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Insurance CAN create trust, but only to the extent that you trust the insurer. The FDIC’s real product isn’t just insurance. It’s confidence that the US government stands behind the banking system and will act quickly in a crisis… ~90% of SVB’s deposits were NOT FDIC insured, but every depositor was made whole by the next day. Only a fool would trust some new neobank insurer the same way. Insurance doesn’t eliminate counterparty risk. It shifts it… but you need to trust the insurer. If…
defyneric@defynericAug 27
genius fintech infra idea: build the FDIC insurance layer for neobanks. one of the biggest barriers to getting customers to hold large balances with a new neobank is trust. so sell neobanks insurance on their customer deposits. charge an annual premium based on deposits covered and let them pass that protection directly to customers. now any neobank can offer: “your deposits are insured up to $250,000.” sell neobanks the trust they need to attract larger deposits. who’s building the FDIC layer for neobanks? genius idea.