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“Most of the attackers do not want to become a bank,” said Mr Härle. “They want to squeeze themselves in between the customer and the bank and skim the cream of
by grandalf 11y ago
“Most of the attackers do not want to become a bank,” said Mr Härle. “They want to squeeze themselves in between the customer and the bank and skim the cream off.”
I'd argue that most of the new entrants would happily become banks if the regulations were more startup friendly.
So while the article paints banks as the victims of tech firms cutting into profits, the reality is that tech firms have been forced to the periphery of banking because few have the appetite or budget to even remotely consider becoming an actual bank.
This creates a lower bound on the fee Stripe can consider charging, for example, and is why bill.com's ACH payments take a week to clear.
Because of the cozy relationship between too-big-to-fail banks and their self-created bureaucracy, the business is out of reach to startups which are forced to compete on the margin.
- deleted 11y ago[deleted]
- princeb 11y ago>cozy relationship between too-big-to-fail banks and their self-created bureaucracy don't know who is cozy but almost everyone in the sell side is being saddled with endless amounts of compliance requirements and unless you enjoy staying into the middle of the night reccing books 500 ways and tagging customer forms and tickets the life has become less and less enjoyable. i am pretty sure i am right when i say the life was good when the regulators were more laissez faire in the early 2000s.
- grandalf 11y agoWhen there was market discipline causing firms to avoid bad underwriting practices, many of those regulations were not necessary. But now nearly everything but the actual incentives has been blamed for why the market crashed. Now, when it crashes again, it will of course have been totally unexpected and impossible to predict, so of course a bailout will be necessary, etc. My overly simplistic take is that the finance industry effectively practices "risk laundering"...
- bainsfather 11y agoThe argument is that these onerous regulations are easier for a large bank to comply with, than for a startup to comply with. i.e. the regulations entrench the big players.