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No one is disrupting banks – at least not the big ones

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Re: No one is disrupting banks – at least not the big ones

#181

Post by lesuorac »

tenthirtyam wrote: post #23
Waterluvian wrote: post #6

Earlier quoted context omitted.

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.

> 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 diamon…

> 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.

Re: No one is disrupting banks – at least not the big ones

#182

Post by lotsofpulp »

WeylandYutani wrote: post #144
ikr678 wrote: post #108

Earlier quoted context omitted.

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.

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.

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.

Re: No one is disrupting banks – at least not the big ones

#183

Post by usefulcat »

hiddencost wrote: post #176
buyucu wrote: post #97

Earlier quoted context omitted.

[flagged]

A sitting president profiting off the presidency is a hall mark of a corrupt state. Doing it so openly suggests there's nothing stopping from doing so in much subtler ways too.

Doing it openly demonstrates that he thinks a lot of people (namely, people who voted for him) won't have any problem with it. In that case a corrupt state is not the biggest problem.

Re: No one is disrupting banks – at least not the big ones

#184

Post by lesuorac »

alecco wrote: post #115
danielmarkbruce wrote: post #36

Earlier quoted context omitted.

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.

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 Al…

> 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/quarterly-...

Re: No one is disrupting banks – at least not the big ones

#185

Post by cle »

lesuorac wrote: post #179
__MatrixMan__ wrote: post #177

Earlier quoted context omitted.

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…

> 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.

Nobody cared that gold conducted electricity until very recently in human history.

Re: No one is disrupting banks – at least not the big ones

#186

Post by lesuorac »

toast0 wrote: post #161
bryanlarsen wrote: post #64

Earlier quoted context omitted.

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…

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%.

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.

Re: No one is disrupting banks – at least not the big ones

#188

Post by BenoitEssiambre »

smnrchrds wrote: post #178
abdullahkhalids wrote: post #135

Earlier quoted context omitted.

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…

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.

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.

Re: No one is disrupting banks – at least not the big ones

#189

Post by jen20 »

ctippett wrote: post #74
throwaway894345 wrote: post #57

Earlier quoted context omitted.

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?

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

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.

Re: No one is disrupting banks – at least not the big ones

#190

Post by SpicyLemonZest »

xwolfi wrote: post #165
ranger207 wrote: post #88

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 faste…

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 an…

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.
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