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> It's important to realize that for banks IT is a cost center Is this a US phenomenon? Where I live, banks are routinely promoting how they are more modern du
by gtirloni 3y ago
> It's important to realize that for banks IT is a cost center
Is this a US phenomenon? Where I live, banks are routinely promoting how they are more modern due to their tech. It's far from a cost center and has been like that for at least 2 decades now.
- jqpabc123 3y agoIt's important to realize the time value of money. "Tech" means faster, easier transfers and processing. This is great for consumers --- but not so great for banks. Banks make a lot of money from "float" --- the lag time between the initiation of a transaction and it's actual completion. The delay between the point in time where money is withdrawn from the sender's account until it is actually credited to the receiver's account. In many cases, this is a day or more in the US. Bottom line --- most US banks have billions of dollars just "floating" on their books --- continuously. This is someone else's money that the *bank* can earn free interest on. "Tech" (aka instant transactions) threatens to eliminate this source of income for banks.