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The question is increasingly: what is the actual purpose of a retail bank in 2021? There was a time when banks and the work they did actually provided added va

The question is increasingly: what is the actual purpose of a retail bank in 2021? There was a time when banks and the work they did actually provided added value, historically: - keeping your physical money safe - providing safe and regulated accounting - giving out loans based on existing deposits - giving their customer financial advice In 2021, it turns out: who needs these things at all? - almost all money is digital - any accounting need an individual will ever need can be provided by the combo of a phone and a $50 computer sleeping in a data center - AFAIU retail banks don't really need deposits to give out loans these days: loans usually gets resold on the open market almost as soon as they are granted. - there are *way* better places to get financial advice than going to me Henry H Banker at the local BofA desk.

oblio 5y ago
What's the alternative? Cryptocurrencies?
- rattlesnakedave 5y ago
  Yes, if you are brave enough to self custody.
after_care 5y ago
Real question, where are my direct deposit “paychecks” suppose to go besides a retail bank? Once they have the money sitting in accounts they might as well lend it or something.
twic 5y ago
My main use of retail banking is for transactions. Having a bank account means that my employer can pay money into it, i can use a card to withdraw cash from it, or make payments from it, i can authorise direct debits against it, and i can use a web interface to make transfers and review my transactions. When i have money to save, or i need to borrow, i don't go to my bank. I go to whoever gives me the best rate. I'd be interested to know what fraction of bank customers are like me. For the features i use, the web interface is probably fairly easy, but all the rest involves integrations with payment networks, which are not entirely trivial [1]. Money may all be digital, but as anyone who has ever worked with computers knows, that doesn't mean it's easy. So for me, the purpose of a retail bank is mostly to provide reliable implementations of a bunch of API clients. [1] although i led a team which build a large chunk of a system for making transfers, and if i can do it it can't be that hard
JohnFen 5y ago
A retail bank in the US is covered by FDIC or NCUA, which means that (up to reasonable limits), my deposit is guaranteed. If the bank goes belly up or someone steals all the money, I will not suffer a loss. That's a very important benefit that is independent of whether or not the money is digital.

oblio 5y ago

What's the alternative? Cryptocurrencies?

rattlesnakedave 5y ago
Yes, if you are brave enough to self custody.

after_care 5y ago

Real question, where are my direct deposit “paychecks” suppose to go besides a retail bank? Once they have the money sitting in accounts they might as well lend it or something.

twic 5y ago

My main use of retail banking is for transactions. Having a bank account means that my employer can pay money into it, i can use a card to withdraw cash from it, or make payments from it, i can authorise direct debits against it, and i can use a web interface to make transfers and review my transactions. When i have money to save, or i need to borrow, i don't go to my bank. I go to whoever gives me the best rate. I'd be interested to know what fraction of bank customers are like me. For the features i use, the web interface is probably fairly easy, but all the rest involves integrations with payment networks, which are not entirely trivial [1]. Money may all be digital, but as anyone who has ever worked with computers knows, that doesn't mean it's easy. So for me, the purpose of a retail bank is mostly to provide reliable implementations of a bunch of API clients. [1] although i led a team which build a large chunk of a system for making transfers, and if i can do it it can't be that hard

JohnFen 5y ago

A retail bank in the US is covered by FDIC or NCUA, which means that (up to reasonable limits), my deposit is guaranteed. If the bank goes belly up or someone steals all the money, I will not suffer a loss. That's a very important benefit that is independent of whether or not the money is digital.