The Early Internet
With the start of the internet, the first peer to peer payment site was paypal.com with the most famous of the paypal mafia being Elon Musk, Peter Thiel, and David Sacks. This was version 1 of the internet and there was a promise of future developments that would allow full banks to move to the web. This was attempted in different ways. There has been Square's Cash App, Zelle, and even Paypal revamped and created Venmo. All of these have been easy for payments, but due to different short fallings have never been a full bank with all of a customers needs. Sofi has tried to change this. Starting with there first big move was to get a Bank Charter, to market themselves as a big bank and to offer the full suite of financial needs to there customers, they have been the first fintech company to really cross the bridge from being just a payments app to becoming a full bank.
How Big Bank's Survived Disruption
All the mean time, the incumbent banks have continued keep market share and a hold on the consumer, despite to be slow in innovation. One of the moats banks look to create is trust with the consumer. They buy big buildings in big cities and hey spend billions in marketing, so that they are top of mind when a young adult's picking a bank. However, they have been unable to bridge the gap and meet the younger generation. They have old apps, outdated websites, and very poor customer service. Additionally, they don't have any incentive to change any of this, because they have created an almost impenetrable moat. Anybody who wants to be a big bank and get the wallet share rewarded to big banks has to act like a big bank. None of the fintechs have really been able to do this in the United States, because there isn't enough of an incentive. In Brazil Nu bank has successfully disrupted the banking industry, because the incumbent banks were so terrible and predatorial to there customers. The customer experience and satisfaction was terrible. This creates an incentive to switch, but on America the banks have been good enough, that there isn't an impetus to switch.
Stay Tuned!
Enter Sofi... Stay tuned for Part 2 as to how they are disrupting this to become the first true tech forward bank and not just a fintech app.