
Why autonomous finance apps are so important - onshm
https://www.sethi.to/2019/12/05/automated-finance-apps-are-eating-deposits/
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keenmaster
Why not take it a step further and let the user opt-in to a “single-buyer”
network of savers? This is how it would work: hundreds of customers would
indicate that they will exclusively use a savings account for one year, but
they don’t care which one as long as it’s SIPC-protected and offers certain
features. Dozens of banking institutions will then “bid” for that bundle of
customers with a yield rate. The company with the highest yield “wins” all the
cash savings of all the customers in that bundle, and in return, those
customers get a higher yield than they ever would have otherwise.

Cash savings, the bread and butter of banks would be utterly and completely
commoditized. If banks want less volatility for maturity transformation
purposes, they would offer a higher yield rate for 5 and 10 year commitments.

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perl4ever
Is this meaningfully different from those customers using bankrate.com to find
the highest yielding one year CD?

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keenmaster
Yes, it’s quite different. Bankrate doesn’t aggregate customers and put them
in a single-buyer bargaining pool. Customer aggregation would basically tell
banks “if you show us your best possible rate, you will potentially gain
hundreds customers instantaneously. Our customers have already pre-committed
to whichever bank offers the highest rate.” That should result in rates going
as high as a bank could possibly offer. Would you use such a service?

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perl4ever
I don't know, it seems to me like a search engine _does_ aggregate customers.
Aggregate means to put together, and having an easy way to search for the
highest rate focuses the people who want that on whoever is at the top. Since
there is predictably a pool of people like that, having them come together in
some more explicit way wouldn't seem to add any value.

The highest rates _are_ a lot higher than normal, (like 2%) and from banks
that you wouldn't normally think of, so I don't understand where anything
additional comes from. It seems like a projected free lunch from unspecified
sources.

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onshm
Search engines aggregate the intent, the app can actually move the funds. Big
difference.

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perl4ever
If bundling the assets of a hundred or a thousand people made a difference,
then entities with millions would be able to get the same deal _already_. But
1 year treasuries only pay like 1.5%, right? Who is getting >2% risk free?

I don't see where the _there_ is.

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sytelus
This is the one area so ready for disruption by a startup. Mint guys came,
quickly cashed out and since then the space has been stagnant.

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cellular
It might back fire: Currently, banks need to offer enough incentive to
motivate a human to spend time to switch. This will benefit the lone deal
seeker.

OTOH, a never-ending bidding to get a customer's money might give a better
result, on average, for everyone involved.

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onshm
The key here is that the app automates the movement of the funds.

The app is the UX that: \- Solves a pointed customer problem (ex: getting best
yield, moving money at right time of month, etc...) \- Removes the friction of
moving accounts

which turns an insured valid account into a commodity that is evaluated purely
on the yield offered at that time.

