Dodd Frank bottlenecked the formation of new banks in the USA but with enough abstraction, new challenger banks and VBOs are arising. Virtual Bank operators — something I’m terming them as — — seem to be all the rage.
Whether it’s a debit card, programmable virtual card, a savings account, the ability to buy treasury bonds etc…. Everyone is unbundling a bank and trying to re-bundle it into an API built performant bank.
I’m just an engineer, not a developer, and I don’t see much other than some pixel shaking, database cell modulating, and licensures that seem like obvious next steps in the growth of deposits but what do I know…..
Each of these is simply an unbundling of a feature a bank does but they try to do it well from start to finish, not because it is innovative, but because Dodd Frank and more handcuffed the banking industry in this nation.
With the loss of 70K+ American factories, the capital of pension funds and private wealth that would normally be allocated to STEM industrialists of the USA has been pushed into building paper-related fintech businesses rather than energy intensive ones.
We’ll see how all of this shakes out in a few years.
If you see a new challenger bank, tweet to me or add a comment and I’ll add it to the list.
If you’re starting a new challenger bank and need a growth playbook, I have one I’ve put together with a giant bag of non-obvious growth tactics that I haven’t seen any of these firms leverage.
- HMBradley — — Bullish on founding team.
- Emburse — — Useful.
- Acorns Spend
- Cash app
- Empower — I don’t bet against Garry Tan.
- Jiko.io (excited about this one, esp. given pension crisis) — There’s some irony here as well. Leveraging pension fund money to encourage people to buy T-bonds.
- PayPal Cash
- SoFi Money +
- Stash Debit
- T-mobile money
- Varo Money
- Venmo Debit