4 ms·

> legacy to deal with which drags them down A non-zero amount of that legacy is due to regulations and compliance. Most of what a bank does is totally invisib

> legacy to deal with which drags them down A non-zero amount of that legacy is due to regulations and compliance. Most of what a bank does is totally invisible to the end customer. A "neobank" is almost always just a shiny consumer-oriented facade in front of a grumpy old bank. Someone still has to follow all of those laws.

sefrost 4y ago
What about Monzo or Starling in the UK? What is the grumpy old bank behind them?
- deleted 4y ago
  [deleted]
- 0x457 4y ago
  Literally on index page: This website is operated by Monzo Inc. Monzo reserves the right to restrict or revoke any and all offers at any time. The Monzo mobile banking app facilitates access to banking services through *Sutton Bank*, Member FDIC. The Monzo Mastercard Debit Card is issued by Sutton Bank, pursuant to a license from Mastercard International Incorporated. Monzo accounts are FDIC insured up to $250,000. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated. That's for the US branch. Monzo in the UK is a real bank. > Starling Bank That one is an actual bank. In the UK, it's easier to open a real bank, than in the US. Bank of England has a special division dedicated to guiding "small" companies in becoming a real bank.
delusional 4y ago
> A non-zero amount of that legacy is due to regulations and compliance. Although there's a kernel of truth there, it's far from accurate. Most of the legacy is due to the assumption of regulations and compliance. The truth is that most of the systems are in fact out of compliance, but as long as you don't touch them the likelihood of a serious audit is small. The complexity is more about erecting an impenetrable wall to make the auditor assume it's probably compliant. It's essentially about overwhelming auditors with details to fatigue them. Not to dissimilar to when lawyers flood each other with documents in tv shows.
searchableguy 4y ago
Plaid founder's new startup column is building a bank from scratch for developers. https://column.com/ https://column.com/
- bob1029 4y ago
  This is still just a fancy rebranding of an old bank: https://www.norcalbank.com/ https://www.norcalbank.com/ Their FDIC charter was issued in 2006.
  - searchableguy 4y ago
    I think they actually bought the bank this time around to use the license. I may be wrong though.
sofixa 4y ago
I should have specified that I'm talking about EU-based neobanks, which are all real banks as far as I am aware (some are entities of bigger banking groups, some are standalone startups). US banking being largely obsolete as a whole (checks? paid wire transfers that take days to arrive?) probably explains why there are no real neobanks in the US and they're all just a UI in front of a legacy bank. I doubt it has much to do with regulations, because I really doubt US banks are more heavily regulated than EU banks, who also have country differences to deal with if they operate in multiple countries (Revolut, N26), and they also have to check if the customers are American tax residents and handle that case too (or simply refuse them to become customers as some banks do).
- iLoveOncall 4y ago
  Most of EU-based neobanks are NOT real banks. 90% of them are just a frontend. Even Revolut that you cite was just a frontend until January 2021 where it became a bank, but just in the UK: https://en.wikipedia.org/wiki/Revolut#History https://en.wikipedia.org/wiki/Revolut#History
  - sofixa 4y ago
    > In December 2018, Revolut secured a Challenger bank licence from the European Central Bank, facilitated by the Bank of Lithuania, authorising it to accept deposits and offer consumer credits, but not to provide investment services. At the same time, an Electronic Money Institution licence was also issued by the Bank of Lithuania. What are you talking about? Revolut is a real bank, same as Monzo, N26, Aumax (part of a larger banking group so it hardly counts), Kard. Specifically regarding Revolut, they are a real bank in multiple countries now - UK, Lithuania, US and a bunch of other European countries.
    - Reason077 4y ago
      Revolut does not have a bank license in the UK. They've applied, but it has not yet been granted.
  - arohner 4y ago

sefrost 4y ago

What about Monzo or Starling in the UK? What is the grumpy old bank behind them?

deleted 4y ago
[deleted]
0x457 4y ago
Literally on index page: This website is operated by Monzo Inc. Monzo reserves the right to restrict or revoke any and all offers at any time. The Monzo mobile banking app facilitates access to banking services through *Sutton Bank*, Member FDIC. The Monzo Mastercard Debit Card is issued by Sutton Bank, pursuant to a license from Mastercard International Incorporated. Monzo accounts are FDIC insured up to $250,000. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated. That's for the US branch. Monzo in the UK is a real bank. > Starling Bank That one is an actual bank. In the UK, it's easier to open a real bank, than in the US. Bank of England has a special division dedicated to guiding "small" companies in becoming a real bank.

delusional 4y ago

> A non-zero amount of that legacy is due to regulations and compliance. Although there's a kernel of truth there, it's far from accurate. Most of the legacy is due to the assumption of regulations and compliance. The truth is that most of the systems are in fact out of compliance, but as long as you don't touch them the likelihood of a serious audit is small. The complexity is more about erecting an impenetrable wall to make the auditor assume it's probably compliant. It's essentially about overwhelming auditors with details to fatigue them. Not to dissimilar to when lawyers flood each other with documents in tv shows.

searchableguy 4y ago

Plaid founder's new startup column is building a bank from scratch for developers. https://column.com/ https://column.com/

bob1029 4y ago
This is still just a fancy rebranding of an old bank: https://www.norcalbank.com/ https://www.norcalbank.com/ Their FDIC charter was issued in 2006.
- searchableguy 4y ago
  I think they actually bought the bank this time around to use the license. I may be wrong though.

sofixa 4y ago

I should have specified that I'm talking about EU-based neobanks, which are all real banks as far as I am aware (some are entities of bigger banking groups, some are standalone startups). US banking being largely obsolete as a whole (checks? paid wire transfers that take days to arrive?) probably explains why there are no real neobanks in the US and they're all just a UI in front of a legacy bank. I doubt it has much to do with regulations, because I really doubt US banks are more heavily regulated than EU banks, who also have country differences to deal with if they operate in multiple countries (Revolut, N26), and they also have to check if the customers are American tax residents and handle that case too (or simply refuse them to become customers as some banks do).

iLoveOncall 4y ago
Most of EU-based neobanks are NOT real banks. 90% of them are just a frontend. Even Revolut that you cite was just a frontend until January 2021 where it became a bank, but just in the UK: https://en.wikipedia.org/wiki/Revolut#History https://en.wikipedia.org/wiki/Revolut#History
- sofixa 4y ago
  > In December 2018, Revolut secured a Challenger bank licence from the European Central Bank, facilitated by the Bank of Lithuania, authorising it to accept deposits and offer consumer credits, but not to provide investment services. At the same time, an Electronic Money Institution licence was also issued by the Bank of Lithuania. What are you talking about? Revolut is a real bank, same as Monzo, N26, Aumax (part of a larger banking group so it hardly counts), Kard. Specifically regarding Revolut, they are a real bank in multiple countries now - UK, Lithuania, US and a bunch of other European countries.
  - Reason077 4y ago
    Revolut does not have a bank license in the UK. They've applied, but it has not yet been granted.
- arohner 4y ago