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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

#201

Post by throwaway2037 »

Joel_Mckay wrote: post #195
nradov wrote: post #192

Earlier quoted context omitted.

ETFs are mostly irrelevant from a 401(k) perspective because no one is trading on a daily basis. Some 401(k) plans do now offer ETFs among the investment options but for the most part they have always focused on regular mutual funds. Average expense ratios have come down a bit since 2008.

Regular mutual funds usually have higher risk and tax exposure than the ETFs... Met a lot of bums in suits trying to sell me on several flavors of BS over the years. lol =3

    > Regular mutual funds usually have higher risk ... than the ETFs.
Can you provide some specific examples? If anything, the transaction friction around mutual funds prevents most regular investors from unnecessary trading that exchange-listed ETFs allow. TL;DR: For most people, more trading means more losses or worse returns.

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

#202

Post by Centigonal »

Capital One did a great job shaking up consumer credit in the late 90s, and then branch banking in the mid 2000s with their weird combination cafe+branches. They're eighth in the US by domestic deposits today. Does the firm need to be headquartered in Silicon Valley for disruption to have occurred?

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

#203

Post by tiffanyh »

bern4444 wrote: post #175

The most interesting tech company in the banking to me is Column[0]. No affiliation but it caught my eye when the launched. Admittedly it still feels abstract to me, but the value proposition of having every capability supported by an API (like AWS's methodology of having all services be API first) on top of an actually chartered bank seems perfectly fitted for the creation of banking services that are significantly…

No blog post in nearly 3-years

https://column.com/blog

No product updates in over 7-months

https://column.com/changelog/

That doesn’t instill much confidence.

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

#204

Post by onlypassingthru »

Centigonal wrote: post #202

Capital One did a great job shaking up consumer credit in the late 90s, and then branch banking in the mid 2000s with their weird combination cafe+branches. They're eighth in the US by domestic deposits today. Does the firm need to be headquartered in Silicon Valley for disruption to have occurred?

It was ING Direct who built the unusual US cafe/bank operation and eventually sold it all to Capital One as part of the great financial crisis restructuring in 2011.

https://www.ing.com/Newsroom/News/Press-releases/PROld/ING-t...

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

#205

Post by smnrchrds »

kevin_nisbet wrote: post #200
abdullahkhalids wrote: post #196

Earlier quoted context omitted.

Interesting. I did not know that. But not surprising in retrospect. But I think the point still stands. WealthSimple is probably not perceived by the median customer as a traditional bank. So people using it is a counter-example to GGP's point that people won't use "startup" banks.

I don't know if the point should be that people won't use a startup bank, just that the assets being directed to the startups/disruptors are not presently threatening to the big banks. I would suspect this is currently the case with WealthSimple here in Canada as well. WealthSimple is at something like $50 billion assets under management [1]. Vanguard asset allocation ETFs are at like $1.3T [2]. 4 Of Canada's Big ban…

I don't think the total assets under management is the correct indicator. Vanguard, Big 5 Canadian banks, and even Power Corp cater not only to consumers but also to institutional investors and ultra high net worth individuals. Wealthsimple, to the best of my knowledge, is purely consumer-facing. It is not competing for the same markets as the other ones. Its parent company Power Corp, which is competing in the same area, has an AUM that is comparable to the Big 5 banks. I wonder if there is enough public data to compare consumer products in isolation.

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

#206

Post by anself »

Having worked in banking for many years (no longer), I can say with confidence, the big banks have a giant moat: regulation.

They want to be heavily regulated so that new upstart competitors will not come in and spoil their cozy space. And it’s easy to justify because terrorism, money laundering, insider trading, etc etc. And many of these regulations are largely ineffective and easily worked around, whilst costing billions to the banks to comply with. Hence the moat.

We won’t get banking disruption until there’s banking deregulation.

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

#207

Post by jsemrau »

1a527dd5 wrote: post #114

They might not be disrupting them, but they are definitely causing competition in the market place again. My main bank account is with Halifax, everyday spend is with Starling. Then Monzo for anything risky. Before Starling/Monzo the Halifax app was _crap_. Barely got any updates and was very basic. Now? The Halifax app is on par with the newer banks, and sometimes even release new features before (e.g. scan cheque i…

That exactly. Fintech forced Financial Institutions into Digital Transformation. Now they have caught up, there is no "next big thing" for Fintech. Crypto might have been it, but it killed itself by terrible UI and a never ending stream of scams and frauds. I believe there is an AI Agent Internet of Money to end Ad Revenue, but haven't found the arbitrage model yet.

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

#208

Post by Joel_Mckay »

throwaway2037 wrote: post #201
Joel_Mckay wrote: post #195

Earlier quoted context omitted.

Regular mutual funds usually have higher risk and tax exposure than the ETFs... Met a lot of bums in suits trying to sell me on several flavors of BS over the years. lol =3

> Regular mutual funds usually have higher risk ... than the ETFs. Can you provide some specific examples? If anything, the transaction friction around mutual funds prevents most regular investors from unnecessary trading that exchange-listed ETFs allow. TL;DR: For most people, more trading means more losses or worse returns.

There are several potential mutual fund problems, but the ones most consumers are exposed to arise from institutional and private "investment advisors". There is no legal protection from banks externalizing toxic assets acquired though risky decisions onto customers, and or ridiculous ballooning management fees siphoning off actual profit. The other issues are mostly from various end-runs around acceptable market rules and practices.

In general, most amateur holds permute well below 3 to 4 months on average. Note the old joke: "Bulls make money, bears make money, pigs get slaughtered"... was never funny for those providing cash capital to gamblers.

Most people assume they are luckier than average... and most of Las Vegas was also built on losers money.

Have a great day, =3

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

#209

Post by solatic »

henry_bone wrote: post #99
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.

That's true of everything we use as money, including precious metals. You can't eat them, live in them, use them as weapons, walk down the street in them. They have value bacause we all agree that they do and we all agree to use them as a means to exchange that value. Also, and this is important and I should have said it first, they have value because their supply is restricted. The same is true for crypto. It's fung…

Government fiat currencies have fundamental value because their taxes are denominated in their fiat currency, while their fiat currency is used to compensate the public sector for their labor. If you, as a private citizen, want to avoid the consequences of not paying your taxes (e.g. prison), you best find a way to get your hands on some of the fiat currency that has entered the economy via the public sector workers.

For a cryptocoin to have fundamental value, someone must be willing to accept it as payment. The only entities willing to do so currently are criminal enterprises and perhaps the El Salvadoran government (to pay taxes). All the other uses (like cross-border payments) rely on speculators on both ends providing liquidity for the exchange to fiat currency.

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

#210

Post by dlenski »

From my vantage point, with accounts in both Canada and the US, the US market seems hard to disrupt because its financial sector is already highly competitive.

Meanwhile Canada has long been completely dominated by 5 or 6 massive big banks that charge high fees for basic chequing accounts, and where credit card perks are far stingier than in the US…

The financially industry is being _pretty massively disrupted_ by Wealthsimple.

- They have a cash account (~checking/savings hybrid) that pays much better interest than all the big banks

- They offer zero-commission trades on Canadian and US stocks and ETFs

- They appear to be preparing a wide rollout of a credit card which offers 2% cash-back on everything (there are few Canadian credit cards that offer more than 1% cashback as a "base rate")

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