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Seeing like a bank

• DamonHD 3y ago
  Insightful and nicely written. I spent decades in finance including investment banking and as a director/founder of a small retail operation. A lot of this really rings true.
  • A4ET8a8uTh0 3y ago
    It also managed to hit home some issues I experienced recently. Long time ago, I was a teller/banker and I was still selling, but the recent experience of in person account opening was just bad ( no rate quote, disclosures thrown at the end for the sake of compliance, and promise of a call back for an issue I raised that I never actually got.. come to think of it ). The poor kid did not know anything about what he was selling and that was basic UTMA savings. Anyway, what I am saying is that is well worth the read; especially the bit about constant firefighting.
• csours 3y ago
  There is something about this that I'd like to be able to communicate better [0]: Organizations are made of teams. That sounds super obvious, but it means that any change request is going to go to a team (or teams). From the outside, it looks like a corporation has effectively unlimited resources; on the inside, any particular team has very limited resources. The team may have just been downsized, lost a lead, been reorganized, etc. 0: Better than I currently can, not better than Patrick. Funny quote: > That retail user is extremely unsophisticated about the bank account, finance in general, and frequently many other things in life.
  • pixl97 3y ago
    Large organizations are made of "money saving entities". I work with a lot of large corporations and we have constant problems with the software I support because the imperative is to continually drop operational costs. We'll have a team we work with that is well trained, understand the software well, and keeps the software working at near 100% capacity. Then suddenly one day they are all gone and you get the offshoring team that knows nothing about the specialist software they are attempting to support, if they have the capability to actually turn a computer on is surprising. Software availability drops significantly having direct impact on deliveries, costing god knows how much in some of these companies. Support on the vendor side (my side) turns into a huge expensive mess because now you're now writing instructions to the level of "when you take a poopy, remember to flush and pull your pants back up".
    • csours 3y ago
      > Large organizations are made of "money saving entities". Working for a cost center vs. a profit center will make a huge difference in your professional life.
      • TeMPOraL 3y ago
        Not everyone is wired for a sales&marketing job, and twisting themselves to fit in that role would also make a huge difference in life, in a more Faustian kind of way.
        • Cheezewheel 3y ago
          There are companies that don't view Development work as the "cost" center for the business, but much more directly as the "Profit" center of the business. This is not necessarily the norm, and certainly not in certain industries like Education or especially Hospitals, or Law where IT are basically seen as second class citizens (however well they may be compensated).
          • TeMPOraL 3y ago
            I feel it's very much not the norm, except for early-stage tech startups, and companies that use software directly to print money - which more often than I'd like means adtech or gambling. All the "useful" or "worthwhile" activities, in the traditional, social sense, tend to be cost centers. Now, without passing too much judgement, I'm starting to feel the unease comes straight from the cost/profit center distinction, as another way to define it is: profit center is what you do to get the money, so you can spend it on the cost center. The former is more exposed to market pressures, thus more likely to evolve into something ugly.
  • kccqzy 3y ago
    I simply cannot upvote this enough. I also believe this is a hard problem to solve. The partitioning of an organization's resources into teams is inherently messy and inefficient. One has to consider internal politics, egos of middle managers, or preferences of individuals when staffing teams within an organization. The end result is often far from what's the best for the organization overall.
• ctoth 3y ago
  > You should prefer a world with credit cards and discount brokerages to one which doesn’t have them, even as you listen to hold music occasionally. The problem with this is, we've known for 30 years that a system that calls you back is better than a system you wait on hold for. If they can't even get something this basic right, then I guess it's good that banks will eventually, someday be software competent, but I'll be long-since dead.
  • landedgentry 3y ago
    I am not really convinced of Patrick's framing of the supposedly inevitable trade-offs. I've lived in other countries with credit cards and discount brokerages, and in my opinion, the U.S. is uniquely bad at servicing customers.
  • janus 3y ago
    It depends on where you live. In my country I would never take a call from a bank at face value and would always expect they give me a phone number to call back, and that better be an institutional number. Phone fraud is rampant.
    • bluGill 3y ago
      Which in turn depends on where you live: some places a call is not ended until both sides hang up. Fraudsters use that to call you, give you a number and then when you call back pretend to be answering the phone (complete with ring noises). If someone like a banks calls you, you need to call back from a different phone line, using a number that you look up before giving private information. Note that most of the time the above doesn't matter, as banks rarely need to call you to get private information. "did you buy X" isn't private - whoever is asking already knows you did: even if they are a scammer you have already lost - if you didn't you need to hang up and call the bank to arrange getting a new account now that your old one is compromised. The only other time that matters is why you know who will call and why (if you just applied for a mortgage you expect the loan officer to call but you also know exactly who that is)
      • 3y ago
• RationalDino 3y ago
  Patio11 is the best resource that I'm aware of to understand how our institutional world works. And its biases. Over and over again it is built in a way that incentivizes some behaviors, and doesn't incentivize others. One behavior that is always incentivized is that the professional and managerial classes should always have prioritized access. This article walks through it in how banks work internally. Much more painful is https://www.bitsaboutmoney.com/archive/the-waste-stream-of-consumer-finance/ https://www.bitsaboutmoney.com/archive/the-waste-stream-of-c..., which shows how rules that supposedly protect poor people from abuse, in practice only help those with access to the skills of the professional and managerial classes. I wish there was a way to summarize his point of view and explain it to people. Part of the problem is that every system where it happens is very complicated. And the complications are exactly why you need professional and managerial class skills to get priority access.
