[HN Gopher] No one is disrupting banks - at least not the big ones
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No one is disrupting banks - at least not the big ones
Author : kazanins
Score : 211 points
Date : 2025-01-26 14:05 UTC (1 days ago)
(HTM) web link (www.popularfintech.com)
(TXT) w3m dump (www.popularfintech.com)
| hobs wrote:
| This implies someone can take deposits and issue loans in a
| "better" way, when the main feature of this type of business to
| customers is showing up with extremely low risk of losing
| deposits, not innovation.
|
| Credit cards are not taking deposits and issuing loans in a
| traditional sense, they are fee generation machines that are
| externalized which would not generally be "traditional banking".
| doomroot wrote:
| There are other banking models that are needed. Look into
| Custodia Bank's model (SPDI). Full reserve system meant to
| backstop high risk (but legal) businesses. They went through a
| multi-year lawsuit around the start of 2020 with the fed who
| didn't want them to exist, ultimately lost.
| intalentive wrote:
| Custodia Bank marks the second enterprise in this thread that
| attempted to gain direct access to the Fed, bypassing
| intermediate banks, but was rebuffed. The other was Reserve
| Trust. Is it possible to obtain and make use of a Fed "Master
| account"?
| Red_Comet_88 wrote:
| No one is disrupting banks because the mega banks have the sole
| power of creating credit out of thin air, and no upstart fintech
| company has this power. To gain this power requires the creation
| of a bank, which as you can imagine, is probably the most gate-
| kept activity on earth.
|
| Andreesen talked about this in his Rogan appearance. The banks
| and gov brought the hammer down on crypto because it was a
| legitimate threat to the banking cabal which runs the American
| Empire.
| scarface_74 wrote:
| Yes and crypto doesn't have any inherent risk like a sitting
| President creating a crypto currency where he has 80% of the
| currency, will probably make a half billion dollars and then do
| a rug pull.
|
| https://fortune.com/2025/01/22/donald-trump-net-worth-memeco...
| Waterluvian wrote:
| That's the thing I can't ever come to understand about
| crypto. It's purely about perception of value. At least with
| some precious metal, it has a floor value as a function of
| its practical uses and abundance.
|
| Which leads me to believe that the only thing that could be
| honestly said is that a crypto is purely about winners and
| suckers and timing.
| mlinhares wrote:
| In this specific case its also about buying access, so I
| doubt he'll rug pull, he can just direct the access
| requests to buy something.
| sali0 wrote:
| The legal landscape forced the industry to be purely
| financial. Hopefully this changes soon.
| doomroot wrote:
| There are pros and cons of cryptocurrencies as money, just
| like gold, which cause people to speculate on the price.
| myvoiceismypass wrote:
| What are the pros of the trump coin or the melania coin?
| Cthulhu_ wrote:
| A brainwashed group of drones that are willling to pay
| money for it.
|
| But I'm convinced most people that buy memecoins like
| that are thinking that there's other suckers that will
| buy it and make the price go up.
| tenthirtyam wrote:
| > At least with some precious metal, it has a floor value
| as a function of its practical uses and abundance.
|
| I don't really give this argument much credence any more.
| If the value of, say, gold or diamonds were to drop their
| practical-use-floor-value, they'd be valued at probably
| less than 1% (maybe much less) of current value. I mean,
| how much gold is actually _consumed_ by industry? And we
| even have industrial diamonds now.
|
| A friend argued to me that crypto is "A Terrible Thing"
| because its just used to fuel the (illegal) narcotics
| industry. At this point, I'm doubting that too - the market
| cap of all crpyto, and the value being transacted e.g.
| daily volume, has increased massively recently. Are we to
| believe that narcotics have caused that? I can't imagine so
| - more likely to me it's around 90-99% speculation which,
| you might well argue, is "Another Terrible Thing."
| wat10000 wrote:
| I think the main thing precious metals have going for
| them is tradition. That's no small thing. They've been
| considered valuable for millennia, and that's likely to
| continue. Bitcoin might be replaced by some other fad in
| a decade.
|
| It's like if you're betting on a religion, Christianity
| is more likely to last than Scientology. They might both
| be equally made up, but one has demonstrated staying
| power.
| XorNot wrote:
| I mean, this is all true which is why we have fiat
| currencies.
|
| The UK government has consistently honoured debt for
| longer then the US has existed, for example.
| nine_k wrote:
| Inflation, and especially _controlled_ inflation, is much
| easier with fiat money. Most governments see it as an
| extremely valuable tool.
| amluto wrote:
| The actual market value of diamonds is pretty low. You
| can pay a jeweler a lot of money for a shiny diamond, but
| good luck reselling it for a similar amount of money.
|
| Gold, OTOH, is fungible. You can melt it, mold it into
| different shapes bars, resell it, etc.
| jajko wrote:
| With diamond jewelry, you pay mostly for the manual work
| of jeweler since folks don't go to jewelry shops to buy a
| diamond stone alone. If we talk about gold bars, no
| sophisticated manual work involved, just pouring molten
| gold into some mold on semi-industrial automated scale.
|
| If you buy sophisticated golden jewelry, you also pay ton
| for work that nobody else may appreciate. Sure you can
| get it smelted into something else, but you burn most of
| the original value, and some more on the change itself.
| lesuorac wrote:
| > A friend argued to me that crypto is "A Terrible Thing"
| because its just used to fuel the (illegal) narcotics
| industry.
|
| My general argument against this is that Ransomware
| _predates_ Crypto.
|
| There's also the whole Regan airlifted Iran literal USD
| for helping him win a presidential election so you don't
| need crypto for scummy behavior.
| spiritplumber wrote:
| Diamond value went through the window already (as it
| should), if gold came down to use value, we'd see it used
| more for electronics and electrochemistry.
| flakeoil wrote:
| It's of course not the criminal use of crypto that has
| caused the price to increase so much lately, but the use
| of it for criminal activity is one of its main real use
| cases (apart from speculation which is not a real use
| case).
| rasmus-kirk wrote:
| > A friend argued to me that crypto is "A Terrible Thing"
| because its just used to fuel the (illegal) narcotics
| industry.
|
| That's a good thing, though.
|
| Jokes aside, as a person who loves crypto technologically
| and agrees with the more cipherpunk roots of bitcoin, I
| have not seen anyone serious use crypto for anything
| other than drugs or small transactions, just for the sake
| of it. People usually just seems to hoard the stuff,
| which is incredibly stupid since the main value
| proposition of crypto is being able to transact it. I
| almost respect the people buying drugs with it more,
| since they at least use cryptocurrency, rather than just
| speculating in its value to fuel their gambling
| addiction.
| tenthirtyam wrote:
| > a person who loves crypto technologically and agrees
| with the more cipherpunk roots of bitcoin
|
| Yep, that'd be me too. What gets my blood pressure rising
| is the sheer amount of coins & tokens available now all
| of which, bar perhaps a tiny fraction, seem to have no
| value proposition other than "number go up". To me, NFTs
| are the nadir of this concept. I struggle to imagine a
| legitimate use case for any crypto that doesn't involve
| rapid, frictionless transacting.
|
| For example, there are a couple of fantastic services,
| like "Cauldron DEX" or "BCHBull" (no affiliation) - smart
| contracts which allow for trustless swapping of tokens.
| The concept is genius and the execution here seems very
| good (to me, non cryptographer) but, again, what can I do
| with these tokens or coins I've traded except trade them
| later for some other token or coin?
|
| BCHBull seems to allow exposure to commodities and some
| fiat currencies - that makes it comparable I suppose to
| actual currency or commodity speculation which has been
| going on for centuries. One might still argue "what can I
| do with all this gold except trade it later for oil?"
| but, well, that seems to be a weaker criticism.
| buu700 wrote:
| Agreed, but unironically. US tobacco consumption is at a
| historic low, while people are dying from an opioid
| epidemic and fentanyl contamination, and somehow the War
| on Drugs is nearly unquestioned as good policy?
| Prosecuting people for making poor health choices is such
| an extreme and frankly insane idea.
|
| Let's go back to selling Bayer Heroin(tm) at pharmacies,
| with sensible regulations. That would better position us
| to minimize narcotic use over the long term, while also
| making it safer, and defunding the cartels while we're at
| it. In the meantime, if someone is going to do drugs, I'm
| all for them using cryptocurrency to make the process as
| safe as it can be given the circumstances.
| Cthulhu_ wrote:
| > I mean, how much gold is actually consumed by industry?
|
| [0] indicates there's a demand of about 5000 tonnes of
| gold per year, with about 560 tonnes going into
| technology and electronics (the vast majority still going
| to jewellery). The total amount of gold in the world is
| about 212.500 tonnes according to [1], which is a cube of
| only 22x22 meters. [2] says about 3600 tonnes are mined
| per year and about 1200 tonnes is recycled/reused.
|
| [0] https://www.gold.org/goldhub/research/gold-demand-
| trends/gol...
|
| [1] https://www.gold.org/goldhub/data/how-much-gold
|
| [2] https://www.gold.org/goldhub/research/gold-demand-
| trends/gol...
| dumah wrote:
| There's at most a zero floor value on holdings of
| government debt, corporate equities, bank holdings, and any
| asset held by a custodian.
|
| The floor value of physical commodities with significant
| storage costs is negative.
|
| The market is aware of these possibilities and these risks
| are generally recognized as being embedded in asset prices
| as premiums.
| halfcat wrote:
| > _It's purely about perception of value_
|
| All money has always been about perception, whether we used
| paper, shiny rocks, or sea shells as money, it's always
| been about perception. Is it real or counterfeit, do you
| trust the person you're transacting with, are enough people
| you know using it, and will people with weapons show up to
| protect your money if someone else tries to steal it?
|
| The "people with weapons" part turns out to be a key
| component. The novel thing about crypto is that you are
| less reliant on the "people with weapons" to protect you
| and tell you what you're allowed to do with your money, and
| more reliant on the "people with encryption".
| wordpad25 wrote:
| No.
|
| Fiat is backed by tax base. US has more assets than debt.
| Additionally US is the largest economy in the world, how
| much would the right to tax it be worth? A lot.
|
| It's not at all just perception and influence as you
| claim.
| macinjosh wrote:
| So hyperinflation only happens when the tax base
| disappears? Perception and influence is clearly part of
| the picture.
| Spooky23 wrote:
| It's one of the core attributes. Zimbabwe wasn't going to
| be raising a trillion dollars of revenue.
| abdullahkhalids wrote:
| US economy has been second largest for over 10 years now
| [1].
|
| [1] https://ourworldindata.org/grapher/gdp-maddison-
| project-data...
| malfist wrote:
| I don't know where that site is pulling their data from,
| but not even the Chinese government claims their GDP is
| as high as that. And our GDP is higher than that site
| claims
| Detrytus wrote:
| This is Purchase Power Parity GDP (as indicated by the
| subtitle "This data is adjusted for inflation and
| differences in the cost of living between countries.")
| signatoremo wrote:
| Huh, the paper cites World Bank, but WB themselves report
| differently:
|
| https://data.worldbank.org/indicator/NY.GDP.MKTP.CD
|
| Any other official sources would tell you that US is the
| largest economy in the world by GDP, which is the most
| commonly accepted metric.
| AnthonyMouse wrote:
| > Fiat is backed by tax base.
|
| The general form of this is, it's backed by something
| that will accept it as payment. But then the same is true
| of non-fiat currencies.
|
| The value of a currency is simply, what can you get when
| you spend it?
| miohtama wrote:
| There is brand value in Trump.
|
| Trump is the largest meme on this planet.
|
| What should be the fair value of his fan coin?
| dotcoma wrote:
| Zero in 4 years' time.
| hinkley wrote:
| The American dollar is also about perception of value, but
| via a maze of interlocking attributes that make it slow to
| move.
|
| A new fiat currency without a state sponsor is fragile by
| comparison. Always will be.
| lanstin wrote:
| But it isn't just the military and the taxes, it is the
| labor of all the people who are willing to work for US
| dollars that give it value. While the majority of people
| paid in dollars are hard working and generally honest, it
| seems that the majority of people paid in
| cryptocurrencies are scammers or criminals in one way or
| the other, or else financial operators. So till more
| people are getting paid in bitcoin or whatever I don't
| see why anyone will find it something other than a
| speculative asset for dollar owners.
| henry_bone wrote:
| That's true of everything we use as money, including
| precious metals. You can't eat them, live in them, use them
| as weapons, walk down the street in them. They have value
| bacause we all agree that they do and we all agree to use
| them as a means to exchange that value. Also, and this is
| important and I should have said it first, they have value
| because their supply is restricted.
|
| The same is true for crypto. It's fungible, private, and
| limited in supply. It's also independent of governments
| although they are doing their level best to correct that.
| losteric wrote:
| What are you talking about? We can wear gold, make
| weapons out of iron, cups out of copper... coins have
| both a fiat face value and real tangible value (the
| "floor").
|
| Bitcoin has no intrinsic value. It's entirely belief.
|
| That's not a bad thing. MLMs can be very profitable, some
| turn into multi-generational institutions of faith.
|
| I own bitcoin because it's like buying a share of the
| Mormon church early on. Absolutely, do it! But comparing
| it with gold? Come on, be real.
| sgregnt wrote:
| Bitcoin physical value is that, one way or the other,
| billions of humans got atoms in their brains, arrange in
| such a way that they recognize bitcoins, and have a
| certain understanding of it's setup... this is a lot of
| atoms, and is no small fit.
| losteric wrote:
| You're describing the belief value.
| pandaman wrote:
| It's mostly correct except it's just the governments that
| agree to take gold and silver to settle debts (no, going
| off "gold standard" did not change this, gold and silver
| are still accepted as bank reserves around the world).
| And governments have the power to take your property to
| settle your debts with them. So for anyone, who is a
| subject of a government assigned debt (via taxation
| usually), gold has very practical value as it allows to
| keep one's property.
|
| The same is not generally true for crypto, perhaps in El
| Salvador they really take crypto to settle taxes but in
| any other country crypto only has value because of
| speculators.
| ninalanyon wrote:
| > the governments that agree to take gold and silver to
| settle debts (no, going off "gold standard" did not
| change this, gold and silver are still accepted as bank
| reserves around the world)
|
| Really? Can you point us, or perhaps just me, to
| something that explains that and which countries this
| applies to? I think that I'd have a hard time paying the
| Norwegian tax authorities with gold or silver. In fact
| even paying them in cash would be difficult.
| pandaman wrote:
| >Can you point us, or perhaps just me, to something that
| explains that and which countries this applies to?
|
| Gladly
| https://www.efginternational.com/us/insights/2021/gold-
| and-b...
|
| >I think that I'd have a hard time paying the Norwegian
| tax authorities with gold or silver.
|
| This might be even true since Norway is not in EU but I
| would be surprised if Norwegian banking had been that
| different from Basel system.
| Terr_ wrote:
| > That's true of everything we use as money, including
| precious metals.
|
| To exploit this chance for quote Terry Pratchett, on a
| book that does happen to be about currency and banking:
|
| > 'The world is full of things worth more than gold. But
| we dig the damn stuff up and then bury it in a different
| hole. Where's the sense in that? What are we, magpies? Is
| it all about the gleam? Good heavens, potatoes are worth
| more than gold!'
|
| > 'Surely not!'
|
| > 'If you were shipwrecked on a desert island, what would
| you prefer, a bag of potatoes or a bag of gold?'
|
| > 'Yes, but a desert island isn't [the city of] Ankh-
| Morpork!'
|
| > 'And that proves gold is only valuable because we agree
| it is, right? It's just a dream. But a potato is always
| worth a potato, anywhere. A knob of butter and a pinch of
| salt and you've got a meal, anywhere. Bury gold in the
| ground and you'll be worrying about thieves for ever.
| Bury a potato and in due season you could be looking at a
| dividend of a thousand per cent.'
