Let's reinvent banking... are you with me?
I went on a tweet storm earlier today while visiting a bank branch to open a savings account. I figured I'd take some time to flesh out my thoughts here.
The banking industry is obviously broken. Sure, it's not the only one, but I happened to visit a bank today, so it's top of mind.
We went to add a savings account alongside our business checking account, plus a savings account for personal, at Chase, as we've just switched from Wells Fargo to Chase. It took all of an hour to get that done. It's absolutely ridiculous.
Banks make their money by gambling with our money. When all goes well, they profit big time. When things go horribly wrong, the taxpayers bail them out, and they pay themselves big bonuses. What's not to like about that?
Legally, as soon as you give the bank your money, it's their money. Period. Yes, you can withdraw it, but there's really no guarantee that they're going to have the money, or be willing to give it to you. A run on the bank means the bank goes kaput and nobody gets their money That's why we have FDIC, as illustrated by these little plastic signs saying "Backed by the full faith and credit of the United States government". Yeah, a government that has about $20 trillion with a "t" in debt, and can't figure out how to make a surplus in good years. Like that's very comforting.
Banks obviously don't care about customers, which is why they give shit service, and the dumbest people work as personal bankers. All the smart people will naturally be deployed in the profit center, which is to say, gambling with our money.
I'm also fascinated by how bad their security is. Both Chase and TD Bank insists that you pick a username with at least one digit in it. Like that's going to effectively increase security. How about teaching people actually good password strategies, like multi-word phrases, or using a password manager. Oh, right, they don't let you copy-paste.
Or how about simple 2-factor authentication using an authenticator app. 2-factor authentication using SMS is only as good as the security of your cellphone carrier, which is to say shit. It took me all of 1 hour to implement for Simplero. It's really not that hard. There are easy-to-use libraries for this stuff.
I want to create a bank that doesn't suck. How hard can it be?
Let's talk about what that would look like. I'm going to write some thoughts here. I might come back and revisit and add more later.
For starters, let's make it easy to open an account. There may be some legalities to adhere to, if so, we'll use Modern Computer Technology to make it as easy and painless as possible.
If you have one account and want to open another, we'll use all the information we already have on you, and only ask for anything we might need in addition to that. Groundbreaking! Innovative!
If you want to close out all of your accounts, we'll let you simply freeze the accounts and all your cards instantly, so no new transactions can go on them. Then when you're ready, you transfer all the money out, and that's it. When we moved from WF to Chase, we asked them to cancel all cards, but then ACH transactions could still go through, and they forgot to cancel some old cards that were somehow still working, even though they'd been replaced, and it was a game of whack-a-mole to wait until all pending transactions had cleared before we could close them. Yes, I understand it might be good for the bottom line in the short run to see if you can wring another $35 fee out of us here or there, but it just cannot be good business in the long run ... or good for morale.
On that note: All communications should be in plain fucking English, written or spoken like you would a friend or at least an intelligent fellow human being. And every demand you put on your customers, such as filing out paperwork, or calling certain phone lines during certain business hours, you should be more than willing to honor, if the situation was reversed. Let's have some perspective here. Treat others like you'd want to be treated. It's just common sense.
Let's have an actually well-designed, logical app. I love that Chase's app has this feature that lets you get a quick balance on your accounts by swiping left on the login screen. Only it doesn't work with Touch ID! If you have Touch ID enabled, you have to swipe REALLY FAST after the app launches, or you get the Touch ID dialog up, then you have to hit cancel, and then next time you want to log on, it's more work. Think, people, think. I know you can't always get everything right, but are you guys even using your own software? You're a giant company with billions and billions of dollars to play with, it really can't be that hard to get things like that right.
Fraud prevention: Use a smartphone app. Granted, Chase is a lot better about this than Wells Fargo. Chase will send me an email or an SMS, and I can say yes or no to whether they were my transactions. But we can do so much better. Send push notifications to the app on my phone. Let me whitelist or blacklist certain vendors. Let me manage regions. I know some companies do this.
Each time a transaction is declined, a push notification is sent to my phone with the EXACT reason for declining the transactions, and EXACT steps I can take to remedy the situation. There should be NO phony limits on the card. If I want to spend $100,000 on my debit card, I should be able to do that. Sure, send me a push notification and maybe do some challenge to make sure I absolutely want to do it, and that I'm me, but it's my money, I should be able to do with it as I wish.
When trying to get money in an ATM, the app will be able to tell me EXACTLY how much I can get, in whatever currency I need. No guessing, trying smaller and smaller numbers until the machine magically agrees, each time having to start over and enter the card and pin once again. How idiotic is a system like that in 2017? Very very idiotic, that's how. Oh, and there shouldn't be any limits, other than the ones I set myself. Maybe those limits will take a visit to an actual branch with my photo ID in hand to change, but they'll be my limits. If I want very high limits, I might have to agree to take some of the risk, but it'll all be very clearly explained, and it'll be clear what I can do to mitigate that risk.
Wires and other transfers should be easy, obviously. My Danish bank (Danske Bank) makes that fairly easy, although their online bank is still pretty clunky overall. Isn't there a way to make wires be trackable, so I can see exactly how far along it is?
I'd want to make a deal to integrate directly with TransferWise. They seem to have figured out how to make international wires be both fast, transparent, and cost-effective. Might as well piggy-back on them.
And what about Dwolla? Haven't heard much about them in recent years, but as far as I recall, they were making domestic transfers so much easier, too.
And what about account types. How about letting me choose how much risk I want the bank to take with my money, and my interest or fees are adjusted accordingly. That seems fair.
Almost everything can be done online, using the best computer security we know that actually works, but whenever you do have to meet with a banker, it should be easy to make an appointment, and the banker will goddam honor the appointment time and never be late. You're the customer, after all. The bank exists for you, not the other way around.
How do we do this? Can we make money that way?
As for how, I think the best path might be to get together funding to buy a small bank that's already plugged into the existing banking infrastructure. Sort-of like Jeff Bezos bought the Washington Post, and have started making it be more like a 2017 newspaper.
Let's pool together the cash, find someone to be the CEO, and make this happen. I wish I had a spare $250M lying around like Bezos, but I don't, so we'd need someone else to put up the cash. Also, I'd make a shit CEO, but I'd love to be on the board, part of the founders, and I'm always happy to roll up my sleeves and get to work on everything related to vision, culture, customer experience, marketing, and technology.
Get in touch if you have resources to throw in the pot.
AS for making money, I think a simple old-fashioned business model of charging for a product can work just great. Perhaps not robber-baron / JP Morgan Chase / Wells Fargo great, but fuck that. Much more important is being able to look yourself in the mirror, having a soul, sleeping at night. Knowing that you're creating something worth creating. Something that needs to exist in the world. Something that you yourself would LOVE to be a customer of. Something that you'd whole-heartedly recommend to your friends and family (assuming you like them and care about them!). That's what has led Apple to being the biggest corporation in the world, after all.
Who's with me?
I know we can do this.
We need to do this.
It may not be the sexiest industry out there, but it's one that touches the lives of (almost) everyone, and it's important. Put your money where your mouth is, as they say. Vote with your money. Don't vote for corrupt, incompetent, shady, kleptocratic banks. Let's vote to make our own bank, the way we'd want a bank to be.