Comments on: Why Small Slices Didn’t Work…In the Past

By: nichebanking

nichebanking — Tue, 15 Dec 2009 22:38:45 +0000

You’re right–the regulatory process is a good thing, that protects depositors and stabilizes the system. No doubt about it. My point is simply that starting a de novo brick and mortar bank is A LOT of work and money, and consequently takes A LOT of profit to pay off that initial investment, let alone pocket any return. That creates a need to have a large volume of business from your customers. This makes the bank’s organizers say, “well if we need to generate so much business, we better be too niche oriented or else we’ll never get the volume of customers we need.”

For instance, if you wanted to start a brick-and-mortar bank in Kansas City, you probably couldn’t target cyclists and only cyclists….because even if every single cyclist in Kansas City decided to bank with you, it still wouldn’t probably be enough!

By: couchconomist

couchconomist — Tue, 15 Dec 2009 07:50:16 +0000

“If you wanted to start a de novo bank, you’d raise millions upon millions of dollars in capital, jump through the pain-in-the-butt regulatory approval process, and eventually open your doors.”

It sounds like you are saying these are bad things…the requirement of millions in capital and regulatory approval processes are in place in order to protect the depositor. I would be severely concerned with any relaxation in those areas.

By: Bye Bye Mass Appeal; Hello Niche Appeal « The Long Tail of Banking

Bye Bye Mass Appeal; Hello Niche Appeal « The Long Tail of Banking — Wed, 25 Nov 2009 01:37:31 +0000

[...] segmentation, Niche banking, Nicheruptive, The Long Tail of Banking. trackback In the last post, “Why Small Slices Didn’t Work…In the Past,” we discussed how in the “olden days” (like last year) a brick-and-mortar bank would [...]