|
| -- _Making Money_ by Terry Pratchett
| solatic wrote:
| Government fiat currencies have fundamental value because
| their taxes are denominated in their fiat currency, while
| their fiat currency is used to compensate the public
| sector for their labor. If you, as a private citizen,
| want to avoid the consequences of not paying your taxes
| (e.g. prison), you best find a way to get your hands on
| some of the fiat currency that has entered the economy
| via the public sector workers.
|
| For a cryptocoin to have fundamental value, someone must
| be willing to accept it as payment. The only entities
| willing to do so currently are criminal enterprises and
| perhaps the El Salvadoran government (to pay taxes). All
| the other uses (like cross-border payments) rely on
| speculators on both ends providing liquidity for the
| exchange to fiat currency.
| AnthonyMouse wrote:
| > At least with some precious metal, it has a floor value
| as a function of its practical uses and abundance.
|
| Suppose the price of gold is 80% perception of value and
| 20% utility for making electronics etc. Then if you buy it,
| 80% of what you buy is perception of value. You could get
| the same result by buying 80% Bitcoin and 20% commodity
| rock salt. Is someone who buys the latter any more of a
| sucker? What about somebody who then decides to divest the
| rock salt because it has a below-market rate of return when
| they have no direct use for it?
| NoLinkToMe wrote:
| Agreed.
|
| Even the scarcity is artificial, and based something
| between a contract and a gentleman's agreement, not any
| physical reality.
|
| That is, the bitcoin software can be changed if enough
| people want to, to make more of it. And you can create
| infinite copies of bitcoin software and call it bitcoin or
| something else.
|
| That's simply not true for the scarcity of gold.
|
| Finally, insofar as there are uses for the blockchain, the
| ostensible finite volume of bitcoin has no bearing on
| anything, as you don't need 'one of 21 million bitcoin' for
| its blockchain functionality, you can use 0.1 or 0.0001
| bitcoin. It's infinitely divisible, and a small unit of
| bitcoin can get you blockchain functionality.
|
| And yet I've begun to put 5% of my monthly savings into it,
| as it seems to have become the long-term speculative asset.
| It doesn't seem to be going anywhere. But it really appears
| like an utterly ridiculous proposition, a self-fulling
| prophecy.
| catlifeonmars wrote:
| Precious metal floor value is not immune either, since (1)
| it is dependent on supply and (2) specific
| technologies/industries that require their use may become
| diminished or obsoleted. Definitely a lot less volatile
| than something not bound by reality though.
| __MatrixMan__ wrote:
| Are you proposing that "value" is meaningful in the absence
| of some perceiver? All value is the perception of value.
| The only difference is that it's easier to find people who
| value precious metals, but that sort of thing always
| depends on where you look. One can easily imagine
| situations where a position at the front of a queue is more
| valuable to the people nearby than a gold coin. Finding
| value in a blockchain is no different.
|
| It's just that none of the blockchains have yet managed to
| situate themselves such that people are likely to value
| their effects. Instead they're focusing on scarcity, which
| is kind of silly because all of the competition is equally
| empowered to create artificial scarcities. I think they'll
| figure it out eventually.
| lesuorac wrote:
| > Are you proposing that "value" is meaningful in the
| absence of some perceiver
|
| Yes.
|
| Gold conducts electricity.
|
| Bitcoin has no physically useful properties. However, I
| will admit a public ledger is actually probably very good
| for the USA so we can see all the grifting easily.
| cle wrote:
| Nobody cared that gold conducted electricity until very
| recently in human history.
| PeterStuer wrote:
| And fiat currency isn't purely about perception of value?
|
| Just as not all crypto is equal, the Zimbabwean dollar
| isn't remotely like the Swiss frank, just as bitcoin isn't
| remotely like hawktua.
| pessimizer wrote:
| > And fiat currency isn't purely about perception of
| value?
|
| Of course not. I don't know the laws of the country you
| live in, but in the US, the dollar is always acceptable
| as the payment of a court judgement and for the payment
| of taxes. That's not perception of value, that's value.
|
| All money is just IOUs, but getting an IOU from your
| landlord is different than getting an IOU from a
| stranger. You will have to pay your landlord in the
| future, or the landlord will send someone to physically
| throw you into the streets, and might be given license
| from the government to just take arbitrary possessions
| from you. An IOU from the landlord will automatically
| offset that.
|
| When you get IOUs from entities you _don 't_ have a
| ongoing financial relationship with, you need buyers who
| either 1) have an ongoing relationship with or are
| willing and able to transact with that entity, or 2)
| trust that they can find someone who has a relationship
| with that entity who will buy the IOU.
|
| 1) is value, 2) is the perception of value. Crypto has
| 3), in which there is no entity issuing or accepting the
| currency against a real debt (such as taxes or legal
| liabilities, which if not paid result in men in uniform
| hitting you with sticks, chaining you up, and locking you
| in a room), and no place to dump the currency other than
| other speculators.
|
| You can find people who believe in bitcoin, so bitcoin is
| liquid. But bitcoin support relies on a constant and
| enormous amount of marketing and lobbying, in the exact
| same way as "hawktwa." Crypto (thus far) only has _value_
| in that it can aid in criminal transactions (semi-
| privacy), and that enough wealthy people own it that they
| 're now convincing weak governments to subsidize it.
| Dodging law enforcement and government handouts to the
| wealthy on one hand; maintaining preexisting legal
| obligations and paying taxes already owed on the other.
| Both fiat and crypto rely on government, but crypto is
| government _subverting itself_. Crypto only has value to
| the degree that governments allow or encourage
| lawbreaking and corruption. Crypto (as it is, not a
| hypothetically) is parasitic.
|
| > Zimbabwean dollar isn't remotely like the Swiss frank
|
| The Zim dollar is exactly like the Swiss franc, except
| it's harder to find people who pay Zim taxes and court
| judgements than people who pay Swiss taxes and court
| judgements. Just as hawktwa is exactly like bitcoin,
| except they lack the lobbyists, and the marketing is
| focused around a viral youtube clip. The big difference
| between the two classes is that you don't have to be
| convinced that government fiat is worth something, you
| know it is. The reach of crypto, outside of fraud and
| government graft (which is real value) is simply the
| reach of crypto marketing.
| fsflover wrote:
| > The reach of crypto, outside of fraud and government
| graft (which is real value) is simply the reach of crypto
| marketing.
|
| Except when your government is not trustable and you have
| to find a way to store and transfer value in an
| independent and anonymous way.
| saalweachter wrote:
| The tricky part is there is a difference between "your
| government is not trustable" and "you don't trust your
| government" that you can never bridge.
| fsflover wrote:
| Why does it matter here?
| saalweachter wrote:
| Moving your money into a non-local currency or store-of-
| value has a cost and its own risks.
|
| If you trust an untrustable government, you lose when
| they betray you. If you don't trust a trustable
| government, you lose when you spend years and decades
| hedging against their betrayal and it never comes.
| fsflover wrote:
| This is all true. The point is that a cryptocurrency
| gives you a choice, which you otherwise don't have, so
| it's useful.
| IsTom wrote:
| If nothing else, when the time to pay tax comes, you'll
| find yourself in need of some fiat if you want to stay
| out of the trouble.
| mandmandam wrote:
| > That's the thing I can't ever come to understand about
| crypto. It's purely about perception of value.
|
| It's not though. It became about that, in general, but
| there are crypto projects out there which don't focus on
| hype or valuation.
|
| It _is_ functional and useful to be able to move value
| worldwide for 10% of the energy of a credit card
| transaction, decentralized, at sub-second speed, with no
| fees, even when just moving tiny fractions of a cent.
|
| There are a lot of maxis and bag holders trying to prevent
| people from figuring that out, but sooner or later a crisis
| will hit and everyone will remember what crypto was about
| in the first place.
| WinstonSmith84 wrote:
| You're mixing up a bit everything. Bitcoin is totally
| different from Ethereum or Solana and these 2 networks are
| different from all the NFTs and meme coins launched on
| these Ethereum and Solana.
|
| By the way, if you thought that Trump was doing something
| illegal, which certainly sounds suspicious, well it isn't.
| This guy gives a good overview of the why
| https://x.com/wassielawyer/status/1881995797245600248
| kasey_junk wrote:
| It's not illegal for a celebrity to launch a meme coin or
| collectible. It's not as clear if the President and his
| direct family can do the same.
|
| Anti-bribery/corruption is the concern with the coins
| (just as it was with his hotels in the first
| administration). Not the legality of the coin.
|
| But it's moot, this admin has decided that norms don't
| constrain it and it will not allow investigations into
| itself. So it's de facto legal.
| WinstonSmith84 wrote:
| it's a ... memecoin - a category of crypto assets.
| pavlov wrote:
| It's a funnel for foreign bribes. That's literally the only
| utility of these Trump coins.
| csomar wrote:
| You don't need a bank to create money out of thin air and
| creating a bank won't allow you to do that.
|
| I can create money out of thin air with you, if you are willing
| to accept my credit worthiness.
| badgersnake wrote:
| Tether appear to have created a huge amount of USD out of thin
| air.
|
| Best not to pay much attention to Andreesen though.
| TeaBrain wrote:
| On this point, I too have a really difficult time
| understanding how there is supposedly >$50 billion in
| treasury bonds backing Tether USDC sitting at Cantor
| Fitzgerald. It really does seem like the bonds backing tether
| just came out of thin air, unless tether was sponsored by an
| entity that gave them the wherewithal to obtain the bonds,
| for the sole purpose of moving money without KYC with tether.
| FireBeyond wrote:
| 100% - even a few years ago, Tether claimed that they were
| receiving USD deposits approaching $5B per _week_. That
| amount of income is at the Saudi Aramco and others level.
|
| Of course, it was all supposedly being deposited into
| Deltec Bank, whose website was a Wordpress site, whose
| "Deputy CEO" couldn't remember the name of the country's
| two banking licenses, and which one Deltec held, or whether
| they held both.
|
| I guess it's hard to track all of those things when you go
| from getting your Masters in Science at HEC Lausanne at 15,
| and immediately being appointed a Professor of Finance at a
| Lebanese university, all while running your own hedge fund,
| "Indepedance (sic) Weath (sic) Management" from
| Jacksonville FL...
| perrygeo wrote:
| > mega banks have the sole power of creating credit out of thin
| air
|
| Amazing that more people don't know this. Most people will
| insist until their face is red that bank credit is a "loan"
| with equal debits and credits on both sides of the balance
| sheet. Wrong. The borrower's bank account goes up. And the
| bank's balance sheet goes up (the loan is an asset). Viola, new
| money.
| danielmarkbruce wrote:
| Take the next step. What happens when the borrower spends the
| money and the place they spend it banks with different bank?
|
| What's amazing is that more people don't think this through.
| They just take the "thin air" story and that's it.
| alecco wrote:
| Alice gets a 400k mortgage at bank A, so she gets 400k in
| credit at her (new?) account at the bank. Alice then pays
| to Bob for the house by transfering the 400k to Bob's
| account at bank B. No real money or gold is moved. Alice
| owes bank A 400k with money slave interest rate (e.g. 7%),
| bank A owes bank B 400k + interbank interest rate (e.g.
| 4%), and bank B owes Bob 400k (but they phrase it as "he
| has credit").
|
| Both Alice and Bob's salaries are just credit at banks in
| the same system. If they sell their cars they get money
| from the same system. There's no way out.
|
| The banking system's accounting trick to create money was
| proven by prof Richard Werner.
|
| The limits on cash transactions are growing. To pay for
| something like a car you'd need a bag of papers as higher
| denominations to match inflation would never be printed.
| Cops can seize cash without much of an excuse. Customs can
| seize cash over 10k without much of an excuse.
|
| A small bank can only go down if other banks don't trust
| them. Like SBV a couple of years ago. But their assets are
| taken by a bigger bank. Lehman Brothers was a rare
| exception and it looks like Goldman wanted them to go down
| for some petty reason. But the AIGs will always be bailed
| out.
|
| More small banks going belly up and more bailouts are
| coming. The world is reducing exposure to dollar. Central
| banks are selling US treasuries and buying gold. The US
| dollar's empire is crashing down and the Western banking
| cartel is getting desperate. They'll try to drag the world
| into war or some other old trick.
| lesuorac wrote:
| > No real money or gold is moved.
|
| Money is moved; this is the problem with your analysis,
| see page 19 of the infamous Bank of England's "How Money
| is Created" paper [1].
|
| [1]: https://www.bankofengland.co.uk/-/media/boe/files/qu
| arterly-...
| danielmarkbruce wrote:
| You missed an important bit... the banks (A & B) accounts
| at the federal reserve are updated (bank A down, bank B
| up) for the transfer. And that's where the rubber meets
| the road. If bank A doesn't have the assets, it all
| stops. Banks don't just give each other endless credit to
| solve payments...
|
| There is no magic in banking. If you describe something
| and it sounds magical, a piece is missing. If you were
| running bank B, you'd never agree to what you described.
| You'd want the assets, or you'd want some kind of
| collateral even if you were willing to do an interbank
| credit, you'd limit it, you'd do all kinds of credit
| analysis on your bank counterparties... And what I just
| described is how trading of securities tends to work
| between banks. But even then, it's not how payments are
| solved...
| ahtihn wrote:
| If you count the loan as an asset, surely you have to count
| it as a liability for the borrower. And the bank has to
| actually give the money, so they're down that money.
|
| In the end both are net zero.
| makeitdouble wrote:
| The transaction is balanced in isolation, but the initial
| part (actually giving the money) is allowed to be negative
| for the bank as long as they're within their leverage
| ratio.
|
| So yes, as a whole the bank gives money from thin air.
| Johanx64 wrote:
| It's not net zero because you collect all the interest on
| money you didn't have to begin with and created out of thin
| air via an accounting trick.
|
| Now obviously the liability will get zeroed out in the end,
| but in the meantime you get to keep all that accumulated
| sweet interest for ... uh... "managing risk"... it's a very
| beautiful thing!
|
| So you have in fact created money out thin air, it's in the
| interest payments! You pay interest for basically
| "nothing!" (cough, cough, "managing risk"). And that
| interest does not get zeroed out! It's "pure" profit from
| an accounting trick.
| kdmtctl wrote:
| You can't do this indefinitely. There a lot of risk
| management rules and capital requirement ratios which dictate
| how much money you can make of "the thin air". Also you
| should have enough liquidity to let the customer transfer the
| borrowed amount outside to actually use it.
| ninetyninenine wrote:
| i thought the central bank does this?
| Frummy wrote:
| It goes up the chain to the central bank.
| danielmarkbruce wrote:
| Getting a banking license in the US at least is totally doable
| and lots of banks are created de novo every year.
|
| As another commenter noted, anyone can create "money out of
| thin air". Come to my corner store and buy an apple on credit.
| Poof!
|
| Credit was the original money, made out of thin air, and can be
| by anyone.
| kcatskcolbdi wrote:
| Everyone has their own opinion of "lots" I suppose, but the
| quickest info I could come by in a quick search was 8 de novo
| created in 2021.
| danielmarkbruce wrote:
| Yup it's in the ~10's every year more or less.
| ianwalter wrote:
| Sure, but because of fintech not as many need to get
| created. Fintech has made it relatively easy for new
| entrants to work with partner banks through BaaS platforms.
| Red_Comet_88 wrote:
| Can your corner store credit be used to pay taxes? How long
| will your corner store survive if the IRS found out you were
| processing transactions in your own currency?
| danielmarkbruce wrote:
| No to paying taxes, mostly because the asset you'd have is
| an apple... The corner store at least has a receivable, but
| the IRS still won't accept that from them.
|
| But, at least in the US, before the national bank acts in
| the 1800's, various taxing entities specified which bank
| notes (or other assets) they'd accept and not accept. It
| was basically whichever bank notes circulated the most with
| no/little discount, some gold/silver coins, some government
| bonds. Ie acceptance by a taxing entity isn't really a
| clear line on "is/is not" money.