  • orangesite 3y ago
    It's absolutely great how @patio11 managed to recreate exactly the same system within stripe despite being fully aware of it. (I save up my karma points precisely so I can burn them on comments like this.)
    • RationalDino 3y ago
      I'm not sure which part you are referring to by "exactly the same system", or to what extent patio11 is personally responsible for it. However listen to his explanations of the incentives, benefits, and downsides. Then remember that he was working within a company that had the exact same incentives (eg same regulatory regimes), who was going to be hiring people out of the same financial system. And remember that there are parts of this that he think really make the world better. Therefore the expected result really should be, "Somewhat better iteration on the basic thing that everyone else does." And so it is no surprise that it would include enough of what you don't like that you'd see it as "exactly the same system".
    • e63f67dd-065b 3y ago
      My impression of what he wrote is that it's an explanation of the status quo, not a denunciation of it. In his conclusion: > Although it certainly doesn’t feel like it to people who hit edge cases, the tiered support model is a technology which took us decades to popularize and which made the world much better. It brought down the cost of financial services and supported product innovation which would have been impossible under the mid-century bank staffing model. We could not have credit cards or discount brokerages without the tiered support model. The biography of Charles Schwab makes this point persuasively at considerable length: competent telephone operations were instrumental to bringing equity ownership to the middle class. You should prefer a world with credit cards and discount brokerages to one which doesn’t have them, even as you listen to hold music occasionally Tiered support is here to stay because tiered support is cheap and resistant to the "unintelligent customer DoS" (my words, not his). As he points out, you can have professional troubleshooters with the capability, authority, and expertise to troubleshoot the problem, but their labour costs in the hundreds of dollars an hour. I personally think there is a reasonable model of the world where customers explicitly pay a hundred dollar fee to have a highest-tier escalation to the office of the CEO/equivalent troubleshooting team and have them take a look at your case, but this is a model that has not yet been developed or in wide use anywhere.
• dcminter 3y ago
  "No system will ever be able to answer all interesting questions about a user; that is formally undecidable in computer science." What? Are they talking about the halting problem? This seems like a stretch without defining what constitutes "interesting" in a very weird way.
  • patio11 3y ago
    Please accept this as a handwavy gesture at the halting problem for an audience which has on average something like 0.2 engineering degrees.
    • dcminter 3y ago
      So what particular banking customer data management software do you have in mind that's adversely affected by the halting problem? (Edit: Ha, didn't notice you were the author!)
      • immibis 3y ago
        Hello, Mr Bank Manager, I have enrolled into a game show which will cost me half my account balance if it's even, otherwise they will triple it and add one...
• bob1029 3y ago
  > Due to the deskilling of the bank branch, the people at a bank branch, including the branch manager in many firms, can only offer solutions to relatively straightforward problems. For the other ones, they also have to call into a support phone tree. Sometimes the bank will have ability to e.g. share context between their screen and the Tier 2 rep; sometimes they’re literally incapable of proving to the bank that they work there. This is essentially the central value proposition of our SaaS product - Providing less-skilled employees the ability to accurately conduct complex account and customer management activities in the branch environment. An "on-rails" style application experience that more-or-less forces you to take legal actions with the end customer. Our most popular workflows from the perspective of bankers are the ones used most rarely - IRA rollovers, conversions, etc. The ones you cannot possibly hope to memorize because they happen so rarely. But, from a board room perspective, the focus is much stronger on the efficiency/correctness gains for the happy-path consumer product stacks. I'd say it's a dragon of a space. Borderline cursed. It took us half a decade just to get core interfaces working well enough and that is only like 20% of the puzzle. Documentation, regulations, back office processes, etc are way more important and involve super nasty conversations with people who might sense that you are trying to replace them.
• lainga 3y ago
  I found the article answered most of the questions it posed, but this one came and went unexplained... > Banks aggressively partition staff based on job duties and levels within those duties. Why?
  • orangesite 3y ago
    Efficiency fallacy. "We can generate more throughput in the system as a whole by negatively incentivizing each component to work itself to death." See Goldratt, Eli.
  • adolph 3y ago
    One phrase that comes up is "segregation of duties" meaning things like "if one person can do X and Y then they can commit fraud without being caught." So the principle of "segregation of duties" means that the people who can do X are on different teams than those who can do Y.
    • immibis 3y ago
      It doesn't only happen at banks, though.
    • NovemberWhiskey 3y ago
      Like, specifically: please don't let your operations people in books and records have access to your treasury and reconciliation systems. Or, don't let front-office people have access to middle-office systems. See: Leeson, Nick; Kerviel, Jérôme.
  • tgsovlerkhgsel 3y ago
    The article answers it - it's cheaper to train a person to be good enough at one thing than training them to be good enough at all the things.
• aidenn0 3y ago
  > I watched senior engineering leadership ask senior Ops leadership why they had never been asked to fix them. Ops replied that their long experience in the financial industry had taught them that Ops never gets to use software which isn’t broken and that complaining about this is like complaining about gravity. I see this everywhere not just at banks. A common workflow is horribly broken with dozens of habitual workarounds and the developer could fix it in a day if they knew about the issue. I even see it between engineering teams when there are cross-team dependencies. It is really hard to train people to not put up with chronic pain in their workflows!
  • MichaelZuo 3y ago
    A lot of the times, the 'correct' workflow isn't even documented enough to recreate it. Often not even enough to identify that there ever was one in the first place.
