iBank
January 23, 2009 7:38 AM Subscribe
iBank? 25 billion in cash and short-term securities. No long-term debt. Why Apple should get into the banking sector, pronto.
Yes, it's a one link post. Yes, it's a modest proposal type of article. But it makes a goofy kind of sense, doesn't it? Most retail banks are so bad at what they do that you wish someone competent would come in and provide some good competition. Like ING Direct with better fonts.
posted by leotrotsky at 7:46 AM on January 23, 2009
posted by leotrotsky at 7:46 AM on January 23, 2009
DU: that's it exactly. Look at the interest on your checking account. Now try to get a loan from that same bank.
posted by leotrotsky at 7:48 AM on January 23, 2009 [2 favorites]
posted by leotrotsky at 7:48 AM on January 23, 2009 [2 favorites]
America needs Jobs, not jobs.
posted by ColdChef at 7:51 AM on January 23, 2009 [1 favorite]
posted by ColdChef at 7:51 AM on January 23, 2009 [1 favorite]
swift: addressed in the article. easy to buy out. I'll stop modding my thread now.
posted by leotrotsky at 7:53 AM on January 23, 2009
posted by leotrotsky at 7:53 AM on January 23, 2009
"I know who would totally be able to fix this - Goo-uh--Apple!"
Tech companies look good because technology, once engineered, is highly scalable and replicatable. One good iPod fits 80+% of users. This gives the illusion of universal competence when it is merely niche competence distributed at scale.
Industries where every single user is something of a niche (business banking, real estate) just don't scale like that.
Also, what does the interest on your checking account have to do with your qualification for a loan? How would Apple's insane mark-up or supposed user-focus improve either of those things? Do you think you deserve a loan because you have an interest-bering checking account? Do you think Apple would think so?
posted by abulafa at 8:01 AM on January 23, 2009 [5 favorites]
Tech companies look good because technology, once engineered, is highly scalable and replicatable. One good iPod fits 80+% of users. This gives the illusion of universal competence when it is merely niche competence distributed at scale.
Industries where every single user is something of a niche (business banking, real estate) just don't scale like that.
Apple’s fanatical attention to design and customer experience gives it an edge that it could exploit in financial services. Now that it’s outsourced many of its manufacturing operations, Apple is a services-and-software company—delivering music through iTunes and iPods and helpful dining or driving advice through iPhones—that rivals its historic strength in computers.This isn't true, basically. Apple doesn't create those iPhone services, it manages the walled garden. For its music it is just providing a download and search experience for specific tastes - something else totally useless to banking. Apple was never, ever about making things, it was about designing things, and that works best for things with serious planned obsolescence so users must keep buying more of them. These don't sound like banking strengths.
Also, what does the interest on your checking account have to do with your qualification for a loan? How would Apple's insane mark-up or supposed user-focus improve either of those things? Do you think you deserve a loan because you have an interest-bering checking account? Do you think Apple would think so?
posted by abulafa at 8:01 AM on January 23, 2009 [5 favorites]
"If Apple were a bank: A dollar bill would cost $5 and would only buy 75 cents worth of goods or services."
And next year's dollar would be twice as small, and prettier.
posted by mr_crash_davis mark II: Jazz Odyssey at 8:02 AM on January 23, 2009 [1 favorite]
And next year's dollar would be twice as small, and prettier.
posted by mr_crash_davis mark II: Jazz Odyssey at 8:02 AM on January 23, 2009 [1 favorite]
But it makes a goofy kind of sense, doesn't it?
No, not really. Apple has lots of money? So does Warren Buffet. Apple is great at branding? So is Coca-Cola, but I wouldn't give them my money.
posted by ThePinkSuperhero at 8:02 AM on January 23, 2009 [1 favorite]
No, not really. Apple has lots of money? So does Warren Buffet. Apple is great at branding? So is Coca-Cola, but I wouldn't give them my money.
posted by ThePinkSuperhero at 8:02 AM on January 23, 2009 [1 favorite]
"If Apple were a bank: A dollar bill would cost $5 and would only buy 75 cents worth of goods or services."
And next year's dollar would be twice as small, and prettier.
