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"No killer use case" No, it's that the killer use case doesn't generate revenue for banks. Efficient transfer of money reduces a bunch of revenue streams (wire

"No killer use case" No, it's that the killer use case doesn't generate revenue for banks. Efficient transfer of money reduces a bunch of revenue streams (wire transfers, overdraft, late fees, check cashing...) without creating a new one. Banks would save costs, but it hurts their bottom line more. We are unlikely to implement anything that helps poor people and reduces revenue for megacorps.

Nextgrid 5y ago
Not convinced all about control. In the UK bank transfers are already free and easy to do through the online banking UI so the bank doesn't lose anything. I think it's more that the banks have no incentive to participate in this system and do the bare minimum they can get away with, but I doubt there is some "anti-open-banking" sentiment as opposed to just apathy. The whole payments aspect of Open Banking seems like an attempt by VC-backed companies to become gatekeepers of bank transfers for no good reason nor benefit to the end customer. They are trying to solve a problem that's inherently not there (in the UK bank transfers are already super easy to do and settle immediately) but they pretend like there is one.
pavlov 5y ago
The EU example has shown that you can simply require banks to adopt customer-friendly interoperability and low fees. If it’s possible in a union of 27 nations with originally very disparate banking systems, it’s certainly possible in America. There’s just no political will.
- mbesto 5y ago
  > The EU example has shown that you can simply require banks Through regulation sure, but that wasn't the parent's point. Without regulation there is virtually no incentive for banks to play ball.
  - deleted 5y ago
    [deleted]
  - banannaise 5y ago
    And the political systems at play in most wealthy non-EU countries will lead to the banks essentially writing the regulation themselves. Ain't it fun?
- banannaise 5y ago
  There's no political will because it helps poor people and reduces revenue for megacorps. Guess who "political will" comes from?
  - JumpCrisscross 5y ago
    > There's no political will because it helps poor people and reduces revenue for megacorps There's no political will because of this fatalistic B.S. There have been multiple bills presented in Congress. The result is usually the same: lukewarm support. (My favorite: a rep talking about cutting wire fees, making them 24/7 and mandating interoperability saying they got letters complaining because she talked about banking. Nobody wrote in support. Guess what got dropped from the bill.)
    - Iefthandrule 5y ago
      Activism on these issues get stamped out by the wealthy. Look at what happened to Bernie and Occupy Wall Street. It is not a matter of lack of passion or organization. It is a matter of corruption.
      - JumpCrisscross 5y ago
        > Look at what happened to Bernie and Occupy Wall Street This is sort of like saying the wealthy have no power because look at John McAfee. Bernie didn’t propose bank interconnects. Occupy didn’t propose anything. (I was there.) Payment infrastructure modernisation, by statute, simply doesn’t have political support in America. It’s between people who want to abolish banks and capitalism and an uncaring supermajority.
RandomLensman 5y ago
Certainly in the EU so far the "killer use case" for PSD2 things hasn't happened/it has not lived up to its hype. So beyond needing regulation to make things happen, there might also be a lack of use cases for most people.
- jeroenhd 5y ago
  Honestly, I like my current bank's app so much that I don't even really need or want some kind of quick money VC to get between me and my bank. Money transfers are done in seconds, almost every place allows me to use contactless payment from my bank app and there's no data being fed to Google or Apple. I wish I could use my checking account app to manage my savings account (on another bank) but I can live with the inconvenience of having a second, slightly inferior app thst I barely use anyway. I think the answer to "what's holding banking back" is often "whatever the EU is doing with banking". The question often gets asked by people in countries where the biggest banks are terrible. The problem is not the concept of banking, the centralization or overly broad government regulations. The problem is that some (big) banks don't give a fuck about their users' experience, especially when transferring money between different banks. This is how PayPal got off the ground. Any of these billion dollar institutions could've built PayPal, or competed it to death when it started to become popular, but they chose not to.
agumonkey 5y ago
It's a strange era where people can communicate and have access to immense amount of means (dev/machines) yet nothing has emerged yet. Maybe there's some hidden complexity that banks solve and small open banking is not capable of yet. Maybe people just want to trust big corps and even if you provide similar services they won't flock to you as much ?
- lcall 5y ago
  Agreed. I'm guessing is the "we can be trusted" service that comes only with longevity and size, and a track record that shows ability to protect data and manage things in the customer's interest, which not many organizations have been able to maintain. Trust is earned by behavior over time, and easily lost. More rambling: I am far from an expert on the current details, but I think that when it comes to taking care of one's savings, and the data closely tied to it, that can be used for identity theft, where we might perceive a worsening track record in institutions in general), trust is a big deal. Trust is given subconsciously sometimes, and ideally earned by things like: behavior over time (not promotions), and institutional size and inertia (why Wells Fargo still has customers, I guess), and/or observed behavior patterns relative to current events, proper staffing (competence, honesty, Golden Rule), and other indicators that suggest it is likely to remain so, to the extent of being a mental shorthand for "It's probably stupid (or not) to put my money there and let them take care of things that are really important to me". Will Rogers I think said, and to varying degrees many have thought similarly, something like: "I'm more interested in the return of my money, than the return on my money." And data, now? maybe there have always been more of people willing to manage others' money, than there is of confidence in trying someone new like a revolving door of trust without track record. And data closely tied to money -- same thing? (various clarifying/fixing edits)
browningstreet 5y ago
Most banks are running on older core banking technologies that are overwhelmingly batch driven. Moving to real time transactions isn’t a minor shift for enterprises that have hundreds or thousands of applications, which would be a mix of in-house, COTS and SaaS solutions.
dbbk 5y ago
I mean, I feel like even the most basic execution of Open Banking (aggregated view of your money across all accounts) is a killer use case. People like to know how much money they have.

