8 ms·

For sure, defeating banks in the matter of customer interaction seems like low-hanging fruit. As the article says, they are too slow, too cumbersome, and I'll a

• WaxProlix 11y ago
  > Banks are to financial startups what taxi driver unions are to Uber. Not quite - taxi driver unions are less competitive (in part at least) because they choose not to disregard regulations.
  • Florin_Andrei 11y ago
    Also because they have less money - by many, many orders of magnitude.
    • WaxProlix 11y ago
      They should have disrupted more! Meritocracy, motherfuckers.
      • Terr_ 11y ago
        * taps the dial of his sarcasmometer, puzzled * If by "disrupting" and "meritocracy" you mean "break the law" and "kleptocracy"...
        • WaxProlix 11y ago
          HN downvoter herd mentality types can't handle the individuality and personal responsibility of libertarian utopias that Uber and its ilk will usher in, so they fight back with the only tools at their disposal. Stupid laws are meant to be broken, and 'kleptocracy' is a shibboleth, identifying you as a poor (or, worse, a poor-sympathizer).
          • obastani 11y ago
            The laws put in place are not stupid -- they are put in place to protect both riders and drivers against well-known market failures such as information asymmetry and market-for-lemons [1,2]. They may be outdated and in need of revision, but I think it's premature to conclude that Uber has all the right answers. [1] http://en.wikipedia.org/wiki/The_Market_for_Lemons http://en.wikipedia.org/wiki/The_Market_for_Lemons [2] http://time.com/3592035/uber-taxi-history/ http://time.com/3592035/uber-taxi-history/
            • WaxProlix 11y ago
              I was being sarcastic, and if that's not fairly apparent I should probably change my approach; there's a tendency for HN to go full meritechnocrat in these situations and side with whoever seems the most disruptive. I find it obnoxious for exactly the reasons you've posted here, among others.
              • eru 11y ago
                Just try less sarcasm next time. I know it feels good, but it seldom furthers any debate.
              • Florin_Andrei 11y ago
                > I was being sarcastic, and if that's not fairly apparent Erm... your audience here is mostly literal-minded computer techies.
            • ensignavenger 11y ago
              While I agree that many of the laws aren't stupid and should be followed, I can't figure out any justification, other than greed, for restricting supply the way many cities do. If you can, please share.
  • darkarmani 11y ago
    And because they choose to disregard user experience.
• wahsd 11y ago
  Although it also would disrupt several startups, I have been saying for a long while now that the payment processors like Visa, MC, etc., really shouldn't exist. The government should have its own digital currency and its own payment processing network. If the government doesn't get on that, it is under serious risk of losing it's primary purpose of governance, to which currency and financial systems belong. There is talk about the end of the dollar as a physical currency sometimes, but government types should really start realizing that simply handing over currency and payment processing to private entities represents probably the biggest threat to the westphalian nation state that ever existed. One of the primary powers that cause people to congregate around a nation state government is the control of currency. It may even represent another major crack that could result in the fracturing of the USA.
  • theorique 11y ago
    Bitcoin is going to break the backs of governments anyway - they can create their own digital currencies, but there's no guarantee that people will use them!
    • deleted 11y ago
      [deleted]
    • obastani 11y ago
      Sure there is -- they can make alternatives illegal. Then big companies must accept the government sponsored digital currency, which would make it the only currency viable for mass market (alternatively, no digital currency will be widely adopted).
      • blumkvist 11y ago
        Boo! Party pooper!
      • jamoes 11y ago
        Do you think people would really accept the banning of certain pieces of code as legitimate? The US government already lost the battle on "export grade" encryption, and I believe they'd lose any attempts to ban other code as well.
• untog 11y ago
  and I'll add that they are too unfun Maybe I'm alone, but I don't have a huge problem with my bank being "unfun".
  • bramgg 11y ago
    I want my bank to give me quirky little compliments like "you look nice today" like Slack every time I walk in.
    • nostrademons 11y ago
      Wells Fargo ATMs will wish you a happy birthday and congratulate you on X years with Wells Fargo. It's a little creepy, but if you like fun...
      • jordanbaucke 11y ago
        1/2 of ATM fees should buy you a lottery ticket every time you get hit for $2... it'd placate the masses!
    • cydonian_monk 11y ago
      WaMu. Maybe they weren't perfect, but one of the things we lost when Chase ate WaMu was their "quirkyness." They always seemed happy and friendly in my branch. Now? Zombies.
      • juliangregorian 11y ago
        No need for quotation marks, quirkiness is a real word.