And you'd really, really want it. But at least your old dollar would have resale value. I think I have sold every Mac I have ever owned, years later, for 80-90% what I paid for it.
In a PC bank, that dollar would be worth a nickel 30 days later.
posted by rokusan at 8:05 AM on January 23, 2009 [4 favorites]
And next year's dollar would be twice as small, and prettier.
And you'd really, really want it. But at least your old dollar would have resale value. I think I have sold every Mac I have ever owned, years later, for 80-90% what I paid for it.
In a PC bank, that dollar would be worth a nickel 30 days later.
posted by rokusan at 8:05 AM on January 23, 2009 [4 favorites]
In a PCWindows bank, that dollar would be worth a nickel 30 days later.
FTFY. If Linux were a bank, we'd be a moneyless meritocracy, like Star Trek, with neckbeards and no showers, like Star Trek fans.
(Disclaimer: I am a Linux-using Star Trek fan.)
posted by DU at 8:08 AM on January 23, 2009 [11 favorites]
FTFY. If Linux were a bank, we'd be a moneyless meritocracy, like Star Trek, with neckbeards and no showers, like Star Trek fans.
(Disclaimer: I am a Linux-using Star Trek fan.)
posted by DU at 8:08 AM on January 23, 2009 [11 favorites]
Geez, get sick for just a few days and what happens to the focus? I ask you!
posted by sjobs at 8:09 AM on January 23 [+][!]
;)
posted by mwhybark at 8:11 AM on January 23, 2009 [2 favorites]
posted by sjobs at 8:09 AM on January 23 [+][!]
;)
posted by mwhybark at 8:11 AM on January 23, 2009 [2 favorites]
If Linux were a bank
... there'd be a 1000-post bank-core mailing list thread fighting about whether or not to use paper or metal money; you'd be able to choose from 17 different designs of paper money, each of which was only spendable in a certain kind of shop; some of the money would in fact only be useful for purposes ethically approved of by a strange beardy dude and the costs involved in actually running the bank would mostly be met by IBM.
Meanwhile MS Money would be non-transferable, and Apple money could only be spent in boutiques and expires after a year.
Well, it makes a change from car analogies, right?
posted by bonaldi at 8:22 AM on January 23, 2009 [6 favorites]
... there'd be a 1000-post bank-core mailing list thread fighting about whether or not to use paper or metal money; you'd be able to choose from 17 different designs of paper money, each of which was only spendable in a certain kind of shop; some of the money would in fact only be useful for purposes ethically approved of by a strange beardy dude and the costs involved in actually running the bank would mostly be met by IBM.
Meanwhile MS Money would be non-transferable, and Apple money could only be spent in boutiques and expires after a year.
Well, it makes a change from car analogies, right?
posted by bonaldi at 8:22 AM on January 23, 2009 [6 favorites]
If Linux were a bank, we'd be a moneyless meritocracy, like Star Trek, with neckbeards and no showers, like Star Trek fans.
Ok, that one made me laugh out loud.
posted by a3matrix at 8:23 AM on January 23, 2009
Ok, that one made me laugh out loud.
posted by a3matrix at 8:23 AM on January 23, 2009
Dollar bills with rounded corners and ATMs with scroll wheels.
posted by rocket88 at 8:26 AM on January 23, 2009 [2 favorites]
posted by rocket88 at 8:26 AM on January 23, 2009 [2 favorites]
This is a colossally stupid idea. First, why wasn't it okay for Microsoft to do this in the early 90's, when the government wouldn't even let it buy the makers of Quicken out of fears they might get into banking?
Second the problem isn't so much that banks are incompetent, it's that borrowers are incompetent.
posted by Pastabagel at 8:33 AM on January 23, 2009
Second the problem isn't so much that banks are incompetent, it's that borrowers are incompetent.
posted by Pastabagel at 8:33 AM on January 23, 2009
Ach, nattering nabobs of negativism, the lot of you.
Think of a Money or Mint type application, coming standard on all macs, that shows and tracks spending habits, syncing automatically with iBank (or even other banks) Think of it tracking checking savings and investment accounts in a straightforward and easy to use fashion.
