> Do we even need monolithic financial entities in this day and age? Most transactions would be better handled by smaller, specialized and modern service companies. Banks are to financial startups what taxi driver unions are to Uber.
On the individual consumer-banking side, there is a strong case to be made that this is true.
However, as long as Fortune 100 companies and large pension funds exist, they're going to do massive transactions in the capital markets -- and you need similarly huge financial institutions to bookrun on these kinds of deals.
So in my view, it's likely that startups that can provide a more agile / fun / efficient / whatever experience stand poised to eat banks' lunch in some areas...but there is definitely a significant slice of the market that requires market-makers to be massively capitalized.
On the individual consumer-banking side, there is a strong case to be made that this is true.
However, as long as Fortune 100 companies and large pension funds exist, they're going to do massive transactions in the capital markets -- and you need similarly huge financial institutions to bookrun on these kinds of deals.
So in my view, it's likely that startups that can provide a more agile / fun / efficient / whatever experience stand poised to eat banks' lunch in some areas...but there is definitely a significant slice of the market that requires market-makers to be massively capitalized.