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Banks need to take on Amazon and Google or die (ft.com)
11 points by zt on Dec 8, 2013 | hide | past | web | favorite | 30 comments

I think banks are in deep trouble whether they know it or not.

Google won't be able to compete -- their attitude towards customer service is to drop trou and shit on their customer. It's annoying enough when it's your email, but if I where to move $10-$100k of cash to them I would expect to pick up the phone and get a human being empowered to make decisions on the phone. I've been on the wrong side of their customer service enough that I actively try to prevent relatives and friends from depending on anything google makes.

Amazon, however, loves coming into medium to high capital requirement low margin businesses and destroying the competition. I'm actually a little surprised they haven't been more aggressive here. The small credit unions that can offer local service and actually answer the phone may survive, but what differentiates citi/bofa/wellsfargo/bancorp etc? Not much that I can see -- unless you're a high net worth individual, there's little reason for most people who don't eg have international banking issues to bother with them.

I've been a customer of a local credit union for nearly 5 years. In that time, I've entered a branch exactly once: when I opened my account. I've opened new accounts, had my credit card stolen, gotten fraudulent purchases refunded, purchased a car via a loan, refinanced another loan, and gotten a quote for a mortgage mostly online with a handful of phone calls.

I can assure you, Google is no better when you're paying them $35 - 50K per year. I would drop Google Maps instantly if Amazon competed with them and had equivalent imagery. Even if it cost more money.

Amazon is a beast. I'd be nervous if I was in any market that Amazon has its eye on.

Not to go too off topic, but is mapbox not a good alternative here? The design of their tiles seems preferable to gmaps. I've used them for smaller projects, but have also heard great things about the people running it.

> but what differentiates citi/bofa/wellsfargo/bancorp etc? Not much that I can see -- unless you're a high net worth individual, there's little reason for most people who don't eg have international banking issues to bother with them.

I actually switched from a big bank (PNC, great service but slow on the tech side to evolve) to Simple [http://www.simple.com]. I get a debit card, beautiful mobile and web apps, and I can do everything I could with a regular bank except going to a branch. And I never go to a branch (mobile deposit, ATM network, debit card, done).

Their support is excellent as well, something I'd never get from Amazon or Google.

One weird thing you can't do with Simple is deposit cash directly through any ATM. They do not allow that. The only way is to get a cashier's check or similar instrument OR deposit cash in an account that does accept cash then transfer the money (and wait several days for it to clear)

This is correct, and while I haven't and should never have the need to do that, I understand some people may require that functionality.

EDIT: It appears you can get a money order at Walmart for 70 cents, and $1.20-$1.60 at USPS. Cashier's check at a local bank would be ~$5-10, depending if you're a customer or not.

Ally's another nice one. Not the prettiest website, and I haven't used the app, but they'll refund me ATM fees charged by the ATM owner as well as not charging any of their own.

What's the benefit over Schwab? Schwab pays back all ATM fees.

Amazing customer service (I've use Schwab's; it's one step above Comcast) and web/mobile interfaces that don't make your eyes bleed (again, I've used Schwab's. Not impressed).

I rarely, if ever, use an ATM, so you and I might haver different use cases. I'd rather have a pleasant UX vs perks like ATM fee reimbursements.

There is differentiation between banks. This is from forbes: "Also Wells Fargo’s average cost of deposits at 0.35% was the lowest in the industry and half of the peer average of 0.70% in 2010 making its cost of funding the lowest in the industry." I'm not 100% sure why they get that- whether it has to do with capital levels or Moody's ratings or what, but it has been cited by Buffett as one of their sustainable competitive advantages.

I think the parent meant differentiation in customer-side features or attitude. The cost of deposits is an internal cost and not something the customer sees/feels directly.

These content paywalls are killing me. I can't even read the story. Even one of my local newspapers decided to put up a paywall. They're losing a lot of readers because of it.

Gannett has been trying an interesting concept on some of their web publications (Military Times, Army Times, Etc.). They have certain content that is marked "premium" that requires a subscription. You have three options to view the article: Subscribe on a monthly basis, subscribe for the day, or watch a 15 second advertisement. Watching the 15 second advertisement will give you 24 hours of access to any premium article. I'm sure this is done on other publications as well, but I thought it was pretty smart.

