5 ms·

Using a bank's services shouldn't require knowing how banking infrastructure works.

toomuchtodo 7y ago
Knowing helps calibrate your expectations so they’re realistic. Stripe can perform magic because they’re a very small piece of the entire puzzle, the banking sector can’t because of the very same decrepit financial infra foundations. Disclaimer: I work in financial services. If you want the plumbing fixed, lean on the Fed and the banking industry as a whole through Congress. You’re delusional if you think you can fix this with a startup (see: BankSimple and Standard Treasury). The industry inertia is overwhelming.
- rhizome 7y ago
  How do unrealistic expectations take root, could it be the gap between reality and advertising? That said, they weren't saying that the knowledge can't help.
  - avianlyric 7y ago
    Difference between only experiencing the 99% happy path, and experiencing the 1% extremely unhappy path.
    - deleted 7y ago
      [deleted]
- barry-cotter 7y ago
  > If you want the plumbing fixed, lean on the Fed and the banking industry as a whole through Congress. Easier and faster to just give up preemptively.
  - toomuchtodo 7y ago
    Yeah! But the work worth doing is never easy, nor fast to get done. Not the best attitude to have Barry!
avianlyric 7y ago
That would be ideal. But building non-leaky abstractions over banking infrastructure is extremely difficult. This due to the simple fact that banking infrastructure is a super complicated pot of badly combined standards created before the internet really existed, and equally complicated regulatory requirements that don’t map well onto the technical standards.
- YawningAngel 7y ago
  If the infrastructure is so poor that building good abstractions over it is essentially impossible, that's another nail in the coffin for the notion that it's reasonable to expect end users to understand it.
- beatgammit 7y ago
  The idea of banking isn't particularly complicated. Basically, you take deposits, use those deposits to make loans, and keep some on hand for liquidity. If you're not getting enough deposits, raise rates. If you're not getting enough stable deposits, you sell products that reward long term deposits (CDs). If you have too many deposits relative to loan demand, you reduce interest rates on both deposits and loans. Rates fluctuate along with supply and demand. This works quite well in the stock market, so why is banking so different? My guess is that it's regulated like crazy, so maybe simplifying those regulations would be a good idea. I'm not very well informed on the particulars of those regulations, but I have looked into building something that involves financial data and it's far more complicated that it needs to be. I should be able to automate money transfers just as easily (if not more easily) as doing stock trades, yet the opposite is true. It's needlessly complicated and expensive to get anything done.
  - cguess 7y ago
    > My guess is that it's regulated like crazy, so maybe simplifying those regulations would be a good idea Most of those regulations are in there for either a.) FDIC compliance to make sure there's enough liquidity in the case of a run (aka the "don't repeat 1929" rule) b.) anti-fraud/money laundering c.) because ACH rules are still there for a ton of legacy reasons The stock market is volatile because it assumes that those investing understand the risk involved. Bank accounts on the other hand should, really have to, be super stable. Treating liquidity like the stock market means a bad bet by the bank managers and everyone loses their college fund. > I should be able to automate money transfers just as easily (if not more easily) as doing stock trades, yet the opposite is true. The reason is because of money laundering. Despite how bad it seems the US has the best anti-money-laundering (AML) rules in the world and yea, this causes friction, but it's what's necessary.
throwaway_tech 7y ago
Satoshi Nakamoto must have missed that when "disrupting" banking with P2P electronic currency.
- tsimionescu 7y ago
  Yes, they did, which is one of the reasons BitCoin is approximately 0.00% percent of the world financial markets.
  - throwaway_tech 7y ago
    Well that is one way to minimize the reality of Bitcoin. On the otherhand the Bitcoin market cap is 50%> than Tesla for example. That may not seem like much, until you realize Bitcoin has a bigger market cap than any US car manufacturer.
    - IAmEveryone 7y ago
      Farmland in southern Asia is worth a lot more than that, and just as easy to use for everyday transactions as Bitcoin is.
      - amdavidson 7y ago
        I have never heard this analogy, and it so clearly refutes what drives me crazy about these Bitcoin :: Tesla|whatever comparisons.
    - tsimionescu 7y ago
      It does not matter whether it seems like much or not, because approximately none of that market cap is coming from using BitCoin for payments, it comes almost entirely from using BitCoin as a speculative asset. All attempts to use it for non-crime-related payments have failed so far, because of its slow speed and huge transaction costs. And in a spectacular turn of events, it may be a worse polluter than any single American car company as well. I bet Satoshi Nakamoto didn't plan for this one, eh?
kovek 7y ago
There’s a few types of checks you can send as payment to whoever. I kept asking why we needed a few different types and they all act in different ways. Some are “like cash”, some will “attempt to withdraw” the amount. I had to ask the bank. I don’t see how else I was supposed to go about my payment when I was asked to send a check.
- kolinko 7y ago
  Well, the issue is with "when I was asked to send a check". In some (if not all) European countries we don't have checks any more. Someone just gives you a bank account number, you wire a transfer, and it's at the recipient within a second to a day at most. The transfers cost between €0 to €0.5, regardless of the amount. I was on a date a few days ago, a girl really wanted to pay for herself, but didn't have the cash, so she asked me for the bank account. I gave it to her via messenger, she wired me €30, it landed on my account instantly, to which I said that this is too much, and wired her €15 back. Yes, seriously :)
  - brianwawok 7y ago
    Yah bank transfers are a mess here, several dollars and minutes of work to do. On the other hand, things like venmo and the cash app are ubiquitous. I just went to lunch with a friend, forgot cash, asked him his phone number and shot a venmo for half in 10 seconds. So luckily we have some services that are filling the shortcoming of our banking industry..
    - mixmastamyk 7y ago
      A rent-seeking third party probably selling your financial transaction data is not what I’d call lucky.
      - brianwawok 7y ago
        It beats the alternative. It’s no secret I sent someone $10 for lunch. I posted it to hacker news.

