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"Since Open Banking didn't exactly set the world on fire, let's try Open Finance." Well played. 

Robinhood had 13M users in its entire existence before Jan. 2021 and gained 6M new users in just six weeks. Robinhood's valuation has also shot up in the recent past.  

I'm guessing many other companies will be dying to pay such a "heavy price" and go through a "fiasco" like Robinhood.

First, fintechs decry banks for dinosaur mindset, legacy systems, slow decision making, and so on. Then, fintechs claim they'd use technology, customer-centric approach, innovation, blah blah blah to disrupt banks. When that doesn't work out, fintechs go back and partner with the same banks.

Obviously, fintechs will face the same problems that customers have faced for ages from traditional banks.  It's extremely lame for fintechs to complain about that.  

This is surreal.

Bubble or not, I won't comment, but a fact that's missed by a lot of people is that bubbles don’t burst overnight. 

Before bursting in the steady state, bubbles go through a transient phase, when they grow and lot of people make a lot of money. Quite often, the transient phase can last years if not a decade.

For example, the subprime mortgage bubble began in the early 2000s and lasted four to five years before it burst and caused the Great Financial Crisis in 2007-8.

While all bubbles burst at steady state, they end badly only for the people who’re caught holding the parcel when the music stops at the end. For many others who make money by passing the parcel around while the music kept playing for years, bubbles prove to be lucrative.

That’s why, even though so many bubbles have burst in the past, that has never stopped new bubbles from forming in the future.

Pundits have been predicting that the startup valuation bubble will burst next year for the last 10 years. But it hasn’t burst yet. If anything, it has only grown.

(Above passage is reproduced with permission from my company blog post titled How Do Founders Become Rich When Their Companies Make Loss).

This post makes the assumption that fintechs want to provide good customer support. Going by the examples of PayPal, Robinhood, et al, that's a flawed assumption.

ICYMI, Reid Hoffman, one of the cofounders of PayPal and Linkedin, wrote a book on so-called Blitzscaling in which he actually advocates blitzscaling startups to ignore customer support. He also gave the following tips in his interview with HBR: Prioritize areas that will result in funding; hire from Tier-1 colleges; use heuristics not rules; half knowledge works; ignore customer service, employee unhappiness, chaos and inefficiency.

I'm guessing fintechs are exactly following that playbook, so customer support is not likely to be high on their agenda.

Did the Accenture report cited in this article actually use the word "donkeys"?

I first heard the meme "People don't wake up in the morning wanting to do banking" 15-20 years ago. Around the same time, I also heard that, for most people, a visit to the bank is more painful than undergoing root canal surgery.

Despite all that, banks are still around, banking is still a separate sphere. I don't see that changing in the forseeable future. You know why?

Banks are not inanimate objects waiting to see the world pass by. Much as finsurgents find it fashionable to call banks dinosaurs, not one of them has actually done anything truly disruptive and fulfilled his / her threat to kill banks. So that should say something. 

The thing is banks also evolve. Today, a typical bank makes a lot of money by distributing insurance products. I know banks who even sell books out of their teller counter. Recently, as a part of platformication strategy, McKinsey advocated that banks should sell flowers. Seriously. 

So, while people may get their loans and BNPLs from their auto and shopping apps, they will always engage with banks - maybe to buy insurance, books, and flowers.

And banking will always be a separate sphere. 

Lehman Brothers was felled by a Black Swan event and collapsed despite regulation. 

I also ponder over Acquirer Risk in payments business. Yes, a tiny percentage of Merchants may go bust 30-60 days after a credit card transaction but does that warrant all the measures taken to mitigate that risk e.g. Hesitation - refusal even - by banks to acquire micro and nano merchants.

I sometimes wonder if there's too much regulation to address extremely rare events.

OTOH, we keep hearing finserv should emulate tech, "fail fast", "move fast and break everything", "YOLO", and all that and govts are printing notes in the name of TARP, Pandemic Stimulus, etc., effectively kicking the very common inflation risk can down the road. 

OTOH, finserv regulation appears to overthink too many rare things.

Irony or am I missing something?

It's a free world, there's nothing stopping anyone from doing anything but, in the real world of business, it's customary for companies to do more of what works and less of what does not work, so that they maximize shareholder value and / or stop themselves from squandering away their limited resources and die. 

So, yes, even if the jackpot is still there, it doesn't mean new companies should waste time trying to do something that killed so many of their ilk earlier. Espeially since there are so many other jackpots out there offering better chances of success.  

In the extreme case, despite all of the above, if a company is hellbent on being delusional, the community can avoid platitudes on the way of the company committing harakiri and, instead, at least provide some guidance, however impractical it might be, for the company to achieve success. As I'd done in my comment below Mastercard bids to bypass own rails with Pay by Bank app promotion:

"A new PSP with 2X Rewards and 0.5X MDR of Visa / MasterCard will be highly disruptive. It won't be profitable. But that hasn't stopped VCs from funding disruptive startups."

Our CRO work for BFSI companies resonates strongly with the findings of many of these studies.

Bad news is, some banks remain oblivious to friction hotspots and abandonments therefrom. I once tried to open an account with a digital bank (not a customer). The journey stopped midway with a message saying somebody from the bank will visit me to collect my fingerprint for KYC. Nobody visited me. But, years later, I still keep getting reminders from this bank to start transacting on this account! 

Good news for the banks that are sensitive to abandonment is that, many friction hotspots can be remediated fairly easily and they can deliver a substantial boost to visitor-to-customer conversion rates.