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Plus hum, would you deposit large money amounts in a small fintech company ? The advantage of giant banks is that you sort of trust their size will make them ab
by xwolfi 2y ago
Plus hum, would you deposit large money amounts in a small fintech company ? The advantage of giant banks is that you sort of trust their size will make them able to weather a crisis, if only because so many taxpayers are involved that the government has no choice but to help.
A fintech with 1M users screwing up loan rate timings being unable to finance savings accounts and facing a run, would not have much runway and the government would simply slowly try to make people get 50c on the dollar and tell them to go back to a big bank if they want better...
- SpicyLemonZest 2y agoI considered doing it a few years ago with a company called Yotta, and thank God I didn’t, because they pivoted to a gambling app before losing track of user funds when one of their providers went bankrupt.
- nradov 2y agoIt's not just size. Real banks maintain customer deposits in separate named accounts. They don't co-mingle funds like fintech companies. This makes a huge difference in the case of insolvency or any sort of fraud.
- netdevphoenix 2y agoIdeally, financial regulation should be there for you in terms of bank failure without you having to trust old players and further making disruption harder. And no matter how big or small the bank, you should never put all your savings in the same bank.