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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

#371

Post by JumpCrisscross »

jncfhnb wrote: post #356
JumpCrisscross wrote: post #345

Earlier quoted context omitted.

> that would be a pretty great way to ruin that Not really. It would be similar to tax rules—not really applicable to non-American depositors.

It _could_ be like that. But we’re very deep down slippery slope hypotheticals by this point.

> we’re very deep down slippery slope hypotheticals by this point

Not really. We're talking about how the U.S. government treats local deposits at American banks. That's not really relevant to the dollar's international role.

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

#372

Post by paperpunk »

ForHackernews wrote: post #367
elric wrote: post #312

US banks are weird [1]. Archaic. Slow. Filthy rich. Incompetent. And yet they're nearly impossible to disrupt due to the benefit of size. Starting a new bank is expensive, unless you want to pretend at being a real bank and letting another bank handling all of the nitty-gritty details. In which case you've now become a reseller of that bank, and will likely be even worse. The only thing that can disrupt US banks is c…

How are they incompetent? My boring old bank has never lost my money, it sends out bill payments on time. Those are the main things I ask for it to do, and it has done them competently for decades. As far as I can see, none of the fintech/web3/crypto-nonsense companies can be trusted to do those things well.

How do you know it’s never lost your money? Do you audit each transaction on your statements?

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

#373

Post by jszymborski »

dlenski wrote: post #211
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…

Glad you're not the only one to point out Canada's comparatively stodgy financial industry. https://news.ycombinator.com/item?id=42838063 The account management interfaces of Canadian banks are pretty universally terrible. Even the neo-banks like Tangerine.

Tangerine still insists on making login credentials your account number, and a 4 digit pin. There used to be a second system where they'd show you a secret combination of images after login and you'd provide an answer to one of four security questions, which kinda made things better as I just provided passwords as the answer to the questions, but now they've replaced that with drumroll SMS 2FA.

Security is a clown show at Tangerine, I no longer use it and can't suggest other folks do.

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

#374

Post by 0xffff2 »

rvba wrote: post #362
dathinab wrote: post #240

Earlier quoted context omitted.

The EU also has put pressure on Banks for decades now to either "innovate" or "get innovated" by regulations forcing them to implement innovative ideas not coming from them. With both having happened over time. They also at least somewhat try to compete with Paypal on online payment on EU specific shops (not they they have much success, not just because of network effect but because a combination of their products be…

In some markets paypal has no market share at all - its whole value proposition is something that banks allready have. Paypal is needed in USA due to archaic systems. In Europe many banks allow instant transactions without the risk of blocking your money for 180 days - what paypal seems to do

Paypal (or its little brother Venmo) haven't been needed in the US in nearly a decade. I've never had a European bank account, but Zelle seems to me to be just as good as what the Europeans have.

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

#375

Post by kasey_junk »

Red_Comet_88 wrote: post #65
danielmarkbruce wrote: post #34

Earlier quoted context omitted.

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.

Can your corner store credit be used to pay taxes? How long will your corner store survive if the IRS found out you were processing transactions in your own currency?

You didn’t say currency, you said credit. But it doesn’t matter, lots of non-US chartered institutions historically create US dollars. There are some treaties around it now but in the beginning English banks created the Eurodollar system with no control by the US government.

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

#376

Post by saalweachter »

fsflover wrote: post #370
saalweachter wrote: post #355

Earlier quoted context omitted.

The tricky part is there is a difference between "your government is not trustable" and "you don't trust your government" that you can never bridge.

Why does it matter here?

Moving your money into a non-local currency or store-of-value has a cost and its own risks.

If you trust an untrustable government, you lose when they betray you. If you don't trust a trustable government, you lose when you spend years and decades hedging against their betrayal and it never comes.

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

#377

Post by jszymborski »

abdullahkhalids wrote: post #196
smnrchrds wrote: post #178

Earlier quoted context omitted.

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.

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.

> WealthSimple is probably not perceived by the median customer as a traditional bank.

Well in fairness Wealthsimple is an investment management platform providing some bank-like features through their partnership with other Schedule 1 banks (previously was Equitable Bank, don't know if they are still with them).

Wealthsimple calls themselves a non-bank [0]. My understanding is that when Wealthsimple says that funds are CDIC ensured, they mean that they are held in a bank account from a third party bank whose funds are CDIC ensured.

I am not a lawyer or a banker, but Wealthsimple always scared me a bit after seeing what happened to (albeit far sketchier) Yotta when a fintech company they relied on (Synapse) folded. While funds are insured, if your funds are not "lost" but simply inaccessible, the insurance isn't really worth anything. Likewise, my understanding is that if WS goes belly-up (unlikely) there's a possibility where funds are still made inaccessible and the CDIC insurance doesn't kick in since the third-party bank is still alive and well.

[0] https://archive.is/58zoJ

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

#378

Post by dghlsakjg »

delusional wrote: post #361
bArray wrote: post #305

What does "disruption" look like in the banking space? Banks want the perception of immovable, confidence, reliable, resilience, etc. It's what gives them the credibility to move big money. They don't want to "move fast and break things". Some may think about digital currencies. My warning is this: Be careful what you wish for. If we were to switch to a full digital currency, there are significant concerns that money…

Why would "the government" do that? I hate it when people talk about "the government" doing something. The real mechanics you'd see in your example is that the business elite would begin astroturfing support from the American public, with some nonsense about helping the poor better control their finances. Nobody would believe it, and progressives would be against it. In reality it will be driven by the commercial des…

The government already does this.

SNAP, colloquially foodstamps, can only be used on certain forms of food. Frozen goods are fine, but cannot be prepared hot, even if there is not a charge or it is the exact same food product.

So my local corner grocery is allowed to sell anyone frozen food, whether they pay with SNAP or cash. But they also have a microwave that anyone can use to heat up purchased food, except for SNAP buyers. It is interpreted as unlawful for a SNAP recipient to use that microwave to heat up their subsidized food at the place that they bought it, so there is a government policy, enforced at the point of sale, severely restricting the use of SNAP.

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

#379

Post by buu700 »

Kiro wrote: post #357
bArray wrote: post #305

What does "disruption" look like in the banking space? Banks want the perception of immovable, confidence, reliable, resilience, etc. It's what gives them the credibility to move big money. They don't want to "move fast and break things". Some may think about digital currencies. My warning is this: Be careful what you wish for. If we were to switch to a full digital currency, there are significant concerns that money…

Cash is already practically gone in a lot of countries. I don't know anyone who uses it and don't even know how the bills look nowadays. Must have been at least 10 years since I even touched physical cash.

I rarely touch physical cash, but when I do I feel like I need to wash my hands.

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

#380

Post by dghlsakjg »

ty6853 wrote: post #269
biohcacker84 wrote: post #264

Earlier quoted context omitted.

US Banks are much worse at serving common people than many other old big banks around the world, certainly compared to Germany's banks for example. And yes it is thanks to a byzantine system of history, regulations and very few Americans travelling abroad to experience radically better systems.

FATCA makes Americans pariahs at foreign banks. I would love to store cash outside US jurisdiction but it is a compliance nightmare usually only worth it for high net worth clients. We know better systems exist, we just often can't use them even when we live overseas. Crypto is the last offshore banking for the middle class. It essentially took over right when FATF eliminated banking privacy and bearer shares -- whic…

I'm a middle class American that has lived in various places, Canada currently.

I opened my first account in Canada while I was still a US resident. FATCA compliance was a matter of a single extra form, and providing my US SSN. It was about the same for my Caribbean accounts with international banks.

If what you are trying to do is open an account that is not visible to the US government, that is much harder.

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