Financial innovation is termed for all recent development done in the world of finance to overcome notorious financial crisis. Off- course it is very beneficial for societal growth but at times it may cause great problem for middle classed. Let us find how?
When we move in the pages of dictionary financial innovation is termed to any act that tends to try new ways of financial instrument, financial technologies, different institution and markets. But according to economist there is very slight difference between financial innovation and manufacturing innovation. In financial innovation we try to work out on different ways that help to enhance the value of currency which in turn attracts profit. In manufacturing innovation manufacturer try different ways to produce product that will help them to increase profit.
The toughest part of financial innovation is predicting the social consequences of the implemented financial measures. Finance itself has a dynamic nature and different financial product and measures may change its course of action with time. Thought research and envision scheduled before implementing the financial may be great and profitable for particular financial year but not necessary that it will work well in following financial year.
Financial innovation has been both praised as the engine of growth for society and criticized for being the source of bringing weakness in the society. But what is the reason behind. Actually and financial change may be good for one group of community and bad for the other. With time if the fraction changes and the follower of the change increase, its good and the innovation will become successful. But if any vice versa occurs the change becomes worst for the society causing wreckage in the development.