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Blue oceans for banks
- easytiger 10y ago> PPI Doesn't know anything about retail banking if you are reusing that term
- neximo64 10y agoSounds a lot like Revolut.
- bachback 10y agoever heard of cryptocurrencies? no banks are neeeded, and identity on blockchain will actually happen.
- vertex-four 10y agoIdentity on the blockchain won't actually happen if nobody actually works to make it happen. In practice, though, it's much more profitable (and easier) to build centralised businesses where you actually have a product or service to sell that only you can provide (due to network effects), so people work on that instead.
- aminok 10y agoCryptocurrency is the only way to circumvent the prohibitionist laws against free exchange of money. The biggest source of inefficiency in the global economy is the organized censorship of human economic activity via state intervention, and cryptocurrency directly addresses that.
- tiatia 10y agoI tend to agree.
- jtchang 10y agoI think the article is missing an important point. Why are there foreign transaction fees in the first place? Also I think that any large service is semi doomed because of the governments in each of the countries you plan to do business in. They want to protect their own banks.
- schappim 10y agoYou're right, however there is a possibility it will play out like Uber. I.E. Many of the states across the globe initially fought hand and tooth to protect their own taxi license systems, only to loosen up later...
- notahacker 10y agoThe financial stability of their economies wasn't dependent on taxi firms.
- brickcap 10y agoYou are right about the countries wanting to protect their own banks. We're not suggesting a "savings account" in the sense that you keep your money in a foreign bank. This is more like an efficient "bank proxy". Does "nginx for banks" explain what I'm trying to say? The money at the end of the day will be kept in your own banks. Your point about foreign transaction fees is also correct in part. There are many layers of fees in a foreign transaction, many portions of which are directly controllable by the parent bank as is already proven by services like Revolut and centtrip. Not much can be done about the remaining charges but even the savings that can be done with the help of a parent bank are very substantial and within the bounds of regulation.
- datahack 10y agoYea. Came here to say what the previous commenter said. This basically sounds like Revolut.
- brickcap 10y agoYes both Revolut and centtrip have marketed their products to only consumers (travelers) where as the concept of multicurrency accounts is very useful to business as well. Not just individuals. The customer acquisition strategy is like Revolut but the larger goal is not (Not that I can say what they have in mind,long term).
- germanier 10y agoRevolut just announced business accounts. https://business.revolut.com https://business.revolut.com
- brickcap 10y agoHa! didn't know. Any way Revolut works in partnership with barclays. There are other banks to whom the service will be valuable. Out of curiosity by just do you mean today?
- germanier 10y agoI think it was at the start of this week. They use Barclays as their backend but is anything of that visible to their customers?
- brickcap 10y agoIt should be on bank statements and on the card. What I was trying to say though was that the fact that Barclays has a system like Revolut is a problem for other banks that don't have a system like that. So our solution is still valuable for them.
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- pja 10y agoThere ain’t no hubris like FinTech startup hubris.
- JustUhThought 10y agoNo doubt. Where does the assumption come from that banks aren't aware of this market. And how on earth does one compare near lawlessness of Facebook with the most heavily regulated sector of banking. Lastly, is the author completely unaware that not all business models try to maximize "eyeballs", or customers and that some attempt simply to maximixe revenue or profit.
- brickcap 10y agoGreat critiques! Please understand that when you write a pitch the tone has to be a bit assertive. It wasn't meant to be insulting but rather invigorating. However I apologize for any offence if might have caused. We didn't mean any of it. Having said that you raise many important points. Let me try to respond to them >Where does the assumption come from that banks aren't aware of this market. I'll concede that they probably are aware of this market. Now we want to build a service that caters to this market. And in the process make a profit for everyone involved. We know that there are businesses like revolut that have proven a part of this concept. We want to take it further. If the market has been observed, services have been shown to be deficient and the concept proposed has been shown to be working then it should be smooth sailing. >"not all business models try to maximize "eyeballs", or customers and that some attempt simply to maximixe revenue or profit" There may be some business that don't try to maximize eyeballs or customers. But banks are not one of them for sure. If you look at the history of original credit cards they were made popular by >"mass mailing of unsolicited credit cards (actual working cards, not mere applications) to a large population.[1] It has also been my personal observation that banks put on large advertisements to attract new customers based on attributes like interest rates and after a certain period of time these attributes get constant across banks. We are suggesting that it could be beneficial in the long run to look for a different set of customers. >And how on earth does one compare near lawlessness of Facebook with the most heavily regulated sector of banking But we didn't suggest any lawlessness! [1]https://en.wikipedia.org/wiki/Visa_Inc.#History https://en.wikipedia.org/wiki/Visa_Inc.#History
- amelius 10y agoFinancial services are a commodity, and that is a good thing. They should face it.
- cloudjacker 10y agoI don't like centralized versions of cryptocurrencies, but they provide the rails and on ramps to lower transaction costs. Ripple, Stellar and Tether are fascinating additions to the cryptocurrency and banking space Tether providing stable value for settlement I think people wouldn't come up with ideas like wrinq if they were aware of existing solutions to build on top of And I say that as a consultant who has seen many potential founders scrap their idea, after I sign their NDA and they finally tell me about their supposedly original idea only for me to tell them the existing solutions It's fine to be unoriginal but they scrap their idea.