|
| Trading receivables has been going on forever, happens
| today, is totally legal. The corner store could sell the
| receivable, and many businesses to sell their receivables.
| snitty wrote:
| >How long will your corner store survive if the IRS found
| out you were processing transactions in your own currency?
|
| Offering someone credit in USD isn't making your own
| currency. The closest widespread version of that are
| community currencies[0], which the US doesn't seem to
| particularly care about -- I'm guessing because they're
| generally pegged to the dollar and promote local economies.
|
| [0] https://en.wikipedia.org/wiki/List_of_community_currenc
| ies_i...
| kasey_junk wrote:
| You didn't say currency, you said credit. But it doesn't
| matter, lots of non-US chartered institutions historically
| create US dollars. There are some treaties around it now
| but in the beginning English banks created the Eurodollar
| system with no control by the US government.
| jdminhbg wrote:
| There used to actually be lots of new banks, now there are
| some: https://www.statista.com/statistics/193052/change-in-
| number-...
| owenversteeg wrote:
| Huh, from about 150/yr from 2000-2008, not one from
| 2011-2016, 10/yr 2017-2023. Interesting.
| jgilias wrote:
| Buying an iPhone on credit is not making money out of thin
| air. Unless you can fractional-reserve create iPhones.
| danielmarkbruce wrote:
| Sure it is. In fact, it's fractional banking where the
| fraction is 0.
|
| Consider how much business can be done on credit, and what
| constrains it. Infinite, and nothing. My corner store is
| not required to hold reserves against it's receivable.
| Apple (or a telco) is not required to hold reserves against
| it's receivable for a phone on credit. Their suppliers
| aren't required to hold reserves against credit on them.
| And so on all the way back to the folks digging stuff out
| of the ground.
| throwaway894345 wrote:
| I remember reading about Monzo bank in the UK a lot some 5
| years ago. I'm curious how they are doing these days. Seems
| like they're still operating?
| ctippett wrote:
| They're doing quite well it seems. Everyone I know seems to
| have an account with them.
|
| They've had a full, unrestricted bank licence since 2017 and
| have over 9.3m customers[1].
|
| [1] https://en.m.wikipedia.org/wiki/Monzo
| jen20 wrote:
| I used them during their beta phase and they were my
| primary bank until I left the UK. Exceptional service, and
| the only app from a UK bank that wouldn't have made you
| want to cry with how awful it was.
| jongjong wrote:
| Exactly. Bankers are modern-day royalty. Banks are granted
| special, exclusive powers by the state to issue/counterfeit the
| nation's currency as loans. Banking executives are anointed by
| decree.
|
| The idea of 'disrupting banks' is gaslighting because it
| pretends that they operate within a 'free market'.
| wisty wrote:
| Crypto fans and gold bugs miss a very important point - if
| their favourite currency were to get big, banks would hold it
| as an asset, and issue loans in exactly the same way as any
| other currency.
|
| Do you want interest and the conviniance and security of a real
| bank? Give it to a bank to look after. There are maybe some
| risks, but there's also risks with a bitcoin wallet or physical
| bullion (theft, losing it).
|
| Do you want money now, and can pay it back later? The bank will
| loan it.
|
| Are the banks in trouble? The government can regulate, and even
| rescue them. A run can happen, but as long as the government
| and banks say the money is there, who cares about conversion to
| a bitcoin or bullion?
| forgetfreeman wrote:
| Crypto has never posed a credible threat to any aspect of the
| establishment, and it never will. Need proof? You don't have to
| go through an arduous screening process to acquire and deploy
| compute. The finance industry saw a pool of dumb money forming
| and predictably decided they'd like a slice of the action.
| cbozeman wrote:
| > an arduous screening process to acquire and deploy compute
|
| That right there is more unlikely than crypto becoming a
| credible threat to the banking establishment.
|
| If you want to see a lot of dead bodies of rich people in the
| street, tell the rest of the world they can't have their
| smartphone and laptop and Xbox and Playstation.
|
| That's a great way to get yourself killed.
| forgetfreeman wrote:
| lol what
| JumpCrisscross wrote:
| > _there is more unlikely than crypto becoming a credible
| threat to the banking establishment_
|
| Follow the money: Wall Street loves and lobbies for crypto.
| snitty wrote:
| >The banks and gov brought the hammer down on crypto because it
| was a legitimate threat to the banking cabal which runs the
| American Empire.
|
| Price instability, confiscatory and variable transaction fees,
| several high profile frauds -- including in a so-called "stable
| coin".
|
| Crypto is its own worst enemy. Not the government.
| Cthulhu_ wrote:
| Yeah, that "banking cabal" includes a heap of checks and
| balances that at least on paper stop financial crimes like
| scams, money laundering, market manipulation, insider
| trading, and they add guarantees like the relative stability
| of value, interest rates, and compensation if your bank does
| end up going bankrupt.
|
| You get none of those protections with cryptocurrency, which
| is exactly what scammers, criminal organizations, and
| financial libertarians want.
| blackeyeblitzar wrote:
| If there isn't sufficient competition for commercial banks, I
| think they should just be regulated as privately owned
| utilities for the public good or just be made into a public
| agency. What is the point of outsourcing this service to
| private industry if there is no working market dynamic?
| cheriot wrote:
| > the mega banks have the sole power of creating credit out of
| thin air
|
| Every bank does that. The US has more than 4,000 of them.
| 1oooqooq wrote:
| in brazil and india, american backed "fintech" could create
| credit like you descibe, plus none of the pesky revenue
| reporting required fom banks.
| RayVR wrote:
| ah...I don't miss the shockingly willful ignorance of the
| crypto boom days. Go try your conspiracy nonsense on reddit and
| leave us be.
| Cthulhu_ wrote:
| > and no upstart fintech company has this power
|
| Most of the cryptocurrency companies prove that this statement
| isn't entirely true though, unless I don't get it. That is,
| they generate cryptocurrencies out of thin air (credit) and say
| it has a certain value, then people pay them fiat money for
| those. They just generated value out of thin air and some
| compute cycles.
| kasey_junk wrote:
| Everyone has the power to create credit out of thin air.
|
| What the banks have (now, due to long history) is a regularly
| regime where we expect the government to fix that credit when
| the bank gets those credit decisions wrong. In trade for that
| extraordinary treatment governments demand banks comply with a
| variety of regulations.
|
| I've worked for a long time in the banking and credit space, no
| one I know in that industry thinks Andreeson did a credible job
| explaining modern banking. To knowledgeable people he came off
| as either fundamentally ignorant or extremely deceptive
| depending on your cynicism levels.
| selecsosi wrote:
| Thank you, this is something I think people really
| misunderstand about "money" in our system. Every time I
| create a "loan" for a family member I've technically created
| (i.e. debt) I've done the equivalent as to what a bank does
| to create "money". The question becomes if I can take the IOU
| I have from my brother, and trade that to another individual
| when I need to acquire goods.
|
| The fact we have a mechanism to create trust in trading debut
| is about assigning and managing risk in the payment of that
| debt, and transferring/holding that risk over time, which is
| a separate aspect to the raw creation of money concern
| (managing total debt loads).
| picafrost wrote:
| In many cases the start-ups that disrupted entrenched big players
| did so by skirting the existing law and regulations the big
| players have to abide by and gaining market share before
| regulators could catch up to them.
|
| Maybe I simply lack vision but I don't think this behavior maps
| well into the fundamental day-to-day livelihoods of every day
| people. Certainly I am not willing to risk my finances for
| marginally increased convenience or marginally lower fees.
| m101 wrote:
| This. Regulation has been set so high on banks that it makes it
| extremely difficult for new players to compete.
|
| The reasons given for regulation are:
|
| - protection from failure because of inability to not bail them
| out (and it has done a good job of this by and large, with some
| obvious risk oversights - e.g. silicon valley bank)
|
| - money laundering regulations
|
| The real corruption/monopoly in financial services that needs
| addressing are the amex/visa/mastercard transaction fees. The
| only way to fix this, in my opinion, is to have the consumer
| pay the fees.
| bryanlarsen wrote:
| The big problem with amex/visa/mastercard is that it's a
| three sided market.
|
| So make it a 2 sided market, unify the processor into one of
| the sides. In other words, either a merchant co-operative or
| a consumer co-operative. In this case, a merchant co-
| operative seems a natural fit. The merchants jointly own the
| co-op, and get a refund of their fees proportional to the
| profit of the co-op.
|
| And you get the consumers on board the standard way: by
| bribing them. So something like a 2% rebate. So the merchant
| fees stay at a similar rate, but the merchants win in other
| ways because they own the processor.
|
| Nobody's going to become a billionaire starting a co-op, but
| an executive in a successful financial co-op would pull in a
| multi-seven figure salary, which should be sufficient
| motivation to interest the startup folks.
|
| And Y-Combinator would have to loan money to such a startup,
| they couldn't buy in. But it's in their interest to do so,
| given how much of the Y-Combinator portfolio is dependent on
| credit cards.
| toast0 wrote:
| I don't see how this is going to work.
|
| Rewards cards already bribe me at 2% (and there are better
| offers). Big merchants often offer a store card, sometimes
| a store card that's also a general use card, but they
| typically bribe people with 5%.
| lesuorac wrote:
| I really don't get why it took so long for a bank to buy
| Discover.
|
| It seems like such a good deal to get higher margin and
| then you could ultimately offer consumers better cashback
| or w/e rewards than a less vertically integrated card
| could.
| bryanlarsen wrote:
| The cards that pay 2%+ are the premium cards that charge
| merchants 4%+. If you're competing against that rate, you
| could give a 4% cash back.
|
| Those big merchant store cards are a likely path for how
| my scenario plays out. Imagine if a half dozen of those
| big merchant store cards merge, ditch their
| visa/mastercard pairing and provide an attractive path
| for other merchants to join.
| blitzar wrote:
| > The real corruption/monopoly in financial services that
| needs addressing are the amex/visa/mastercard transaction
| fees.
|
| The filthy anti capitalist socialists in Europe have already
| done that.
|
| EU Interchange cap as follows: 0.2% of the transaction value
| for Visa and Mastercard consumer debit cards. 0.3% of the
| transaction value for Visa and Mastercard consumer credit
| cards.
|
| Seems to work fine.
| throwaway894345 wrote:
| My company works in the healthcare space. I don't know if we're
| really "disrupting" as much as we are inventing new niches that
| were previously unoccupied, presumably because of the
| difficulties of dealing with regulators, working with
| electronic healthcare record (EHR) systems, and working with
| large, bureaucratic healthcare organizations like hospitals,
| insurance companies, pharmaceutical companies, and EHR
| providers. We've had a lot of success without dodging or
| stretching regulation (although we did work with regulators to
| create a new category of medical device: algorithms).
| epolanski wrote:
| One problem with fintechs is that they are severely ad
| disadvantage when it comes to regulations.
|
| The first thing those banks face when they open in Italy is a
| huge surge of difficult customers and they realize too slowly
| how difficult and expensive it is to abide to anti laundering.
|
| 6 months down the road they start closing accounts left and
| right just because you do too many operations and it's
| expensive to track them.
| scarface_74 wrote:
| What isn't the bank doing for me that is in need of "disruption"?
|
| High Yield Savings Accounts? Amex offers a HYSA that is 3.8% vs
| LendingClubs 4.5%. How many people have enough money in savings
| to make the difference worthwhile and make them willing to trust
| a non traditional bank? I have a year's worth of expenses in mine
| (in addition to retirement savings) and I wouldn't even bother.
|
| My bank is there to accept my money and let me pay stuff with it.
| hansvm wrote:
| In the $5k-$10k savings range, you can also average 4.5% just
| by switching banks every year and taking advantage of sign-up
| bonuses. With a spouse and the referral bonus, the break-even
| cap goes up to $15k-$30k. Everything is FDIC-insured the whole
| time.
|
| I'll wager that under $5k in savings, the $35/yr difference
| between those two account types might probably doesn't matter
| in the slightest. That opinion is colored by a couple of these
| neobanks "losing" thousands of my dollars for months at a time
| during transfers, the prospect of which seems much more
| dangerous to somebody with limited savings and likely only one
| bank.
|
| Above $30k, you can easily and cheaply get a medium-touch
| experience with a company like Merrill Lynch (who themselves
| offer 4.2% even in zero-risk (outside of bankruptcy) accounts)
| and should maybe start looking at moving some of that out of a
| traditional savings account anyway.
| dylan604 wrote:
| > What isn't the bank doing for me that is in need of
| "disruption"?
|
| Why is there still a hold for check deposits? Why do we still
| have banker's hours and business days for transactions?
|
| There are plenty of ways banks could be improved
| scarface_74 wrote:
| What type of transactions do you need to make outside of
| business hours that you can't do electronically?
|
| And who actually deals with physical checks? Even the various
| contractors I used when preparing my home for sell took some
| form of electronic payment
| dylan604 wrote:
| if i transfer money from one bank's account to another, it
| takes minimum of 48 hours if I make the request before 3pm
| cutoff time. Day 1, the transfer request is made at 1pm.
| Day 2, the money is no longer available in the sending
| account yet not in the receiving account. Day 3, the money
| is available in the receiving account. If I do it after
| 3pm, the request is not placed until Day 2. Why? WTF does a
| computer have a cutoff time? Does it go home and cook
| dinner for the family and do homework with the kids?
|
| >took some form of electronic payment
|
| These are nothing but electronic requests. No human needs
| to be involved, yet here we are. But sure, let's go ahead
| and argue like I don't have valid issues because you seem
| to not have any.
| scarface_74 wrote:
| Zelle is run by the banks and transfers are instant and
| free.
|
| https://www.zellepay.com/faq/how-long-does-it-take-
| receive-m...
| RestlessMind wrote:
| Zelle has a limit on the amount I can transfer,
| especially for new contacts. And it is precisely new
| contacts where I need to make a big payment, latest
| example being the contractor to remodeled my kitchen and
| didn't want credit card payment for some reason.
| dylan604 wrote:
| > didn't want credit card payment for some reason.
|
| i'm guessing 3.5%+ is the some reason
| Spooky23 wrote:
| Tradesmen who are allergic to credit cards are always
| avoiding tax, period.
|
| The proper response is to ask for the cash price.
| scarface_74 wrote:
| Exactly this. Paying 3% more for credit card vs cash is a
| wash for me. I get 2x back by charging it to my Amex Blue
| Business Plus, those 2x points are easily worth more than
| 3% when transferring to an airline.
| zellehell wrote:
| Zelle isn't run by the banks, it's operated by Early
| Warning and it's a scam service designed to harvest
| everyone's bank transaction history for intelligence
| gathering and fraud detection services
|
| https://www.earlywarning.com/
| scarface_74 wrote:
| An the Early Warning System is co-owned by 7 banks
|
| https://www.floridatoday.com/story/news/2024/08/14/zelle-
| inv....
|
| > Zelle is owned by Early Warning Services, a financial
| tech firm and consumer reporting agency that is co-owned
| by seven of the largest U.S. banks: Bank of America,
| Capital One, Chase, PNC, Truist, U.S. Bank and Wells
| Fargo,
|
| Once you are part of the banking system, everything is
| tracked anyway
| ianburrell wrote:
| Wait for FedNow to get rolled out. That is the Federal
| Reserve's instant payment system. It does need to be
| implemented by banks cause it is just an API. One nice
| feature is that it has push model, pulling money means
| making request that can be approved which should increase
| the security.
