1/5 Though there may be some discussion to be had on long term market dynamics for Neobanks, perspectives like this seem to miss the point. It’s not about neobanks having better underwriting or technology per se:
qz.com/1728419/point-…
qz.com/1728419/point-…
2/5 I believe Neobanks will acquire customers by redistributing profit pools like overdraft ($32bn/year) back to consumers, which incumbents will struggle to match b/c it’s short term profit destroying for them (thus hard to prioritize internally).
3/5 And they will carry structurally lower costs through vertical integration of products + tech in areas with high legacy costs or where middlemen reign (401k, brokerage etc).
4/5 Monetization will should occur in a way that’s aligned with consumer needs (engagement / subscription / moving to cheaper debt / financial automation).
5/5 Banks today make money through net interest margin, interchange and fees - all are opportunities for delivering more value to consumers!
