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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 suf

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.
  - swatcoder 3y ago
    Sorry, but that’s nonsense. I didn’t say “a century ago”, I said “for a century” Local banks and credit unions still do it, competently enough to earn very high satisfaction ratings from their customers/members. (And there are indeed still plenty of “housemaids and gas station attendants” so that was a weird aside anyway)
    - astrange 3y ago
      > Local banks and credit unions still do it, competently enough to earn very high satisfaction ratings from their customers/members. Wrong question. If they were popular with their customers they wouldn't be small banks, they'd be big banks. (The exception is that because of regulations, there's businesses that only small banks can get into, so it may help to appear to be small.) > (And there are indeed still plenty of “housemaids and gas station attendants” so that was a weird aside anyway) Do you live in India?
      - swatcoder 3y ago
        > If they were popular with their customers they wouldn't be small banks, they'd be big banks. What? That’s not how businesses work. Businesses don’t grow indefinitely, they size themselves to fit an underserved niche. Pretty much every census region still has one or several local banks and one or several credit unions, all serving the needs of people and businesses underserved by larger banks. And they do very well. Too much growth would precisely undermine their edge in serving these customers, for exactly the reasons I outlined in my original comment. > Do you live in India? No.
        astrange 3y ago
        > What? That’s not how businesses work. Businesses don’t grow indefinitely, they size themselves to fit an underserved niche. You're posting on a forum for a startup accelerator. That's pretty good evidence against that. Anyway, there is structural pressure against a credit union growing, but not a bank; it just wants to profit like everything else. Like I said, the US is unique in having small banks. Most countries don't. > No. Then where are you seeing live in servants?
    - jldugger 3y ago
      > gas station attendants Only when legally required by law, and you end up paying for it in the price and availability -- ever tried getting gas in Oregon after 9pm?

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.
- swatcoder 3y ago
  Sorry, but that’s nonsense. I didn’t say “a century ago”, I said “for a century” Local banks and credit unions still do it, competently enough to earn very high satisfaction ratings from their customers/members. (And there are indeed still plenty of “housemaids and gas station attendants” so that was a weird aside anyway)
  - astrange 3y ago
    > Local banks and credit unions still do it, competently enough to earn very high satisfaction ratings from their customers/members. Wrong question. If they were popular with their customers they wouldn't be small banks, they'd be big banks. (The exception is that because of regulations, there's businesses that only small banks can get into, so it may help to appear to be small.) > (And there are indeed still plenty of “housemaids and gas station attendants” so that was a weird aside anyway) Do you live in India?
    - swatcoder 3y ago
      > If they were popular with their customers they wouldn't be small banks, they'd be big banks. What? That’s not how businesses work. Businesses don’t grow indefinitely, they size themselves to fit an underserved niche. Pretty much every census region still has one or several local banks and one or several credit unions, all serving the needs of people and businesses underserved by larger banks. And they do very well. Too much growth would precisely undermine their edge in serving these customers, for exactly the reasons I outlined in my original comment. > Do you live in India? No.
      - astrange 3y ago
        > What? That’s not how businesses work. Businesses don’t grow indefinitely, they size themselves to fit an underserved niche. You're posting on a forum for a startup accelerator. That's pretty good evidence against that. Anyway, there is structural pressure against a credit union growing, but not a bank; it just wants to profit like everything else. Like I said, the US is unique in having small banks. Most countries don't. > No. Then where are you seeing live in servants?
  - jldugger 3y ago
    > gas station attendants Only when legally required by law, and you end up paying for it in the price and availability -- ever tried getting gas in Oregon after 9pm?