Think of automatic bill pay with actual security and fraud protection, which most banks don't care to provide, because they either stick the costs with the vendor, or with you.
Think of a loan app, integrated with the above app, that lets you do 90% or more of the application online, and has most of the necessary info already, due to the tracking done by the app
Think of a credit card with quadruple reward points for any Apple or iTunes or partner purchase, with a front-of-the-line guarantee for any new Apple Shiny, and special events for devoted fanboys.
I'm not talking anything complicated, just straightforward personal banking, with basic loans. This isn't rocket science, underwriters aren't getting creative, they're just applying simple rules. It's pretty one-size-fits-all. And it's very profitable.
Oh yeah, LOLSCROLLWHEEL!
posted by leotrotsky at 8:44 AM on January 23, 2009
Think of a Money or Mint type application, coming standard on all macs, that shows and tracks spending habits, syncing automatically with iBank (or even other banks) Think of it tracking checking savings and investment accounts in a straightforward and easy to use fashion.
Think of automatic bill pay with actual security and fraud protection, which most banks don't care to provide, because they either stick the costs with the vendor, or with you.
Think of a loan app, integrated with the above app, that lets you do 90% or more of the application online, and has most of the necessary info already, due to the tracking done by the app
Think of a credit card with quadruple reward points for any Apple or iTunes or partner purchase, with a front-of-the-line guarantee for any new Apple Shiny, and special events for devoted fanboys.
I'm not talking anything complicated, just straightforward personal banking, with basic loans. This isn't rocket science, underwriters aren't getting creative, they're just applying simple rules. It's pretty one-size-fits-all. And it's very profitable.
Oh yeah, LOLSCROLLWHEEL!
posted by leotrotsky at 8:44 AM on January 23, 2009
Not just any company can up and decide to become a bank, simply because it has a lot of cash. There are severe activities restrictions placed on institutions that own banks (called bank holding companies). These restrictions generally prevent a BHC from engaging primarily in a "non-banking" business like building computers and selling music.
The law gets way more complicated than this, of course. There are forms of banks without as many activities limits - like savings and loan holding companies and industrial loan companies - but the basic problem is still there. However, no matter which form it chooses Apple would have to radically restructure itself to comply with bank laws and regulations, as well as subject itself to strong government oversight.
Of course, if Apple only lent money, but did not accept deposits, there are other forms of organizing besides a bank that it could choose, with less regulation and restrictions. All of this, however, would move them away from their core competencies, so, to me, it doesn't make a lot of business sense.
posted by thewittyname at 8:45 AM on January 23, 2009
The law gets way more complicated than this, of course. There are forms of banks without as many activities limits - like savings and loan holding companies and industrial loan companies - but the basic problem is still there. However, no matter which form it chooses Apple would have to radically restructure itself to comply with bank laws and regulations, as well as subject itself to strong government oversight.
Of course, if Apple only lent money, but did not accept deposits, there are other forms of organizing besides a bank that it could choose, with less regulation and restrictions. All of this, however, would move them away from their core competencies, so, to me, it doesn't make a lot of business sense.
posted by thewittyname at 8:45 AM on January 23, 2009
Pastabagel: "Second the problem isn't so much that banks are incompetent, it's that borrowers are incompetent."
The job of the bank is to judge the competence of the borrower, and lend or not based on that judgment.
Hence: banks are incompetent.
posted by alexei at 8:49 AM on January 23, 2009 [1 favorite]
The job of the bank is to judge the competence of the borrower, and lend or not based on that judgment.
Hence: banks are incompetent.
posted by alexei at 8:49 AM on January 23, 2009 [1 favorite]
I'd just like to see them try to pull off a one-button ATM.
posted by mkultra at 8:54 AM on January 23, 2009
posted by mkultra at 8:54 AM on January 23, 2009
Wow, just what we need, more people in the banking business that have no clue. Good idea!
posted by sfts2 at 8:55 AM on January 23, 2009
posted by sfts2 at 8:55 AM on January 23, 2009
with less regulation and restrictions
Pretty sure we tried that already.
posted by a3matrix at 8:55 AM on January 23, 2009
Pretty sure we tried that already.
posted by a3matrix at 8:55 AM on January 23, 2009
In the book AppleDesign, there is a photo from the Apple industrial design team that was exploring ideas for "Mac-like Things". One of these was a money exchanger machine. You stuck USD bills in one end, and DEM bills came out the other. Naturally this was only a mockup. I can't imagine how that could ever be legal.
posted by mkb at 8:58 AM on January 23, 2009
posted by mkb at 8:58 AM on January 23, 2009
If the government wouldn't let Walmart become a bank*, they're probably not going to let Apple become one either.