I'm the OP. FT seems better at the paywall thing than NYT, for example. I couldn't quite figure out a way to link to the article that didn't bring up the paywall. (Admittedly I didn't try that hard).

Here's a Google link: https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&c...

If Google is the referrer, FT drops the paywall.

That link didn't work for me, but google cache did. https://webcache.googleusercontent.com/search?q=cache:http:/...

search for the text of the link on google, that will get you past the paywall ..


Do something like the following: right click on the link, click "search with Google" in the context menu and navigate to the first link on the search results page.

It's not that hard ..

So pay the subscription fee.

I have a subscription to a couple of news sources. I'm not super willing to just subscribe to things that show up on HN. I know FT is highly regarded, but the only articles I've ever successfully read on it are those bizarre fetishistic lunch interview things.

There is some sort of balance you need to strike between porous and impenetrable with a paywall. FT is too closed to be compelling to me, and probably a lot of other people.

More broadly, if you're putting a link on HN, it's your responsibility to make sure people can read it. If they can't, don't post it, please.

Micro-payments. Quick, easy, one-time. Then you don't need to worry about a thousand subscriptions to rarely-read sources.

Sounds easy, but I don't believe anyone has something that works?

Micro-payments have two fundamental problems:

The first problem is inertia. You need a critical mass of users before anyone will bother to accept a particular payment processor, but users don't sign up if no one accepts the payment service. This is the reason why people still use Paypal.

The second problem is fraud. If someone commits fraud over a matter of $0.20, what amount of resources can you really afford to spend investigating it? A micropayment processor that thoroughly investigates fraud will have to charge the sellers a large chunk of the payments they process, but one that doesn't will be bankrupted by fraudsters.

Crypto currencies have some potential to break this by changing who eats the loss in the case of fraud. If it isn't the payment processor (or there is no payment processor) then micro-payments become viable. You still have problems with e.g. malicious software stealing bitcoins, but they're different problems that don't break micro-payments.

Except it's a sucky paywall for new readers/people who don't frequent the Financial Times. I don't recall ever reading anything on the Financial Times before; in fact, it's not even a familiar news source for me. And their paywall just prevented me from even reading one article. My reaction was to hit the back button and go check out the comments on HN for a summary/discussion. I'm not going to pay for something before becoming familiar with what I'm going to be buying. Their paywall just isn't a friendly experience for new readers.

Or they could accept micropayments. I'd pay 50 cents to read the article.

This article is horseshit. Just because some random sees google/amazon disrupting other industries doesn't mean they'll disrupt banking too. Not saying it couldn't happen ever, but it has the same basis as saying google is going to disrupt the railroad industry or the carpet and flooring industry. There aren't any particularly strong signs that point to amazon wanting to service your mortgage anytime soon.

One interesting sign(regarding commercial banking) is that amazon has started offering loans to some businesses who sell using it's platform , and is able to offer better terms using sales data they've got.

I've heard of that. PayPal also has Bill Me Later, and there are niche players like Kabbage. They're all still a ways off from full scale banking operations like JP Morgan Chase. The big banks are nearly as large as Google in Market cap individually and have trillions of dollars worth of assets on their balance sheets. My point being they are players with the resources to go up against a google in Washington, D.C. If anyone is a threat to banking, I would say it is PayPal. They have over 100M people signed up in the US alone to transfer money, but that only competes with a small aspect of bank business (service fees), the larger parts being investment banking and loan operations/net interest income

You can view the artical by googleing for it by the title (same as on HN) and then clicking the link from there (or change your referral site to google.com I suppose)


Interesting the mention of payment processors like PayPal or Dwolla but little mention of payments. If banks became the primary interface for making payments, that would change everything for businesses and allow the kind of data usage they're talking about here.

That's what I'm working on, nice to see someone pointing out some of the things we've been talking about internally!

Any start-ups trying to help mortgage brokers / originators? Many like Ellie Mae, LPS and others feel like old school application vendors. Of the banks, who "gets it?"

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