Hacker News Reader

Comment by madamelic | Hacker News Reader

Personally, I think US banking needs something an Uber or AirBnB style shake-up to get their act in order.

It's awful how behind the times the US is when it comes to banking. 2 - 3 days to get money from one account to another is beyond embarrassing in the modern day. It took the US something like 15 years to get chip-and-pin.

Banks are still these monolithic entities that don't care to innovate or listen to customers because "what are you going to do, go to one of the other 4 monoliths that are all in cahoots with each other"

View on HN

Other countries managed to regulate their banks to innovate just fine without blockchain technology, though. It doesn’t always need a startup to disrupt something by flipping the finger to lawmakers. Sometimes humble regulation is enough. Take SEPA as an example: I can transfer money free of charge to any European bank account, in a few seconds.

To be fair, European Central Bank also wants to introduce its own official Euro-backed "stablecoin" (https://en.wikipedia.org/wiki/Digital_euro), mostly because they are scared of the posibility that Dollar-backed stablecoins could make Euros less relevant in the future (https://www.politico.eu/article/lagardes-euro-moment-busted-...).

Small money is fine. Any big transaction will get flagged and potentially delayed.

I don't know about you, but I'd rather use a system that allows me to do what I want with my funds without anyone else controlling it.

> I don't know about you, but I'd rather use a system that allows me to do what I want with my funds without anyone else controlling it.

How do we know that this unusual transaction is you doing what you want and not someone else controlling and defrauding you?

A small well-understood amount of friction that significantly reduces everyone's risk is not an attempt to control your funds.

Old systems with arbitrary delays based on twentieth century processes should be replaced, but not everything needs immediate infinite speed to be valuable.

> How do we know that this unusual transaction is you doing what you want and not someone else controlling and defrauding you?

That's what they'd like you to believe, but fact of the matter is that you're still not protected. For example, at my last company, the finance department was phished into changing a bank account number and transferred $50k to another account. Bank just shrugged.

Did they get the 50K back?

Not to my knowledge.

Do you want to live in a world where everyone else can do whatever they want with their funds without anyone else controlling it, though? Seems pretty optimistic for anyone to think they'd do well in that world.

I want to live in a world where responsible, law abiding citizens can use their money however they choose.

In the US, we already have credit scores, a system meant to reflect some sort of trustworthiness. Right now, it mostly determines your interest rates and access to capital. But why not extend that trust to granting people more freedom in how they use their funds?

If I want a large loan from my bank, I’m forced to provide endless paperwork and deal with people, despite having a great credit score. In DeFi, I just post collateral and instantly borrow against it. No gatekeepers, no conversations.

These limitations become even more obvious if you’re a nomad or frequent traveler. Suddenly you’re not just facing your local government, you’re up against borders and layers of extra regulation.

This sentence:

> Why not extend that trust to granting people more freedom in how they use their funds?

followed immediately by:

> If I want a large loan from my bank

with absolutely zero irony is very funny.

I don't understand the humor. Please explain.

“Post the collateral”

I’m fairly sure if you want a bank loan and are prepared to lodge cash in the bank to secure it they won’t need too much paperwork.

Usually people getting loans don’t have the funds in cash already. Defi is nothing like that its currency speculation at best.

If you want to buy a house and you need a loan, it is a deep investigation into your bank finances.

If I have the money for a down payment, and I want to buy a house, I don't need someone poking around at my finances, even if I have nothing to hide.

> Usually people getting loans don’t have the funds in cash already.

Source? People get loans for all sorts of reasons. Loans are backed by some sort of collateral and if that isn't assets, it definitely involves having someone look at your records.

> Defi is nothing like that its currency speculation at best.

Wrong. DeFi itself has nothing to do with speculation. There is $57B locked up in AAVE on ethereum alone. It isn't a toy.

> Sometimes humble regulation is enough. Take SEPA as an example: I can transfer money free of charge to any European bank account, in a few seconds.

SEPA was a success but it was only a first step to modernise the banking system. The following regulations/directives like PSD2 failed in my opinion.

The ECB also had one of those CBDC built much earlier than people have been told. They already had something quite advanced around 2020, with a optimist launch date in 2022 I believe.

It obviously failed miserably and I read a few weeks ago that they are "exploring Ethereum and Solana for digital euro launch".

I would be curious what happened exactly but my guess is the banks just said "NO WAY".

> The ECB also had one of those CBDC built much earlier than people have been told. They already had something quite advanced around 2020, with a optimist launch date in 2022 I believe.

> It obviously failed miserably

They had a CBDC but hid it from everyone... but then somehow it failed miserably. If it wasn't released, how? They even had it before they decided to have it (2021). This seems just like a load of bullshit.

When they saw Bitcoin and Ethereum they obviously understood a great disruption was coming and acted on it. SWIFT too.

