Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Why is everyone a bank?

medium.com

Post reply on HN
Print view View original

101–110 of 258 posts

Re: Why is everyone a bank?

#101

Post by Scoundreller »

delfinom wrote: post #55
Apocryphon wrote: post #49

Is this going to be the sort of phenomenon that we will eventually look back as a signifier of the dumb money economic bubble we're in, similar to past trends like the wild access to credit in the Roaring Twenties, the run up to the S&L crisis in the '80s, the worthless tech IPOs of the Dot-Com Bubble, the liar's loans of the 2000s, and another examples of rampant finacialization? If the environment is one in which n…

The tech companies aren't even underwriting the accounts. They are just resellers of accounts from actual banks, throwing on a fancy web interface and then data mining your transactions.

And skimming off some of the float.

What's a company worth with a $1b in it that doesn't have to payout any interest on it and people are in no rush to get back (on average) ?

Re: Why is everyone a bank?

#102

Post by BjoernKW »

tlb wrote: post #4

Another answer: because regular banks are awful to deal with. They don't have nice APIs to just move money around. They apply velocity limits at surprising times. They can terminate your account suddenly for opaque reasons. They charge high regular fees and even higher "gotcha" fees if you make a mistake. They can take back money sent to you for up to 90 days, but often can't get back money you sent to crooks even if…

I absolutely agree.

Back in 2016 I wrote a blog post about accounting being still a strangely manual process: https://bjoernkw.com/2016/04/03/accounting-in-2016/

Ultimately, I came to the conclusion that in order to solve these problems I would have to start my own bank.

Unfortunately, not much has changed since then. At least I now use this useful tool for converting CSV exports of my account statements to MT940 files: https://github.com/msc01/soacsv2mt940

It’s still a semi-automatic and somewhat error-prone process, though.

Re: Why is everyone a bank?

#103

Post by vanniv »

tlb wrote: post #4

Another answer: because regular banks are awful to deal with. They don't have nice APIs to just move money around. They apply velocity limits at surprising times. They can terminate your account suddenly for opaque reasons. They charge high regular fees and even higher "gotcha" fees if you make a mistake. They can take back money sent to you for up to 90 days, but often can't get back money you sent to crooks even if…

Honestly, I wouldn't trust Google (or any other tech giant) to be my bank.

My bank doesn't have a history of locking people's accounts when they post "the wrong" political opinions online.

My bank doesn't have a plan to monetize access to my account, or to limit use of the account to only those activities of which the bank's army of woke employees approve.

I think I'll stick with a real bank, thanks.

Re: Why is everyone a bank?

#104

Post by briatx »

matheusmoreira wrote: post #48
whatshisface wrote: post #24

Earlier quoted context omitted.

Thin air? What are all the employees doing then?

Yup, thin air. When people borrow money, the bank just creates the money out of nowhere. That money doesn't actually exist until the debt is paid. Banks are ultimately responsible for the extreme inflation of virtually all currencies currently in use.

That is not at all how the money multiplier works.

https://en.m.wikipedia.org/wiki/Money_multiplier

Re: Why is everyone a bank?

#105

Post by girvo »

vanniv wrote: post #103
tlb wrote: post #4

Another answer: because regular banks are awful to deal with. They don't have nice APIs to just move money around. They apply velocity limits at surprising times. They can terminate your account suddenly for opaque reasons. They charge high regular fees and even higher "gotcha" fees if you make a mistake. They can take back money sent to you for up to 90 days, but often can't get back money you sent to crooks even if…

Honestly, I wouldn't trust Google (or any other tech giant) to be my bank. My bank doesn't have a history of locking people's accounts when they post "the wrong" political opinions online. My bank doesn't have a plan to monetize access to my account, or to limit use of the account to only those activities of which the bank's army of woke employees approve. I think I'll stick with a real bank, thanks.

While I agree with your caution regarding Google, banks do indeed lock or close accounts for entirely opaque reasons, too, with little to no recourse!

Re: Why is everyone a bank?