Knowing helps calibrate your expectations so they’re realistic. Stripe can perform magic because they’re a very small piece of the entire puzzle, the banking sector can’t because of the very same decrepit financial infra foundations. Disclaimer: I work in financial services. If you want the plumbing fixed, lean on the Fed and the banking industry as a whole through Congress. You’re delusional if you think you can fix this with a startup (see: BankSimple and Standard Treasury). The industry inertia is overwhelming.

rhizome 7y ago
How do unrealistic expectations take root, could it be the gap between reality and advertising? That said, they weren't saying that the knowledge can't help.
- avianlyric 7y ago
  Difference between only experiencing the 99% happy path, and experiencing the 1% extremely unhappy path.
  - deleted 7y ago
    [deleted]
barry-cotter 7y ago
> If you want the plumbing fixed, lean on the Fed and the banking industry as a whole through Congress. Easier and faster to just give up preemptively.
- toomuchtodo 7y ago
  Yeah! But the work worth doing is never easy, nor fast to get done. Not the best attitude to have Barry!

avianlyric 7y ago

That would be ideal. But building non-leaky abstractions over banking infrastructure is extremely difficult. This due to the simple fact that banking infrastructure is a super complicated pot of badly combined standards created before the internet really existed, and equally complicated regulatory requirements that don’t map well onto the technical standards.

