Who in their right mind would launch an online personal finance startup right now?

The answer should obviously be no one.

Apparently, the obvious is not necessarily so for many internet mogul wannabes. I read with equal parts amazement and dread a post yesterday on Netbanker about yet another online personal finance startup, the tenth — that’s right, TENTH — this month alone in North America. These 10 join an already jammed dogfight for online personal finance users. When I was back in college, they’d call that too much supply for too little demand.

The volume of launches would be enough to get me shaking my head, but to see them now?!? With the economy and the banking world where they are today?!? You don’t just slap out a startup. It takes time. And that means these startups were greenlighted in the late winter/early spring 2008. These entrepreneurs should have seen the financial cataclysm around us — that is, if they really understand banking and personal finance. Let me put it another way. Would you have started a mortgage company in 2007? No. Would you have launched an internet company in 2000? Of course not. But online personal finance companies are still coming.

These startups are coming out of the woodwork in advance of Netbanker’s Finovate conference next month, which normally we would be enthusiastic for. But it just seems wrong to be considering new financial services ventures when financial services is facing a protracted and painful contraction. I guess there is some value in “thinking” about new banking ideas, but the focus right now needs to be on shoring up existing business models and overhauling risk management for any number of facets of banking. As I implied in this post a few days ago, now is not the time for 2006-era innovation. But that’s obvious, right?