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Tolerating full cloud outages with Monzo Stand-in

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Re: Tolerating full cloud outages with Monzo Stand-in

#21

Post by blibble »

jkingsman wrote: post #11
joshstrange wrote: post #10

Completely unrelated to this blog post but I really dislike Fintech saying "Get paid early" in their promos. It's clearly marketing at someone too stupid to be able to see right through how utterly useless that is. If you are celebrating getting your paycheck 1 day earlier (every time) then your financial literally and financial health are probably in the toilet. They _must_ know they are preying on people with state…

Though, in some cases (like when it's your bank saying it), it's usually just them frontrunning reliable (coming from a payroll provider) and predictable (getting paid the same time each month) ACH transactions with a near-zero likelihood of not settling, then crediting you the money before the ACH is totally settled, so not ALL cases are fintech gimmicks. But most are, and unfortunately, as the proliferation of payd…

as a banker, when I first heard about that I did I wonder if they've modeled that risk correctly

it's the sort of thing that could probably wipe out their capital completely in a black swan event

Re: Tolerating full cloud outages with Monzo Stand-in

#22

Post by fujinghg »

fragmede wrote: post #20
fujinghg wrote: post #19

Earlier quoted context omitted.

Or maybe I just have higher standards and better risk appraisal after seeing their customer support response for two separate people after they had problems was “fuck off and talk to the ombudsman”. Problems being stuck payment during migration to another bank (after payment issues) and a frozen account after false positive on a fraud. No those aren’t fuck off things they are fix them. Missing or stuck cash is not a…

TWO people you know had bad support interactions! Well then.

I’m a statistician. What point are you trying to make? Write it off as an anecdote? It’s not 1999.

It’s two observations. Observations lead to questions which lead to collecting more data. Which lead to a conclusion that it is not pretty.

When managing risk you judge a company not on a good day but how they handle things on a bad day. And Monzo are terrible. It’s a pattern.

Go look and find.

Re: Tolerating full cloud outages with Monzo Stand-in

#23

Post by simonvc »

blibble wrote: post #21
jkingsman wrote: post #11

Earlier quoted context omitted.

Though, in some cases (like when it's your bank saying it), it's usually just them frontrunning reliable (coming from a payroll provider) and predictable (getting paid the same time each month) ACH transactions with a near-zero likelihood of not settling, then crediting you the money before the ACH is totally settled, so not ALL cases are fintech gimmicks. But most are, and unfortunately, as the proliferation of payd…

as a banker, when I first heard about that I did I wonder if they've modeled that risk correctly it's the sort of thing that could probably wipe out their capital completely in a black swan event

It's a risk that was very much understood and it's fully covered.

Re: Tolerating full cloud outages with Monzo Stand-in

#25

Post by quesera »

jkingsman wrote: post #11
joshstrange wrote: post #10

Completely unrelated to this blog post but I really dislike Fintech saying "Get paid early" in their promos. It's clearly marketing at someone too stupid to be able to see right through how utterly useless that is. If you are celebrating getting your paycheck 1 day earlier (every time) then your financial literally and financial health are probably in the toilet. They _must_ know they are preying on people with state…

Though, in some cases (like when it's your bank saying it), it's usually just them frontrunning reliable (coming from a payroll provider) and predictable (getting paid the same time each month) ACH transactions with a near-zero likelihood of not settling, then crediting you the money before the ACH is totally settled, so not ALL cases are fintech gimmicks. But most are, and unfortunately, as the proliferation of payd…

Right, some banks will not post a deposit to your account until after a holding period. I deal with a lot of ACH payments, and despite a very strict schedule in the network, the retail customer-facing side is surprisingly unpredictable.

So the "post credit early" promise is not a gimmick, but the whole idea of being paid early is a gimmick. The next pay period is still a full period away, so any benefit to being credited early is literally a one-time, and probably just one-day thing.

Re: Tolerating full cloud outages with Monzo Stand-in

#26

Post by blibble »

simonvc wrote: post #23
blibble wrote: post #21

Earlier quoted context omitted.

as a banker, when I first heard about that I did I wonder if they've modeled that risk correctly it's the sort of thing that could probably wipe out their capital completely in a black swan event

It's a risk that was very much understood and it's fully covered.

I've heard that one before

Re: Tolerating full cloud outages with Monzo Stand-in

#27

Post by quesera »

4ndrewl wrote: post #24

Really interesting. Would love to understand how they came to the decision to build this,and whether there's any precedent for it.

Payment card networks have delegated authorization plans, where if a major processor goes down, they will still route transactions and use a simplified secondary network for making approval decisions.

It's called "stand-in processing", and I assume it's the inspiration here.

Re: Tolerating full cloud outages with Monzo Stand-in

#28

Post by 4ndrewl »

quesera wrote: post #27
4ndrewl wrote: post #24

Really interesting. Would love to understand how they came to the decision to build this,and whether there's any precedent for it.

Payment card networks have delegated authorization plans, where if a major processor goes down, they will still route transactions and use a simplified secondary network for making approval decisions. It's called "stand-in processing", and I assume it's the inspiration here.

The Monzo example feels different though, as they're explicitly not looking to replicate all functionality, just something minimal to get by whilst they fix the primary cloud services.

Re: Tolerating full cloud outages with Monzo Stand-in

#29

Post by quesera »

blibble wrote: post #21
jkingsman wrote: post #11

Earlier quoted context omitted.

Though, in some cases (like when it's your bank saying it), it's usually just them frontrunning reliable (coming from a payroll provider) and predictable (getting paid the same time each month) ACH transactions with a near-zero likelihood of not settling, then crediting you the money before the ACH is totally settled, so not ALL cases are fintech gimmicks. But most are, and unfortunately, as the proliferation of payd…

as a banker, when I first heard about that I did I wonder if they've modeled that risk correctly it's the sort of thing that could probably wipe out their capital completely in a black swan event

There's an ocean of historical data to predict reversal or settlement failure of ACH transactions.

I would guess that payroll credits are the second most-reliable category in the ocean of ACH transactions, right after US Treasury payments.

How black would this swan need to be to blow up this stability?

Re: Tolerating full cloud outages with Monzo Stand-in

#30

Post by blibble »

quesera wrote: post #29
blibble wrote: post #21

Earlier quoted context omitted.

as a banker, when I first heard about that I did I wonder if they've modeled that risk correctly it's the sort of thing that could probably wipe out their capital completely in a black swan event

There's an ocean of historical data to predict reversal or settlement failure of ACH transactions. I would guess that payroll credits are the second most-reliable category in the ocean of ACH transactions, right after US Treasury payments. How black would this swan need to be to blow up this stability?

not sure what american payment transfers have to do with UK BACS payments, but ok

> I would guess that payroll credits are the second most-reliable category in the ocean of ACH transactions, right after US Treasury payments.

maybe some sort of lunatic getting control of the US treasury payment systems?

I suppose that can't ever happen

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