| wahern wrote:
| The problem with pushing payments is that the cost of
| fraud falls on the payer. In the pull model, if the payer
| says it was unauthorized, the rules favor the payer--
| restoring the payer account happens as a matter of
| course, and disputes are handled subsequently. This sucks
| for the payee, but they're usually businesses who are
| more sophisticated and better placed to handle these
| issues. But in the push model, the presumption is the
| payment was intended by the payer. It's a wholly
| reasonable presumption assuming sophisticated, rational
| agents. But we're talking rolling out push payment
| systems where the payer will be your elderly grandmother.
|
| It won't be pretty unless there are some aggressive
| changes to existing regulatory and legal frameworks. But
| it's not easy to figure out to protect consumers in push
| payment systems without opening gaps where fraudsters can
| directly abuse the system, like checking kiting scams of
| old. (Checks are a pull payment type of system, but the
| important point is that the cost of check fraud--forged,
| kiting, etc--fell primarily on banks and merchants, and
| less on individual grandmas who couldn't buy food because
| they were stuck in a months-long battle with the bank to
| recover funds.)
| ianburrell wrote:
| Pulling fraud with ACH is pretty rare. All the scammers
| trick people into sending them money, or take over
| account and send it, this is more common with phones and
| Zelle. The latter would be handled with current system.
| The former isn't handled with current system, and would
| be helped if there was way to reject transfers to help
| with return money scams.
|
| There is danger that people will send money on bogus
| requests, but invoice fraud is already covered. Other
| countries have the same model of sharing account number
| widely and it works.
| wahern wrote:
| > There is danger that people will send money on bogus
| requests
|
| It's a _huge_ danger. This is why there are so many
| Bitcoin ATMs in convenience stores. Scammers call
| vulnerable people and induce them to send them Bitcoin.
| The number of people who you can convince to withdraw
| hard currency from their bank and feed it into a Bitcoin
| machine on the request of their "sick nephew" or
| "Microsoft Security Team" is mind blowing. Even elderly
| former police and attorneys do this.
|
| Push payments make it much, much easier--now it's just a
| click away. The risk is higher for the scammer and it's
| easier to trace as compared to Bitcoin transfers. But it
| will be an endless game of whack-a-mole, and because the
| losses won't primarily fall on banks, payment networks,
| or other least code avoiders (unlike with credit cards--
| especially--or other forms of pull payment in general),
| there's less direct economic incentive to do prevention.
| We'll likely end up with more centralized, government
| policing, which will be far less effective and generate
| more political friction.
|
| Push payments are the future. They're already ubiquitous
| in many other countries. But while it will streamline
| day-to-day transactions, there are going to be many more
| victims of fraud left holding the bag. And you can see
| this in Europe, where push payment fraud is rapidly
| expanding.
|
| And even if, in nominal dollar amount, total push fraud
| ended up equivalent to pull (e.g. credit card) fraud, the
| social cost is greater as you end up with a small number
| of people bearing all the costs, whereas with pull fraud
| the costs are effectively spread across society in the
| form of slightly higher transaction costs and goods &
| services prices. There's no built-in transfer mechanism
| (i.e. tax) like that in push fraud because the incentive
| and accountability structure is radically different,
| notwithstanding that in the abstract it's a very simple
| change in who is considered the initiator of a payment.
| epolanski wrote:
| In Europe we have instant bank transfers, for free in
| Italy as of January 2025.
|
| The bad thing is that they don't work outside business
| hours (not a huge problem), and that you can't
| cancel/revert it.
| dutchbookmaker wrote:
| This is because of counter party risk with settlement. It
| is not hard to figure out. You just have no idea what you
| are talking about.
| blitzar wrote:
| > if i transfer money from one bank's account to another,
| it takes minimum of 48 hours if I make the request before
| 3pm cutoff time
|
| In the bulk of the free world these transfers are instant
| 24/7 - if I stay within the single banking brand I can do
| that internationally.
| dutchbookmaker wrote:
| Banking already has been disrupted too.
|
| It is so easy to move money around now there is no reason to
| keep that much in savings. It is crazy how easy it is to move
| money from a savings account to a brokerage account and buy a
| tbill in 2025 vs 1990.
|
| Retail banking has really been stripped to its absolute bare
| essentials. There is no growth in banking in the US other than
| growth by acquisition.
|
| I can't think of a worse investment than a bank startup.
| joshstrange wrote:
| I love HYSA, I made a sizable chunk on the interest and
| switching banks for the best rate is normally only a few steps.
| Right now I'm moving my savings from One Finance (3.75%) to
| Barclay (4.25%) because One dropped their rates (from 4.5%
| IIRC) and I'll make ~$40 more a month from the switch. It's not
| a ton of money but it's not nothing and it's dead simple for me
| to move the money.
| adamtaylor_13 wrote:
| I don't think disrupting banks is even possible. The time, money,
| and energy required is simply not realistic. There's so many
| disrupt-able industries out there and I'm not even sure banking
| is the most beneficial one to tackle.
|
| It's a realistic Star Wars story where the Empire always wins
| because... well it's the fucking empire. They didn't get there by
| losing.
| rco8786 wrote:
| Right. Banks are boring. The whole industry is based on very
| simple math. Nothing much to disrupt.
| absolutelastone wrote:
| They've "lost" a few times by now. Government has propped them
| up.
|
| The other side of the innovator's dilemma is the fact that the
| market leaders who don't stick to their current winning
| formula, instead risking big on a new technology, will sooner
| or later get it wrong and fail on their own. That's why it's a
| dilemma.
| danielmarkbruce wrote:
| JP Morgan Chase and Wells Fargo would have been fine in '08
| had they been left alone.
| qaq wrote:
| Not all of them were on the loosing side of that situation
| JPM had sold off most of risky mortgages in prior years
| taking a sizable haircut while other banks were supposedly
| raking it in. There was a ton of pressure on Jamie Dimon not
| to do it because JPM numbers looked bad compared to peers in
| those years.
| adamtaylor_13 wrote:
| I guess that's my argument as to why it's not losing.
|
| If the government bailed you out, you didn't lose. They have
| yet to really lose. Thus no incentive to disrupt such a
| "steady" industry.
| Neonlicht wrote:
| The government is very conservative in handing out banking
| licenses.
|
| There was a famous scandal with an Icelandic bank that was
| disrupting the market with higher interest rates.
| imtringued wrote:
| It is basically impossible to license a new bank in Germany
| and the financial regulations have become stricter over time,
| with a full banking license being mandatory for more and more
| things. It's kind of disturbing.
|
| If you are a big bank, you already have all the licenses and
| can do everything so what difference does that regulation
| make in practice?
| okanat wrote:
| N26 did it but creating a new bank attracts money
| launderers and scammers. The legal department costs are
| infeasible and half a century-old systems are not easy to
| adapt to new banking concepts. The government and
| regulation side of the system needs serious improvements in
| Germany to bring them to 21st century first. However, there
| is little economic incentive to do so. With an aging
| population and deeply conservative culture, there is little
| political incentive to improve any infrastructure. The
| current governing parties will probably lose the election
| next month because they made costly infrastructure fixes.
| luckylion wrote:
| But you don't necessarily need a banking license, right?
| My understanding is that there's a handful of bank-as-a-
| service banks that have a license and will let you do
| your thing.
|
| I'm sure the aging population doesn't help, but to me the
| primary inertia comes from how difficult it is to switch.
| You can take your phone number with you while changing
| providers, you can't do that with your bank account. They
| have "services" that are supposed to handle that, but
| having dealt with their investment arms and moving a
| broker account from one bank to another, I wouldn't trust
| them to not mess it up, and suddenly my rent isn't
| getting paid. So I'd have to do it myself, which will
| make me deal with lots of stupid systems and processes
| and cost a hours upon hours. I'd need to save 100% of my
| banking fees (which are way too high) for a decade or two
| to make that worthwhile.
|
| Make switching banks as easy as switching phone providers
| and you'll get some competition going.
| okanat wrote:
| To be honest, in Germany even the brick and mortar banks
| provide transfer services. They will detect and move your
| automatic payments. You usually fill a form, login to
| each bank and they send automatic requests to move stuff.
| Similarly my broker also supports moving accounts for me.
|
| Moreover, especially after the Wirecard scandal, I
| wouldn't trust any company that doesn't have a banking
| license. Without a banking license they can nuke my
| entire account and I will be the only responsible idiot
| for that.
|
| Btw, the US system is exploitative and decades behind
| what the worst European countries have. NFC payments
| became a thing after Apple brought them to the US.
| Europeans, heck, Middle Eastern countries were already
| using NFC EMV payments for 5 years by then. The
| technologically best and most trustworthy banks are
| usually from Northwestern Europe so look for Nordics and
| the Netherlands, if you would like to see a modern but
| not totally exploitative banking looks like.
| jajko wrote:
| > The current governing parties will probably lose the
| election next month because they made costly
| infrastructure fixes.
|
| Germany is heading / has bet on a completely different
| direction than actual real world out there is moving to.
| The unability to admit massive failures and adapt is
| glaringly obvious even from outside, and literally fucks
| up whole EU left and right. Germany and its population
| has tremendous potential, we all know it, yet it looks
| like headless chicken running around yard with no
| positive future that I can see.
|
| I don't care who will rule there, nobody outside
| understands nor cares about detailed internals of
| Germany. But, for a change, please put there somebody
| competent who can steer country and a bit whole continent
| as a consequence, has respect of peers and adversaries
| and can do necessary changes to keep it all afloat.
| Current and past leadership was and is... don't have a
| nice name, so better not describe it. Massive damage
| across whole EU. Weak EU then invites dictators to try to
| test its strength.
| hinkley wrote:
| There comes a point where a reverse merger makes more
| sense. You want to be a bank? Buy one. You want to be a
| "different" bank? Buy one that's at a tipping point and
| make your agent of change pitch.
| ninetyninenine wrote:
| all empires eventually fall
| lxm wrote:
| Isn't that usually indicative of a winner-takes-all sector
| running on pretty thin margins?
| JumpCrisscross wrote:
| > _don't think disrupting banks is even possible_
|
| They've been disrupted on multiple sides massively in the last
| twenty years. Blackrock, Vanguard and Fidelity are disruptors
| to their deposit and savings-account models. Quicken _et al_ a
| disruptor to their lending side. Private credit, securitised
| lending--all taking away their balance sheet operations.
|
| Retail banking hasn't changed inasmuch as people like branches.
| But the moment you go branchless the banking options radiate,
| and that's more people every day.
| pqdbr wrote:
| In Brazil traditional banks are totally being disrupted. See
| Nubank.
| rapfaria wrote:
| Not sure abou that:
|
| Credit portfolio in 2023:
|
| Itau - $1176 billion
|
| Banco do Brasil - $1109 billion
|
| Bradesco - $877 billion
|
| Nubank - $91 billion
|
| Nubank also had the highest default rate between them (some
| 6%).
|
| It was great when it was created (fully digital, no credit
| score check for a credit card), but it is now dealing with the
| same problems as the big banks
| hcarvalhoalves wrote:
| To be fair, you have to compare credit portfolios by product
| and customer size. That is how the Central Bank reports and
| tracks these numbers.
|
| Nubank offers consumer credit (credit card, personal loans),
| but you're comparing portfolios that include mortgages, large
| companies, industry, agriculture, etc.
|
| Similarly, the default rate of the entire portfolio varies
| according to the product mix, so you can't compare that way.
| neilwilson wrote:
| First thing you have to do is understand how banks actually work
| at root[0]
|
| [0]: https://new-wayland.com/blog/framework-of-a-basic-bank/
| d_burfoot wrote:
| It's crazy to me that we're still using the same approach to
| banking, given that the banking system regularly blows up and
| drags the rest of the economy into a recession.
| myvoiceismypass wrote:
| Regularly?
| gabruoy wrote:
| It's crazy to me that we're still living on Earth, given the
| climate risks and the natural disasters destroying people's
| lives.
| a1o wrote:
| Aren't the big banks buying the fintech companies that have more
| probability to create disruption?
| nottorp wrote:
| Hm so when a fintech "disrupts" banks it ends up walking and
| quacking ... like a bank? Is it even a fintech any more?
| jbs789 wrote:
| The large banks have achieved scale in terms of accepting
| deposits and lending at lowish margins. To accept deposits they
| need regulatory approval and oversight.
|
| For higher margins lending products they are absolutely being
| "disrupted" by private credit.
| jiehong wrote:
| China has seen its banks disrupted quite a bit more than over
| here with things like WeChat or AliPay. All daily transactions
| are done with them, and even small loans.
|
| UPI in India at least made payment system much better, by forcing
| banks in the end. So quite different.
|
| In Europe, SEPA is doing something similar to India's UPI, albeit
| much slower. Again by forcing banks on a standard, unlike in
| China.
| wslh wrote:
| I believe a genuine way to address this problem is through the
| creation of financial sandboxes [1]: controlled environments
| where regulations are relaxed to promote innovation at a certain
| scale.
|
| However, current regulations favor banks, making it difficult for
| new entrants to disrupt the status quo without becoming a bank
| themselves. This complexity is further compounded by the
| intersection of regulations and geopolitics, which makes change
| particularly challenging. Additionally, while lifting regulations
| can encourage innovation, it must be approached cautiously to
| avoid potential financial disasters.
|
| [1] https://www.fca.org.uk/firms/innovation/regulatory-sandbox
| surfingdino wrote:
| Banks sell one thing--debt. Many have tried to "disrupt" that
| industry, but all attempts boil down to: getting a cut of payment
| fees or getting paid to resell debt. All "innovation" in this
| sector is done by crossing fingers and hoping the regulators
| don't notice you trying to use language to pretend you are a bank
| when you are not.
| PaywallBuster wrote:
| Revolut had credit cards for a few years but only in Lithuania
|
| https://www.revolut.com/en-LT/credit-cards/
|
| I guess they'd need to apply for banking license to offer CC in
| every EU state and that would be an order of magnitude more
| expensive than Lithuania's banking license
| fph wrote:
| I think that the true reason is another one: credit cards come
| with credit, which people can choose not to pay back. It is
| complicated to recover money from a person abroad, possibly
| having to sue them in every EU state.
| dotcoma wrote:
| Nope. They still have only a Lithuanian license, plus maybe one
| for the UK.
|
| All it takes to operate in the EU is a license from one member
| state.
| danielmarkbruce wrote:
| No one is providing a value proposition that would make me move
| away from [my large bank] when it comes to a basic checking
| account.
|
| Banks were disrupted in the mortgage market - a very large chunk
| of residential mortgages go through brokers.
|
| Banks are being disrupted in corporate credit. "Private Credit"
| is exploding.
| zigglezaggle wrote:
| This is like saying "nobody is disrupting AWS" and then pointing
| out that competitors don't have a version of AWS Glue.
|
| Plenty of startups have disrupted banks. AMEX purchased one to
| jumpstart its small business checking accounts just a few years
| ago. You're just not looking hard enough.
|
| If you move the goal posts to core checking/savings accounts by
| consumers, then yeah there's not much of an upside there.
| Consumers go decades to lifetimes on average without changing
| banks. Capital One was the last one to do anything "disruptive"
| here re: providing accounts and credit to the lower class, and
| I'm not sure there's enough juice to squeeze left for a smaller,
| more focused product to make any money given the stickiness of
| checking accounts generally.
| xyst wrote:
| Disruption will take awhile. The current players have rigged the
| game in their favor. They have government officials, lobbyists,
| and 40+ years of shitty neoliberal economic theory behind them.
| The subprime mortgage crisis and subsequent bailout of banks by
| main street is an example.
|
| It will take more than a credit card or fancy app to disrupt this
| corrupt machine.
| poisonborz wrote:
| What do we understand under "banks"? If keeping with the simply
| notion of "stores funds and provides debit cards", the most
| common usage in EU, especially east, banks were deeply disrupted.
| Revolut and Wise took a large segment of the youth, who now also
| got hooked on more services like savings accounts and stocks.
| They have startup-like culture while being registered as standard
| banks. Obviously their services, quality and support are
| lightyears ahead of any traditional financial institution.
