*Who* should be a bank?
As the functions of banks are replicated by technology, new audience-centric institutions will be created.
Theoretical banks:
- Joe Rogan
- Kim Kardashian
- Alex Jones
- Gwyneth Paltrow
/thread 👇
thegeneralist.substack.com/p/the-disappea…
1/ The bank
What do banks *do*?
Fundamentally, banks transform non-translatable assets (commodities) into translatable assets (money).
2/ The bank
Banks offer three core functions:
- Payments between parties
- Deposits for future use
- Loans to support new endeavors/purchases
3/ Surplus managers
Banks are the *managers of surplus.*
We keep our excess money with banks with the expectation they will keep it safe and grow our funds. Banks do that (and make money for themselves) through complex investments.
4/ Faulty managers
The problem is that banks aren't very *good* at managing surplus. They often invest in speculative, esoteric instruments.
The global financial crisis was catalyzed by overinvestment in CDOs. Despite that, investment in leveraged loans has increased.
5/ Embedded finance
The functions of a bank are being unbundled by technology.
- Payments? Use Stripe.
- Lending? Synapse.
- POS? Affirm.
Better yet, these services can be "embedded," placed in context.
6/ Affinity finance
This raises a question: if "banks" (or their features) can be easily spun up, consumers should have more options.
Where (and with who) will they choose to keep their money?
7/ Theoretical banks
We may choose to keep our money with those that keep our attention?
Will there be a Bank of Ye, run by @kanyewest?
8/ New surplus managers
This has profound effect on how society manages its surplus. Instead of storing money with banks, we may store it with influencers (or the tech platforms enabling them.)
Will individual audiences impact how capital is allocated?
Banks, in their current form, are disappearing.
They may be replaced by affinity products that leverage existing audiences.
To dig into other theoretical institutions including products from Mr Beast, Addison Rae, and others, read below 👇👇
thegeneralist.substack.com/p/the-disappea…
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