  • pixl97 3y ago
    I work with banks on, um issues, without disclosing too much. Occasionally we find issues with their software workflows, and this isn't related directly to monetary stuff. We're not allowed to have the end result change in any way most of the time. "But we're getting a wrong answer", or "This is costing XX person hours per day" isn't up for consideration. Nothing must change. Ugh, and on the subject of banks computer operations. Every single department is in deep blame avoidance mode. It's not "find and identify problems" mode, it's "It wasn't me" mode. We had our application performance drop to almost zero (like we dropped to disk operations per minute IOPM) I spent hours telling the customer, this is your infrastructure. So we got infrastructure teams on the call trying to figure out where it was. Not a single one of them were helpful "Everything fine, it's not us" was the first thing out of their mouths and the second was "We didn't change anything". It took 10 hours of sitting on a call over 2 days to get the NAS team to admit they turned on anti-virus on the NAS side and that the machines were in meltdown mode because the CPU was off the charts. The preceding people didn't even look at the metrics before coming back with a "it's not my problem, everything is fine" response.
    • rkagerer 3y ago
• rdtsc 3y ago
  > at some financial institutions, you can get a SAR filed for knowing what a SAR is, because “advanced knowledge of anti-moneylaundering procedure” is a characteristic only of financial professionals and terrorists. That is messed up. You ask about a SAR or indicate you know about them in general, you get a SAR slapped on you, and they close your account. You're one of hundreds of thousands, why bother handling a SAR-ed user when they can just move on without you. Are individuals allowed to have a public forum to discuss and share notes of what they did in their account to learn and prevent this from happening in the future? It seems in a lot of cases it's using these payment systems like Zelle or have anything associated with phrases resembling black-listed countries or organization.
  • RationalDino 3y ago
    Yes, individuals are allowed to have a public forum for that. We have freedom of speech after all. However such a forum is going to be of particular interest for would-be money launderers. And therefore you should expect it to be monitored by people connected to the financial system. With the result being that active participation in such a forum may itself become grounds for a SAR to be slapped on you. A SAR that, of course, you will never be informed of. Because, as patio11 documents, that is the law.
    • AmericanChopper 3y ago
      Anti-Money Laundering laws are a complete anti-democratic tyranny. With AML you are assumed guilty anytime you possess money, or participate in any financial transactions, or have any assets. If called upon to do so you will have to prove your innocence beyond a reasonable doubt, and if you fail to do so, your assets or money can be permanently seized. All of this occurs without any form of due process. The government actually wouldn’t be able to make these regulations for itself, and the only way it manages to make AML laws work is with a complete governance anti-pattern. Where they simply tell the banks that if they unknowingly allow any “money laundering”, then they will be punished, rather than actually creating some regulations for them to follow. So the institutions just create these kafkaesque nightmares themselves, because they don’t really care about who gets screwed over by them. The worse part is that money laundering is trivially easy for anybody who wants to do it, it just costs money to do the compliance properly. The only people who get thwarted by these laws are immigrants who do a lot of remittance, and law-abiding wealthy people who naively think they’re entitled to possess their own money. Two groups that society generally doesn’t care at all about protecting. I personally make a lot of money off the AML compliance industry, so I’m not really complaining for my own sake. But these laws are the intended outcome of “anti-terrorism” and “anti-tax-evasion” policies.
• kylehotchkiss 3y ago
  My very very naive take on this: why don't banks have more common operating systems and data structures? Why is it this hard for acquisitions to work? They're a guaranteed part of business so a common software stack could help Chase integrate First Republic without two parallel systems? (I welcome any responses on why this will never happen though!)
  • patio11 3y ago
    There is a famous joke about standards: the great thing about common standards is that you have so many to choose from. A corollary to it: if none of the existing common standards meets your need, how about letting some of your senior staff get promoted by successfully creating and popularizing a new common standard?
  • mrkeen 3y ago
    Every problem you solve takes time away from solving other problems, and this one is a particularly difficult coordination problem with very little payoff. You might be imagining two banks coordinating together, now scrap that and imagine ALL banks coordinating, because you don't know which two are going to merge. Banks have been born at different times (think centuries - or even millenia). So they'd all have to move in lockstep from clay tablets to papyrus to printing press to typewriter before they even decide whether or not they want to bet on computers as a way forward. To some degree banks already have 'a shared operating system' in the form of clearing houses and central banks. I don't know enough about that stuff. But it's the reason why bank transfers have mostly taken days to complete, rather than seconds, in the past few decades. Come to think of it, there's a huge incentive not to stay in lockstep with all the other banks if you can offer customers instantaneous transfers when other banks make you wait for days.
    • nvm0n2 3y ago
      Bank transfers take days to complete because of liquidity management, not due to IT system delays. When you do a big enough transfer, the bank has to have a balance with the central bank that can be moved to the target bank's CB account, but, your bank doesn't actually have the money you deposited. It's out on loan instead. So the bank has to go into the market and sell some assets to raise that money. It may not be possible to do this immediately, and even if it is, they want to be able to time their sales to reduce capital inefficiencies. This is also why they're often so very expensive. That $25 or whatever isn't being spent on the cost of updating the ledger. It's the cost the bank incurs because of the need to sell assets (loans) before they intended to.
• jampekka 3y ago
  I'd wager the reason a lot of bank systems suck is that them sucking doesn't matter to the banks, and the suck can be even beneficial to them. It's rather difficult to change one's bank, and banks actually put up hurdles to make the change difficult. E.g. moving loans can have huge "rearrangement fees", loan guarantees may be almost impossible to transfer and the bank account info is in quite a few places and having it wrong can cause missed payments. A good example is that when it was proposed that one should be able to transfer their account number to another bank (as telecoms have to do for phone numbers here in Finland at least), the bank lobbyists said this is technically impossible, which is of course ridiculous. And that we still this day and age have to wait for days for a bank transfer to clear. There are some new banks (e.g. Monzo) that once you use them, it really shows that most banks just suck. When you have literally a license to create money out of thin air, you can be really incompetent (except in lobbying of course) and still make hand over fist.
