Author Topic: Are big banks value traps ?  (Read 3580 times)

scorpioncapital

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Re: Are big banks value traps ?
« Reply #30 on: October 10, 2019, 09:00:59 AM »
I have a feeling brokerage firms are at intersection of payment services and banking. In fact if banks ever go negative in rates brokerage firms may offer lower borrow costs and higher interest rates. If this is so I think brokerage firms may be able to substitute a vast amount of function of the bank at the consumer level.


TwoCitiesCapital

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Re: Are big banks value traps ?
« Reply #31 on: October 10, 2019, 09:38:35 AM »
I have a feeling brokerage firms are at intersection of payment services and banking. In fact if banks ever go negative in rates brokerage firms may offer lower borrow costs and higher interest rates. If this is so I think brokerage firms may be able to substitute a vast amount of function of the bank at the consumer level.

I disagree. Brokerages can certainly collect deposits - but they've shown an unwillingness to pay decent returns on it by moving from money markets to bank deposit sweeps as the default options.

In other words, brokerages have obviously expressed a preference to move deposits held BACK to banks in exchange for fees for those banks.

Further, there is limited lending brokerages can engage in outside of securities Based lending. Mortgages/personal loans/auto loans/etc for those who don't have the cash/securities to cover those expenses would be non-existent.

Banks still win here and brokerages are demonstrating that by sending current deposits straight back to banks.

John Hjorth

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John Hjorth

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Re: Are big banks value traps ?
« Reply #33 on: October 10, 2019, 12:42:13 PM »
Mastercard [June 25th 2015: Press Releases - Mastercard and P27 Nordic Payments Platform to build a world first real-time payments system across the region.

Now exactly that press release made me relate to what has been posted here on CoBF by Spekulatius earlier. [No link here, but i'll dig it up, if needed]. In short : Wake up, [not as a an investor, more like as a citizen] or you're destined to fall behind.

There are no cheques bouncing around here in Denmark, now for years. Simply because the whole chequing account system was put into run-off YE2016 [If IRC, with a 3 months run-off period.]. Pretty much the most cost intensive and the most cumbersome system - ever - to carry cash from A to B.
« Last Edit: October 10, 2019, 12:46:19 PM by John Hjorth »
”In the race of excellence … there is no finish line.”
-HH Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai

Spekulatius

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Re: Are big banks value traps ?
« Reply #34 on: October 10, 2019, 02:43:29 PM »
I think one takeaway from this is that technological prowess matter more so in the past for banks. In the US, I consider BAC and JPM the leader followed by WFC. WFC really was the best bank in terms of how they managed their branches, but I think this is now much less and advantage than it has been in the last. A lot of regional and small banks are going to be in trouble.

A lot of the larger credit unions are doing well. I am member with a few and many have grown their balance sheet organically by ~10% annually since the Great Recession. They have certainly taken market share, probably from smaller banks. Credit unions tend to have very few, but larger branches, which plays well into going online and doing just doing the transactions requiring consulting in the branches.
To be a realist, one has to believe in miracles.