*Though apparently Mexico has
posted by drezdn at 9:01 AM on January 23, 2009
*Though apparently Mexico has
posted by drezdn at 9:01 AM on January 23, 2009
It's true that the time is ripe if you want into banking, but I'm not sure all these other companies want into banking. Well, I suppose you'd want into banking if you felt you understood banking. Do the banks even understand banking?
posted by jeffburdges at 9:03 AM on January 23, 2009
posted by jeffburdges at 9:03 AM on January 23, 2009
Think of a Money or Mint type application ... of automatic bill pay with actual security and fraud protection ... a loan app ... of a credit card ...
I think not.
If you think of a bank as a set of applications (computer applications or business processes or what have you), then there's a superficial appeal in your suggestion. But that's not what a bank is, and even if that were all there were to banking, the appeal would be only superficial at best. Apple makes good consumer products, they make good computers, but they are not really a software development shop; their software exists only to sell hardware, and the software, by itself, is just not all that good. But even if they were the world's best software development shop, that is not a qualification for any other line of business.
posted by me & my monkey at 9:06 AM on January 23, 2009
I think not.
If you think of a bank as a set of applications (computer applications or business processes or what have you), then there's a superficial appeal in your suggestion. But that's not what a bank is, and even if that were all there were to banking, the appeal would be only superficial at best. Apple makes good consumer products, they make good computers, but they are not really a software development shop; their software exists only to sell hardware, and the software, by itself, is just not all that good. But even if they were the world's best software development shop, that is not a qualification for any other line of business.
posted by me & my monkey at 9:06 AM on January 23, 2009
I'm pretty sure this is stupid.
The author clearly missed out on the MobileMe fiasco; Apple actually doesn't do services remarkably well the way it does applications. And people bank through services, not applications. I like Apple's branding because it is an encompassing experience; their music products and applications are comprehensive. The personal finance is a domain that users enter maybe once a month. So who really cares if they made great simple finance apps? Banks don't sell apps.
Apple does market well, but.... since when is that an argument for competency? And why does the author point out they have $25B in reserves, but shucks howdy, if they were a bank they could get in on that TARP action. WTF?
The only thing the author manages to get right is that Apple has competently managed their business and has a positive balance. Congratulations.
FAIL Page Post.
posted by butterstick at 9:06 AM on January 23, 2009
The author clearly missed out on the MobileMe fiasco; Apple actually doesn't do services remarkably well the way it does applications. And people bank through services, not applications. I like Apple's branding because it is an encompassing experience; their music products and applications are comprehensive. The personal finance is a domain that users enter maybe once a month. So who really cares if they made great simple finance apps? Banks don't sell apps.
Apple does market well, but.... since when is that an argument for competency? And why does the author point out they have $25B in reserves, but shucks howdy, if they were a bank they could get in on that TARP action. WTF?
The only thing the author manages to get right is that Apple has competently managed their business and has a positive balance. Congratulations.
FAIL Page Post.
posted by butterstick at 9:06 AM on January 23, 2009
I like Slate and read it a lot, but an article like this makes me wince. It's so clearly intended to drive site traffic to their new-ish "Big Money" offshoot. The stupidity of the piece's proposition didn't sit well with me, but the transparency of the ploy is what really made me feel icky.
posted by veggieboy at 9:13 AM on January 23, 2009
posted by veggieboy at 9:13 AM on January 23, 2009
"Oh, one last thing..."