YawningAngel 7y ago
If the infrastructure is so poor that building good abstractions over it is essentially impossible, that's another nail in the coffin for the notion that it's reasonable to expect end users to understand it.
beatgammit 7y ago
The idea of banking isn't particularly complicated. Basically, you take deposits, use those deposits to make loans, and keep some on hand for liquidity. If you're not getting enough deposits, raise rates. If you're not getting enough stable deposits, you sell products that reward long term deposits (CDs). If you have too many deposits relative to loan demand, you reduce interest rates on both deposits and loans. Rates fluctuate along with supply and demand. This works quite well in the stock market, so why is banking so different? My guess is that it's regulated like crazy, so maybe simplifying those regulations would be a good idea. I'm not very well informed on the particulars of those regulations, but I have looked into building something that involves financial data and it's far more complicated that it needs to be. I should be able to automate money transfers just as easily (if not more easily) as doing stock trades, yet the opposite is true. It's needlessly complicated and expensive to get anything done.
- cguess 7y ago
  > My guess is that it's regulated like crazy, so maybe simplifying those regulations would be a good idea Most of those regulations are in there for either a.) FDIC compliance to make sure there's enough liquidity in the case of a run (aka the "don't repeat 1929" rule) b.) anti-fraud/money laundering c.) because ACH rules are still there for a ton of legacy reasons The stock market is volatile because it assumes that those investing understand the risk involved. Bank accounts on the other hand should, really have to, be super stable. Treating liquidity like the stock market means a bad bet by the bank managers and everyone loses their college fund. > I should be able to automate money transfers just as easily (if not more easily) as doing stock trades, yet the opposite is true. The reason is because of money laundering. Despite how bad it seems the US has the best anti-money-laundering (AML) rules in the world and yea, this causes friction, but it's what's necessary.

throwaway_tech 7y ago

Satoshi Nakamoto must have missed that when "disrupting" banking with P2P electronic currency.

tsimionescu 7y ago
Yes, they did, which is one of the reasons BitCoin is approximately 0.00% percent of the world financial markets.
- throwaway_tech 7y ago
  Well that is one way to minimize the reality of Bitcoin. On the otherhand the Bitcoin market cap is 50%> than Tesla for example. That may not seem like much, until you realize Bitcoin has a bigger market cap than any US car manufacturer.
  - IAmEveryone 7y ago
    Farmland in southern Asia is worth a lot more than that, and just as easy to use for everyday transactions as Bitcoin is.
    - amdavidson 7y ago
      I have never heard this analogy, and it so clearly refutes what drives me crazy about these Bitcoin :: Tesla|whatever comparisons.
  - tsimionescu 7y ago
    It does not matter whether it seems like much or not, because approximately none of that market cap is coming from using BitCoin for payments, it comes almost entirely from using BitCoin as a speculative asset. All attempts to use it for non-crime-related payments have failed so far, because of its slow speed and huge transaction costs. And in a spectacular turn of events, it may be a worse polluter than any single American car company as well. I bet Satoshi Nakamoto didn't plan for this one, eh?

kovek 7y ago

There’s a few types of checks you can send as payment to whoever. I kept asking why we needed a few different types and they all act in different ways. Some are “like cash”, some will “attempt to withdraw” the amount. I had to ask the bank. I don’t see how else I was supposed to go about my payment when I was asked to send a check.

kolinko 7y ago
Well, the issue is with "when I was asked to send a check". In some (if not all) European countries we don't have checks any more. Someone just gives you a bank account number, you wire a transfer, and it's at the recipient within a second to a day at most. The transfers cost between €0 to €0.5, regardless of the amount. I was on a date a few days ago, a girl really wanted to pay for herself, but didn't have the cash, so she asked me for the bank account. I gave it to her via messenger, she wired me €30, it landed on my account instantly, to which I said that this is too much, and wired her €15 back. Yes, seriously :)
- brianwawok 7y ago
  Yah bank transfers are a mess here, several dollars and minutes of work to do. On the other hand, things like venmo and the cash app are ubiquitous. I just went to lunch with a friend, forgot cash, asked him his phone number and shot a venmo for half in 10 seconds. So luckily we have some services that are filling the shortcoming of our banking industry..
  - mixmastamyk 7y ago
    A rent-seeking third party probably selling your financial transaction data is not what I’d call lucky.
    - brianwawok 7y ago
      It beats the alternative. It’s no secret I sent someone $10 for lunch. I posted it to hacker news.