  • mrkeen 3y ago
    > When you have literally a license to create money out of thin air Well, you can loan out some amount of money that you don't have, hopefully get it returned to you with some interest.
    • jampekka 3y ago
      If enough doesn't get returned, the gov/centeral bank gives it to you as a bailout. And for many loans you automatically get it from the gov if the debtor can't pay.
      • vkou 3y ago
        > If enough doesn't get returned, the gov/centeral bank gives it to you as a bailout. No, the gov/central bank will give it to the people you borrowed money from as a bailout. Your equity will be zeroed out, your executives will all be fired, and your customer accounts will be fed to another bank.
        • 3y ago
• techsupporter 3y ago
  > And, as a particular thing which could help unlock that: if one cares a lot about the experience of people at the socioeconomic margins, one should perhaps spend less time fulminating about greedy capitalists and spend more time reading Requests For Public Comment by relatively obscure parts of the administrative state. For what it's worth, there are a staggering number of people doing political advocacy who follow these sorts of things. The main problem is, unless you are inside that system, there is no (scalable) way to know which relatively obscure parts are about to do something that you want to comment on. And, as patio11 wrote out, it's a massive system that has been layered on top of layers. Part of the reason why spend "time fulminating about greedy capitalists" is because those "greedy capitalists" are the ones inside the system. Hell, a good amount of time, advocates are having to spend time pushing back against "greedy capitalists" because the status quo is already known and understood, but a change would cost money even if it is beneficial so the change must be opposed. What advocacy could really use is more people who have this deep understanding and can write out lengthy articles like this explaining all of the ins-and-outs to come along with the advocates as a guide. The problem is, the economic and cultural incentives don't work like that.
• cafebee 3y ago
  > For better or worse, the side channels are not an accident. They are extremely intentionally designed. Accessing them often requires performance of being a professional-managerial class member or otherwise knowing some financial industry shibboleths What is meant by side channels here? Is it writing "a paper letter to the VP of Retail Banking", as mentioned elsewhere in the article? That doesn't seem "intentionally designed", so the author must be referring to something else, but I don't have the imagination to guess it
  • RationalDino 3y ago
    That is an example of a side channel. That's the kind of thing done by people who the bank really doesn't want to offend. The bank decided it wants that to work for them. Therefore the bank created a way of making sure it works. That it is not documented or advertised is a feature.
  • seraphine 3y ago
    Not sure if this is what he meant but you can call a bank or visit a branch, get a phone number for a specific department and call them directly and get almost VIP levels of helpful service in my experience. Something that would entail hours of phone support thru official channels cut down to 15 minutes. Once you discover this there's no going back and it all depends on who you ask, and how you ask.
  • timerol 3y ago
    The "intentionally designed" part isn't just the mail, it's the process that comes after receiving mail. The VP of Retail Banking does not read their own mail. Who does read that mail? How are various letters delegated to appropriate teams? What letters are discarded or given a canned response? How does the bank make sure that it doesn't ghost people (most of the time)? It basically needs an entire support system, which may or may not rely on parts of the official support system
  • tgsovlerkhgsel 3y ago
    The paper letter would be one such side channel. jeff@amazon.con would be an even better such example. You will get a response from a "Executive Customer Relations" team, which is likely still a tiered tech support team, but the lowest tier is already capable of actually solving most problems that would get completely stuck in the regular support queue. It doesn't get much more intentionally designed than that. For banks and other regulated industries, if something is a sufficient clusterfuck of incompetence and getting-the-runaround, filing a complaint at some supervisory authority also works. That generally gets the attention of the "troubleshooting" team mentioned, which is usually all it takes. The supervisory authorities know this, and most complaints likely get resolved this way (getting it in front of someone with some level of competence and authority). I think the tiering structure is reasonable (some of my requests simply need a Tier 1 person to press a button that they have and I don't), and I've seen cases get escalated appropriately, but when the escalation fails/doesn't happen quickly it's incredibly infuriating. Other side channels can be (real examples): - legal department (note: this can be a one-way street and can make the company only talk to you through a lawyer, but if e.g. you have a complaint with a company that would result in a small claims court judge shake their head over the company's behavior, and are willing to take it to small claims court, this can be really effective). To reach them and get their attention, filing a small claims court case can be effective! - Really bad feedback (0/10 on every category, including the "are you satisfied with the person on the other end", not just the company) on a customer satisfaction survey - Social media (the common way to escalate "beyond the abilities of normal support channels" issues with tech companies). There are teams specifically for tracking and escalating social media feedback, but that's again a tiered system. Bigger shitstorm = higher tier.
• tomjen3 3y ago
  And now you wonder why wanted crypto to succeed. It was not because it was quick way to make money: It was so that banks had to compete with real technology and so that no one ever had to have their lives savings stolen by bankers with no recurse.
  • timerol 3y ago
    > so that no one ever had to have their lives savings stolen by bankers with no recurse. This is meant sarcastically, right? Crypto is extremely efficient at causing people's life savings to evaporate
    • immibis 3y ago
      Not by bankers, so it's all good. I will say, PancakeSwap stole a trivial amount of my money, and probably more of other people's. Are they bankers?
