4 ms·

Every new financal technology tries to kill the existing middlemen, then replace them with new middlemen who promise to be better. Turns out, these new middleme

by 013a 7y ago

Every new financal technology tries to kill the existing middlemen, then replace them with new middlemen who promise to be better. Turns out, these new middlemen (1) never fully comprehend how complex modern finance is, which raises costs, and (2) are human and thus become corrupt, whether subtly or unsubtly, over time. I also have a sneaking suspicion that, in conjunction with point (1), many of these modern finance plays also totally fail to comprehend the vast investment into technology that traditional finance companies have made. They see a shitty iOS app, think "wow Old School Bank is never going to understand computers, let's disrupt them", so they start with an amazing iOS app, then struggle to reliably implement the rest of the stuff that matters (process automation, scalability, government relationships, customer support). Point being, the world turns, time goes on, the players might change, but the game doesn't.

negamax 7y ago
I don't understand your point. No one is disagreeing about the contribution that big finance has made in shaping our current systems. FB raised money, got listed. There's tons of financial system which helped them and help everyone from invoices to making a trip everyday. But that doesn't mean something better can't come up. People don't hate banks for the monolith but their monopoly like nature that had stifled innovation and displayed outright criminal behavior. Don't forget 2008 recession was triggered by banks. Recent libor scandal.. About the technology investments. I would argue against this. Banks are more regulatory and defend my turf play than a technology play. Have you ever worked for a bank or any finance facing institution. There's layers and layers of clutter. Whole party is one big monolith, sucking money from places that it doesn't deserve. Biggest benefit banks provide as in traditional banks is the account and trust that, that money in the account will remain on the name of holder. That trust as well was breached multiple times during withdrawal limits and freezes. We all need better alternative. May be FB won't be the one. May be bank themselves will become more open and lean. But someone needs to push. There's a lots of money to be made and quite frankly FB deserves it for trying.
- 013a 7y ago
  > Banks are more regulatory and defend my turf play than a technology play. There's layers and layers of clutter. Why do you think this is? Do you think its just because "hur hur they're evil"? I'm not saying there isn't some of that. But I am saying: 1. The big banks have discovered something that the small, modern banks haven't. YET. They will. Its that banking sucks, and we need the regulatory hurdles. 2. If you think these small banks don't have the potential to be just as evil as the big ones currently are, you're delusional. Money corrupts everything. Google and Facebook used to be the darling of the tech community, and look at them now. If they can turn so suddenly, anyone can. Maybe we need a better system. Maybe we dislike the system we have, but we can't have a better one. Maybe we need better people. But, you can't change human nature. Healthcare is a similar industry. Its ridiculously huge. Everyone needs it. There's trillions of dollars in it. Plenty of money. Then Theranos comes along and thinks that the old way of doing things is overrated. And then they die. Because, fun fact, agility and leanness works in some industries, but its mostly industries that don't actually matter.
  - curryst 7y ago
    > Maybe we need a better system. Maybe we dislike the system we have, but we can't have a better one. Maybe we need better people. But, you can't change human nature. Do you have some sort of evidence for that? "We can't have a better (system)" is a pretty bold statement to make without some kind of supporting evidence. Absolute truths require absolute evidence.
    - 013a 7y ago
      I can't see how you'd think those are absolute truths when they're all prefixed with the word "Maybe".
baby 7y ago
You're saying that yet Monzo and Revolut (the cool iOS apps you're mentioning) are killing the banking system already in Europe/UK.
- 013a 7y ago
  "Killing" is a pretty funny word to use. Everything is easy when you're small. Look at Simple in the US; they have an awesome iOS app, a few interesting features, they gained customers, became more popular, and... feature development stopped. Their pace of externally-facing innovation has DRAMATICALLY slowed over the past three years. They've done automated expense allocating w/ recurring goals, family accounts, and protected savings accounts with a high interest rate, and that's, like, it. In three years. They don't even have 2FA w/o SMS. Why is that? I don't know. But I have a suspicion: Banking is fucking difficult. Its insane. There's regulation and red tape everywhere, you make one mistake and you instantly not only lose customers but could ruin their lives. Its fundamentally not an easy industry to operate in. So, they have to allocate a ton of engineering effort into the back-office side of things, which is exactly what every other bank does. Simple even contracts with BBVA to handle the accounts, which should make some things easier. Crypto doesn't change anything at all. Again, its easy and awesome when its small, and Crypto also has an advantage that regulation has been slow to catch up, so in some ways they can just shrug their shoulders and say "its not real money, you can't have the same expectations." For now. As it gets bigger it'll become subject to the same regulations that fiat is subject to, and years later it'll look exactly the same. The underground networks, including Bitcoin, can maybe escape some of this due to the lack of centralized corporate backing, but Facebook can't.
  - dalyons 7y ago
    Simple got acquired by BBVA(a giant 150 yrold banking conglomerate) in 2014. That’s my guess as to why they’ve stopped innovating, it’s a tale as old as acquisitions have existed. Also, they got acquired because they had no profitable business model.
    - baby 7y ago
      Being banned from using their app because I’m not a US citizen, I really do not feel for them at all.

