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Comment by movedx | Hacker News Reader

I smiled at your last comment. You're clearly a charming individual :-)

Out of interest, what's the solution here? With your experiences in mind, what are the banks doing wrong from a technological perspective?

I get the impression banks should almost start again on the side, building a completely new bank they then (manually?) move customers over to, or just use to take in new customers whilst waiting for the previous ones to die out. I guess if they built a whole new system, wouldn't it then be a "simple" case of doing a money transfer into the new system?

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French banks are actually doing that! SG/Société Générale, a brick and mortar bank that costs a hundred dollars a year, built Boursorama, an e-bank that's free and that gives you $200 if you subscribe. Advantage: SG has too many manned agencies and can't justify preemptively mass-firing them yet – they first need the customer base to dwindle. Better IT, usage of Internet techniques at the core, and drastically simplifying the product line is an intended consequence.

Same happens with other French banks. As a personal PoV, banks' manned agencies provide bad service (from 20x delays to plain mistakes), so I won't cry for them.

Boursorama is not a bank. It's a website to allow people to play on the financial markets ("bourse" = exchange). I think Americans would call that a sort of dealing account.

Obviously, a dealing account has to hold funds and handle transfers. That's not any close to a consumer bank though.

Boursorama Banque is a bank, as in, a normal cheque account, IBAN, VISA card, loans, term deposits and no trading account. Real normal bank. The main Boursorama website is another department, it's not really clear on their website.

It is now also a bank. I own one Boursorama bank and I have account credit card...

Boursorama also owns an Spanish "digital bank" called Self Bank. I have an account there.

You can't wait for customers to "die out" as their mortgages will go on for decades. You definitely need a customer's old data in the new system. Now you have to maintain and develop two systems - bugs, banking regulation require constant work. Often the clock is ticking for old systems and asking vendors to provide and maintain ancient tools can be expensive or impossible. You can't "manually" move customers over, you need to "migrate" lots and lots of data - both systems will have huge, completely different database schemas.

While mortgages do go on for decades (typically), people will frequently re-mortgage based on new interest rates.

e.g. in the UK it's typical to sign up for 2-10 year deals, with the interest increasing after these offer periods, meaning people will likely switch to another deal.

So there will be a certain amount or organic churn.

Not enough churn, though. I worked on mortgages for a UK high street bank a while ago, and they were still running the mortgage systems for every bank and building society they'd taken over in their decades of growth, plus a few different attempts at building one system to rule them all.

For an example of how this system switchover looks like, First Bank in the United States just did a whole-system switchover in March, at least for their business customers. They handle my wife's business' banking, which means I do all the paperwork, and it definitely was a pain. Basically it was like signing up for a whole new bank account. They copied over something like only the last 6 months of transactions and some payroll info, but things like automatic bill payments and everything else (even basic online login) had to be set up again.

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