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I don’t think disrupting banks is even possible. The time, money, and energy required is simply not realistic. There’s so many disrupt-able industries out there

I don’t think disrupting banks is even possible. The time, money, and energy required is simply not realistic. There’s so many disrupt-able industries out there and I’m not even sure banking is the most beneficial one to tackle. It’s a realistic Star Wars story where the Empire always wins because… well it’s the fucking empire. They didn’t get there by losing.

rco8786 2y ago
Right. Banks are boring. The whole industry is based on very simple math. Nothing much to disrupt.
absolutelastone 2y ago
They've "lost" a few times by now. Government has propped them up. The other side of the innovator's dilemma is the fact that the market leaders who don't stick to their current winning formula, instead risking big on a new technology, will sooner or later get it wrong and fail on their own. That's why it's a dilemma.
- danielmarkbruce 2y ago
  JP Morgan Chase and Wells Fargo would have been fine in '08 had they been left alone.
- qaq 2y ago
  Not all of them were on the loosing side of that situation JPM had sold off most of risky mortgages in prior years taking a sizable haircut while other banks were supposedly raking it in. There was a ton of pressure on Jamie Dimon not to do it because JPM numbers looked bad compared to peers in those years.
- adamtaylor_13 2y ago
  I guess that’s my argument as to why it’s not losing. If the government bailed you out, you didn’t lose. They have yet to really lose. Thus no incentive to disrupt such a “steady” industry.
Neonlicht 2y ago
The government is very conservative in handing out banking licenses. There was a famous scandal with an Icelandic bank that was disrupting the market with higher interest rates.
- imtringued 2y ago
  It is basically impossible to license a new bank in Germany and the financial regulations have become stricter over time, with a full banking license being mandatory for more and more things. It's kind of disturbing. If you are a big bank, you already have all the licenses and can do everything so what difference does that regulation make in practice?
  - deleted 2y ago
    [deleted]
  - okanat 2y ago
    N26 did it but creating a new bank attracts money launderers and scammers. The legal department costs are infeasible and half a century-old systems are not easy to adapt to new banking concepts. The government and regulation side of the system needs serious improvements in Germany to bring them to 21st century first. However, there is little economic incentive to do so. With an aging population and deeply conservative culture, there is little political incentive to improve any infrastructure. The current governing parties will probably lose the election next month because they made costly infrastructure fixes.
    - luckylion 2y ago
      But you don't necessarily need a banking license, right? My understanding is that there's a handful of bank-as-a-service banks that have a license and will let you do your thing. I'm sure the aging population doesn't help, but to me the primary inertia comes from how difficult it is to switch. You can take your phone number with you while changing providers, you can't do that with your bank account. They have "services" that are supposed to handle that, but having dealt with their investment arms and moving a broker account from one bank to another, I wouldn't trust them to not mess it up, and suddenly my rent isn't getting paid. So I'd have to do it myself, which will make me deal with lots of stupid systems and processes and cost a hours upon hours. I'd need to save 100% of my banking fees (which are way too high) for a decade or two to make that worthwhile. Make switching banks as easy as switching phone providers and you'll get some competition going.
ninetyninenine 2y ago
all empires eventually fall
- adamtaylor_13 2y ago
  And when they do, the banks and “innovation” are the least of anyone’s concerns. As long as the USA stands, banks won’t change, and if the USA doesn’t stand, I’m not sure banking will even matter anymore.
  - ninetyninenine 2y ago
    When the USA doesn’t stand you can go to China for the banking.
lxm 2y ago
Isn't that usually indicative of a winner-takes-all sector running on pretty thin margins?
JumpCrisscross 2y ago
> don’t think disrupting banks is even possible They’ve been disrupted on multiple sides massively in the last twenty years. Blackrock, Vanguard and Fidelity are disruptors to their deposit and savings-account models. Quicken et al a disruptor to their lending side. Private credit, securitised lending—all taking away their balance sheet operations. Retail banking hasn’t changed inasmuch as people like branches. But the moment you go branchless the banking options radiate, and that’s more people every day.
southernplaces7 2y ago
>here’s so many disrupt-able industries out there If you could name a couple that you think stand out more usefully than banking, i'm curious.