  • unfunco 11y ago
    You're not alone, I want my bank to be boring and I want almost no interaction with them. There's a bank in the United Kingdom called Metrobank which promised to be different to existing high-street banks, they managed to get me through the door out of interest but as soon as I saw one of the members of staff dressed as Henry VIII I made a hasty exit out of the other door. They also seem more interested in dogs than their customers[0]. https://www.metrobankonline.co.uk/Discover-Metro-Bank/DogsRule/ https://www.metrobankonline.co.uk/Discover-Metro-Bank/DogsRu...
• leroy_masochist 11y ago
  > Do we even need monolithic financial entities in this day and age? Most transactions would be better handled by smaller, specialized and modern service companies. Banks are to financial startups what taxi driver unions are to Uber. On the individual consumer-banking side, there is a strong case to be made that this is true. However, as long as Fortune 100 companies and large pension funds exist, they're going to do massive transactions in the capital markets -- and you need similarly huge financial institutions to bookrun on these kinds of deals. So in my view, it's likely that startups that can provide a more agile / fun / efficient / whatever experience stand poised to eat banks' lunch in some areas...but there is definitely a significant slice of the market that requires market-makers to be massively capitalized.
• jpmattia 11y ago
  > and I'll add that they are too unfun, and their sales departments are pushy and intrusive. I think you missed something big: They are too rich. As the saying goes, "Where are the customers' yachts?" Just as the rise of etrade, datek, ameritrade killed off the overpriced stock broker biz, there are whole swaths of banking waiting to be dragged into the internet age.
• pc2g4d 11y ago
  > Do we even need monolithic financial entities in this day and age? Four letters: F.D.I.C.
  • eru 11y ago
    What do you want to say? That FDIC forces institutions to be large? Or that FDIC is a large institution and that we need them?
    • pc2g4d 11y ago
      My point was that banks are still useful because they get federal deposit insurance, while Silicon Valley startups apparently don't.
      • ensignavenger 11y ago
        I don't see any reasons why a silicon valley startup couldn't. Lots of small bank startups sprout up all over the country. Also, Simple.com was a startup (they are now part of a very large bank) that got FDIC insurance through a partner bank.
      • prostoalex 11y ago
        In theory it shouldn't be too hard for a private insurance company to develop a similar product if there was enough interest from startups.
        • setpatchaddress 11y ago
          I'd love to hear you expound on that theory. I find it really unlikely that anyone would trust a private corporation in that role.
          • prostoalex 11y ago
            Private corporations already underwrite bonds (and related debt products like pensions, corporate loans, annuities or mortgages). A deposit in a bank is not completely different from a customer loaning money to the banking institution (at low or zero interest) in exchange for on-demand funds availability.
• criley2 11y ago
  >Do we even need monolithic financial entities in this day and age? Most transactions would be better handled by smaller, specialized and modern service companies. Banks are to financial startups what taxi driver unions are to Uber. You forgot one of the most critical functions of banks like this-- large scale institutional lending. A business needs to borrow $2 billion dollars -- are you going to crowd fund that? A state government wants to borrow $800 million in bonds for a new arena, can you GoFund that? A major government wants to store $30 billion of their own currency in a financial product that will decrease in value against the dollar more slowly than their currency. Is there an app that helps governments store 30 billion in assets (or are we naive enough to suggest that bitcoin is a smart investment?) A major pension plan serving 100,000 retirees needs their 100 billion dollars in assets to be managed responsibly, can a 24 year old Stanford grad manage that? I think calling Banks the "taxi union against Uber" is painfully naive in the sense that it only looks at small transactions and consumer transaction while ignoring the very large institutional business-to-business and business-to-governments side of banking. Maybe small business will get their lending needs with new technology but I just don't see a Fortune 50 company taking a multi-billion dollar loan through crowdsourcing.
  • Selfcommit 11y ago
    Is it a terrible thing that massive amounts of money can't be promised and taxed? If that kind of lending is in fact good business(I'm not convinced it is) Couldn't the same loan be made through multiple smaller share holders? I don't think billion dollar loans are a requirement for society to function, or the best option.
    • criley2 11y ago
      It could but that's the wrong perspective. In "free" system that respects private choice, what can and cannot be achieved isn't as important as what deciders decide on. A large bank will perform risk analyses and consult with their data and math people, consult their legal people, consult their insurance people, and will choose what they think is best. So your option can be totally feasible and never chosen by a large bank- a similar fate to many new technically feasible ideas. But then again, if you were a large entity, would you prefer to be indebted to one large entity, or a thousand small ones? All things equal, I'd rather owe 1 person 1000$ than 1000 people 1$, and I imagine their lawyers and insurance people agree.
