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I had a similar idea, so I looked up the process for starting a bank. There's a good reason fresh-faced startup VCs can't get into it. - Extremely high startin

I had a similar idea, so I looked up the process for starting a bank. There's a good reason fresh-faced startup VCs can't get into it. - Extremely high starting capital requirements (10-100 million USD) - Knowledge on security, finance, and law, means you will be needing an expert team of lawyers, accountants, cryptographers, etc. - An actual location and strictly controlled building to keep the physical money. There are a lot more requirements but the first 3 make it almost impossible for a lay-man to start their own bank.

driverdan 8y ago
This is why most financial services companies partner with an existing bank. A better alternative to starting a new bank is buying a small bank. It may actually be cheaper than starting a new one.
sofaofthedamned 8y ago
TBF in Europe (or specifically the UK) the new regulations seem to have come up with a plethora of new banks -Starling, Monzo, Revolut, Tide, etc. Both my personal and business accounts are with these, and it's awesome. Starling for my personal account and Tide for the business one. I get notifications of payments usually before the in-store machine has finished sorting itself out. Also get nice things like being able to use Google Pay before the card arrives. I've just got married, and our joint account will be one of these. I assume these banks have popped up from these EU regulations, as they didn't exist 3 years ago.
- pebers 8y ago
  Not from those EU regulations - PSD2 is more recent than most of those challengers. They've popped up because the FCA (the UK regulator) deliberately tried to make it easier to start banks in order to get more competition in the space.
  - sofaofthedamned 8y ago
    Interesting, thank you.
stephengillie 8y ago
Sales pitch: - Extremely high ($10 billion plus) market opportunity, with a ~0.1% to ~1% capital requirement. - Recruit a team with the highly diverse skills needed to operate a modern bank. - Have a secure location? Let us pay you to leverage assets from another startup.

driverdan 8y ago

This is why most financial services companies partner with an existing bank. A better alternative to starting a new bank is buying a small bank. It may actually be cheaper than starting a new one.

sofaofthedamned 8y ago

TBF in Europe (or specifically the UK) the new regulations seem to have come up with a plethora of new banks -Starling, Monzo, Revolut, Tide, etc. Both my personal and business accounts are with these, and it's awesome. Starling for my personal account and Tide for the business one. I get notifications of payments usually before the in-store machine has finished sorting itself out. Also get nice things like being able to use Google Pay before the card arrives. I've just got married, and our joint account will be one of these. I assume these banks have popped up from these EU regulations, as they didn't exist 3 years ago.

pebers 8y ago
Not from those EU regulations - PSD2 is more recent than most of those challengers. They've popped up because the FCA (the UK regulator) deliberately tried to make it easier to start banks in order to get more competition in the space.
- sofaofthedamned 8y ago
  Interesting, thank you.

stephengillie 8y ago

Sales pitch: - Extremely high ($10 billion plus) market opportunity, with a ~0.1% to ~1% capital requirement. - Recruit a team with the highly diverse skills needed to operate a modern bank. - Have a secure location? Let us pay you to leverage assets from another startup.