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In Brazil traditional banks are totally being disrupted. See Nubank.
Credit portfolio in 2023:
Itaú - $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
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…
I can create money out of thin air with you, if you are willing to accept my credit worthiness.
Earlier quoted context omitted.
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...
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.
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."
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…
Best not to pay much attention to Andreesen though.
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 m…
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.
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.
There was a famous scandal with an Icelandic bank that was disrupting the market with higher interest rates.
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…
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.
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.
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 m…
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
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