If we had to do it all over again (which we may) the banking business would look nothing like it does today.
It’s one of the last remaining 18th century business models. The dinosaur of; savings accounts, community lending and bank tellers is an emaciated beast which has been kept on life support. Its time to let her go.
We are in the information age of the internet, PayPal and the automated teller machine. Furthermore, large scale bankers are really not that interested in the whole deposit and lending thing. Who could blame them, it’s boring.
Let’s face it, in a World of FICO scores and the internet there really isn’t much for a cracker-jack lender to really ponder anymore. Loan “analysis” is 3rd grade math, that barely needs a calculator.
What large banks really like is Wall Street complexity, fun stuff like global derivatives and investment banking. That is where their heart lies. I say we should cut the bankers loose so they can pursue their passions.
They just have to leave their deposit and lending business and branches behind. Furthermore, Daddy U.S. government (i.e., the tax payers) aren’t going to bail you out anymore, message to bankers your liberated and free to be foolish. Good luck.
Where I live there is a string of six banks within a half a mile. It’s redundant and wasteful. From the outside they all looked alike other than their logos. On it inside; bored tellers file their nails, managers try to look busy. The “team” all anxiously hopes that someone (anyone) comes in, so they can apply their well-honed “Welcome skills”.
An exciting day in the branch banking today is when someone with a cute dog goes thru the drive thru. Other than that it’s crickets… For the good of humanity 4 or 5 of these branches should be closed.
The sticky wicket is that bank deposits are guaranteed (by all of us) which means that whoever is in charge of the till better be a librarian and not a river boat gambler.
The good news is that we do have a librarian business model that seems to work well most of the time. It’s called regulated public utilities.
Political conservatives should be relieved that it’s not a socialist plot (at least it’s a plot that they have seen before). Political liberals may appreciate “common good” principles of public rate hearings and the exodus of the fat cats (boring regulated businesses don’t pay that well).
The banking industry sole purpose is to efficiently allocate capital and resources to a higher and better use. It’s time for the banking industry to “re-allocate” itself.
The age of the dinosaur is over… they consume too much resources, they have a mean bite and they are way too hard to clean up after.