    • shakow 3y ago
      The Forex is equally extremely efficient at vaporising life savings, still you wouldn't say that's the fault of the dollar/euro/yen/yuan/dinar/...
    • tomjen3 3y ago
      Sure but only by their actions, not by the actions of some stupid mainframe software.
  • ranger207 3y ago
    The story of crypto is the story of recreating the existing financial system from scratch, particularly including all its regulations that make the current modern financial system so annoying. Yes, the current financial regulations suck, but each one was put into place because of failures like you see in crypto every day. In the long run cyrpto regulation will wind up looking much like modern financial regulation because it suffers from the same pressures, incentives, and attack surfaces as the modern financial system. This isn't to say that the current financial regulation regime is good in any sense of the word, just that it's effective at what it's explicitly designed to respond to. Crypto that lacks the regulation of modern finance will suffer from one set of problems; modern financial regulation suffers from another set of problems emergent from the system of regulation itself. That crypto doesn't suffer from problems caused by the system of regulations does not make it inherently better than modern finance
• yboris 3y ago
  The book Seeing Like a State referenced in the article is an amazing read: https://www.amazon.com/Seeing-like-State-Certain-Condition/dp/0300078153 https://www.amazon.com/Seeing-like-State-Certain-Condition/d... Highly recommend, though glance at summary to confirm you'll enjoy / benefit: https://en.wikipedia.org/wiki/Seeing_Like_a_State https://en.wikipedia.org/wiki/Seeing_Like_a_State
  • orliesaurus 3y ago
    ty bought it
  • tomjakubowski 3y ago
    one of the great books on understanding corporate management too.
  • RachelF 3y ago
    and if you want some rather funny videos on this topic: https://www.youtube.com/results?search_query=reasontv+unintended+consequences https://www.youtube.com/results?search_query=reasontv+uninte...
  • Symmetry 3y ago
    It's a great book but one sided in its analysis. I'd recommend pairing it with a book about a case where High Modernism worked great, like The Ghost Map or something. https://www.goodreads.com/book/show/36086.The_Ghost_Map https://www.goodreads.com/book/show/36086.The_Ghost_Map
    • brianpan 3y ago
      If you want both sides in one book: The Wizard and the Prophet by Charles Mann https://www.goodreads.com/book/show/34959327-the-wizard-and-the-prophet https://www.goodreads.com/book/show/34959327-the-wizard-and-...
  • nomat 3y ago
    It would be cool to map the relationship between a book getting linked on HN and its checkout rate at the local public library. That's usually the first place I head when I see something I want to read on here.
• gniv 3y ago
  Interesting read, as usual. "You can understand why, right? From their perspective, they were just going about their life, doing nothing wrong, and then for some bullshit reason the bank charged them $35." I'm not sure it's quite right to blame this on math illiteracy. I think some people are still in denial on bank fees.
  • immibis 3y ago
    The reality is the person also got paid $500 on the same day, but even though the paycheck arrived early in the morning, the bank chose to process it late at night to collect that $35 overdraft fee in the meantime.
    • astrange 3y ago
      Down significantly. https://www.consumerfinance.gov/data-research/research-reports/vast-majority-of-nsf-fees-have-been-eliminated-saving-consumers-nearly-2-billion-annually/ https://www.consumerfinance.gov/data-research/research-repor... Payroll ACH transfers usually get deposited two days faster than they used to as well (1 day instead of 3 days).
    • ted_bunny 3y ago
      If anyone's reading this like a joke, it's not. They'll also reorder your charges for the same purpose. Have $70, and then ring up charges for $5, $10, and $75, and you will consistently have three overdrafts instead of one.
• sherlock_h 3y ago
  Great article. Explains the chalenges that I just had with having all money frozen with Marcus.com. It is literally impossible to break through these layers of support in order to get your case heard / solved. The biggest challenge is that it‘s so intransparent with very little communication from the bank as to how a support case is actually moving through and how close it is to getting resolved.
  • astrange 3y ago
    Did you read the article carefully enough? It gives you several ways to get to the "useful" support. But besides his way of writing the right kind of letter, you can make a CFPB complaint.
• woodruffw 3y ago
  > Sometimes the bank will have ability to e.g. share context between their screen and the Tier 2 rep; sometimes they’re literally incapable of proving to the bank that they work there. I've experienced this one directly: I ran into an issue with a large transfer between banks a few years ago, and watched with a mixture of amusement and anxiety as the branch employee was unable to prove his identity to his counterpart on the line. He was supposed to share some kind of OTP to prove that he was in front of a branch computer, but whatever microservice was responsible for generating and/or delivering the OTPs was offline.
  • notahacker 3y ago
    I'd have been even more anxious if the workaround for the missing OTP was him saying "trust me, I'm the manager, the customer is very upset" or some other thing that's trivially socially engineered by a competent scammer...
• cratermoon 3y ago
  This could also apply to the way airlines see passengers. In my experience, passenger information is scattered across different systems and representation. One system tracks the reservation itself, which has information 1 or more passengers. Another system tracks the fare and various feeds paid or due. Another tracks check-in status. Yet another has seating information. Bags checked live somewhere else. There's not a common key. There are of course confirmation numbers (those 6-character codes), but only after a reservation is confirmed. If a person has a frequent flyer code, that's another key. As the passenger moves through the system, each different subset of attributes is attached only to the system in which it lives, and cross-correlating a passenger across systems is done in numerous ad-hoc ways. The customer service folks have a lot of tribal knowledge, and if you happen to get an experienced one, they can really smooth the way. During the pandemic, though, a lot of people left the industry, and a lot of knowledge just walked out the door.