• fweespeech 11y ago
  While I'd say we have too few banks... > Do we even need monolithic financial entities in this day and age? Most transactions would be better handled by smaller, specialized and modern service companies. Try dealing with all the special snowflake APIs of twenty or a hundred suppliers of physical goods which are essentially a list of transactions. Then on the other end you mesh with Amex, a merchant gateway for Visa/Mastercard, Paypal, Amazon, etc. Even "standards" tend to get "adjusted". EDI becomes Vendor X's bastardization of EDI that only resembles EDI at a glance from a non-technical person. The more "special snowflake" providers you have, the more complex the system becomes and complexity breeds all sorts of inefficiencies. I'd much rather have 50 'monolithic' banks that all abstract things and talk to each other so I only have to deal with "my" bank than 10,000 "financial entities". > what taxi driver unions are to Uber I don't want Uber "oh, we'll break regulations and standards because we can get away with it and the contractor is the one that is legally liable" anywhere near any kind of banking system. That attitude would cause all sorts of truly massive problems.
  • dragonwriter 11y ago
    > EDI becomes Vendor X's bastardization of EDI that only resembles EDI at a glance from a non-technical person. Having spent much of the last decade dealing with systems dealing with EDI in healthcare, I have to say I suspect that largely happens with X-12 EDI standards (at least, the HIPAA mandated ones in healthcare, its possible others are different) because they only resemble suitable technical standards for the intended business domain at a glance from a person unfamiliar with either technology, the business domain, or, ideally, both. (And, on top of that, they are interdependent, each standard is non-free, the standard packaging of all the mandated standards doesn't include the basic standards underlying all of them that they rely on, and even with all the X-12 standards each of them relies on, by reference, dozens of other non-free, third-party standards, for many of which the X-12 standard provides only a postal address for the third-party source.)
    • fweespeech 11y ago
      Fair enough, but I was mainly using it as an example of a "standard" being not-a-standard-because-too-many-different-implementations and why a monolithic entity would be less prone to this problem.
• nissimk 11y ago
  Uber used a classic wall st. move to get where they are: regulatory arbitrage. The law said that you can't pick up passengers that wave you down in the street unless you buy a yellow taxi medallion for $1.5m. But uber said that pressing a button on your phone while standing in the street is not the same as waving your hand at the car so now it's ok. I've been thinking that if someone can do a similar thing for banking using bitcoin that they can avoid some of the rules and operate for a lot less cost than the existing regulated entities. Unfortunately I have no idea what this would look like.
  • rpcope1 11y ago
    I don't know about you but this makes me incredibly nervous; I have mentioned before there probably is some inefficiency in taxi medallions, but uber is also doing things like ignoring government regulations wholesale (see Germany), potentially breaking labor laws, and may exist to the detriment of the public as a whole. If you recall 2007/2008 the banks got in big trouble because they were doing legally questionable things (sub-prime lending, etc). If the means by which tech start ups get ahead of Wall Street is by subverting the spirit of the law even more so than Wall Street does currently, the precedent and consequences that would come of this would be rather awful and most unnerving.
    • eru 11y ago
      Lots of those legally questionable things were driven by regulation. Repackaging subprime mortgages as AAA security was driven by the requirements of some institutional investors to only deal in AAA rated securities. Instead of giving banks secrecy and deposit insurance, we should do the opposite: require open books (perhaps with a six month lag), and no deposit insurance. That would keep customers monitoring their banks much more carefully for any fanciful shenanigans, and give a premium to the most boring banks imaginable. Boring is sometimes good.
      • rpcope1 11y ago
        I agree mostly, I think more regulation is important, and transparency is critical and much needed. I would not choose, however, to bank with anyone who wasn't FDIC insured; while the FDIC may allow some banks to be less risk-averse than they should be, consider a metaphor to your suggestion: when was the last time you audited all the security critical code on your computer? When was the last time an average person audited the security code on their computer? To truly expect everyone to watch out for themselves is asking a lot, without deposit insurance, sets up you up for the kind of problems seen in the 1920s that brought about the FDIC in first (even "good" banks can suffer a catastrophic run during events like what occured in 1929). If you're ever seen the amazing games corporations can play with their accounting, and begin to realize the magnitude of the task before a group like the SEC, to expect an average consumer to trust his/her checking account to their own ability to watch out for themselves seems rather foolish.