#106

Post by sroussey »

vanniv wrote: post #103
tlb wrote: post #4

Another answer: because regular banks are awful to deal with. They don't have nice APIs to just move money around. They apply velocity limits at surprising times. They can terminate your account suddenly for opaque reasons. They charge high regular fees and even higher "gotcha" fees if you make a mistake. They can take back money sent to you for up to 90 days, but often can't get back money you sent to crooks even if…

Honestly, I wouldn't trust Google (or any other tech giant) to be my bank. My bank doesn't have a history of locking people's accounts when they post "the wrong" political opinions online. My bank doesn't have a plan to monetize access to my account, or to limit use of the account to only those activities of which the bank's army of woke employees approve. I think I'll stick with a real bank, thanks.

Oh, so not true. Banks often close accounts of types of people or businesses they don’t like at the moment. Just ask a PE/VC with a BofA account!

Re: Why is everyone a bank?

#107

Post by jimbru »

It's easy (and fun) to complain about the bad (or just weird) product experiences that banks regularly churn out. Believe it or not, most banks are trying their best. But as other commenters have noted, banks aren't staffed by technologists, so their choices for how to solve these problems begin and end with buying one of the available off-the-shelf software products. Spoiler alert, these products generally are both expensive and not very good.

If you want to understand the toolkit bankers have at their disposal, take a look at FIS, Fiserv, and Jack Henry. These three companies represent approximately $170 billion in market cap. Your interactions with your bank, whether it's a click in an app or a conversation with an actual banker, almost certainly bottom out with a call into one of these company's software systems. These systems are (almost) all mainframe software originally designed in the 1980s. Every product the bank delivers is built on this shaky foundation, which results in all sorts of workarounds and weirdness at every layer of the stack.

That all worked fine back in the '80s, but in the decades since, not only have our expectations changed (most bankers don't know what "API" stands for, by the way), but also banks' regulatory reporting requirements have expanded dramatically. Governments wants to know (very reasonably) that a terrorist or money launderer won't be able to make payments. But when you mix in the inertia of old enterprise software and the relative dearth of good alternatives, the result is a broken product experience (like the random velocity controls like @tlb cited above).

Being a bank is big and complex. And since deregulation and the Internet happened, being a bank is no longer about geography (remember branches?), it's about software and product. This seems like a pretty natural fit for a startup: break off a desirable chunk of the bank's customers and deliver a modern, specialized solution that's 10x better. There's ~$12 trillion of bank deposits in the U.S., that's a lot of market to go after.

* * *

Full disclosure, my company, Treasury Prime (https://treasuryprime.com/) sells software to banks so that we can expose developer APIs for banking. If you have a fintech startup and you need a bank partner with good, modern APIs, email me: jimbru@treasuryprime.com.

Re: Why is everyone a bank?

#108

Post by ceejayoz »

IggleSniggle wrote: post #98
cstoner wrote: post #59

Earlier quoted context omitted.

Your examples seem like cases that can easily be handled by a checking account. > Fundamentally, I should not have to explain why I would desire immediate access to my own cash reserves at a moment's notice to excuse broken financial infrastructure. Yes, if you are investing in less-liquid assets to get a better RoI then you absolutely do. If you don't like the terms then you are free to keep your cash in your checki…

Just bought a brand new car this week from a dealership (US) and the seller refused to accept a check.

They’ll generally accept a cashier’s check. Ours would also accept a personal one as long as you didn’t mind them delaying mailing the title for a few weeks.

Re: Why is everyone a bank?

#109

Post by coolio2657 »

toomuchtodo wrote: post #43
dr_dshiv wrote: post #40

Earlier quoted context omitted.

You should see how easy it is to do these things in the Netherlands. No charge to wire money to an individual or business. No transaction cost for paying by card. Pay online with ideal for 0%, just scan qr code with bank app. Simple and easy.

Europe in general would be my example for how banking should be done.

Would you be willing to go into more detail on why banking is better in Europe? They seem to have their own problems, too.

Re: Why is everyone a bank?

#110

Post by zhte415 »

The article doesn't touch this, US-centric, but I feel worth mentioning is the EU's PSD2 (Payment Services Directive 2) which is driving a lot of consumer banking Fintech/Regtech.

An article from 2016 which I think gives the best tl;dr especially highlighting the roles of ccount Information Service Providers (from roboadvisors to replacements of traditional 3rd party transaction layers such as Visa) and Payment Initiation Service Providers (which essentially turn any traditional bank into a whitelabel product) https://www.finextra.com/blogposting/12668/psd2---what-chang...

Post reply on HN