service providers and customers join their efforts to help the community manage their finances. The community will have an online platform where they can connect, collaborate, participate and help each other and where the customer will be very self-service. The online platform should also be a knowledge hub for the community. List of reference sources http://baselinescenario.com/2009/04/18/financial-innovation-for-beginners/ http://www.investopedia.com/terms /s/securitization.asp http://www. brighthub.com/money/personal-finance/articles/42073.aspx http://nl.wikipedia.org/wiki/Geschiedenis_van_het_internet http://www.buzzle.com/articles/history-of-internet-banking.html http ://nl.wikipedia.org/wiki/Geschiedenis_van_het_internet http:/ /www.praxis.ee/fileadmin/tarmo/Toimetised/toimetised_06_2003.pdf