Optical diagnosis of polyp histology can potentially result in enormous cost savings by way of the "resect and discard" strategy for diminutive polyps and the "do not resect" strategy for diminutive hyperplastic polyps in the distal colon. Narrow Band Imaging (NBI) highlights the surface mucosal and vascular pattern on polyps and has been shown to accurately characterize adenomatous and hyperplastic polyps by experts. However, the results have been a little discouraging amongst lesser experienced endoscopists. Studies have also shown that using the NBI diagnosis of diminutive polyp histology, experts can accurately define the future surveillance colonoscopy intervals. However nonexperts in academic or community setting have as yet failed to achieve the recommended thresholds. The subjectivity in assessment by endoscopists leads to the variable accuracy rates and can be circumvented by computer based automated tools. Although initial experience with a few computer based algorithms have shown accuracies comparable to experts, further refinement and validation will be required before these can be implemented in clinical practice. Incorporation of optical diagnosis of diminutive polyps into clinical practice is bound to face several hurdles. But the potential for enormous cost saving makes it an attractive strategy that can make colonoscopy more cost effective.