( a giant 1 flashes up on the display behind Jobs )
"That's right. The interest rate is back. One percent on all T-Bills. If you buy an iPod, Macbook or any other Apple product when you invest, we'll increase that to one-point-oh-five."
posted by boo_radley at 9:17 AM on January 23, 2009
( a giant 1 flashes up on the display behind Jobs )
"That's right. The interest rate is back. One percent on all T-Bills. If you buy an iPod, Macbook or any other Apple product when you invest, we'll increase that to one-point-oh-five."
posted by boo_radley at 9:17 AM on January 23, 2009
I love it. The Big Money says "Apple! You have a lot of money! Bring it to the banking industry! We'll be good with it, I swear!" lolgofuckyourselfbanks.
posted by shmegegge at 9:28 AM on January 23, 2009 [2 favorites]
posted by shmegegge at 9:28 AM on January 23, 2009 [2 favorites]
The author also completely skips the fact that the $25B in cash isn't in a big vault where Steve Jobs swims in it a la Scrooge McDuck. It's in a bank. And those banks are lending it out. Problem solved.
posted by GuyZero at 9:47 AM on January 23, 2009
posted by GuyZero at 9:47 AM on January 23, 2009
iATM Shuffle. No screen and it dispenses random amounts of money.
posted by Tacodog at 9:54 AM on January 23, 2009
posted by Tacodog at 9:54 AM on January 23, 2009
Metafilter: niche competence distributed at scale.
posted by incessant at 10:16 AM on January 23, 2009 [1 favorite]
posted by incessant at 10:16 AM on January 23, 2009 [1 favorite]
Application iBank has unexpectedly quit.
posted by loquacious at 11:20 AM on January 23, 2009
posted by loquacious at 11:20 AM on January 23, 2009
This is such a dumb Idea. Not just for the world but for Apple shareholders as well. Look at the share price of any bank vs. Apple over the past few months! Banking is not a good sector to get into and if they tried their share prices would plummet.
Apple can purchase any securities it wanted including corporate bonds or money commercial paper, and those are mostly the same kinds of things that banks invest in. The only difference would be consumer lending, but why in gods name would anyone want to get into consumer lending now?
As far as getting into taking deposits, well, why? They don't need cash, so what's the point in that?
Our current banking crisis wasn't caused by poor user interfaces or lack of rounded corners.
This is a colossally stupid idea. First, why wasn't it okay for Microsoft to do this in the early 90's, when the government wouldn't even let it buy the makers of Quicken out of fears they might get into banking?
What are you talking about? They couldn't buy Quicken because then they'd be the only company out there with a popular personal finance program. No one stopped them from making Microsoft Money.
posted by delmoi at 11:21 AM on January 23, 2009
Apple can purchase any securities it wanted including corporate bonds or money commercial paper, and those are mostly the same kinds of things that banks invest in. The only difference would be consumer lending, but why in gods name would anyone want to get into consumer lending now?
As far as getting into taking deposits, well, why? They don't need cash, so what's the point in that?
Our current banking crisis wasn't caused by poor user interfaces or lack of rounded corners.
This is a colossally stupid idea. First, why wasn't it okay for Microsoft to do this in the early 90's, when the government wouldn't even let it buy the makers of Quicken out of fears they might get into banking?
What are you talking about? They couldn't buy Quicken because then they'd be the only company out there with a popular personal finance program. No one stopped them from making Microsoft Money.
posted by delmoi at 11:21 AM on January 23, 2009
Oh this is just wonderful. Just freaking wonderful. And after Apple gets bored with applying its "One app fits all" philosophy to banking, why don't we let it take over the entire government? iDictatorship anyone?
posted by happyroach at 11:34 AM on January 23, 2009
posted by happyroach at 11:34 AM on January 23, 2009
I heard a rumor that Microsoft would use its vast cash reserves to buy back stock and put more liquidity into the market. No idea if it is true or not.
posted by Blazecock Pileon at 12:19 PM on January 23, 2009
posted by Blazecock Pileon at 12:19 PM on January 23, 2009
I heard a rumor that Microsoft would use its vast cash reserves to buy back stock and put more liquidity into the market.