• donalhunt 3y ago
  > Ops feels like the world is on fire because the world is always on fire This gave me a chuckle. :)
• creeble 3y ago
  Funny comment about First Republic and Chase. I too have/had a mortgage at FR and I now see it in my existing Chase account (maybe the balance is even correct, pretty hard for me to know), but I have no idea whether they are going to still take the payment out of my FR checking account, despite their official transition page saying "all automatic payments will be transferred as well." I guess I can't take the money out of my FR account until I know.
  • numlocked 3y ago
    Too funny. I am in the exact same boat. For what it's worth I spoke to their customer service (Chase) yesterday who indicated that the auto-payment would continue to work as it always had, but will process "10 days late". So I'm expecting it to come out of my FRB account on the 10th or the 13th. I was also caught totally off-guard when I logged into FRB and it informed me my mortgage had been closed. If I didn't have a Chase credit card (and saw my mortgage there when I went to pay the credit card) I'd probably still be baffled.
    • creeble 3y ago
      I think I also saw that only this _first_ auto-payment will work -- after that you have to set it up at Chase if you want to continue auto-payment. One thing I found out about mortgage auto-payments at FRB was that they wouldn't take the money out unless there was enough in the account within the first 6 days of the month. They would automatically check every day, and if the balance was high enough, they would take it out. On the 7th day I guess they would send you an overdue notice (and maybe keep checking? no idea). They could only do this because they owned both accounts. Edit: Okay, TMI but this is just so... interactive right now. I looked up the transfer balance in my FRB account, and the account balance at Chase was $6k higher. So I called Chase Mortgage. The wait was only about 3m (after the touch-tone gauntlet), and I talked to a very nice dude who welcomed me to Chase... and then promptly told me he'd have to transfer me because I am a "Premium Customer" coming from FRB. I've been on hold the last 15m. Premium I guess means "wait more".
• toasted-subs 3y ago
  [flagged]
• pdntspa 3y ago
  I didn't read the article as it appeared to go off on tangents that don't really get to the heart of the matter: SARs and everything else are super super secret and there are severe penalties for even cluing someone in about them. There is a lot of bullshit clockwork that is hidden from consumers under the guise of anti-money-laundering and anti-organized-crime stuff. If I recall the training correctly, you aren't even allowed to acknowledge there is this whole secret process! Which is stupid. All of this is because FinCEN has banks by the balls
• gravitate 3y ago
  What about 'neo banks'? I am with Revolut free tier and I know why they have a free tier/basic tier, because I know they monetize my bank statements and purchase habits for 'market research' and other insights.
  • ponector 3y ago
    Revolut is a EU bank and has the same regulations, AML, KYC rules as other banks. There are tons of stories about closed accounts by revolute. It is even worse than "regular" bank because you can't go to the branch or call the support number. You can get help via chatbot from the application and I doubt you can use it without active account.
• grishka 3y ago
  I don't know what banking is like in the US, but having to deal with a UAE bank was a culture shock for me. This article made me understand why it's so shitty. No one seems to want to do their job. Everything — I mean everything — takes ages. The branch employees are utterly powerless. The only thing they can do right there and right now is cash transactions, everything else requires a form to be filled and signed and sent "to the back office" for the thing you asked for to maybe happen in "3 to 5 working days". I have only tried calling them once. They use a toll number, but then still try their hardest to "solve your issue" through an automated voice menu before you have any chance to talk to a real human. Writing to the right person directly to their work email sometimes gets your problems solved very quickly though. It was a culture shock because I'm Russian and banks don't play as important of a role in our society because of the Soviet past. Yes, most of our population has a bank account these days. Yes, most people are paid by transfers to that account. But — our entire banking system was built from scratch in the 90s. Banks had to sell the whole idea of banking to people to begin with. So if you have an issue and you go to a branch to get it sorted, you do get it sorted on the spot by a branch employee. It probably also helps that many Russians "don't trust banks" so they'd go to an ATM on their payday and withdraw their entire salary and use cash for all their transactions. We've also never had checks, we skipped that entirely. We also have this nifty СБП system that allows you to instantly make a transfer from any bank to any other bank using just the recipient's phone number. Very useful for things like splitting bills. I was shocked to find out that most other countries don't have anything like this and even sending someone money within one bank is quite a process.
  • ponector 3y ago
    Passage about checks is simply not true. Other countries in EU have similar systems where you can use phone number instead of IBAN. It is convenient for small sums. Also you can do free SEPA wire transfer in any EU currency to any account in EU or abroad. Big difference to how expensive is to move money from pre-war Russia or USA.
    • grishka 3y ago
      > Passage about checks is simply not true. The only time I've seen checks used it was for a company account. That is in contrast with some countries where checks are still in wide use by regular people for large personal expenses like rent. About EU, yes, I heard about this. Also India has a similar system.
• nologic01 3y ago
  There should be more of this. Much more. From different angles and view points but with the same clarity and directness. Banking is in a deep, existential crisis for decades now and the march of digitization only increases the pressure to find a way forward. In response techno-solutionists imagine all sorts of replacements, whether it is "fintech", or "banking-as-a-service" or "crypto" but all are hopelessly shallow and incomplete, almost insultingly crude. What is entirely missing from these neobanking movements is any straight definition of what is the purpose of banking and bankers. What is their irreducible value proposition that cannot be delegated to machines and algorithms. What is their role in society. Are they allies or enemies of surveillance capitalism? Are their users clients or products? Can there be an honest relation with the sovereign monetary system and the lender of last resort or is private banking a scheme to privatize profits and socialize losses? Last but not least, what role, if any, should they play towards environmental sustainability. The questions and challenges are pilling up and there are no breakthroughs worth mentioning. In a parallel universe we might have something like BN (banking news), where all sorts of individuals, teams small or large, would pimp their blogs, radical ideas, open source solutions or fancy software products, but above all a positive, forward looking vision for a crucial sector.