A Central Bank do not share everything they consider/plan with the public. It is not really hidden or secret, but they also do not make a press release about it.

Also if they are fundamentally gonna transform our banking system they better start early because a lot of things can go wrong. I estimate the time to build such a system is about 10 years if everything goes well.

I do not know exactly what went wrong, my guess is the banks pushed back as much as they could because most of them would have been made irrelevant under that model. Now they are talking about Ethereum and Solana because they understood they have to fight against the Dollar in this arena.

SEPA allows this in theory; in practice, for amounts >10k€, most banks will require you to provide proofs for the transaction due to the maximalist AML laws in the EU.

My bank requires me to download a PDF on their website, print it, fill it out by hand, scan it, and then send it by mail. After a few days, someone will decide to allow it (or not). If it is refused, I don't get any reason why and have to call the client service for clues.

working in the field: Would you please share name or BIC of this institute?

Unfortunately, given my post history it would be easy to identify me, all I can say is that it was a French bank.

US banks literally collapsed the world financial system in 2008. You don't deserve humble regulation after that. They got, and they deserved, the Dodd-Frank Act, which has now been significantly rolled back.

Neither Uber nor AirBnB got anyone’s “act in order”.

Uber just captured wealth via operating at a loss until competition was absorbed or destroyed.

AirBnB just helped further drive up the prices of single family homes and didn’t really have much effect on the hospitality industry at all - it caused a minor observable loss in profit which ultimately resulted in nothing.

Outside of maybe NYC, taxi service in the U.S. was totally unreliable before Uber/Lyft. It's not even a matter of price. It's so much easier to get a ride now in most of the country.

I don't think AirB&B really improved hotels, but it did organize and centralize the "vacation rental" market, making it easier to, for example, rent a beach cottage for the weekend.

Existing Taxi services did not improve - they were replaced by a lower quality, more expensive alternative with a lesser economic infusion to local economies.

Hotels and the hospitality industry did not improve at all.

None of those points refute me or support the argument I was contesting - that a “uber or airbnb of banking” would cause banks to “get their act in order”.

they were replaced by a lower quality, more expensive alternative

That's certainly... an opinion.

Banks have banded together to create Zelle for mostly instantaneous payments for individuals. As far as transactions between individuals, moving money quickly is a solved money. As for moving money from individuals to businesses, taking a long time gives customers more "float" and more time to earn interest, and it is a feature not a bug.

There are other issues to consider in the payments world. For example, I may not want my payment data to be used for marketing purposes[1] or have my payment processor block my steam purchases[2]. I'm skeptical that Stripe will deliver on those gaps though.

[1] https://www.gao.gov/blog/why-do-banks-share-your-financial-i...

[2] https://www.thegamer.com/paypal-not-accepting-most-currencie...

Banks banded together to create Zelle to offload most fraud risk onto individuals.

They used "mostly instantaneous payments" as the carrot to get those individuals to use the service.

Banks have near zero obligations around Zelle transaction fraud - if they do anything, it's often mostly as a goodwill gesture for a customer.

> 2 - 3 days to get money from one account to another is beyond embarrassing in the modern day

I've had next day ACH between all my various accounts for years now. Wires have also been a thing basically forever though most people need to pay to send and receive them. Same day ACH and FedNow are both out there too, though I've yet to see widespread implementation.

Try international transfers and get back to me

The activities you listed are not the main business of a bank. It's getting deposits and loaning them out with interest. In that regard, they are very successful and it's hard to see how Uber or AirBnB would do better given the disaster of microfinancing.

What other countries are you comparing to? I did a multi year assignment in Germany and holy fucking hell does their banking system suck. It took weeks for my checks to be deposited and reconciliation times were longer. Not defending the US here by my only non-US banking experience was atrocious.

You take a bad example and compare it to another bad example. Germany is well known to be behind the curve like the US. It's the only western European country I still bring a healthy amount cash when I go there. Wouldn't be the first time I had to pay parking with cash in recent times. Every where else this is a non issue. It's rapidly changing though, but I don't like the common in use PIN terminals as they have no way of hiding the PIN entry.

Now I'm not generally a big defender of Germany, but the reason for much more prevalent use of cash is largely privacy in Germany. And I sort of agree that handing all monetary transactions to the mastercard/visa duopoly is a terrible idea.

We are essentially trading the convinience of a tap for increased prices and unelected gatekeepers that can (and will) easily push sectors out of business, because they don't like what they do.

Regarding the parking, I much rather would be able to pay with cash than the $2 parking plus 50 cents cc transaction fee that you have to pay in many places in NZ.

The question is why did you use cheques? I don't know anyone who is not American who has used cheques in the last 20 years or so. I have not been living in Germany in a long time so I can't talk much about the banking system, but I have had transfers with German friends and family which never took more than maybe a day or 2 within Europe.

Reply on news.ycombinator.com