Banks sell one thing--debt. Many have tried to "disrupt" that industry, but all attempts boil down to: getting a cut of payment fees or getting paid to resell debt. All "innovation" in this sector is done by crossing fingers and hoping the regulators don't notice you trying to use language to pretend you are a bank when you are not.
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
#32In many cases the start-ups that disrupted entrenched big players did so by skirting the existing law and regulations the big players have to abide by and gaining market share before regulators could catch up to them. Maybe I simply lack vision but I don't think this behavior maps well into the fundamental day-to-day livelihoods of every day people. Certainly I am not willing to risk my finances for marginally increa…
This. Regulation has been set so high on banks that it makes it extremely difficult for new players to compete.
The reasons given for regulation are:
- protection from failure because of inability to not bail them out (and it has done a good job of this by and large, with some obvious risk oversights - e.g. silicon valley bank)
- money laundering regulations
The real corruption/monopoly in financial services that needs addressing are the amex/visa/mastercard transaction fees. The only way to fix this, in my opinion, is to have the consumer pay the fees.
Re: No one is disrupting banks – at least not the big ones
#33What 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…
> What isn’t the bank doing for me that is in need of “disruption”? 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
What type of transactions do you need to make outside of business hours that you can’t do electronically?
And who actually deals with physical checks? Even the various contractors I used when preparing my home for sell took some form of electronic payment
Re: No one is disrupting banks – at least not the big ones
#34No 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…
Getting a banking license in the US at least is totally doable and lots of banks are created de novo every year.
As another commenter noted, anyone can create "money out of thin air". Come to my corner store and buy an apple on credit. Poof!
Credit was the original money, made out of thin air, and can be by anyone.
Re: No one is disrupting banks – at least not the big ones
#35Earlier 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.
There are pros and cons of cryptocurrencies as money, just like gold, which cause people to speculate on the price.
What are the pros of the trump coin or the melania coin?
Re: No one is disrupting banks – at least not the big ones
#36No 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…
> mega banks have the sole power of creating credit out of thin air 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.
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.
Re: No one is disrupting banks – at least not the big ones
#37I 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.
The government is very conservative in handing out banking licenses. There was a famous scandal with an Icelandic bank that was disrupting the market with higher interest rates.
It is basically impossible to license a new bank in Germany and the financial regulations have become stricter over time, with a full banking license being mandatory for more and more things. It's kind of disturbing.
If you are a big bank, you already have all the licenses and can do everything so what difference does that regulation make in practice?
Re: No one is disrupting banks – at least not the big ones
#38Revolut had credit cards for a few years but only in Lithuania
https://www.revolut.com/en-LT/credit-cards/
I guess they'd need to apply for banking license to offer CC in every EU state and that would be an order of magnitude more expensive than Lithuania's banking license
Re: No one is disrupting banks – at least not the big ones
#39No 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…
> mega banks have the sole power of creating credit out of thin air 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.
If you count the loan as an asset, surely you have to count it as a liability for the borrower. And the bank has to actually give the money, so they're down that money.
In the end both are net zero.
Re: No one is disrupting banks – at least not the big ones
#40No one is providing a value proposition that would make me move away from [my large bank] when it comes to a basic checking account.
Banks were disrupted in the mortgage market - a very large chunk of residential mortgages go through brokers.
Banks are being disrupted in corporate credit. "Private Credit" is exploding.