One point tho – banks make money by lending more than they take as deposits, and trusting that everyone won’t want their money back at once. If you weren’t money lending (and earning x% interest), you wouldn’t have anything to pay your depositors any interest with (at x-2% etc). If you paid interest out of new deposits, that would be a ponzi/pyramid scheme. Just taking people’s money wouldn’t actually earn you anything unfortunately.

If it was an easy business to undercut, someone would be doing it!

Meanwhile, their customer service is going down the tubes.

I’ve found that the banks in 2nd and 3rd world countries usually are more technologically savvy. This is sad.

I was stunned, however, to hear about the revenue model. At least me personally, I would not like my bank to tinker with my transaction records (just as little as I want Google to analyse and tinker with my personal communication).

Wouldn’t that result in me giving money AND data to the bank in return for… hm. A fast webinterface and a beautiful credit card? This appears to be imbalanced.
While most banks don’t offer the latter, I hope they at least are not making additional money with my data.

(Of course, the idea of doing the recommending yourself and making money by some sort of clickthrough to new services makes me feel more comfortable. But it still requires a considerable amount of trust in your privacy fineprint…)

I’d love my bank to blog, I just think it would show they cared, anyway I’m reading Bank Simple’s blog for now https://www.banksimple.net/blog/ great stuff!

Matt, an amazing post and I only see these things as having to be implemented, slowly but surely perhaps, whether it’s you. a company, me or the girl down the street, lets go for it (:

Sounds like they’re taking a different approach though, and avoiding starting a bank entirely, just partnering with several existing banks for a variety of services and hiding the messy details behind one slick web UI. Interesting idea, though I don’t have the expertise to know whether it’s really feasible or not… Seems to me that the partner banks would want to maintain their current profit margins and then we’re back to square one.

Anyone else with some banking experience care to chime in?

BankPress I love it!

Opensource banking!

Banks don’t want to do this for two reasons (and besides these two reasons they say it is technically not feasible – mostly because they don’t WANT to):

(1) They claim people will take the balance literally and not realize that checks or VISA/MC charges may still be pending. This of course is just dumb. Not only do their own user agreements defend against such witless thinking by some dumb user, but they could also (shocking!) print a disclaimer below every balance that says just that: “Balance does not reflect pending checks and Visa/MC charges yet to have cleared”, or better, “Balance may be smaller than it appears”.

(2) And of course, this is really reason #1, the banks don’t want to give any kind of warning to users that they may be perilously close to overdrawing their account.

I, like most people, am responsible and check, but we all have that one moment in our year where all heckaroo breaks loose (death in the family, etc) and we don’t really check because we think we know. But we don’t know that our wife took something out. Or we guess wrong. Or, well, life! Life is for living – not checking balances (iPhones or otherwise).

First bank that does this across all vendors and ATM’s wins by loyalty and future business. Hint: It ain’t much in $$, but I’ll throw in as much free P.R. to my friends and family as I can. At the least, it shows they care about making OUR lives easier – not theirs.

Here in South Africa we now bank with http://www.capitec.co.za – mostly relying on technology, low key branches (ATM indoors) and a web interface that got me wondering where the buttons went – as they only use links – sometimes only 2 or 3 on a page. No massive sponsoring (like the 4 other abysmal dinosaurs that ‘monopolise’ the country.
They are actually so ‘David’, that the State Telco monopoly doesn’t accept payments from them (and can get away with it!)
But yes, often dreamt about the same: how to run my own ‘honest bank’ – but that might be a contradictio in terminis…

Wouldn’t be much need for huge transaction fee’s etc. as all the money would be going into the bank anyways.

Paul Graham wrote a good article outlining all this in more detail recently