| liendolucas wrote:
| I'm a happy Revolut customer. Their app is great and it has
| features that banks here in Italy don't (or if they do they
| always charge it, that's why I'm trying to slowly break away
| from them). Banking in Italy is the worst of the worst. They
| are extremely well trained to make you waste time. Avoid at all
| costs Banco Posta. People are not just inefficent, they have
| absolutely no idea about anything you ask them and they love to
| make you wait eternally. I have recently asked for more
| information about a loan at another bank and surprisingly they
| refuse to send me a formal document to read all the terms and
| conditions. They literally sent me a plain text email with some
| numbers, when I required them formal details (the famous "small
| letter") about it they simply didn't reply.
| epolanski wrote:
| I'm a revolut user, but I fail to understand how they plan to
| make any money off me with all they throw.
| Havoc wrote:
| There was one playing the move fast and break things playbook.
| SVB...
| devops000 wrote:
| Bitcoin
| epolanski wrote:
| Ah yeah, nothing beats Bitcoin when it comes to banking /s
| ranger207 wrote:
| The products being pointed out in this article as an attempt to
| disrupt banks seem to be basically the same product for a
| different price. Like, a high-yield savings account is just a
| savings account with a better price, right? How do you disrupt an
| industry by selling the same products? The advantage of startups
| is that they're more nimble, can pivot to fit the market better,
| and can adapt to customer requests faster. None of that applies
| to "selling the same product at a lower price", especially for
| savings accounts where stability ("the company not suddenly
| disappearing") is an important part of the pitch anyway
| ikr678 wrote:
| This is a very US centric article, a lot of the disruptions
| listed are incumbent 'big bank' products in other
| jurisdictions. I feel the lack of adaptability is likely a
| result of US market conditions/regulations rather than lack of
| innovation.
| Joel_Mckay wrote:
| The US crash of 2008 exposed the nature of their banking
| system leverage ratios, and worker 401k vulnerability to
| dubious ETFs.
|
| The incoming market volatility will likely have winners and
| losers... but historically it was mostly losers (>6.4 million
| families and counting.) =3
| throwaway2037 wrote:
| > worker 401k vulnerability to dubious ETFs
|
| Can you explain this part in my detail? Do you mean money
| market funds that "broke the buck"?
| lxm wrote:
| ETFs are a relatively recent phenomenon, the criticism I
| remember from 2008 era is having paycheck + employee
| stock purchase plan + 401k concentrated in a single stock
| - employer's.
| Joel_Mckay wrote:
| There is intelligent life on YC after all. A+ =3
| nradov wrote:
| ETFs are mostly irrelevant from a 401(k) perspective
| because no one is trading on a daily basis. Some 401(k)
| plans do now offer ETFs among the investment options but
| for the most part they have always focused on regular
| mutual funds. Average expense ratios have come down a bit
| since 2008.
| Joel_Mckay wrote:
| Regular mutual funds usually have higher risk and tax
| exposure than the ETFs...
|
| Met a lot of bums in suits trying to sell me on several
| flavors of BS over the years. lol =3
| throwaway2037 wrote:
| > Regular mutual funds usually have higher risk ... than
| the ETFs.
|
| Can you provide some specific examples? If anything, the
| transaction friction around mutual funds prevents most
| regular investors from unnecessary trading that exchange-
| listed ETFs allow. TL;DR: For most people, more trading
| means more losses or worse returns.
| Joel_Mckay wrote:
| There are several potential mutual fund problems, but the
| ones most consumers are exposed to arise from
| institutional and private "investment advisors". There is
| no legal protection from banks externalizing toxic assets
| acquired though risky decisions onto customers, and or
| ridiculous ballooning management fees siphoning off
| actual profit. The other issues are mostly from various
| end-runs around acceptable market rules and practices.
|
| In general, most amateur holds permute well below 3 to 4
| months on average. Note the old joke: "Bulls make money,
| bears make money, pigs get slaughtered"... was never
| funny for those providing cash capital to gamblers.
|
| Most people assume they are luckier than average... and
| most of Las Vegas was also built on losers money.
|
| Have a great day, =3
| JumpCrisscross wrote:
| You're mixing up adviser fees (ETFs have lower fees than
| mutual funds; neither is directly related to adviser
| fees), toxic assets, CMOs, balloon mortgages and possibly
| management fees and carried interest. These are related
| concepts inasmuch as they're all financial terms.
| Joel_Mckay wrote:
| You seem confused by my frustration with tools towing the
| company line rather than providing reliable investment
| advice.
|
| Personally, I prefer retaining the option to sue people
| that pull stunts. But to each their own... =3
| JumpCrisscross wrote:
| > _I prefer retaining the option to sue people that pull
| stunts_
|
| If that's an option for you, sure. I work in finance and
| retain FINRA arbitration as a customer. When I'm signing
| with clients, I do not like to include it--I have a
| _strong_ advantage in court and don 't want a venue
| that's biased against me as a professional.
|
| All of this is _totally_ irrelevant to ETFs, mutual funds
| and CMOs because those are distributed funds whose terms
| aren 't negotiable after offering. (If you're worrying
| about suing the guy selling you ETFs, you're doing
| something wrong. Probably overtrading.)
| nradov wrote:
| You seem to be confused about finance. There is no
| particular connection between a fund's risk and tax
| exposure, and whether it is exchange tradable or not.
| Some regular mutual funds are very low risk. Some ETFs
| are very high risk. Tax exposure is largely irrelevant
| for 401(k), IRA, and other tax-free retirement accounts.
| JumpCrisscross wrote:
| > _no particular connection between a fund 's risk and
| tax exposure_
|
| They seem to be posting a lot of word-salad comments, but
| assuming good faith, they're saying these are separate
| downsides of mutual funds over ETFs.
|
| Mutual funds trade on your behalf, like an ETF, but they
| pass through the gains and losses. That can be painful if
| they realise those gains when you'd rather not have them,
| or crystallise losses when you don't have offsets. In
| this, they're correct. On risk, they're wrong--you can
| stuff nonsense into ETFs as comfortably as mutual funds.
| What they're indirectly criticising here is active versus
| passive management, which is its own can of worms.
|
| The only advantage of a mutual fund over an ETF is it
| provides friction to trading. Otherwise, they're a
| vestige from the cusp of computerised portfolio
| management. (If you have more than ~$1 to 10mm, you
| should be rolling your own portfolio in most cases.)
| Joel_Mckay wrote:
| This account posts a lot of off-topic straw-man
| arguments, and wild context guesses like regular bot
| slop.
|
| My issue with bank-fool recommend mutual funds is
| primarily they are often a self-serving structured
| product. i.e. the odds a sucker never sees a consistent
| behavior is far greater than random chance, and a
| unconstrained arbitrary guess of a chicken would likely
| perform better in the markets.
|
| Best of luck, =3
| JumpCrisscross wrote:
| > _bank-fool recommend mutual funds...the odds a sucker
| never sees a consistent behavior is far greater than
| random chance_
|
| Again, you're criticising active management in general.
| (And seem to be mixing up alpha and tracking error.
| Passively-managed funds aren't aiming to outperform the
| market.)
|
| There is no evidence actively-managed ETFs (or hedge
| funds, for that matter) outperform actively-managed
| mutual funds. There is also not a material difference in
| tracking error between their passive products.
|
| ETFs are a retail product. Like mutual funds. Make
| financial decisions based on the product, not the
| wrapper. (Also, where in the fuck does one go to get
| mutual funds in 2025 anyway?!)
| Joel_Mckay wrote:
| How many SS's are in "Slow Mississippi bass" ?
|
| You have exceeded my off-topic straw-man limit for the
| day.
|
| Best of luck, =3
| WeylandYutani wrote:
| I think it could also be cultural. In my country people are
| perfectly happy to have a video chat with a bank employee
| about mortgages but in other country's you still need to go
| into a branch office for that kind of thing.
| lotsofpulp wrote:
| I don't even need to have a video chat in the US for a
| mortgage. I have long been able to shop from any number of
| lenders and close the deal via email. The lender might send
| out an appraiser.
| netdevphoenix wrote:
| Just curious, why do you need a video chat? Can't you just
| have a phone call? I don't get the need to see someone's
| face
| AdamN wrote:
| I don't get the need for synchronous comms at all. I can
| book airplane tickets, food delivery, e-commerce
| generally, and most other things through a web interface.
| Not sure why I need to talk to somebody to get a mortgage
| aside from Know Your Customer but even then a short
| signing ceremony at the end would be best.
| netdevphoenix wrote:
| I agree! I am a big fan of synchronous comms
| andrepd wrote:
| I think getting a mortgage might be a tad more of an
| impactful decision than ordering takeout... I'm not a
| boomer but I still would like to speak to someone in
| person before I sign an O(million$) loan.
| JumpCrisscross wrote:
| > _I still would like to speak to someone in person
| before I sign an O(million$) loan_
|
| Why? I'd much rather have anything said in writing.
| close04 wrote:
| Because a lot of people don't understand how the products
| work or what they need. Trying to understand a complex
| product, with multiple options that come with advantages
| and disadvantages, and having adding on top that it's a
| very consequential decision is much easier if any
| misunderstanding can be corrected and explained real-
| time. The alternative is to do it async with some lead
| time for every back and forth.
|
| Your pizza order needs no clarifications and if you get
| it wrong, it's just a pizza. If you misunderstand your
| mortgage you're looking at far more costly consequences.
| bennyelv wrote:
| You should never be taking the advice on such a thing
| from the person who has a vested interest in you buying
| it.
|
| Although you could well be right about the nature of the
| transaction, it's definitely a bad idea to be doing that
| with the bank!
| close04 wrote:
| This applies to everything, a mechanic, a lawyer, a
| dentist. You can't have all the prerequisite knowledge on
| every field where you may need to make big choices so
| eventually you'll need to talk to _someone_.
|
| If it's not the bank, and it's not you, it has to be
| someone else. You can ask over email for all the
| information available on the products from the bank and
| take it to an independent advisor. Eventually you'll run
| into the need to have a live chat with _that_ trusted
| advisor or risk moving one mail per day in each direction
| trying to explain what you want and what you could get.
| philipwhiuk wrote:
| That's why there's independent financial advisors.
| michaelt wrote:
| For some people, the mortgage application process can be
| complicated.
|
| Maybe I'm in graduate school and my salary is called a
| 'stipend' and I don't get any payslips, plus I have a
| part-time job in sales where my base salary is very low
| and about 75% of my income is commission, and also my
| girlfriend will be helping with the mortgage, but not the
| deposit, and she's a Ukrainian refugee and self-employed
| content creator.
|
| An expert who's seen it all before would know how to
| navigate my situation properly.
| nradov wrote:
| That doesn't make any sense. At least in the USA, if the
| school is paying you then they have to issue you either a
| W-2 or 1099, regardless of whether they label it as a
| salary or stipend or whatever. Mortgage lenders are
| accustomed to verifying income from sources like that,
| it's not complicated.
| michaelt wrote:
| Here in the UK a 'stipend' from EPSRC or similar is not
| classified as income for purposes of income tax or
| council tax. It's treated more like a scholarship.
|
| _> That doesn 't make any sense._
|
| Tell me about it. They still won't give you a mortgage,
| though.
| magicalhippo wrote:
| Why do you need a phone call? I just had to take some
| pictures and fill in some details on their app, and a day
| later I had the mortgage to my home.
| PontifexMinimus wrote:
| I (for one) prefer video chats to phone calls.
|
| There is a reason why "face to face communication" is a
| phrase.
| msh wrote:
| I have had video chats with my bank. The video part was
| not super important but nice given the magnitude of the
| transaction (house loan things). The more important part
| was the screensharing to sho the advisors calculations
| and other info.
| nradov wrote:
| Why do you need someone to show you the calculations? All
| of the important numbers including principal, fees,
| points, interest rate, and amortization schedule fit on a
| short PDF. You can verify the calculations yourself on a
| pocket calculator if you want, it's like grade school
| level arithmetic.
| msh wrote:
| There are different sorts of loans that you can do in
| different ways. It certainly does not fit a short pdf (I
| am not in the US). So it's nice to have someone walk you
| through that consequences of the different choices.
| some_random wrote:
| I (American) didn't need to go to a branch office for my
| mortgage. In fact, I don't think my mortgage provider has
| branch offices.
| dathinab wrote:
| The EU also has put pressure on Banks for decades now to
| either "innovate" or "get innovated" by regulations forcing
| them to implement innovative ideas not coming from them.
|
| With both having happened over time.
|
| They also at least somewhat try to compete with Paypal on
| online payment on EU specific shops (not they they have much
| success, not just because of network effect but because a
| combination of their products being sub-par and them
| realizing that various other even less competitive/ux
| friendly competitors would make them more money if anyone
| would just be using it..., so they are in the process to "get
| innovated" again by forcing impl. of certain ideas related to
| person-to-person money transfer which have proven to
| work/being useful in a few countries where they/their banks
| did adapt them years ago.)
| rvba wrote:
| In some markets paypal has no market share at all - its
| whole value proposition is something that banks allready
| have.
|
| Paypal is needed in USA due to archaic systems. In Europe
| many banks allow instant transactions without the risk of
| blocking your money for 180 days - what paypal seems to do
| 0xffff2 wrote:
| Paypal (or its little brother Venmo) haven't been needed
| in the US in nearly a decade. I've never had a European
| bank account, but Zelle seems to me to be just as good as
| what the Europeans have.
| dathinab wrote:
| Paypal is never needed, not in the EU nor in the US but
| that misses the point.
|
| Pretty much every single online shop/website ever allows
| paying with PayPal (and Credit Card). And you pretty much
| have to use it as not allowing paying with PayPal will
| reduce your sales noticeable, especially for
| international orders. This is something people funnily
| frequently rediscover, again and again.
|
| Also I don't thing many people do use PayPal to send
| money between each other tbh. when I mean competing I
| mean for paying online not for p2p money transfer. Like
| sending other private people money always had been
| trivial, through slightly annoying, in the EU, even
| before smartphones where a thing.
| dathinab wrote:
| In both the EU and US PayPal is very widely used to pay
| in online shops. To a point that disabling PayPal
| temporary can show noticeable decrease in sales for most
| online shops, especially if international orders are
| involved.
|
| When I sayed "competing with PayPal" I meant for paying
| online, i.e. alternatives to both PayPal and Credit
| Cards. Not p2p money sending.
| biohcacker84 wrote:
| US Banks are much worse at serving common people than many
| other old big banks around the world, certainly compared to
| Germany's banks for example.
|
| And yes it is thanks to a byzantine system of history,
| regulations and very few Americans travelling abroad to
| experience radically better systems.
| ty6853 wrote:
| FATCA makes Americans pariahs at foreign banks. I would
| love to store cash outside US jurisdiction but it is a
| compliance nightmare usually only worth it for high net
| worth clients. We know better systems exist, we just often
| can't use them even when we live overseas.
|
| Crypto is the last offshore banking for the middle class.
| It essentially took over right when FATF eliminated banking
| privacy and bearer shares -- which IMO is no mere
| coincidence.
| psunavy03 wrote:
| Crypto is not banking.
| dghlsakjg wrote:
| I'm a middle class American that has lived in various
| places, Canada currently.
|
| I opened my first account in Canada while I was still a
| US resident. FATCA compliance was a matter of a single
| extra form, and providing my US SSN. It was about the
| same for my Caribbean accounts with international banks.
|
| If what you are trying to do is open an account that is
| not visible to the US government, that is much harder.
| Joel_Mckay wrote:
| Most people have zero notion of what money is... let alone what
| banks offer as a business.
|
| Indeed, the entrenched investment industry has become less fair
| (or an outright liability) to customers, but casinos are at
| least honest with their customers. Gambling with other peoples
| money was not a real financial service until relatively
| recently.