I read that too quickly. Thought it said "use its vast cash reserves to buy bad stock and put more liquidity into the market." That would be in character.
posted by terranova at 1:18 PM on January 23, 2009
I read that too quickly. Thought it said "use its vast cash reserves to buy bad stock and put more liquidity into the market." That would be in character.
posted by terranova at 1:18 PM on January 23, 2009
Apple is not used to designing systems with the scale and reliability constraints of a bank. (Neither is Microsoft, and neither does anyone use Linux for this). The systems have evolved over decades, and replacing them overnight with a new system would create gigantic nightmares. My dad has been working on these systems for 40 years, it's not something you just hook a bunch of OSX machines to and say: go!.
Could they do a good job on the client/banking interface end? Probably. But I would NOT trust them to run the backend (again, I wouldn't trust Microsoft or any other personal computer-oriented company either).
Banks have more than just one computer system: the core transaction processing systems work nothing like a PC. They also have PC networks, web-facing computers, etc that are more like standard systems, and these are the parts most desperately in need of upgrading. The transaction processing stuff is pretty solid.
(I realize the article isn't even really thinking about the technology aspect, but that would be the least silly part. The idea that Apple would know about the business aspects of banking is ludicrous. Besides, MS and Google and lots of other companies are sitting on billions in cash and continuing to rake in profits as well, there's nothing special about Apple in that regard)
posted by wildcrdj at 3:09 PM on January 23, 2009
Could they do a good job on the client/banking interface end? Probably. But I would NOT trust them to run the backend (again, I wouldn't trust Microsoft or any other personal computer-oriented company either).
Banks have more than just one computer system: the core transaction processing systems work nothing like a PC. They also have PC networks, web-facing computers, etc that are more like standard systems, and these are the parts most desperately in need of upgrading. The transaction processing stuff is pretty solid.
(I realize the article isn't even really thinking about the technology aspect, but that would be the least silly part. The idea that Apple would know about the business aspects of banking is ludicrous. Besides, MS and Google and lots of other companies are sitting on billions in cash and continuing to rake in profits as well, there's nothing special about Apple in that regard)
posted by wildcrdj at 3:09 PM on January 23, 2009
"One app fits all" philosophy to banking, why don't we let it take over the entire government?
What, you don't like the War and business party vs the Business and war party arrangement?
posted by pompomtom at 3:15 PM on January 23, 2009
What, you don't like the War and business party vs the Business and war party arrangement?
posted by pompomtom at 3:15 PM on January 23, 2009
If the government wouldn't let Walmart become a bank*, they're probably not going to let Apple become one either.
*Though apparently Mexico has
75% APR for consumer loans?! That's... that's legal? Sheesh!
posted by Talanvor at 4:57 PM on January 23, 2009
*Though apparently Mexico has
75% APR for consumer loans?! That's... that's legal? Sheesh!
posted by Talanvor at 4:57 PM on January 23, 2009
If Apple is going to do anything other than technology products they should start a religion. The loyalty that they have makes Scientology look like a casual gig.
posted by sien at 6:51 PM on January 23, 2009
posted by sien at 6:51 PM on January 23, 2009
The idea is seriously wacky. A tech company starting a financial company at the height of a downturn in the markets, which was lead by financial companies. That would be like a record label trying to get into the air transportation market ... wait ... Well, maybe someone did that, but this is not a good idea. Steve Jobs is a tech fetishist and a great visionary of his company, which successfully seeks other tech fetishists as customers, but he's not a banker.
Wal-Mart is charging 75% interest for a loan in Mexico? Really?
posted by krinklyfig at 7:02 PM on January 23, 2009
Wal-Mart is charging 75% interest for a loan in Mexico? Really?
posted by krinklyfig at 7:02 PM on January 23, 2009
I like Apple produces, but I trust the company about as far as I can throw a Lisa*.
* about 12 ft. last I checked.
posted by lekvar at 8:07 PM on January 23, 2009
* about 12 ft. last I checked.
posted by lekvar at 8:07 PM on January 23, 2009
If Windows XP is good enough for the White House, it's good enough for banking.
We see how well this has worked out, no?
posted by fourcheesemac at 8:53 AM on January 25, 2009
We see how well this has worked out, no?
posted by fourcheesemac at 8:53 AM on January 25, 2009
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posted by DU at 7:45 AM on January 23, 2009 [25 favorites]