7 ms·

I think banking is a logical sector for tech firms to move into. Apple, Google, Amazon. They build platforms, and they enhance those platforms with services tha

I think banking is a logical sector for tech firms to move into. Apple, Google, Amazon. They build platforms, and they enhance those platforms with services that they charge for. Day to day banking is the sort of service that would really enhance their platforms, and would also have a massive side benefit of cutting out a notoriously difficult middle man that no one really likes anyway. Take Apple as a thought experiment. The banks have already seeded Apple's hypothetical bank will all of their customers via Apple pay. Here in the UK, I can change bank account at the push of a button and everything is taken care of for me in just a couple of days. That's the law and there's nothing the banks can do to stop me. If Apple one day gave me a "Would you like to move your bank account to Apple" button, I'd press it in a flash, and feel a great sense of pleasure as I stuck it to the established British banks. With Apple's huge stock piles of cash, I think a takeover of an existing bank would not be unfeasible. In addition, should tech firms start setting up or buying existing banks, there's plenty of legislation in place to ensure they play fair with each other. It's pie in the sky thinking, but interesting to think about none the less.

peyton 10y ago
Interesting idea. I'm curious what the regulatory landscape is like. Is it feasible to run a bank off of a giant multinational tech company? I remember back in the day Apple needed to charge for iPod Touch software updates for some sort of accounting purpose.
- tomelders 10y ago
  I wasnt suggesting they offer those services for free. If they were to consider this, I imagine buying an existing bank would be the first thing they would look at. There are a number of banks out there that very few people have heared of. It wouldn't have to be a Barclays or a HSBC, just someone with a banking license or the opportunity to acquire one in the relevant territories. Also, the Financial Conduct Authority here has a strong appetite for being progressive and trying out new ideas. Other countries also take a lead from what the FCA says is OK or not.
- kuschku 10y ago
  > Is it feasible to run a bank off of a giant multinational tech company? Many German companies have exactly that, although the banks are usually only used to offer stuff like buying a VW on credit, or leasing a VW, or holding accounts for employees. But banking and tech have been connected for many decades.
snowwrestler 10y ago
Consumer retail deposit banking is a highly regulated, poorly profitable business. Where do banks make their money? Not on checking accounts; usually it's on debt issuing and investment activities. Holding deposits is just a way to build capital to do the things that actually make money. So, I don't know why Apple would suddenly decide to take deposits, unless they also decided to get into capital-intensive businesses like lending or investing. But here's the thing: Apple has an enormous pile of capital already. If they wanted to get into capital-intensive businesses, they could do it tomorrow, without taking deposits. If they did that, their stock would tank, though. It's much better for them to stick to consumer technology and try to take a slice of the payments business.
vilmosi 10y ago
I think you are underestimating the tech involved with banking... Plus, I don't really understand your issue with UK banks but I had nothing but stellar service. I can do everything on the mobile app (which looks pretty good), I can switch easily, contactless is everywhere, transfers are basically instant... What would Apple bring to the table? I just find it odd to put so much trust in a consumer facing company when banks, by law, have to follow so many laws and regulations that I doubt Apple is willing to follow.
- tomelders 10y ago
  I do actually work for bank, but you couldn't have known that. FS is currently my area of expertise.
  - vilmosi 10y ago
    It's just the impression I got from your comment. I'm very interested in knowing what do you expect Apple to offer in addition to what we have in the UK.
    - tomelders 10y ago
      I'd like to write a lot about this, but I don't have the time. So I'll rattle off some stuff without going in depth. Better software. Better integration into peoples lives. Cheaper fees. Less exploitative and predatory lending practices (as in no desire to be a lender at all so that's not an issue). Holding more deposits as capital so deposits are safer. No investment banking to put deposits at undue risk. Generally just a fresh attitude towards everything. Apple, Amazon or Google would not need to be a "bank" in the way banks operate today. I'd say that would be the biggest benefit of all. Somewhere safe to keep your money and nothing more. The speculative side of banking can be left to those people and institutions with an appetite for risk. And they can risk their own money.
      - vilmosi 10y ago
        Ah ok, I get it. When it comes to software, I don't get what complaints you might have about mobile / internet banking, as they are pretty good, in the UK at least. Maybe you are talking about the back-end of things and not consumer? The rest of the complaints I think are symptoms of the industry itself (some of which tech companies like TransferWise ARE trying to disrupt). Don't know what tech companies can do about that but one can hope :)

peyton 10y ago

Interesting idea. I'm curious what the regulatory landscape is like. Is it feasible to run a bank off of a giant multinational tech company? I remember back in the day Apple needed to charge for iPod Touch software updates for some sort of accounting purpose.

tomelders 10y ago
I wasnt suggesting they offer those services for free. If they were to consider this, I imagine buying an existing bank would be the first thing they would look at. There are a number of banks out there that very few people have heared of. It wouldn't have to be a Barclays or a HSBC, just someone with a banking license or the opportunity to acquire one in the relevant territories. Also, the Financial Conduct Authority here has a strong appetite for being progressive and trying out new ideas. Other countries also take a lead from what the FCA says is OK or not.
kuschku 10y ago
> Is it feasible to run a bank off of a giant multinational tech company? Many German companies have exactly that, although the banks are usually only used to offer stuff like buying a VW on credit, or leasing a VW, or holding accounts for employees. But banking and tech have been connected for many decades.

snowwrestler 10y ago

Consumer retail deposit banking is a highly regulated, poorly profitable business. Where do banks make their money? Not on checking accounts; usually it's on debt issuing and investment activities. Holding deposits is just a way to build capital to do the things that actually make money. So, I don't know why Apple would suddenly decide to take deposits, unless they also decided to get into capital-intensive businesses like lending or investing. But here's the thing: Apple has an enormous pile of capital already. If they wanted to get into capital-intensive businesses, they could do it tomorrow, without taking deposits. If they did that, their stock would tank, though. It's much better for them to stick to consumer technology and try to take a slice of the payments business.

vilmosi 10y ago

I think you are underestimating the tech involved with banking... Plus, I don't really understand your issue with UK banks but I had nothing but stellar service. I can do everything on the mobile app (which looks pretty good), I can switch easily, contactless is everywhere, transfers are basically instant... What would Apple bring to the table? I just find it odd to put so much trust in a consumer facing company when banks, by law, have to follow so many laws and regulations that I doubt Apple is willing to follow.

tomelders 10y ago
I do actually work for bank, but you couldn't have known that. FS is currently my area of expertise.
- vilmosi 10y ago
  It's just the impression I got from your comment. I'm very interested in knowing what do you expect Apple to offer in addition to what we have in the UK.
  - tomelders 10y ago
    I'd like to write a lot about this, but I don't have the time. So I'll rattle off some stuff without going in depth. Better software. Better integration into peoples lives. Cheaper fees. Less exploitative and predatory lending practices (as in no desire to be a lender at all so that's not an issue). Holding more deposits as capital so deposits are safer. No investment banking to put deposits at undue risk. Generally just a fresh attitude towards everything. Apple, Amazon or Google would not need to be a "bank" in the way banks operate today. I'd say that would be the biggest benefit of all. Somewhere safe to keep your money and nothing more. The speculative side of banking can be left to those people and institutions with an appetite for risk. And they can risk their own money.
    - vilmosi 10y ago
      Ah ok, I get it. When it comes to software, I don't get what complaints you might have about mobile / internet banking, as they are pretty good, in the UK at least. Maybe you are talking about the back-end of things and not consumer? The rest of the complaints I think are symptoms of the industry itself (some of which tech companies like TransferWise ARE trying to disrupt). Don't know what tech companies can do about that but one can hope :)