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This is a very US centric article, a lot of the disruptions listed are incumbent 'big bank' products in other jurisdictions. I feel the lack of adaptability is
by ikr678 2y ago
This is a very US centric article, a lot of the disruptions listed are incumbent 'big bank' products in other jurisdictions. I feel the lack of adaptability is likely a result of US market conditions/regulations rather than lack of innovation.
- Joel_Mckay 2y agoThe US crash of 2008 exposed the nature of their banking system leverage ratios, and worker 401k vulnerability to dubious ETFs. The incoming market volatility will likely have winners and losers... but historically it was mostly losers (>6.4 million families and counting.) =3
- throwaway2037 2y ago> worker 401k vulnerability to dubious ETFs Can you explain this part in my detail? Do you mean money market funds that "broke the buck"?
- lxm 2y agoETFs are a relatively recent phenomenon, the criticism I remember from 2008 era is having paycheck + employee stock purchase plan + 401k concentrated in a single stock - employer's.
- Joel_Mckay 2y ago[flagged]
- nradov 2y agoETFs are mostly irrelevant from a 401(k) perspective because no one is trading on a daily basis. Some 401(k) plans do now offer ETFs among the investment options but for the most part they have always focused on regular mutual funds. Average expense ratios have come down a bit since 2008.
- Joel_Mckay 2y agoRegular mutual funds usually have higher risk and tax exposure than the ETFs... Met a lot of bums in suits trying to sell me on several flavors of BS over the years. lol =3
- throwaway2037 2y ago> Regular mutual funds usually have higher risk ... than the ETFs. Can you provide some specific examples? If anything, the transaction friction around mutual funds prevents most regular investors from unnecessary trading that exchange-listed ETFs allow. TL;DR: For most people, more trading means more losses or worse returns.
- Joel_Mckay 2y agoThere are several potential mutual fund problems, but the ones most consumers are exposed to arise from institutional and private "investment advisors". There is no legal protection from banks externalizing toxic assets acquired though risky decisions onto customers, and or ridiculous ballooning management fees siphoning off actual profit. The other issues are mostly from various end-runs around acceptable market rules and practices. In general, most amateur holds permute well below 3 to 4 months on average. Note the old joke: "Bulls make money, bears make money, pigs get slaughtered"... was never funny for those providing cash capital to gamblers. Most people assume they are luckier than average... and most of Las Vegas was also built on losers money. Have a great day, =3
- JumpCrisscross 2y agoYou’re mixing up adviser fees (ETFs have lower fees than mutual funds; neither is directly related to adviser fees), toxic assets, CMOs, balloon mortgages and possibly management fees and carried interest. These are related concepts inasmuch as they’re all financial terms.
- Joel_Mckay 2y ago
- throwaway2037 2y agoDo 401k plans allow people to buy single stocks? I never saw it in my experience. I cannot believe that would be considered "prudent" by financial regulators. However, when you leave a company you can "roll-over" your 401k into an IRA, then you can go wild and buy anything that you want (IBRK allows it).
- bdangubic 2y agoi401k’s which you have to manage yourself if you are a contractor allow you to purchase whatever you want depending on where your account is. I was with Vanguard and they do not allow it - I moved my account to etrade and now my 401k account is basically like my brokerage account, I can buy whatever I want.
- WeylandYutani 2y agoI think it could also be cultural. In my country people are perfectly happy to have a video chat with a bank employee about mortgages but in other country's you still need to go into a branch office for that kind of thing.
- lotsofpulp 2y agoI don’t even need to have a video chat in the US for a mortgage. I have long been able to shop from any number of lenders and close the deal via email. The lender might send out an appraiser.
- netdevphoenix 2y agoJust curious, why do you need a video chat? Can't you just have a phone call? I don't get the need to see someone's face
- AdamN 2y agoI don't get the need for synchronous comms at all. I can book airplane tickets, food delivery, e-commerce generally, and most other things through a web interface. Not sure why I need to talk to somebody to get a mortgage aside from Know Your Customer but even then a short signing ceremony at the end would be best.
- netdevphoenix 2y agoI agree! I am a big fan of synchronous comms
- andrepd 2y agoI think getting a mortgage might be a tad more of an impactful decision than ordering takeout... I'm not a boomer but I still would like to speak to someone in person before I sign an O(million$) loan.
- JumpCrisscross 2y ago
- dathinab 2y agoThe EU also has put pressure on Banks for decades now to either "innovate" or "get innovated" by regulations forcing them to implement innovative ideas not coming from them. With both having happened over time. They also at least somewhat try to compete with Paypal on online payment on EU specific shops (not they they have much success, not just because of network effect but because a combination of their products being sub-par and them realizing that various other even less competitive/ux friendly competitors would make them more money if anyone would just be using it..., so they are in the process to "get innovated" again by forcing impl. of certain ideas related to person-to-person money transfer which have proven to work/being useful in a few countries where they/their banks did adapt them years ago.)
- rvba 2y agoIn some markets paypal has no market share at all - its whole value proposition is something that banks allready have. Paypal is needed in USA due to archaic systems. In Europe many banks allow instant transactions without the risk of blocking your money for 180 days - what paypal seems to do
- 0xffff2 2y agoPaypal (or its little brother Venmo) haven't been needed in the US in nearly a decade. I've never had a European bank account, but Zelle seems to me to be just as good as what the Europeans have.
- dathinab 2y agoPaypal is never needed, not in the EU nor in the US but that misses the point. Pretty much every single online shop/website ever allows paying with PayPal (and Credit Card). And you pretty much have to use it as not allowing paying with PayPal will reduce your sales noticeable, especially for international orders. This is something people funnily frequently rediscover, again and again. Also I don't thing many people do use PayPal to send money between each other tbh. when I mean competing I mean for paying online not for p2p money transfer. Like sending other private people money always had been trivial, through slightly annoying, in the EU, even before smartphones where a thing.
- biohcacker84 2y agoUS Banks are much worse at serving common people than many other old big banks around the world, certainly compared to Germany's banks for example. And yes it is thanks to a byzantine system of history, regulations and very few Americans travelling abroad to experience radically better systems.
- ty6853 2y agoFATCA makes Americans pariahs at foreign banks. I would love to store cash outside US jurisdiction but it is a compliance nightmare usually only worth it for high net worth clients. We know better systems exist, we just often can't use them even when we live overseas. Crypto is the last offshore banking for the middle class. It essentially took over right when FATF eliminated banking privacy and bearer shares -- which IMO is no mere coincidence.
- psunavy03 2y agoCrypto is not banking.
- deleted 2y ago[deleted]
- dghlsakjg 2y agoI'm a middle class American that has lived in various places, Canada currently. I opened my first account in Canada while I was still a US resident. FATCA compliance was a matter of a single extra form, and providing my US SSN. It was about the same for my Caribbean accounts with international banks. If what you are trying to do is open an account that is not visible to the US government, that is much harder.