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Things I value in a bank as a consumer. Loans that are serviced by a single entity for the life of the loan. Not ordering transactions in an attempt to drive

by mey 8y ago

Things I value in a bank as a consumer. Loans that are serviced by a single entity for the life of the loan. Not ordering transactions in an attempt to drive the balance below zero in a day. Ease of ATM access. Customer service. I have all of these at the CU I use. I don't keep large liquid in my CU, instead that is in higher yeild accounts, but that was true with Chase or BoA as well. The reliable IT system has to be there, but you might be horrified about the beast of systems (human and computer) that make our banks/ach/transactions/etc function. I don't worry much about loosing money in the bank due to FDIC/ NCUSIF. I can't audit their internal process so I instead depend on insurance. It kinda removes worry about their IT infra from my mind. If you are above FDIC value, you should be banking with multiple banks and putting your money to better uses.

madeofpalk 8y ago
> It kinda removes worry about their IT infra from my mind. For me, 'good IT infrastructure' isnt for reliability (though that's important!), but got good digital products. I want an iPhone app for my bank that's made my actual humans that know how to make apps. In my eyes, the most successful banks have realised that there's actually very little differentiation between financial products between banks, and where you can set yourself apart is with your internet banking and mobile apps. I use Monzo in the UK and really enjoy it.
- lifeisstillgood 8y ago
  There are some issues here. I also use monzo and would recommend them happily. however i used them to put business expenses on a single card, and each month grabbed the data and pushed it to a 3rd party. then they changed their statements (from memory "Amazon" become "amazon mktplace" - not just in future months but in past downloads. hence their past output depended on current config settings. (another issue was they changed how they represented a chargeback) This would never happen with major banks - because they screwed the pooch with that in the 1980s and still have the same COBOL patches running today. What I am trying to say is that the new banks will offer really good new products - but there is a risk premium.
  - MoBattah 8y ago
    "because they screwed the pooch with that in the 1980s and still have the same COBOL patches running today." What?
fro0116 8y ago
I've always wondered what rich people do when their savings/investments vastly exceed the FDIC/SIPC maximums of 250k per institution, because past a certain point, splitting among multiple banking institutions becomes logistically infeasible. Do they tend to get some kind of private insurance against institutional failures for their entire balance? Or do they just not worry about it?
- jefftk 8y ago
  FDIC protects cash at (fractional reserve) banks. SIPC protects securities at (non-fractional reserve) brokerages. A very rich person isn't going to have enormous quantities in cash; most of it will be invested. But the risk of a brokerage losing your stock is way lower than a bank losing your cash deposits, and even that is very low. If they wanted to buy insurance against it that wouldn't be very expensive.
- mey 8y ago
  Plenty of places to put money outside a bank depending on liquidity/risk needs. Money market at the lower risk high liquidity end to high risk non-liquid of investing in private companies (Hello world). Managing these kinds of portfolios can be and is a full time job.

by mey 8y ago

madeofpalk 8y ago

> It kinda removes worry about their IT infra from my mind. For me, 'good IT infrastructure' isnt for reliability (though that's important!), but got good digital products. I want an iPhone app for my bank that's made my actual humans that know how to make apps. In my eyes, the most successful banks have realised that there's actually very little differentiation between financial products between banks, and where you can set yourself apart is with your internet banking and mobile apps. I use Monzo in the UK and really enjoy it.

lifeisstillgood 8y ago
There are some issues here. I also use monzo and would recommend them happily. however i used them to put business expenses on a single card, and each month grabbed the data and pushed it to a 3rd party. then they changed their statements (from memory "Amazon" become "amazon mktplace" - not just in future months but in past downloads. hence their past output depended on current config settings. (another issue was they changed how they represented a chargeback) This would never happen with major banks - because they screwed the pooch with that in the 1980s and still have the same COBOL patches running today. What I am trying to say is that the new banks will offer really good new products - but there is a risk premium.
- MoBattah 8y ago
  "because they screwed the pooch with that in the 1980s and still have the same COBOL patches running today." What?

fro0116 8y ago

I've always wondered what rich people do when their savings/investments vastly exceed the FDIC/SIPC maximums of 250k per institution, because past a certain point, splitting among multiple banking institutions becomes logistically infeasible. Do they tend to get some kind of private insurance against institutional failures for their entire balance? Or do they just not worry about it?

jefftk 8y ago
FDIC protects cash at (fractional reserve) banks. SIPC protects securities at (non-fractional reserve) brokerages. A very rich person isn't going to have enormous quantities in cash; most of it will be invested. But the risk of a brokerage losing your stock is way lower than a bank losing your cash deposits, and even that is very low. If they wanted to buy insurance against it that wouldn't be very expensive.
mey 8y ago
Plenty of places to put money outside a bank depending on liquidity/risk needs. Money market at the lower risk high liquidity end to high risk non-liquid of investing in private companies (Hello world). Managing these kinds of portfolios can be and is a full time job.