- vidarh 10y agoSince they mention airlines: Norwegian (the airline) started it's own bank: https://en.wikipedia.org/wiki/Bank_Norwegian https://en.wikipedia.org/wiki/Bank_Norwegian
- brickcap 10y agoYes! and virgin has a bank as well. This is a very lucrative market.
- osullivj 10y agoYes, Virgin Money does a range of retail financial products. Their residential and buy to let mortgage offerings are based on their 2012 purchase of Northern Rock from the British Gov't. Northern Rock collapsed during the 2008 financial crisis due to the poor quality of its loan book and loss of access to wholesale money markets. Borrow short and lend long to sub prime borrowers turned out to be a bad strategy! I've just come off a year long contract working on the mortgage origination software Virgin Money inherited from Northern Rock. If I learned one thing it's this: the UK mortgage industry is technologically stone age!
- brickcap 10y ago>the UK mortgage industry is technologically stone age! Very interesting. Would love to have more details! May I also ask if Virgin money has services that integrate with their other business, like say virgin airlines, as well?
- osullivj 10y agoHappy to answer questions by email - see my profile for the addr...
- tiatia 10y agoThis has very likely tax reasons. Many major companies have their own banks and even insurances. An insurance is an easily available tax shelter.
- cs702 10y agoThe very smart, very shrewd, hard-working folks at Simple tried building a new kind of bank... and found out that the business of banking is FAR more complicated than it seems. Ultimately, Simple decided it would be best to sell to a giant established bank, BBVA (USD 800 billion in assets): https://www.simple.com/company/the-next-chapter https://www.simple.com/company/the-next-chapter The OP is a short ambitious document written by two guys who think they can do better. They think they can build a new kind of "bank for tourists." So far, they have a landing page and a mobile app: https://www.wrinq.com/ https://www.wrinq.com/ ...They will need a lot of luck.
- brickcap 10y agoThe idea of posting it on hacker news is to make sure that if we can't do it someone else (better) can. There is a market. There is big money to be made. Banks are more receptive of startups than they've ever been. It'd be a shame to see this opportunity pass by. Further we're not building a new bank. We're proposing to use the existing systems available, in any international bank today ,in a new way. Simple was a challenger. We want to collaborate. Hacker news might just be the rabbit's foot!
- neffy 10y agoWhat you´re describing isn´t a bank. It´s an international payment facilitator. There´s more competition in that space than you realise. If you want to be a bank, you´ll need to solve lending, and you should also investigate nostro/vostro accounts.
- tiatia 10y agoThe paper contains a lot of bullshit and I don't see any new idea in it. Foreign transaction costs are not "prohibitive" expensive and there are CC in the US with no foreign transaction fees. You can use transferwise or WU in the worst case (just wired a buddy who is broke US$ 300 online). Social network and payments? Use Wechat! There are three major problems that they won't be able to solve. 1. KYC regulations 2. Fraud. The financial industry makes it more difficult and more difficult to access your own money (e.g. require a receive text message to wire money. Good luck with that abroad) 3. "in multiple currencies and fast unrestricted exchange of funds within the internal banking network" This is not a problem as long as your stay within ONE country. Use Wechat in China, use M-Pesa in Kenya etc. It becomes a problem when you do it internationally because many countries are heavily regulated and afraid that capital leaves the country. Have you made, as an average person, international transactions with China? India? Sri Lanka? Ethiopia? Good luck buddy! In fact, even getting cash at the ATM abroad becomes more tricky. Recently I got into the habit of just carrying cash for all my travels after I run nearly out of cash twice (Ethiopia and India). What do I carry? Euros! They did not want my dollars in Ethiopia because they were "not the latest series" (remember point 2?)
- Cypher 10y agoSounds like markets succeed by creating monopolies... like cable providers...
- brickcap 10y agoWe've compiled a list of questions that Banking partners,investors and startup mentors and other people have asked us in the past. If nothing else the document is a good overview of how the concept has evolved during the last couple of months. We're constantly updating the list as new questions come in. Here's the link:- https://docs.google.com/document/d/1cu7vl4GiQHg8Tqqt_nGj7JOTfZlT3p-pFLZv7dy02DU/ https://docs.google.com/document/d/1cu7vl4GiQHg8Tqqt_nGj7JOT...
- brickcap 10y agoOur two part plan for corporate banking innovation:- - The low hanging fruits in corporate banking services (https://docs.google.com/document/d/11SRXfuC0-L5iGlHypnviI9H525M3ffhQ6_fxY5l7250/edit?usp=sharing https://docs.google.com/document/d/11SRXfuC0-L5iGlHypnviI9H5...) - A scalable banking proxy (https://docs.google.com/document/d/11SRXfuC0-L5iGlHypnviI9H525M3ffhQ6_fxY5l7250/edit?usp=sharing https://docs.google.com/document/d/11SRXfuC0-L5iGlHypnviI9H5...)