|
| There is a market for a fiscally sustainable savings/investment
| industry, but most people with under $2m in cash can't afford
| the bonded fiduciary services.
|
| Good luck, I kind of admire their ill fated ambition. =3
| nine_k wrote:
| > _fiscally sustainable savings_
|
| Buy gold bullion, rent a bank safe deposit box, store it
| there. I suspect this is what comes closest to that, as of
| now. (Sigh.)
| Joel_Mckay wrote:
| Precious metal prices rarely track with inflation, but 1.7%
| of a portfolio should contain such leaky holdings.
|
| While it is currently legal for US citizens to own gold
| bars since 1974, if the tax man gets hungry... the old
| rules may come back into popularity.
|
| Best of luck, =3
| JumpCrisscross wrote:
| > _Buy gold bullion, rent a bank safe deposit box, store it
| there_
|
| This is the worst of all worlds. You have a high-
| transaction cost volatile asset in a box which provides you
| with less legal protection than crap stored in a home with
| renter's or homeowner's insurance [1].
|
| [1] https://www.nytimes.com/2019/07/19/business/safe-
| deposit-box...
| ty6853 wrote:
| Renter/homeowner insurance rarely cover precious metals
| unless they are in their highest premium ( read worst as
| store of value ) forms as jewelry or kitchenware. A vault
| with stronger property rights than US and insurance is
| probably better than your house (Singapore insured PM
| vault maybe) but not as good as a hole in the ground
| somewhere where metal detectors get a lot of false
| positives somewhere remote with no attachment to your
| identity.
| JumpCrisscross wrote:
| > _Renter /homeowner insurance rarely cover precious
| metals unless they are in their highest premium ( read
| worst as store of value ) forms as jewelry or
| kitchenware_
|
| You're already paying a double-digit round-trip spread on
| retail gold. The point is out of all the places you could
| put physical gold, safe-deposit boxes max out the worst
| attributes.
| throwaway2037 wrote:
| > bonded fiduciary services
|
| I never saw this term before. Google shows me nothing. Can
| you explain what you mean, please?
| Joel_Mckay wrote:
| It is a legally enforceable relationship with your
| investment managers: "A fiduciary financial advisor is a
| financial advisor who is legally and ethically bound by
| fiduciary duty to serve in your best interests"
|
| This detail becomes important when various cons come around
| to bleed off your assets. Could be as simple as a "friend"
| hyping worthless pump-and-dump stocks, or a fund manager
| with ballooning fees.
|
| In general, the lack of impulse control shown on YC seems
| to indicate this information is not that useful for many
| readers. Some people like being poor apparently lol =3
| JumpCrisscross wrote:
| > _never saw this term before_
|
| They're mixing up a securities term (irrelevant to banking
| _per se_ and cash management totally).
|
| What they mean is getting an adviser who is bound to act as
| your fiduciary versus as a counterparty [1]. If you're
| trusting your portfolio management entirely to a third
| party, they should be a fiduciary.
|
| That said, people outside finance seem to make a bigger
| deal out of this than it is--in America if you're a retail
| investor and you have a problem with a FINRA-member broker,
| FINRA arbitration will almost always side with the retail
| investor. Fiduciaries will tend to cost more (it's riskier)
| and say no to you more; after all, you're asking them to
| take decisions for you. I work in finance and couldn't tell
| you which of my managers and advisers are fiduciaries
| because I double check what they say and limit what they
| can do. And this, again, has to do entirely with
| investments. Not banking.
|
| More pointedly, this part is nonsense: "most people with
| under $2m in cash can't afford the bonded fiduciary
| services." What you want for cash management is yield
| (reward) and sweep (risk management).
|
| [1] https://www.investopedia.com/financial-
| edge/0912/5-misconcep...
| Joel_Mckay wrote:
| While phonetically similar to a "securities term", the
| conversation was about legal agreements with a registered
| professional.
|
| I think you are feigning ignorance for some reason or
| posting AI slop,
|
| Best of luck =3
| JumpCrisscross wrote:
| > _While phonetically similar to a "securities term", the
| conversation was about legal agreements with a registered
| professional_
|
| No. A "bonded fiduciary service" is not a thing. That's
| why there are literally zero hits on Google for that
| string.
|
| You're thinking about an adviser--who must be a
| registered professional in the U.S., but that's a
| separate topic--who agrees to be _bound_ as a fiduciary.
| ( _Bonding_ is a surety concept [1]. If someone is
| arguing their fiduciary duties are stronger because they
| 're bonded, please report them to your regulators because
| that's nonsense.)
|
| [1] https://www.investopedia.com/what-does-bonded-mean-
| definitio...
| Joel_Mckay wrote:
| How many SS's are in "Slow Mississippi bass" ?
|
| I already donated to the Yellow Feather Fund friend, as I
| recognized some people are very special in this world =3
| Dalewyn wrote:
| >Like, a high-yield savings account is just a savings account
| with a better price, right?
|
| Most if not all the big banks have a high yield savings account
| or an equivalent under different names.
|
| And yes, it's just a savings account with an actually
| noteworthy interest rate. It's usually a bit below the interest
| rate of money market funds.
| abdullahkhalids wrote:
| One datapoint: On /r/PersonalFinanceCanada a very common advice
| is to save money in WealthSimple or Questrade type of online
| financial institutions. And people seem to be very happy with
| doing this.
|
| Any financial institution that makes the act of investing money
| simple and legible will win some market share. I have some
| savings accounts in RBC Canada, and the UX seems to be designed
| by monkeys throwing around crayons.
| smnrchrds wrote:
| Wealthsimple is a subsidiary of Power Corporation, a gigantic
| financial services company that has existed for 100 years.
| Its success is more an example of insider innovation rather
| than outsider disruption.
| BenoitEssiambre wrote:
| Ah that's an interesting tidbit. I have a Wealthsimple
| account through my (YC company) employer. The Desmarais
| (Power corp folks) gave me a scholarship back in the day. I
| hadn't made the connection.
| abdullahkhalids wrote:
| Interesting. I did not know that. But not surprising in
| retrospect.
|
| But I think the point still stands. WealthSimple is
| probably not perceived by the median customer as a
| traditional bank. So people using it is a counter-example
| to GGP's point that people won't use "startup" banks.
| kevin_nisbet wrote:
| I don't know if the point should be that people won't use
| a startup bank, just that the assets being directed to
| the startups/disruptors are not presently threatening to
| the big banks. I would suspect this is currently the case
| with WealthSimple here in Canada as well. WealthSimple is
| at something like $50 billion assets under management
| [1].
|
| Vanguard asset allocation ETFs are at like $1.3T [2]. 4
| Of Canada's Big banks appear to add up to just over 2T
| Assets under management based on what Google just gave me
| as summary. So while I think this is a great outcome for
| a startup (even with Power backing them), to me it seems
| in a similar space as the above article that we're still
| talking a relatively small market share, and likely still
| closer to early adopter status.
|
| [1] - https://en.wikipedia.org/wiki/Wealthsimple#:~:text=
| As%20of%2... [2] -
| https://www.vanguard.ca/en/product/investment-
| capabilities/a...
| smnrchrds wrote:
| I don't think the total assets under management is the
| correct indicator. Vanguard, Big 5 Canadian banks, and
| even Power Corp cater not only to consumers but also to
| institutional investors and ultra high net worth
| individuals. Wealthsimple, to the best of my knowledge,
| is purely consumer-facing. It is not competing for the
| same markets as the other ones. Its parent company Power
| Corp, which is competing in the same area, has an AUM
| that is comparable to the Big 5 banks. I wonder if there
| is enough public data to compare consumer products in
| isolation.
| jszymborski wrote:
| > WealthSimple is probably not perceived by the median
| customer as a traditional bank.
|
| Well in fairness Wealthsimple is an investment management
| platform providing some bank-like features through their
| partnership with other Schedule 1 banks (previously was
| Equitable Bank, don't know if they are still with them).
|
| Wealthsimple calls themselves a non-bank [0]. My
| understanding is that when Wealthsimple says that funds
| are CDIC ensured, they mean that they are held in a bank
| account from a third party bank whose funds are CDIC
| ensured.
|
| I am not a lawyer or a banker, but Wealthsimple always
| scared me a bit after seeing what happened to (albeit far
| sketchier) Yotta when a fintech company they relied on
| (Synapse) folded. While funds are insured, if your funds
| are not "lost" but simply inaccessible, the insurance
| isn't really worth anything. Likewise, my understanding
| is that if WS goes belly-up (unlikely) there's a
| possibility where funds are still made inaccessible and
| the CDIC insurance doesn't kick in since the third-party
| bank is still alive and well.
|
| [0] https://archive.is/58zoJ
| dlenski wrote:
| As I understand it, Wealthsimple was founded independently
| but then quickly bought by Power Corporation.
|
| It is indeed quite interesting that its innovation and
| competitive pricing
| (https://news.ycombinator.com/item?id=42838063) in the last
| couple years has happened under old, established Power
| Corp.
|
| Any educating theories about why this is happening now?
| dlenski wrote:
| Glad you're not the only one to point out Canada's
| comparatively stodgy financial industry.
| https://news.ycombinator.com/item?id=42838063
|
| The account management interfaces of Canadian banks are
| pretty universally terrible. Even the neo-banks like
| Tangerine.
| jszymborski wrote:
| Tangerine still insists on making login credentials your
| account number, and a 4 digit pin. There used to be a
| second system where they'd show you a secret combination of
| images after login and you'd provide an answer to one of
| four security questions, which kinda made things better as
| I just provided passwords as the answer to the questions,
| but now they've replaced that with _drumroll_ SMS 2FA.
|
| Security is a clown show at Tangerine, I no longer use it
| and can't suggest other folks do.
| AdamN wrote:
| Come to Germany and try Deutsche Bank. Those monkeys are just
| throwing !@#$# at the wall. Moving from the US to Germany is
| like taking a time machine to another era when it comes to
| online banking.
| xwolfi wrote:
| Plus hum, would you deposit large money amounts in a small
| fintech company ? The advantage of giant banks is that you sort
| of trust their size will make them able to weather a crisis, if
| only because so many taxpayers are involved that the government
| has no choice but to help.
|
| A fintech with 1M users screwing up loan rate timings being
| unable to finance savings accounts and facing a run, would not
| have much runway and the government would simply slowly try to
| make people get 50c on the dollar and tell them to go back to a
| big bank if they want better...
| SpicyLemonZest wrote:
| I considered doing it a few years ago with a company called
| Yotta, and thank God I didn't, because they pivoted to a
| gambling app before losing track of user funds when one of
| their providers went bankrupt.
| nradov wrote:
| It's not just size. Real banks maintain customer deposits in
| separate named accounts. They don't co-mingle funds like
| fintech companies. This makes a huge difference in the case
| of insolvency or any sort of fraud.
| netdevphoenix wrote:
| Ideally, financial regulation should be there for you in
| terms of bank failure without you having to trust old players
| and further making disruption harder. And no matter how big
| or small the bank, you should never put all your savings in
| the same bank.
| jiggawatts wrote:
| I can tell you right now what I want from a "bank" as a
| consumer: Putting the consumer first, not seventeenth or
| whatever I typically experience with retail banks.
|
| As a random example, I had $3,600 stolen from one of my
| accounts by transactions labelled "Microsoft Online Services"
| or something like that. The bank reversed _most_ , but not all
| of the transactions, and then had the _nerve to lecture me_ --
| an IT professional more than a bit knowledgeable about security
| -- about how somehow this was all my fault.
|
| Turns out that banking security and reliability from a
| customer's perspective is absolutely insane. It's totally ass-
| backwards. It's the _opposite of the Apple experience_ that
| made that particular company the biggest in the world.
|
| 1) Every field in a credit card transaction is attacker-
| controlled. They can put down whatever business name they want,
| whatever text they want, etc...
|
| 2) Every field in a transaction history is either an alias
| ("operating as xyz pty ltd"), an abbreviation, or just outright
| confusing.
|
| 3) Transaction histories and "you paid $ to X" notifications
| often turn up hours or days later. There's no geo-location or
| any other strong identifier linking these to the actual
| business because of (1) and (2).
|
| 4) There's no receipt details in the transaction history. "XYZ
| pulled $123 from your account... for reasons. It's a mystery!"
|
| 5) You can't see who's got recurring subscriptions on your
| account. You can't trivially cancel or block someone from
| pulling money from your account.
|
| 6) Some banks now show categorised graphs of what you're
| spending your money on, but _they 're guessing_. They don't
| actually have the info of where the money went, so this is
| useless. You can't figure this out yourself either because of
| the tiny amount of info available to you.
|
| 7) You can't use your transaction history for warranty
| purposes, or any similar thing. You have to keep tiny pieces of
| paper that fade rapidly... which is I'm _suuuure_ is just a
| coincidence, right? Right?
|
| 8) My bank claims I get notified if a transaction occurs on my
| account. This is a lie, they only notify me of _some_ types of
| transactions, and not reliably either.
|
| 9) Trivial impossible-travel protections are not put in place.
| If my phone is used for a payment in a "physical store" while
| the GPS says it's in a different continent, pop up an "Approve
| Y/N?" prompt at a minimum!
|
| 10) You can't generally limit a vendor's access to your account
| if they have your credit card details. You can't restrict them
| to a single transaction, a fixed amount, or no-sneaky-
| subscriptions.
|
| 11) With shared accounts, you can't generally tell _who_ made a
| transaction, even if they have individual cards and /or mobile
| devices. (You can sometimes, depending on the bank and the type
| of account, but it's not consistent. This is what happened to
| us: Both of us assumed the other partner set up a valid
| subscription.)
|
| Etc, etc, etc....
|
| I could go on for hours.
|
| Unfortunately, like many people of said, the inertia of the
| incumbents and their moat of regulation makes this kind of
| thing nigh impossible with backwards compatibility.
|
| Some org like Apple or Meta with very wide reach might be able
| to force vendors to jump through their hoops, which then will
| drag the traditional banks kicking and screaming into the
| future.
|
| I'm not holding my breath.
| PeterStuer wrote:
| "You can't see who's got recurring subscriptions on your
| account. You can't trivially cancel or block someone from
| pulling money from your account"
|
| This is because any company that has the potential for
| creating recurring subscriptions can do so to anyone at any
| time with nothing but an account number.
|
| There is no pre-verification of authorization whatsoever. The
| only thing you can do is continuously monitor your bank
| statements and dispute the charges when you see something
| turn up, then hope for the best.
|
| This system is croocked by design. Most people can't even
| believe it is this way , but presentations by budding fintech
| to small companies tout this 'feature' as the greatest thing
| since sliced bread.
| vel0city wrote:
| > There is no pre-verification of authorization whatsoever.
|
| There actually is a way they can sync up to say this is an
| authorized regular transaction and they get the ability to
| keep charging even when the old number expires and a new
| card gets issued.
|
| I forget what it's called, and I don't believe it's
| supported everywhere.
| reginald78 wrote:
| This "feature" pisses me off. I was going to switch to
| capital one virtual cards but from reading around it
| seems that these two can be updated and even have
| spending limits overridden in the case of subscription
| services. Since protection from overcharging is the main
| draw that product had it seems like a useless feature
| once I read the details. They bill it as a benefit but
| with the possible exception of my life insurance I'd much
| prefer it the other way.
| vel0city wrote:
| It seems to me this feature should just come disabled for
| virtual cards, as that's the whole point of virtual
| numbers.
|
| Personally though in a lifestyle with like a dozen
| regular recurring credit transactions I'm not likely to
| cancel on a whim or forget (electricity, gas, daycare,
| insurance, internet, etc.) I'm fine most of these
| entities getting a more stable identifier for billing but
| I do agree it would be better to be opt-in on the
| cardholder side.
| mu53 wrote:
| If these things bother you, consider a service that offers
| virtual credit cards. Privacy.com or Revolut.
