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What if you don’t raise money from ordinary depositors? I really liked the Beal Bank model when I read about it, they raised from CDs, money market funds, etc
by ikeboy 8y ago
What if you don’t raise money from ordinary depositors?
I really liked the Beal Bank model when I read about it, they raised from CDs, money market funds, etc which had a low funding cost but not much IT needs. The guy who started it is worth 10B+ now
- quirkot 8y agoI think you may have it backwards. CDs and money market funds are actually liabilities for the financial institution. They're ways of paying customers more in the hopes of attracting deposits. There are non-depository financial institutions, but you'd be more familiar with them by other names: investment banks, insurance companies, pension funds, mutual funds
- ikeboy 8y agoYes, they're liabilities just like deposits. But if you offer them and not regular deposits (like the bank I mentioned) you don't need to built out a whole infrastructure for payments, checks, etc, just for the much more limited set of actions you need to support those.