And I must say that the Silicon Valley way of dealing with fraud isn’t much more fun from a user experience point of views (solving captchas all day long, waiting for 2fa that may or may not come, accounts suspended without explanations, etc).
Also the author thinks that buying a bank will solve things. This is also naive. Either you are not a regulated owner and you are severely limited in what influence you can have on the bank, or you become a banking group and banking regulations apply to you too.
The solution is competition, but regulations have made it so expensive for a new player that there isn’t really any. That’s the cost of you not having to worry about whether the money on your bank account will still be there tomorrow. Then in absence of competition, it is pretty horrifying how laziness and incompetence can cripple a large organisation to a quasi standstill.
As a consumer who doesn't work in the banking industry, there seems to be tons of competition between banks. Almost every week I get a come-on from this or that bank asking me to move my savings or open a new checking account in return for a cash bonus, or some juicy (temporary) promotional interest rate.
To my mind, it seems like banks are competing for consumers, they're just not competing using the kinds of gimmicks that techies want: mobile apps, powerful APIs, faster money transfers.
Honestly, I'll take $300 cold hard cash over a flashy iOS app any day.
It's not really that expensive to get your foot on the door. There has been a lot of these fintech banks (basically a card and an app). Here is the problem: They don't offer many of the products that banks offer (the most important being credit). Also, from experience, they have a shittier customer service. The guy complains about branches, yet I have found branches much better than having no person to contact what-so-ever.
Credit isn’t really what makes a bank. In fact many non banks provide credit (amex isn’t a bank I think). Taking deposits is the key thing. And I understand most fintech use an actual 3rd part bank if they take deposits. And without taking deposits, it is hard to provide cheap long term credit.
Granted, bad example. But my point is that you don't need a banking license to make a loan, except in certain jurisdictions for certain loans (mortgages).
> That’s the cost of you not having to worry about whether the money on your bank account will still be there tomorrow.
That's too high a cost. The eg Scottish banking system of the industrial revolution and the Canadian banking systems of the 19th century had this piece of mind in practice _and_ plenty of competition.
Also the author thinks that buying a bank will solve things. This is also naive. Either you are not a regulated owner and you are severely limited in what influence you can have on the bank, or you become a banking group and banking regulations apply to you too.
The solution is competition, but regulations have made it so expensive for a new player that there isn’t really any. That’s the cost of you not having to worry about whether the money on your bank account will still be there tomorrow. Then in absence of competition, it is pretty horrifying how laziness and incompetence can cripple a large organisation to a quasi standstill.