| foobarian wrote:
| Why involve banks in day-to-day financial transactions? The
| way debit transactions work is batshit insane. One of the
| reputable credit card providers is much better. Amex, Chase,
| or Citibank are very good. Citibank offers virtual account
| numbers with adjustable expiration date and daily spend
| limit.
| joshstrange wrote:
| I "solve" most these issues by using a different tool/layer
| (YNAB) on top of my financial institutions so that I can see
| all my finances in one place with a good UI and and API. I
| agree things should be better, I just wanted to share how I
| handle tracking payments and bring some level of sanity to my
| finances.
| lazide wrote:
| Finance is heavily regulated.
|
| Disrupting a heavily regulated market is usually called
| 'racketeering' or 'organized crime'.
| ty6853 wrote:
| Regulation is the racketeering. The central ringleader is the
| fed, who 'ease' money into thin air, bypassing the pesky
| annoyance of going around and collecting taxes to fund their
| private and public benefactors.
| lazide wrote:
| Hey, you can assert cops are the real criminals all you
| want - but one of them is thrown in jail, and the other
| (typically) isn't.
| ty6853 wrote:
| It does share the characteristic it was secretly planned
| under assumed identities (on jackyll island) and
| intentionally set up to be 'governed' by unelected bosses
| intentionally firewalled from democratic processes.
| rpcope1 wrote:
| Well, there was an attempt at it. There was a startup run by one
| of the best startup guys I've ever seen, Dave Wright, called
| Reserve Trust, which managed to actually get a fed account. I
| think some people in power caught wind of it, and it ended up
| with congressional testimonies and a lot of other problems before
| it basically got shut down.
| ausbah wrote:
| seems like there was a conflict of interest where a fed high up
| helped them get a fed master account while also serving in the
| company's board
|
| https://www.bankingdive.com/news/kc-fed-has-revoked-reserve-...
| pelorat wrote:
| Because it's only possible in the USA. In the rest of the world
| everything is a bank and regulated as such.
| buyucu wrote:
| Banking is a heavily regulated sector. Regulation effectively
| blocks any kind of disruption and perpetuates the established
| firms.
| create-username wrote:
| I want AI to rename my million of duplicate files
| epolanski wrote:
| As an European I love Revolut, it has some nice features.
|
| On the other hand when it comes to serious money spending
| (credit, mortgage) I want my physical local bank.
| la64710 wrote:
| Disrupt cancer if you can. Don't disrupt functioning system that
| is not broken.
| Quindecillion wrote:
| I really hope this is satire.
| 1a527dd5 wrote:
| They might not be disrupting them, but they are definitely
| causing competition in the market place again.
|
| My main bank account is with Halifax, everyday spend is with
| Starling. Then Monzo for anything risky.
|
| Before Starling/Monzo the Halifax app was _crap_. Barely got any
| updates and was very basic.
|
| Now? The Halifax app is on par with the newer banks, and
| sometimes even release new features before (e.g. scan cheque in
| to deposit).
| kylecazar wrote:
| Interesting... We've had scanned check deposits at Chase (US)
| for at least 15 years, I think.
| stevesimmons wrote:
| Bear in mind that's a measure of how backwards US banking is,
| not how advanced.
|
| In the UK, I can't remember the last time I wrote or received
| a cheque. Maybe twice in the 17 years I've been living here,
| and certainly not in the last decade.
|
| So with UK cheque usage being a tiny fraction of the US rate,
| there's simply no demand for it in banking apps.
| 1oooqooq wrote:
| most countries abandoned checks at least 15 years...
| Symbiote wrote:
| Cheque use in the UK is now around two per year per person.
| (This includes business-to-business cheques.)
|
| The over-65 age group is most likely to use them, and least
| likely to use an app, so you can see why it wasn't a big
| priority for most banks.
|
| It's been at least 15 years since the banks stopped giving
| account holders chequebooks by default. If you want one you
| have to ask.
| spacebanana7 wrote:
| I get a couple of cheques a year from family in the UK.
| It's an infrequent transaction but an important one, and
| cheque scanning is actually the only reason I maintain my
| legacy bank account.
| danpalmer wrote:
| Yeah I feel like Monzo and Starling really forced the high
| street banks to level up their game. A friend of mine was a PM
| on an app at one of the big high street banks and they said the
| instruction from the top was explicitly to be like Monzo, and
| they did iterate, get better at app development, and ship a
| bunch of features that people like (spending notifications, in
| app card freezing, etc).
| jsemrau wrote:
| That exactly. Fintech forced Financial Institutions into
| Digital Transformation. Now they have caught up, there is no
| "next big thing" for Fintech. Crypto might have been it, but it
| killed itself by terrible UI and a never ending stream of scams
| and frauds. I believe there is an AI Agent Internet of Money to
| end Ad Revenue, but haven't found the arbitrage model yet.
| alt227 wrote:
| Halifax is owned by Lloyds banking group, and their current app
| is just the exact same Lloyds app with a different logo. I know
| because I bank with both and the apps are identical.
|
| Previous to the merging of online services, you are correct
| that Halifax had its own app and it was terrible. But at that
| time Lloyds had a great app, they just hadnt unified the back
| end tech of all the different bank brands they own.
|
| It wasnt disruption from startups that caused the improvement,
| it was the parent company taking its time to merge the decent
| tech it had developed for itself.
| anonfordays wrote:
| The sad truth is most people don't have enough money in savings
| for 4% vs 0.5% to make a material difference. The B2B stuff is
| tougher to "disrupt", due to contractual agreements, regulatory
| overhead, etc. Also not as sexy.
| phendrenad2 wrote:
| Banks are the most immune to disruption, because they function so
| closely with government, and they are nothing without the
| blessing of government. And the hurdles to create your own bank
| are very high. Check out this great Netflix documentary "Bank of
| Dave": A moderately successful businessman decided to start his
| own bank, just to see if it could be done (and to lower fees for
| his local community). The results are... pretty much what you'd
| expect. "You can't start a bank... nobody starts a BANK!" (They
| just kinda... have always existed!)
| dalyons wrote:
| UK specific maybe? ~10 banks get started every year in the US,
| there are ~5000 US banks.
| phatfish wrote:
| It depends of the services the bank offers, because there are
| plenty of smaller regulated banks with deposit protection that
| offer savings accounts in the UK. I assume running a current
| account has a lot more regulatory requirements than savings?
| TuringNYC wrote:
| I think Evolve/Synapse and the fog surrounding the responsible
| parties, along with complete radio silence on persons responsible
| (almost as if newsmedia has been given a gag order) has
| _completely kneecapped bank competition for a half-decade at
| least._
|
| If it takes experts to explain how Evolve/Synapse happened, why
| it couldnt happen to another "Fintech bank", and how to tell if
| you are at risk...then there is no point even venturing past
| Chase/BoA/Citi/your local bank.
|
| https://www.reuters.com/business/finance/fed-penalizes-evolv...
| pg5 wrote:
| I personally want my bank to be as boring as possible.
| larrydag wrote:
| I believe disruption can come in the form of underwriting and
| servicing loans. The old model of large call centers that do
| buying and servicing loans has been around forever. It scales
| fairly well but it is costly and very inefficient. If those
| processes are lean then savings could be passed to pricing.
| Basically creating a credit union model to a national scale.
| bern4444 wrote:
| The most interesting tech company in the banking to me is
| Column[0].
|
| No affiliation but it caught my eye when the launched.
|
| Admittedly it still feels abstract to me, but the value
| proposition of having every capability supported by an API (like
| AWS's methodology of having all services be API first) on top of
| an actually chartered bank seems perfectly fitted for the
| creation of banking services that are significantly easier for
| consumers to interact with and understand.
|
| I'm curious to see what people build on top of it.
|
| [0]https://column.com
| tiffanyh wrote:
| No blog post in nearly 3-years
|
| https://column.com/blog
|
| No product updates in over 7-months
|
| https://column.com/changelog/
|
| That doesn't instill much confidence.
| cudgy wrote:
| Maybe because the Fintech companies are being built and largely
| financed by the banks?
| Centigonal wrote:
| Capital One did a great job shaking up consumer credit in the
| late 90s, and then branch banking in the mid 2000s with their
| weird combination cafe+branches. They're eighth in the US by
| domestic deposits today. Does the firm need to be headquartered
| in Silicon Valley for disruption to have occurred?
| onlypassingthru wrote:
| It was ING Direct who built the unusual US cafe/bank operation
| and eventually sold it all to Capital One as part of the great
| financial crisis restructuring in 2011.
|
| https://www.ing.com/Newsroom/News/Press-releases/PROld/ING-t...
| Centigonal wrote:
| Interesting! I didn't know that
| anself wrote:
| Having worked in banking for many years (no longer), I can say
| with confidence, the big banks have a giant moat: regulation.
|
| They want to be heavily regulated so that new upstart competitors
| will not come in and spoil their cozy space. And it's easy to
| justify because terrorism, money laundering, insider trading, etc
| etc. And many of these regulations are largely ineffective and
| easily worked around, whilst costing billions to the banks to
| comply with. Hence the moat.
|
| We won't get banking disruption until there's banking
| deregulation.
| thisislife2 wrote:
| > _many of these regulations are largely ineffective_ ...
|
| Maybe in the US or some other parts of the world, but the
| Reserve Bank of India (RBI), the indian banking regulator, does
| a pretty decent job, as is evident from the public payment
| infrastructure they have fostered (see
| https://en.wikipedia.org/wiki/National_Payments_Corporation_...
| ) . They also create a competitive market by allowing small
| players to enter the market (e.g. https://byjus.com/free-ias-
| prep/payment-banks/). Many of their regulations also do a
| decent job of protecting consumer rights (e.g.
| https://timesofindia.indiatimes.com/business/india-business/...
| ).
| dlenski wrote:
| From my vantage point, with accounts in both Canada and the US,
| the US market seems hard to disrupt because its financial sector
| _is already highly competitive_.
|
| Meanwhile Canada has long been completely dominated by 5 or 6
| massive big banks that charge high fees for basic chequing
| accounts, and where credit card perks are far stingier than in
| the US...
|
| The financially industry is being _pretty massively disrupted_ by
| Wealthsimple.
|
| - They have a cash account (~checking/savings hybrid) that pays
| much better interest than all the big banks
|
| - They offer zero-commission trades on Canadian and US stocks and
| ETFs
|
| - They appear to be preparing a wide rollout of a credit card
| which offers 2% cash-back on everything (there are few Canadian
| credit cards that offer more than 1% cashback as a "base rate")
| Paddywack wrote:
| In developing countries (Africa, South Asia, South America) many
| of the banks were disrupted by mobile payments providers.
| Granted, it was more that they missed servicing the 80% of their
| markets that were unserviced but still needed to do things we all
| take for granted. Some of these are now the default payments
| systems.
| spiritplumber wrote:
| https://en.wikipedia.org/wiki/M-Pesa Stuff like this did happen.
| 0dayz wrote:
| Isn't this mostly due to fintech being the middleman?
| Quindecillion wrote:
| Without being an expert on the topic I'm going hazard a guess
| that it's due to regulatory moats that keep challengers out of
| the arena, and banks endlessly lobby to maintain that regulatory
| capture.
| spacebanana7 wrote:
| In the UK there's no significant regulatory advantage to big
| banks outside of the mortgage market, yet the same dynamics
| occur. The biggest issue for new digital banks is customer
| acquisition cost. Most consumers won't change bank accounts
| unless you spend hundreds of pounds on adverts and incentives.
| fergie wrote:
| There was a massive disruption to banking in 2008. Governments
| bailed them out.
| bux93 wrote:
| If you only count startups that offer payments - and little else
| - as fintechs, then yeah, they're not displacing banks.
|
| If you count private credit funds like Apollo Global Management,
| the story is very different: private credit is seriously
| encroaching on the balance sheets of banks. Not very tech, but
| very fin. In investments, ETFs and podshops are both fin and
| tech, and crushing it.
| 2d8a875f-39a2-4 wrote:
| You can't really "take deposits and issue loans" without just
| becoming a bank yourself. People start new banks all the time.
|
| Or by "disrupting" does he just mean "end run around the laws and
| regulations"?
| n4r9 wrote:
| > People start new banks all the time
|
| Is that true in the US? In the UK there was recently a period
| of around 150 years during which not a single new banking
| licence was issued. There's a film called Bank of Dave which
| dramatises the attempts of Dave Fishwick - a businessman from
| the North of England - to set up a local community bank. It's
| distressing the lengths that the established banks went to to
| quash it.
|
| If I understand correctly, he still does not have a licence,
| although Metro bank did manage to get one in 2010.
|
| Wiki article about the film:
| https://en.wikipedia.org/wiki/Bank_of_Dave_(film)
|
| Guardian article from the real-life inspiration for the main
| character: https://www.theguardian.com/tv-and-
| radio/tvandradioblog/2012...
| 2d8a875f-39a2-4 wrote:
| Don't know the UK banking landscape, but it doesn't look that
| unusual in recent times:
| https://www.bankofengland.co.uk/prudential-regulation/new-
| ba...
| biohcacker84 wrote:
| Uhmm... isn't that what crypto is basically?
|
| Per Mark Marc Andreessen the Biden admin tried to shut down
| crypto entirely But with the new administration we'll hopefully
| see growth and real competition to the old banks.
| aketchum wrote:
| I'm not being a troll I'm seriously asking - how does crypto
| replace banks? Am I going to get a mortgage in BTC? If narrow
| banking, why give them my btc at all instead of holding myself?
| If not narrow banking then they are lending out my btc? Does
| that even work on blockchain? How do you do fractional reserve
| lending with a deflationary and one of one asset?
| tcgv wrote:
| > how does crypto replace banks?
|
| Crypto can replace some banking functions, such as payments,
| electronic transfers, and lending/borrowing.
|
| One could argue that crypto eliminates the need for
| traditional checking accounts since you have full control
| over your funds with private keys. However, this doesn't
| account for the legal safeguards and protections that banks
| provide.
|
| > Am I going to get a mortgage in BTC?
|
| I don't recall seeing mortgage services in crypto yet.
| However, there are borrowing platforms like AAVE, primarily
| used for leveraging crypto investments or speculation. These
| platforms are decentralized, with strict collateral
| requirements, typically limiting borrowing to 80% of your
| collateral.
|
| > If narrow banking, why give them my btc at all instead of
| holding myself?
|
| Not sure I fully understand your question, but typically,
| when you lend your crypto to a service, you're seeking to
| earn a yield in exchange for the risk of lending your assets.
|
| > Does that even work on blockchain?
|
| Theoretically, yes. You could create a narrow bank using
| crypto, but you'd need a decentralized mechanism to verify
| the bank's holdings. This could involve creating an oracle
| (ex: Chainlink) service to confirm asset reserves.
|
| > How do you do fractional reserve lending with a
| deflationary and one of one asset?
|
| Instead of using deflationary assets like BTC, fractional
| reserve lending could rely on stablecoins, which are better
| suited for such systems. That said, not all stablecoins are
| equally reliable.
| slashdev wrote:
| I've seen plenty of attempts to disrupt the big banks that are
| quickly bought by the big banks if they develop traction.
|
| You see the same with big tech.
|
| To get real disruption we need founders and investors willing to
| play the long game.
| egberts1 wrote:
| Does the article blatantly ignore the basic principle of
| fractional reserve?
|
| A tiny deposit for a bank to hold means 7x more money to loan
| out, or something?
| alistairSH wrote:
| I'd be thrilled if US banks figured out how to do "instant" money
| exchanges.
|
| Today, if I pay my credit card from an account with a different
| bank, the payment is reflected immediately in my Visa account,
| but takes 3-5 days to reflect in my main checking account. It's
| completely bonkers that a 100% electronic transaction takes days
| to fulfill.