  • vkou 3y ago
    > what is the purpose of banking and bankers. To borrow money from you, paying you a low interest rate, but allowing you to withdraw it at a drop of the hat, while lending money to someone else, at high interest rates, but on a fixed, multi-year repayment schedule. Borrow short, lend long. It's socially useful, and if the bank does it well, it stands to make a lot of money.
    • kayamon 3y ago
      The purpose of banking is to allow people to store their money safely. It is not to allow finance bros to gamble with customer deposits without consent.
      • immibis 3y ago
        The purpose of banking for most people is to put their money in so they don't need to carry cash around, but the purpose of banking for banks has been to make profit by gambling the money people are giving you for safekeeping. A bit like the relationship between Gmail and personal data, really.
• iamleppert 3y ago
  Treat bank accounts like an unreliable host. You wouldn’t have a single database instance running your entire business like you shouldn’t have a single bank running your business. Open multiple accounts and when one starts acting up change it out for another. Always have several bank accounts at the ready. Every transaction you make has risk, counter party risk extends to your financial institution as well. You should be running drills every quarter and randomly switching up your bank. Don’t be a victim when you have engineering solutions to these problems! If you have money in an account at a bank for business operations, keep that in a completely separate bank and legal entity than the one with a risky transaction profile. Use an intermediary bank to receive deposits from the likely to close bank account that transfers money out immediately to your operational account, and make sure it’s at a competitor. Banks don’t share info and you can take advantage of slow processes and communication delays to give enough time to fix problems with a flaky bank before they impact your business. Think of it like a firewall for your business.
  • avn2109 3y ago
    By far the most pro comment in this thread, should be much higher.
  • deleted 3y ago
    [deleted]
• jdblair 3y ago
  It has been instructive to experience banking in the Netherlands after living in the USA most of my life. Transferring money to any other IBAN number, even large sums? Ridiculously easy, and available immediately in the recipient’s account. Transferring large sums between the US and my Dutch account? Wise.com makes this much simpler, but its not easy. I can use ACH transactions, but that is limited to 20k at a time. Wire transfers provide a way, but my US bank limits daily transfers initiated online to a pretty small amount (good to combat fraud, inconvenient if buying a house). I can travel to the US and initiate the transfer in person, but you may recall that travel was difficult in 2020. I had to send a paper form, with proof of identity provided by a Dutch notary (more like a paralegal than a US notary, to a central office for the bank in the US. Maybe this is ok? It’s not like I need to do it very often. I do hope FedNow makes the usual European experience more common in the US.
• crotchfire 3y ago
  [dead]
• creer 3y ago
  The fine article mentions "Banks are extremely good at tracking one kind of truth, ledgers." In some cases that's - alarmingly - not even true. Or at least they are running their ledgers in ways that are so counter-intuitive and undocumented that they don't make sense to their customers. I.E. it's self-serving at best. This is a problem from banks that are supposed to pay attention to large chunks of your money. No? Obviously? A little? Yeah it is. Similarly alleging savage competition is self serving once you move beyond the most common low-balance checking account. FATCA for example took care of competition when it comes to running european bank accounts for US residents. Or try to borrow money against your financial assets - in the US - and find out how much competition there is there. And yet, there we are. An actual mainstream (among the top largest on the planet) bank where 1-3 times a year, I roll my eyes, spend time reassuring myself that it's okay-enough, figure out how to present that nonsense to the IRS, make a note for my own tax reporting purposes and so that I don't have to do the research again after I forgot, and fiinaallyyy move on with my life. I'm sure that ledger works out for the bank.
• TacticalCoder 3y ago
  > And partly, we as a society have to make some tradeoffs. We want something from 12 CFR § 21.11(k)(1) . It was not written by accident or because the drafters were stupid. Every future with 12 CFR § 21.11(k)(1) in it will include many Americans whose bank accounts are closed for no reason that can be disclosed to them. Many of them will have done nothing wrong. I totally dispute that and there's a contradiction in there. If many of them will have done nothing wrong, then the drafters were plain stupid. Typically senile, dumb, stupid, out-of-touch people. There's nothing for the people in there and it wasn't the result of a democratic process. It is also a complete and utter failure, costing $180bn worldwide for a mere $12bn frozen (not even seized but temporarily frozen, some being actually legit money that'll eventually be unfrozen). In other words: it's yet another pointless law that is not having the intended effect and that is costing business and taxpayers money and time while making people feel they live in a dystopian madness. And there's more drugs than ever sold both in, say, the EU and the US. And there's still child pornography. And there's still 3% to 5% of the world's GDP that is tied to criminal activities. "The more numerous the laws, the more corrupt the state" (Tacitus thousands of years ago)
  • astrange 3y ago
    > It is also a complete and utter failure, costing $180bn worldwide for a mere $12bn frozen (not even seized but temporarily frozen, some being actually legit money that'll eventually be unfrozen). Selection effect (the question is how many illegal activities it prevents in the first place) > And there's more drugs than ever sold both in, say, the EU and the US. Base rate effect (population and disposable income are going up, and who does market research on drug sales anyway?)
