Why is everyone a bank?

The thing you tend to hear about banking services is that everyone is dissatisfied with them. This is probably why a lot of startups think they can jump in and disrupt.

People should lend directly to each other, or have sensibly priced investments, or people should have simple bank accounts that don't surprise you with charges, or be able to change FX cheaply. Those kinds of ideas are pretty easy to suggest for outsiders, and the answer is always "I'm gonna make a website that's better than the incumbent".

To be fair, startup FS sites have tended to be easier to navigate, and focusing on an area like FX does create a simpler user experience.

The question is whether any money can be made. For instance we now have a load of challenger banks that have a slick app for sending money to people. But how much is the customer actually worth? Do they stick around or open a whole bunch due to it being so easy? Also what are you gonna upsell them on other than the metal card?

What about the lending markets? How come Lending Club has issues making money as the premier business in the direct lending category?

What about the investment businesss? Competing on price is generally something they tell you not to do in business school, but that seems to be the main value proposition as far as I can tell. I reckon Google could jump in here though. They have credibility among the general populace as being pretty smart with ML, and I bet they could morph their bank into a super hedge fund.

The FX niche, I don't know how TransferWise are doing, but it's fairly easily encroached on by the challenger banks. The backend is fully commoditized, it's a question if getting customers. Which is probably why TW are offering bank account like services.

thanks perspective1! I find overt self-promotion to be distasteful, so glad it came across well. We are using the interchange fees to pay for the $5000 emergency fund, they have to move their direct deposit over to switch "ON" the safety net. We do break even based on our current estimates of annual spend and claims, but looking at a few different ways, upselling insurance is the big one! Will write about it and make sure to post on this comment thread!

It seems like they're making the point that this will be better for Google and for things like Google Pay/Wallet which can now operate at a bank level rather than at a customer of a bank level.

For the rest of us, I agree with your view.

Another asnswer: Because the people making the business decisions in these companies is the only thing they can do.

When you have no vision as a company or no visionary in your team, you get served by the countless consultants and ex-bankers who went to big-tech because of its the new Wallstreet. Of course, they have no idea what Tech does and is and of course no clue how to provide something of significant value. Instead, they steer the companies into direction where is familiar to them through their finance classes and/or their Private Equity, Venture Capital backgrounds.

The fact that everyone wants to become a bank is not engagement, is not profits. Its a sign of a failing economy where capital decided that the best thing it can do is to invest in itself.

> I have had to come up with a dollar amount worth several months of expenses on very short notice (same day, life is unpredictable).

That seems like a perfect use case for using a credit card to cover the expense and then pay yourself back when your money moves out of the savings account.

I have trouble imagining a case outside of a hostage situation where you would need access to your emergency fund same day.