No one is disrupting banks – at least not the big ones

Why big banks are hard to “disrupt”

• Regulation is repeatedly described as the main moat: banking licenses, capital ratios, AML/KYC, and supervisory regimes make entry costly and slow.
• Big banks often want heavy regulation because it locks in incumbents and makes new competitors uneconomical.
• Some argue that in practice disruption is often just “regulatory arbitrage” or skirting rules until regulators catch up.
• Attempts to get direct Fed “master accounts” (e.g., Reserve Trust, Custodia) faced strong resistance and, in one cited case, revocation.

How money and credit actually work

• Several comments stress that all banks create credit “out of thin air” via lending, constrained by capital and liquidity rules.
• Others note that anyone can create credit (IOUs, trade receivables); what banks have is a special legal/regulatory backstop when they misprice risk.
• There’s debate over how “magical” this is: some see it as an accounting trick that yields interest on created credit; others emphasize system-wide balance and interbank settlement via central banks.

Fintech and neobanks: real but limited disruption

• In consumer retail, neobanks (Monzo, Starling, Revolut, Nubank, etc.) are credited with better apps, instant notifications, fee pressure, and forcing incumbents to improve UX.
• Yet core deposit and lending power, especially at scale and in mortgages, remains with large incumbent banks.
• Some see better savings rates (HYSAs, brokerage cash accounts) and app interfaces as incremental competition, not structural disruption.

Crypto and alternative currencies

• Strong disagreement: some claim crypto was suppressed because it threatened banks; others say crypto has never been a credible threat and mostly fuels speculation, scams, and some criminal use.
• Long subthread on value: fiat vs crypto vs gold/diamonds; many note all money rests on shared belief, but government fiat is anchored by tax obligations and legal enforceability.
• Skeptics highlight volatility, lack of real-world use, and regulatory risk; boosters point to censorship resistance and global, low-friction transfers.

Payments, UX, and “what needs disrupting”

• Many users say they’re satisfied: banks safely hold money and enable payments; most people lack enough savings for rate differences to matter.
• Others are frustrated by slow interbank transfers, check holds, business-hour cutoffs, opaque transaction data, and poor tooling for detecting and cancelling fraud or subscriptions.
• Instant payment systems elsewhere (EU SEPA instant, India UPI, FedNow plans) are contrasted with slower US ACH and card rails; card networks’ fees are widely viewed as a separate, under-addressed oligopoly.

Global and sectoral angles

• Examples of more meaningful change:
  • Mobile money and wallets (e.g., M-Pesa, WeChat Pay, AliPay, Brazilian neobanks) reaching unbanked or leapfrogging cards.
  • India’s public payment infrastructure and regulatory “sandboxes” enabling new models.
  • Private credit and securitization shifting large chunks of corporate and real-estate lending off bank balance sheets (disruption on the “fin” more than the “tech” side).

Trust, safety, and failures

• Recent collapses (SVB, Synapse/BaaS issues, various crypto blow-ups, meme coins) make commenters wary of entrusting core savings to fintechs or crypto platforms.
• Many explicitly say they want their bank to be boring, stable, and un-“disrupted,” and will only use fintech for small balances or specific conveniences.