by 013a 7y ago

negamax 7y ago

I don't understand your point. No one is disagreeing about the contribution that big finance has made in shaping our current systems. FB raised money, got listed. There's tons of financial system which helped them and help everyone from invoices to making a trip everyday. But that doesn't mean something better can't come up. People don't hate banks for the monolith but their monopoly like nature that had stifled innovation and displayed outright criminal behavior. Don't forget 2008 recession was triggered by banks. Recent libor scandal.. About the technology investments. I would argue against this. Banks are more regulatory and defend my turf play than a technology play. Have you ever worked for a bank or any finance facing institution. There's layers and layers of clutter. Whole party is one big monolith, sucking money from places that it doesn't deserve. Biggest benefit banks provide as in traditional banks is the account and trust that, that money in the account will remain on the name of holder. That trust as well was breached multiple times during withdrawal limits and freezes. We all need better alternative. May be FB won't be the one. May be bank themselves will become more open and lean. But someone needs to push. There's a lots of money to be made and quite frankly FB deserves it for trying.

013a 7y ago
> Banks are more regulatory and defend my turf play than a technology play. There's layers and layers of clutter. Why do you think this is? Do you think its just because "hur hur they're evil"? I'm not saying there isn't some of that. But I am saying: 1. The big banks have discovered something that the small, modern banks haven't. YET. They will. Its that banking sucks, and we need the regulatory hurdles. 2. If you think these small banks don't have the potential to be just as evil as the big ones currently are, you're delusional. Money corrupts everything. Google and Facebook used to be the darling of the tech community, and look at them now. If they can turn so suddenly, anyone can. Maybe we need a better system. Maybe we dislike the system we have, but we can't have a better one. Maybe we need better people. But, you can't change human nature. Healthcare is a similar industry. Its ridiculously huge. Everyone needs it. There's trillions of dollars in it. Plenty of money. Then Theranos comes along and thinks that the old way of doing things is overrated. And then they die. Because, fun fact, agility and leanness works in some industries, but its mostly industries that don't actually matter.
- curryst 7y ago
  > Maybe we need a better system. Maybe we dislike the system we have, but we can't have a better one. Maybe we need better people. But, you can't change human nature. Do you have some sort of evidence for that? "We can't have a better (system)" is a pretty bold statement to make without some kind of supporting evidence. Absolute truths require absolute evidence.
  - 013a 7y ago
    I can't see how you'd think those are absolute truths when they're all prefixed with the word "Maybe".

baby 7y ago

You're saying that yet Monzo and Revolut (the cool iOS apps you're mentioning) are killing the banking system already in Europe/UK.

013a 7y ago
"Killing" is a pretty funny word to use. Everything is easy when you're small. Look at Simple in the US; they have an awesome iOS app, a few interesting features, they gained customers, became more popular, and... feature development stopped. Their pace of externally-facing innovation has DRAMATICALLY slowed over the past three years. They've done automated expense allocating w/ recurring goals, family accounts, and protected savings accounts with a high interest rate, and that's, like, it. In three years. They don't even have 2FA w/o SMS. Why is that? I don't know. But I have a suspicion: Banking is fucking difficult. Its insane. There's regulation and red tape everywhere, you make one mistake and you instantly not only lose customers but could ruin their lives. Its fundamentally not an easy industry to operate in. So, they have to allocate a ton of engineering effort into the back-office side of things, which is exactly what every other bank does. Simple even contracts with BBVA to handle the accounts, which should make some things easier. Crypto doesn't change anything at all. Again, its easy and awesome when its small, and Crypto also has an advantage that regulation has been slow to catch up, so in some ways they can just shrug their shoulders and say "its not real money, you can't have the same expectations." For now. As it gets bigger it'll become subject to the same regulations that fiat is subject to, and years later it'll look exactly the same. The underground networks, including Bitcoin, can maybe escape some of this due to the lack of centralized corporate backing, but Facebook can't.
- dalyons 7y ago
  Simple got acquired by BBVA(a giant 150 yrold banking conglomerate) in 2014. That’s my guess as to why they’ve stopped innovating, it’s a tale as old as acquisitions have existed. Also, they got acquired because they had no profitable business model.
  - baby 7y ago
    Being banned from using their app because I’m not a US citizen, I really do not feel for them at all.