it is just like p2p,but more regular.my point the future is g2g a few years ago.
Why is everyone a bank?
201–210 of 258 posts
Re: Why is everyone a bank?
#202> It also happens to be an incredibly sticky product. Think of the last time you saw an overdraft charge on your statement and swore to yourself that this was the last straw — you are taking your business elsewhere only to be confronted with the downstream effects of moving your “financial address” — telling HR where to send the next paycheck, calling up each utility company, changing autopay for each credit card bil…
In the UK we have the "Switch Guarantee"[1]. It was setup when there was stickiness in current accounts (English term for checking accounts). Now when you sign up for a current account you can opt-in to this service and they do payment redirection. So if someone tries to transfer your old account money, it'll get forwarded onto your new bank. That's on top of them organising the migration of payments.
Re: Why is everyone a bank?
#203Earlier quoted context omitted.
Europe in general would be my example for how banking should be done.
If France is part of Europe, then no f’ing way. It’s a nightmare: arbitrary limits on debit cards, large transfers have to be done in person at your specific branch. The security requirements are Byzantine. For example, to get a new pin code, they actually mail you paper, you can do it in a branch. International money transfers require permission (only obtained at your specific branch.) They charge a monthly fee to h…
I'm from France and I'm using an online bank. Almost none of these apply to me - yes the pin code and the card come by mail but I can transfer arbitrary amounts online, I have a free gold card, there are basically no fees at all: the account is free, the card is free, transfers are free, I don't think this account cost me anything at all. I had to open the account with a significant amount to get the gold card but you can open it with a much lower amount or by receiving your salary there, and the only difference is that you get a regular card instead.
The only downside is that you don't have a physical branch you can go into but you can do basically anything online without ever interacting with anyone, or at worst you can always call them. Those are real banks btw, not pseudo-bank fintech companies.
Re: Why is everyone a bank?
#204Earlier quoted context omitted.
Not regulated well enough, imo, MasterCard is already willing to sell data to these same actors: https://www.theverge.com/2018/8/30/17801880/google-mastercar...
Half of Visa's, and MasterCard's business model is selling payment flow. This isn't some novel development for these processors - they've been doing it for decades. Shockingly enough, people don't care enough to shred all their credit cards! Even people who tend to get outraged on the internet about these sorts of things still have, and use at least one. (And before someone brings up that EU is not heavy on credit ca…
Live too live in a debt based society!
Re: Why is everyone a bank?
#205Interest is profitable. You take cash, you make interest. It's just a step away from the oldest game in the book—loan sharking.
Re: Why is everyone a bank?
#206Related: In Denmark (where I live), we have an officially designated "NemKonto" (translates to "EasyAccount"), which is where most employers, public institutions, etc. put paychecks, payouts, etc. automatically. So if you change banks, you can simply designate the new account your official NemKonto, and the money will automatically be routed there - no need to contact anyone.
This, in addition to how easy our PBS (DK version of ACH) is to use means switching banks is something that can be done easily. I know of people who will regularly contact 5-10 banks with their current mortgage details and ask for a better deal, and then go back to their current bank and tell them "match this offer or I'm switching".
We also have a simple interest on overdraft (usually 8-15% annually on any amount over draft), though excessive overdraft will get your account locked. But beyond that, no fees for hitting negative $0.05. Is there any US bank that offer a similar fee structure? I imagine people would migrate in droves if that was already the case.
Re: Why is everyone a bank?
#207Earlier quoted context omitted.
This 100%. I work at a fintech that's not a bank. Instead, we integrate with people who integrate with banks--we've basically got one middleman per continent (except a few). It's awful. Rather than having to figure out the regulatory details of each jurisdiction so that we can be compliant, we instead have to figure out the regulatory details of each jurisdiction so that we can trick whichever middleman into being co…
« why not cut out the middlemen and be the only parasite in the loop? » Observation: this is precisely what cryptocurrencies do. No middleman. Users transact directly with each other.
> No middleman
except for a handful of giant server farms in china
Re: Why is everyone a bank?
#208Earlier quoted context omitted.
This 100%. I work at a fintech that's not a bank. Instead, we integrate with people who integrate with banks--we've basically got one middleman per continent (except a few). It's awful. Rather than having to figure out the regulatory details of each jurisdiction so that we can be compliant, we instead have to figure out the regulatory details of each jurisdiction so that we can trick whichever middleman into being co…
I don’t know if it is specific to banks but there is a common pattern I have seen among internal developers: not only a complete lack of curiosity to understand finance, the underlying business, but an active resistance to any attempt to explain them. They want the numbers to be data, and don’t want to have to know anything about this data, and be told exactly what to do with it and they will code it up. I am sure th…
As a counter, I've contracted for a bank and big business generally, and they are activly resistent to allowing you to interface with the business in any meaningful way.
There's several reasons for this, but at the end of the day people don't take kindly for your making them redundent and there's a lot of fiefdoms going around.
Why would any developer who wants a deeper look stick around?
Re: Why is everyone a bank?
#209If you're interested in this space, we're building a fully-regulated platform bank to essentially power all of these consumer/business facing banking applications.
This is us: https://griffinbank.com
Re: Why is everyone a bank?
#210Earlier quoted context omitted.
For individual mass market the big driver is loan margins, both for home mortgages and various short-term loans. But the improvement in payments was mostly driven by legislation (e.g. the Payment Services Directive from 2007 with most of implementation at 2012) without which banks were quite happy to offer payments as slow and expensive as they could as it was too profitable for the industry to voluntarily agree to d…
With 1.6% interest rates for mortgages... I don't know how dutch banks make money. They sell insurance and offer consumer investment accounts -- which are not permitted for us citizens!
I don't know anything particular about the Dutch market, but some rough estimates:
Current 3m euribor is -0.4% so 1.6% interest rate means 2% margin. Assuming that your initial costs of selling/assessing/processing the mortgage are covered with fees, something like 0.5% would be enough to cover the main (non-systemic) risks and expenses for decent quality mortgages, so you get 1.5% of pure profit; for every billion in your portfolio you'd get 15 million profit each year; Dutch banks have 500B of housing loans so that's a capacity of something like 7-8 billion of profit per year from housing loans alone.
And various short-term loans have lower volumes, but much higher interest rates and room for profitability.
Looking at the stats in https://www.statista.com/topics/3442/the-banking-sector-in-t... it's clear that the net interest income dominates, it's something like 5x the fee income.