So I think I argued in the WFC thread a while ago that big banks are at risk of losing their moat because there is so much fintech that is basically modularizing everything that big banks do. For example if you want a loan you can now go to Quicken, or Lending Tree. If you want to buy stocks, discount broker (or even a safe place to deposit money). You want to perform an electronic payment transaction you can now work around banks with things like Paypal, venmo, Alipay. If you want deposits, there are challenger banks going all electronic that have no branches willing to give you higher interest deposits and lower interest loans. I think I made a big point on challenger banks.
I wanted to point out that it looks like challenger banks and other fintech looking to disrupt how banks do business are running into more difficulty overcoming the regulation that big banks use as moats. For example, see here:
https://www.ft.com/content/77ef93ec-e100-11e9-9743-db5a370481bcGoldman Sach's Marcus is also having trouble:
https://www.pymnts.com/earnings/2019/red-ink-marks-marcus-and-goldmans-risky-consumer-bet/As is Facebook's Libra which is well known.
Anyway, my point is that my position on this whole thing has evolved as I got more information (as well as discussions on the WFC thread). I think modularization is still a thing, and it will take big banks like ten years to have an as efficient cost structure as these challenger banks (as they have to close down branches and build up an entirely online deposit base) and other non-bank entities. But thus far, it seems like the big bank moats are holding up and preventing even the low-cost producers from taking significant share. I still wouldn't be long WFC though, as a lot of other big banks are further along in closing branches than WFC and will have a cost advantage for the foreseeable feature.