Nextgrid 5y ago

Not convinced all about control. In the UK bank transfers are already free and easy to do through the online banking UI so the bank doesn't lose anything. I think it's more that the banks have no incentive to participate in this system and do the bare minimum they can get away with, but I doubt there is some "anti-open-banking" sentiment as opposed to just apathy. The whole payments aspect of Open Banking seems like an attempt by VC-backed companies to become gatekeepers of bank transfers for no good reason nor benefit to the end customer. They are trying to solve a problem that's inherently not there (in the UK bank transfers are already super easy to do and settle immediately) but they pretend like there is one.

pavlov 5y ago

The EU example has shown that you can simply require banks to adopt customer-friendly interoperability and low fees. If it’s possible in a union of 27 nations with originally very disparate banking systems, it’s certainly possible in America. There’s just no political will.

mbesto 5y ago
> The EU example has shown that you can simply require banks Through regulation sure, but that wasn't the parent's point. Without regulation there is virtually no incentive for banks to play ball.
- deleted 5y ago
  [deleted]
- banannaise 5y ago
  And the political systems at play in most wealthy non-EU countries will lead to the banks essentially writing the regulation themselves. Ain't it fun?
banannaise 5y ago
There's no political will because it helps poor people and reduces revenue for megacorps. Guess who "political will" comes from?
- JumpCrisscross 5y ago
  > There's no political will because it helps poor people and reduces revenue for megacorps There's no political will because of this fatalistic B.S. There have been multiple bills presented in Congress. The result is usually the same: lukewarm support. (My favorite: a rep talking about cutting wire fees, making them 24/7 and mandating interoperability saying they got letters complaining because she talked about banking. Nobody wrote in support. Guess what got dropped from the bill.)
  - Iefthandrule 5y ago
    Activism on these issues get stamped out by the wealthy. Look at what happened to Bernie and Occupy Wall Street. It is not a matter of lack of passion or organization. It is a matter of corruption.
    - JumpCrisscross 5y ago
      > Look at what happened to Bernie and Occupy Wall Street This is sort of like saying the wealthy have no power because look at John McAfee. Bernie didn’t propose bank interconnects. Occupy didn’t propose anything. (I was there.) Payment infrastructure modernisation, by statute, simply doesn’t have political support in America. It’s between people who want to abolish banks and capitalism and an uncaring supermajority.

RandomLensman 5y ago

Certainly in the EU so far the "killer use case" for PSD2 things hasn't happened/it has not lived up to its hype. So beyond needing regulation to make things happen, there might also be a lack of use cases for most people.

jeroenhd 5y ago
Honestly, I like my current bank's app so much that I don't even really need or want some kind of quick money VC to get between me and my bank. Money transfers are done in seconds, almost every place allows me to use contactless payment from my bank app and there's no data being fed to Google or Apple. I wish I could use my checking account app to manage my savings account (on another bank) but I can live with the inconvenience of having a second, slightly inferior app thst I barely use anyway. I think the answer to "what's holding banking back" is often "whatever the EU is doing with banking". The question often gets asked by people in countries where the biggest banks are terrible. The problem is not the concept of banking, the centralization or overly broad government regulations. The problem is that some (big) banks don't give a fuck about their users' experience, especially when transferring money between different banks. This is how PayPal got off the ground. Any of these billion dollar institutions could've built PayPal, or competed it to death when it started to become popular, but they chose not to.

agumonkey 5y ago

It's a strange era where people can communicate and have access to immense amount of means (dev/machines) yet nothing has emerged yet. Maybe there's some hidden complexity that banks solve and small open banking is not capable of yet. Maybe people just want to trust big corps and even if you provide similar services they won't flock to you as much ?

lcall 5y ago
Agreed. I'm guessing is the "we can be trusted" service that comes only with longevity and size, and a track record that shows ability to protect data and manage things in the customer's interest, which not many organizations have been able to maintain. Trust is earned by behavior over time, and easily lost. More rambling: I am far from an expert on the current details, but I think that when it comes to taking care of one's savings, and the data closely tied to it, that can be used for identity theft, where we might perceive a worsening track record in institutions in general), trust is a big deal. Trust is given subconsciously sometimes, and ideally earned by things like: behavior over time (not promotions), and institutional size and inertia (why Wells Fargo still has customers, I guess), and/or observed behavior patterns relative to current events, proper staffing (competence, honesty, Golden Rule), and other indicators that suggest it is likely to remain so, to the extent of being a mental shorthand for "It's probably stupid (or not) to put my money there and let them take care of things that are really important to me". Will Rogers I think said, and to varying degrees many have thought similarly, something like: "I'm more interested in the return of my money, than the return on my money." And data, now? maybe there have always been more of people willing to manage others' money, than there is of confidence in trying someone new like a revolving door of trust without track record. And data closely tied to money -- same thing? (various clarifying/fixing edits)

browningstreet 5y ago

Most banks are running on older core banking technologies that are overwhelmingly batch driven. Moving to real time transactions isn’t a minor shift for enterprises that have hundreds or thousands of applications, which would be a mix of in-house, COTS and SaaS solutions.

dbbk 5y ago

I mean, I feel like even the most basic execution of Open Banking (aggregated view of your money across all accounts) is a killer use case. People like to know how much money they have.