  • immibis 3y ago
    The goals for politicians are not the same goals for you and I. They don't have the goal to protect people from fraud, or whatever they said their goal was.
• RecycledEle 3y ago
  TL/DR: We look like idiots, but it's not our fault because: (1) We went through lots of acquisitions and mergers. We had no control over that, really! (2) We deal with the public, and nobody could have seen that coming! (3) Federal law prevents any due process. (4) Senior management only cares about calls from congresspeople and tear jerking stories about widows (that could end up in the news.) If we screw enough peasants we can find some great bonuses! (5) We have a semi-functional bureaucracy, which is in no way our fault. Honest! (6) Some of our most valuable customers are silly old people who do not have degrees in computer science and expect to speak to a real human to resolve their problems. The nerve of those elderly fuddy duddies! Why can't they just learn to code like the rest of the human race. I still think lying in behalf of a corporation should be a felony or (depending on the dollar amount involved);a capital crime.
  • anonylizard 3y ago
    The simple answer is: Banking is too cheap to offer a hands on service for most people, hence automation and the lack of recourse. Private banking doesn't suffer from any of these issues. Banks just assign a staff for like every 10-50 accounts, who offer white-glove support to any questions. Each private banking customer can generate $100k+ revenue for the bank in a year, hence support is possible. Your average savings account generates like $10, that's worth 10 minutes of support annually.
    • swatcoder 3y ago
      Funny thing: local banks and credit unions pulled it off for a century or so, albeit sometimes with account fees. Sure, a free savings account can’t generate enough behind-the-scenes revenue to cover its share of overhead in a multinational bank with a 300-layer org chart and fourteen divisions, but a $10/mo account would (and did) go a long way towards humanizing a community bank with a dozen branches. Things don’t have to be like they are.
      • astrange 3y ago
        Service workers are incredibly more expensive than they were "a century ago" because of productivity increases and Baumol. You can't have a housemaid or a gas station attendant either. Also, local banks and credit unions are usually less competent than big banks. They can't afford competence. That's why most countries don't have local retail banks; the US is an outlier here.
• empathy_m 3y ago
  The corollary to this "if your account was abruptly closed with no explanation, it was a pile of SARs, so sorry" story is that when you're at an airport and weird stuff happens, the best boogeyman reason is air marshals. Did your seat assignment abruptly change and the gate agent is evasive or outright refuses to say why? Nod knowingly. Say "oh, right, must be a FAM." Ask for what you want: "I'll just take the next flight for free", "I understand if there are upgrades available on my return", or just nod and wink. The GA won't be able to say whether or not you guessed right and it's much funnier that way.
• shermozle 3y ago
  "Your Princess Is In Another Castle" made me snort. Nice work @Patio11
• EZ-E 3y ago
  > Then you have Tier Three, which at some firms sits in Customer Service and at some firms sits in Operations. There exist some ambiguity and spectral ranges here, but at some point the job changes in character from “low-wage peon reciting a script” to “professional who has a career doing this and is no longer managed on a tickets-closed-per-hour basis.” As a developper I do this on the side of regular dev work for my job at company with a lot of technical debt and antiquated systems. This is my guilty pleasure to act on very weird edge cases or escalations. Sometimes it's aggravating looking at what the customers go through as CS agents are obviously confused when the case they are handling goes out of the norm.
• bernardlunn 3y ago
  I used to work in a company selling core banking systems and yes they are a mess. I never imagined they would still be running in 2023. I could write a book full of horror stories. What amazes me is how so many banks do ok despite a massive failure to delight customers or innovate. Banks are literally “a license to print money”.
  • eyphka 3y ago
    Out of curiosity, was it metavante?
    • bernardlunn 3y ago
      No, Misys
      • eyphka 3y ago
        I’m having trouble remembering, but that was the predecessor to finastra phenoix right? I’d love to grab you virtual coffee and talk - chris@prelim.com
• cjmcqueen 3y ago
  "If you think that talking to a compassionate human is a core part of the banking experience, there are many banks in Iowa who will sell that service to you. If you simply want to access your money on your phone and have that almost always work, Cash App will happily operate as a front end over Lincoln Savings Bank to make that happen." As someone living in Iowa, I can confirm this is true and also less effective. I bank at Chase because a straight forward "no" or clear process is so much more efficient and effective than a "nice person trying to help". People in Iowa hate that truth, but waste so much time listening and passing people around to solve a problem that should be resolved with a clear answer.
  • anitil 3y ago
    I didn't understand that section of the article (I'm not from the US). Is Iowa renowned for customer service or friendliness? Is it some sort of banking hub?
• HeavyStorm 3y ago
  It's strange how Patrick, one of my favorite writers in the tech business, is stating a lot of his anedoctal experiences as fact. I've been in banking longer than he was, I think (15 years in my case) and a lot of what he says isn't true for many institutions out there. The overall view is somewhat accurate - there are such issues in a Bank, usually stemming from how big they are, but details are not necessary what is being described. Take the article with a grain of salt.
• zigman1 3y ago
  The current CTO at the place where I work has multiple years of experience in tech within the banking sector. Ho once said that, if you'd be aware of the systems the banks are using, you'd keep your money in a sock.
• robertlagrant 3y ago
  > if one cares a lot about the experience of people at the socioeconomic margins, one should perhaps spend less time fulminating about greedy capitalists and spend more time reading Requests For Public Comment by relatively obscure parts of the administrative state This is the antidote to many a HN commenter.
• deleted 3y ago
  [deleted]
• hammock 3y ago
  Is this article about banks, or about customer service delivery?