rco8786 2y ago

Right. Banks are boring. The whole industry is based on very simple math. Nothing much to disrupt.

absolutelastone 2y ago

They've "lost" a few times by now. Government has propped them up. The other side of the innovator's dilemma is the fact that the market leaders who don't stick to their current winning formula, instead risking big on a new technology, will sooner or later get it wrong and fail on their own. That's why it's a dilemma.

danielmarkbruce 2y ago
JP Morgan Chase and Wells Fargo would have been fine in '08 had they been left alone.
qaq 2y ago
Not all of them were on the loosing side of that situation JPM had sold off most of risky mortgages in prior years taking a sizable haircut while other banks were supposedly raking it in. There was a ton of pressure on Jamie Dimon not to do it because JPM numbers looked bad compared to peers in those years.
adamtaylor_13 2y ago
I guess that’s my argument as to why it’s not losing. If the government bailed you out, you didn’t lose. They have yet to really lose. Thus no incentive to disrupt such a “steady” industry.

Neonlicht 2y ago

The government is very conservative in handing out banking licenses. There was a famous scandal with an Icelandic bank that was disrupting the market with higher interest rates.

imtringued 2y ago
It is basically impossible to license a new bank in Germany and the financial regulations have become stricter over time, with a full banking license being mandatory for more and more things. It's kind of disturbing. If you are a big bank, you already have all the licenses and can do everything so what difference does that regulation make in practice?
- deleted 2y ago
  [deleted]
- okanat 2y ago
  N26 did it but creating a new bank attracts money launderers and scammers. The legal department costs are infeasible and half a century-old systems are not easy to adapt to new banking concepts. The government and regulation side of the system needs serious improvements in Germany to bring them to 21st century first. However, there is little economic incentive to do so. With an aging population and deeply conservative culture, there is little political incentive to improve any infrastructure. The current governing parties will probably lose the election next month because they made costly infrastructure fixes.
  - luckylion 2y ago
    But you don't necessarily need a banking license, right? My understanding is that there's a handful of bank-as-a-service banks that have a license and will let you do your thing. I'm sure the aging population doesn't help, but to me the primary inertia comes from how difficult it is to switch. You can take your phone number with you while changing providers, you can't do that with your bank account. They have "services" that are supposed to handle that, but having dealt with their investment arms and moving a broker account from one bank to another, I wouldn't trust them to not mess it up, and suddenly my rent isn't getting paid. So I'd have to do it myself, which will make me deal with lots of stupid systems and processes and cost a hours upon hours. I'd need to save 100% of my banking fees (which are way too high) for a decade or two to make that worthwhile. Make switching banks as easy as switching phone providers and you'll get some competition going.

ninetyninenine 2y ago

all empires eventually fall

adamtaylor_13 2y ago
And when they do, the banks and “innovation” are the least of anyone’s concerns. As long as the USA stands, banks won’t change, and if the USA doesn’t stand, I’m not sure banking will even matter anymore.
- ninetyninenine 2y ago
  When the USA doesn’t stand you can go to China for the banking.

lxm 2y ago

Isn't that usually indicative of a winner-takes-all sector running on pretty thin margins?

JumpCrisscross 2y ago

> don’t think disrupting banks is even possible They’ve been disrupted on multiple sides massively in the last twenty years. Blackrock, Vanguard and Fidelity are disruptors to their deposit and savings-account models. Quicken et al a disruptor to their lending side. Private credit, securitised lending—all taking away their balance sheet operations. Retail banking hasn’t changed inasmuch as people like branches. But the moment you go branchless the banking options radiate, and that’s more people every day.

southernplaces7 2y ago

>here’s so many disrupt-able industries out there If you could name a couple that you think stand out more usefully than banking, i'm curious.