It's crazy to me that we're still using the same approach to banking, given that the banking system regularly blows up and drags the rest of the economy into a recession.
Regularly?
No one is disrupting banks – at least not the big ones
41–50 of 452 posts
Re: No one is disrupting banks – at least not the big ones
#42Earlier 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.
There’s at most a zero floor value on holdings of government debt, corporate equities, bank holdings, and any asset held by a custodian.
The floor value of physical commodities with significant storage costs is negative.
The market is aware of these possibilities and these risks are generally recognized as being embedded in asset prices as premiums.
Re: No one is disrupting banks – at least not the big ones
#43I 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.
They've "lost" a few times by now. Government has propped them up. The other side of the innovator's dilemma is the fact that the market leaders who don't stick to their current winning formula, instead risking big on a new technology, will sooner or later get it wrong and fail on their own. That's why it's a dilemma.
JP Morgan Chase and Wells Fargo would have been fine in '08 had they been left alone.
Re: No one is disrupting banks – at least not the big ones
#44This is like saying "nobody is disrupting AWS" and then pointing out that competitors don't have a version of AWS Glue.
Plenty of startups have disrupted banks. AMEX purchased one to jumpstart its small business checking accounts just a few years ago. You're just not looking hard enough.
If you move the goal posts to core checking/savings accounts by consumers, then yeah there's not much of an upside there. Consumers go decades to lifetimes on average without changing banks. Capital One was the last one to do anything "disruptive" here re: providing accounts and credit to the lower class, and I'm not sure there's enough juice to squeeze left for a smaller, more focused product to make any money given the stickiness of checking accounts generally.
Re: No one is disrupting banks – at least not the big ones
#45Earlier quoted context omitted.
> 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
if i transfer money from one bank's account to another, it takes minimum of 48 hours if I make the request before 3pm cutoff time. Day 1, the transfer request is made at 1pm. Day 2, the money is no longer available in the sending account yet not in the receiving account. Day 3, the money is available in the receiving account. If I do it after 3pm, the request is not placed until Day 2. Why? WTF does a computer have a cutoff time? Does it go home and cook dinner for the family and do homework with the kids?
>took some form of electronic payment
These are nothing but electronic requests. No human needs to be involved, yet here we are. But sure, let's go ahead and argue like I don't have valid issues because you seem to not have any.
Re: No one is disrupting banks – at least not the big ones
#46I 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.
They've "lost" a few times by now. Government has propped them up. The other side of the innovator's dilemma is the fact that the market leaders who don't stick to their current winning formula, instead risking big on a new technology, will sooner or later get it wrong and fail on their own. That's why it's a dilemma.
Not all of them were on the loosing side of that situation JPM had sold off most of risky mortgages in prior years taking a sizable haircut while other banks were supposedly raking it in. There was a ton of pressure on Jamie Dimon not to do it because JPM numbers looked bad compared to peers in those years.
Re: No one is disrupting banks – at least not the big ones
#47No 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.
Everyone has their own opinion of "lots" I suppose, but the quickest info I could come by in a quick search was 8 de novo created in 2021.
Re: No one is disrupting banks – at least not the big ones
#48Revolut 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
I think that the true reason is another one: credit cards come with credit, which people can choose not to pay back. It is complicated to recover money from a person abroad, possibly having to sue them in every EU state.
Re: No one is disrupting banks – at least not the big ones
#49Earlier quoted context omitted.
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?
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Re: No one is disrupting banks – at least not the big ones
#50In 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…
My company works in the healthcare space. I don’t know if we’re really “disrupting” as much as we are inventing new niches that were previously unoccupied, presumably because of the difficulties of dealing with regulators, working with electronic healthcare record (EHR) systems, and working with large, bureaucratic healthcare organizations like hospitals, insurance companies, pharmaceutical companies, and EHR providers. We’ve had a lot of success without dodging or stretching regulation (although we did work with regulators to create a new category of medical device: algorithms).