| slumberlust wrote:
| It took us 15 years to get tap to pay; I wouldn't holdout on
| any of these dinos innovating anytime soon.
| tencentshill wrote:
| They want as much time as possible for that money to gain
| interest before it leaves their possession.
| BenjiWiebe wrote:
| FedNow is slowly rolling out. We'll see what happens.
| krunck wrote:
| https://en.wikipedia.org/wiki/FedNow
|
| FedNow's list of participating financial institutions on
| their web site is a downloadable Excel spreadsheet.
| Innovation indeed.
| kasey_junk wrote:
| In the US most banks are no longer in the take deposits and give
| loans consumer business and haven't been for a really long time.
|
| They do take deposits but the major source of consumer loans,
| mortgages, are outsourced to Fannie and Freddie. Some big banks
| have lending arms in the form of credit card issuance, but short
| term loans like that aren't really what people tend to mean and
| they aren't why we chartered banks as a society historically.
| Small business loans are both vanishingly rare and governmentally
| backed.
|
| The real disruption in banking going on right now is in large
| business lending. Commercial real estate, bonds, etc. Those are
| also no longer showing up on bank balance sheets. Capital
| regulations have made that too expensive, so the big banks are
| outsourcing that function to private non--bank companies. They
| just aren't fintechs.
|
| So disruption is absolutely happening it's just on the finance
| side, not the consumer marketing side of the house.
| herodoturtle wrote:
| In South Africa the "big" (historically incumbent) banks were
| indeed disrupted by a "startup" bank relatively recently (in the
| last 20 years) - and this startup bank went on to in turn become
| one of the big banks.
|
| There is an excellent book called "Stalking Giants" [1] that
| covers this story nicely. It's a fun read (especially for South
| Africans) and was published recently.
|
| [1] https://www.amazon.co.za/Capitec-Stalking-Giants-T-J-
| Strydom...
| loourr wrote:
| The big banks are larger then ever because of consolidation and
| inflation but I do think they're getting disrupted.
|
| I think services like Fidelity are meaningfully disrupting banks.
| I much rather have my money in a money market fund then a deposit
| checking account. Most loans are not being held on bank balance
| sheets any more either, but are getting sold to the market, so
| they're no longer as critical a part of the financing stack.
|
| And we're still early days on stable tokens and the defi
| infrastructure around them.
| bArray wrote:
| What does "disruption" look like in the banking space? Banks want
| the perception of immovable, confidence, reliable, resilience,
| etc. It's what gives them the credibility to move big money. They
| don't want to "move fast and break things". Some may think about
| digital currencies.
|
| My warning is this: Be careful what you wish for. If we were to
| switch to a full digital currency, there are significant concerns
| that money could be allocated like a voucher, where it could be
| sent and only spent in a certain way. Suddenly the government
| decides those receiving some kind of social care allowance must
| spend different parts in different ways, i.e. a minimum of 50%
| MUST be spent on rent (an extremely enticing proposition in a
| recession). Perhaps there is a tax for not spending enough, or on
| the correct thing. Perhaps there is a micro-tax for moving it
| around. Maybe the micro-tax is dependant on your social credit
| score. The slippery slope goes on.
|
| The only thing currently stopping this is that you can withdraw
| your entire wage each month and spend it however you want,
| without such a tax. The government or banks cannot be certain of
| precisely how you spend your money when using cash. The very
| moment cash is gone, such implements can be created and there is
| nothing you can do about it.
|
| Maybe I am behind the times, but I don't like the sound of
| "disruption" in the banking industry. That last time I saw
| "disruption" was in 2008, and many people lost their homes.
| jncfhnb wrote:
| The other thing stopping it is the law and the fact that the US
| dollar is the global reserve currency and that would be a
| pretty great way to ruin that
| JumpCrisscross wrote:
| > _that would be a pretty great way to ruin that_
|
| Not really. It would be similar to tax rules--not really
| applicable to non-American depositors.
| jncfhnb wrote:
| It _could_ be like that. But we're very deep down slippery
| slope hypotheticals by this point.
| JumpCrisscross wrote:
| > _we're very deep down slippery slope hypotheticals by
| this point_
|
| Not really. We're talking about how the U.S. government
| treats local deposits at American banks. That's not
| really relevant to the dollar's international role.
| danielmarkbruce wrote:
| A digital dollar is not down some rabbit hole of
| hypotheticals. The fed (amongst others) debate/study it.
| Published this a couple years ago:
|
| https://www.federalreserve.gov/publications/files/money-
| and-...
| jncfhnb wrote:
| We're not talking about a digital dollar so much as a
| government mandated spending program for all citizens or
| perhaps retail account owning individuals.
| wussboy wrote:
| I'm not worried about the government doing these things, I'm
| worried about corporations colluding to do these things.
| Galatians4_16 wrote:
| That's basically the same thing.
| yfw wrote:
| At least we pretend to have accountability in the
| government.
| thatfrenchguy wrote:
| I mean, the government in the US already loves dictating what
| poor people can spend their money on when they get assistance.
|
| Look at WIC for example, even in progressive California, they
| literally force you to buy only white eggs:
| https://docs.wic.ca.gov/Content/Documents/ShoppingGuide-EN-A...
| . You also can't buy any cheese with taste, because you are
| poor and you don't deserve good food.
|
| Think of the cost of that stupid bureaucracy.
| Kiro wrote:
| Cash is already practically gone in a lot of countries. I don't
| know anyone who uses it and don't even know how the bills look
| nowadays. Must have been at least 10 years since I even touched
| physical cash.
| buu700 wrote:
| I rarely touch physical cash, but when I do I feel like I
| need to wash my hands.
| johnmaguire wrote:
| To the detriment of many. See
| https://news.ycombinator.com/item?id=42696204
| EduardoBautista wrote:
| My main issue with cash is that I hate receiving coins. If it
| weren't for coins, I would try to do occasional transactions
| in cash, just to support something that is truly anonymous.
| danielmarkbruce wrote:
| But the option is there. It matters.
| delusional wrote:
| Why would "the government" do that? I hate it when people talk
| about "the government" doing something.
|
| The real mechanics you'd see in your example is that the
| business elite would begin astroturfing support from the
| American public, with some nonsense about helping the poor
| better control their finances. Nobody would believe it, and
| progressives would be against it. In reality it will be driven
| by the commercial desire to FORCE people to purchase coca cola
| or whatever.
| Galatians4_16 wrote:
| You can think of it in terms of political parties, if it
| helps.
|
| "The Democrats would never do that" then Republicans pass the
| bill, and the Democrats protest, but run with it and don't
| abolish it when back in power... Swap parties as required for
| your flavour of government.
| dghlsakjg wrote:
| The government already does this.
|
| SNAP, colloquially foodstamps, can only be used on certain
| forms of food. Frozen goods are fine, but cannot be prepared
| hot, even if there is not a charge or it is the exact same
| food product.
|
| So my local corner grocery is allowed to sell anyone frozen
| food, whether they pay with SNAP or cash. But they also have
| a microwave that anyone can use to heat up purchased food,
| except for SNAP buyers. It is interpreted as unlawful for a
| SNAP recipient to use that microwave to heat up their
| subsidized food at the place that they bought it, so there is
| a government policy, enforced at the point of sale, severely
| restricting the use of SNAP.
| bear141 wrote:
| Requiring people who get government money for food to not
| use it on prepared food is a good thing I would think.
| Technicalities like the one you presented do seem
| ridiculous on their own however.
| yfw wrote:
| This is all seen as acceptable but try tying a tax break to
| hiring or investment and you'll hear screams from the stock
| buyback board
| kbolino wrote:
| These incentives already exist. The tax code has been
| manipulated to encourage or discourage behavior since at least
| WW2. A digital currency makes a lot of these incentives easier
| to create and easier to enforce, but they wouldn't be _new_.
| danielmarkbruce wrote:
| It's a huge difference. Incentives are one thing, being able
| to force or take money directly is a whole different level.
|
| Right now you need someone in the government administration +
| a court + a bank to do anything like this. With a digital
| dollar, you lose the last two.
| kbolino wrote:
| The Federal Reserve _is_ a bank. And we already have a
| relevant historical example to examine, postal savings
| accounts. I 'm not aware of any special power that the
| executive branch had to bypass the judicial branch where
| those accounts were concerned, versus privately held
| accounts. Plus, the Post Office was directly answerable to
| the President then, while the Federal Reserve has never
| directly answered to the President. This is an unfounded
| fear and doesn't reflect anything intrinsic to a (central
| bank-administered) digital currency.
| danielmarkbruce wrote:
| Not for consumers and non-bank businesses it isn't. You
| don't have an account at the fed. You have an account at
| plain old commercial bank. Someone at the plain old
| commercial bank can freeze your money, right now. You'll
| have to sue, go to court, win, just to get access to your
| money.
|
| If the fed becomes the place you have an account, they
| can do what the commercial bank currently can do.
|
| The difference is incentives - why do it? Commercial
| banks have no incentive, and in fact have the incentive
| to push back when asked.
|
| As for the president - sure - generally speaking the fed
| is independent. But they have significant regulatory and
| supervisory roles all by themselves, and are part of the
| administration of the government even if they aren't
| "part of the administration" as the term is usually used
| in the US.
| elric wrote:
| US banks are weird [1]. Archaic. Slow. Filthy rich. Incompetent.
| And yet they're nearly impossible to disrupt due to the benefit
| of size. Starting a new bank is expensive, unless you want to
| pretend at being a real bank and letting another bank handling
| all of the nitty-gritty details. In which case you've now become
| a reseller of that bank, and will likely be even worse.
|
| The only thing that can disrupt US banks is consumer outrage, of
| which there seems to be very little.
|
| [1] Source: I've consulted for some of the largest US, European
| and African banks.
| throwawaysleep wrote:
| And trust. Fintech in the US has had a bunch of spectacular
| implosions and scams.
| GuB-42 wrote:
| What about Japanese banks? They have a reputation of being
| terrible, justified for the little experience I had with them.
|
| Lots of fees, bureaucratic, inconvenient opening times,...
|
| In Japan, cash is king, and loan sharking is very prevalent.
| Not a very good sign for the banking system.
|
| Note that it is now becoming increasingly possible to go
| cashless, though cash is still the most widely accepted option.
| And I think it is mostly thanks to foreign banks like Citibank.
| lotsofpulp wrote:
| I don't see what more US banks could do. I have been
| transferring money instantly to people online for over a decade
| for free. They have websites/apps, I can withdraw paper money
| around the world, what other utility could a "bank" provide me?
|
| They are utilities that keep a database associating account
| number and dollar number.
|
| I earn a few thousand dollars from them every year in the form
| of sign up bonuses, and I have never spent a dime in fees for
| having an account or transferring money.
|
| If the US government offered a more protected way of saving
| money not subject to know-your-customer-revoke-access-to-your-
| property-at-anytime-under-the-guise-of-potential-criminal-
| activity laws, then I would use them.
| nothercastle wrote:
| Pay interest. They charge you 400bps to hold your money it's
| outrageous
| lotsofpulp wrote:
| US banks do pay interest. If you're not earning at least US
| federal funds rate minus ~50bps, that's on you for not
| choosing to spend 5 min to open a bank account.
|
| https://www.doctorofcredit.com/high-interest-savings-to-
| get/
|
| Capital One/CIT/Citi/PNC/Apple Card/Marcus/Ally/American
| Express are all reputable, big banks with long histories.
| Mistletoe wrote:
| I don't know if it counts as disruption exchanging one behemoth
| for another but my life got a lot better when I started using a
| Fidelity cash management account as my bank.
| RandomBacon wrote:
| That doesn't have the same protections (at least FDIC) as a
| standard checking or savings account, correct?
| TrackerFF wrote:
| Here in Norway new, innovative, and successful banks have
| been...wait for it...acquired by the big old banks. Then the
| enshittification starts.
|
| Then customers scramble to find a replacement, which opens up
| the door to a new exciting bank, and history repeats.
| ninalanyon wrote:
| Have you found a replacement for SBanken?
| segasaturn wrote:
| Could banking customers moving their business to Credit Unions
| be disruptive? I know nothing about this space, by the way.
| nothercastle wrote:
| They suck, pay no interest and charge the same high fees. The
| best alternative is investment brokerage cash accounts. They
| pay interest, allow you to buy short term treasuries with
| savings and provide checking/debt cards
| ForHackernews wrote:
| How are they incompetent? My boring old bank has never lost my
| money, it sends out bill payments on time. Those are the main
| things I ask for it to do, and it has done them competently for
| decades.
|
| As far as I can see, none of the fintech/web3/crypto-nonsense
| companies can be trusted to do those things well.
| paperpunk wrote:
| How do you know it's never lost your money? Do you audit each
| transaction on your statements?
| kbolino wrote:
| I would hope so. I certainly do. In 25 years of using them,
| I have never had a conventionally regulated financial
| institution (NCUA-insured credit union, FDIC-insured bank)
| lose so much as a penny. Whether they are keeping proper
| reserves is another question entirely, but also not really
| my problem (NCUA and FDIC exist for a reason).
| kazinator wrote:
| Could it be that the sub-prime mortgage goofballs did exactly
| that two decades ago, and the shields are still up?
| openrisk wrote:
| Both "disruption" and "banks" are very broad terms. The three
| common subtypes of banks (retail, commercial, investment) live in
| different planets as far as infrastructure, products, business
| models etc.
|
| So called "fintech disruption" typically concerns just retail
| banking and is basically just: use an "app" instead of physical
| branches to cater to the mobile-native generations. Nothing that
| any old bank cannot also implement as an alternative channel.
|
| Real disruptions do happen every once in a while and involve new
| financial products and business models (securitisation,
| derivatives etc.). But these are typically driven by legal rather
| than digital innovations.
| Spooky23 wrote:
| Exactly. Apps can be differentiators.
|
| Also, large banks fundamentally work. People with money want
| excitement and disruption away from their money.
| AutistiCoder wrote:
| Bitcoin was supposed to disrupt banking.
|
| Look how _that_ turned out.
| Developerx wrote:
| Take a look at Russian bank apps and ecosystems. How fadt they
| transfer money etc. I hate every time I'm in America. So stupid
| and ugly bank apps. It's funny they still not have portable card
| readers so I don't give my card to the waitress
| Finnucane wrote:
| "Nobody is going to put their money in Fred's Bank."---Steve
| Martin
| jefurii wrote:
| This is probably a good thing. I don't want disruption in my
| bank.
| insane_dreamer wrote:
| The collapse of Synapse is a pretty good example of why people
| don't -- and shouldn't -- put their money in the hands of a
| "fintech startup". And while not a "startup", the collapse of SVB
| certainly doesn't help due to its close association with SV and
| by extension FinTech startups.
|
| I'm happy to use FinTech startup products for certain
| transactions -- CashApp and Wise are great and I might keep a
| small balance with them. But it takes decades of being around
| before people are willing to entrust serious deposits with them.
| financetechbro wrote:
| I think you're reaching far to connect dots here. SVB collapse
| has nothing to do with innovations related to fintech. Their
| issue was more of the typical run on the bank situation than
| anything to do with innovation. So it was a failure of the
| traditional banking model, which any bank is susceptible to
| 4d4m wrote:
| Chime would disagree with this article title...
| Mathnerd314 wrote:
| Well, it's half true and half false. There are a lot of "new"
| fintech-ish banks competing on fees, transaction speed,
| overdrafts, etc. - bank-type things that matter to consumers.
| But it's true, there are no fintech banks competing to be "too
| big to fail" and getting that government bailout money. You
| have to look at crypto for equivalents of the Federal reserve,
| and people don't recognize those as banks. Although I would
| say, Coinbase is getting pretty close to a consumer-level
| "crypto bank".
| Yhippa wrote:
| It's hard to break into banking because the big banks
| successfully used regulatory capture to lock out new
| participants.
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