[jimbru]

It's easy (and fun) to complain about the bad (or just weird) product experiences that banks regularly churn out. Believe it or not, most banks are trying their best. But as other commenters have noted, banks aren't staffed by technologists, so their choices for how to solve these problems begin and end with buying one of the available off-the-shelf software products. Spoiler alert, these products generally are both expensive and not very good.

If you want to understand the toolkit bankers have at their disposal, take a look at FIS, Fiserv, and Jack Henry. These three companies represent approximately $170 billion in market cap. Your interactions with your bank, whether it's a click in an app or a conversation with an actual banker, almost certainly bottom out with a call into one of these company's software systems. These systems are (almost) all mainframe software originally designed in the 1980s. Every product the bank delivers is built on this shaky foundation, which results in all sorts of workarounds and weirdness at every layer of the stack.

That all worked fine back in the '80s, but in the decades since, not only have our expectations changed (most bankers don't know what "API" stands for, by the way), but also banks' regulatory reporting requirements have expanded dramatically. Governments wants to know (very reasonably) that a terrorist or money launderer won't be able to make payments. But when you mix in the inertia of old enterprise software and the relative dearth of good alternatives, the result is a broken product experience (like the random velocity controls like @tlb cited above).

Being a bank is big and complex. And since deregulation and the Internet happened, being a bank is no longer about geography (remember branches?), it's about software and product. This seems like a pretty natural fit for a startup: break off a desirable chunk of the bank's customers and deliver a modern, specialized solution that's 10x better. There's ~$12 trillion of bank deposits in the U.S., that's a lot of market to go after.

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Full disclosure, my company, Treasury Prime (https://treasuryprime.com/) sells software to banks so that we can expose developer APIs for banking. If you have a fintech startup and you need a bank partner with good, modern APIs, email me: [e-mail].

[acjohnson55]

I have to imagine that you get used a bunch in the backends of FinTech products, but any chance better IT starts to reach consumers? My inability to know exactly what's going on with my money on my own terms is endless frustrating. The aggregators help, but are still quite limited.

[TeMPOraL]

I don't think the new breed of fintech startups is going to help here much. The reason you can't see what's going on with your money on your own terms is because banks want you to use their software in order to upsell you financial products. The articles point out that the new fintech companies are also interested in exploiting the stickiness and eyball-attracting aspects of banking, if not for direct upselling then for something else.

[jimbru]

I think there's progress happening, banks just tend to move slowly. Competition from fintechs may end up providing the banks some incentive to upgrade. The other problem is, as a consumer, you're probably last in line for new stuff. Businesses can demand new software or better economic terms and back that up with their (large) deposits loan book. Consumer deposit accounts, on the other hand, are often money-losers for banks; they only offer it as a cross-sell into mortgages or some other lending.

[kaushikktiwari]

huge fans of you guys! Dimitri has been such a great person for advice!