My prediction is that Apple is going to enter the banking business and disrupt the heck out of it. I sure hope so. I'd switch my account to an Apple Bank on the first day of business if they did it right, and they probably would.

The fingerprint technology on the new iPhones is the first step. Once Apple controls the process of identifying a customer, both by fingerprint and possibly by physical location of the phone, it will have the first phase of a stranglehold on banking.

Retail banking is the most tangled rat's nest of a legacy system that civilization has ever known. Nothing really compares in terms of how it touches nearly every citizen (or should) and how user-unfriendly it is. Compare the potential of an Apple Bank to the potential of a crappy me-too Apple wristwatch. Now ask yourself if Apple thinks small.

Lately Apple has been too quiet, and probably not because Jobs has shed his mortal coil to become pure energy, or whatever it is that he negotiated with the universe. I think Apple has something big planned, and it isn't television and it isn't a watch, although they might take a run at those products too.

Online banking and banking apps are big improvements over the old process of walking into a branch bank. But we're still clearly in the Sony Walkman phase of where online banking needs to be. It should take three seconds to pay a bill online, not five minutes. I should be able to send money to anyone on my contacts list in seconds. I should never need to carry credit cards and ATM cards again.

Why do you have to fill out so much paperwork to apply for a loan when all of your records already exist somewhere in the cloud? My Apple Bank would know everything about me, including my credit worthiness, at all times. If I want a loan I should have it in less than five seconds from the time I put my thumb on my phone.

I don't think I need to describe all of the inefficiencies with the current banking system. You get the idea. In my view, the marriage of smartphones with banking represents the largest market opportunity in history. Would Apple stay out of that business just because entering would be hard? I don't think so.

Disclosure: I own some Apple stock. I often wish I didn't.
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+4 Rank Up Rank Down
Sep 25, 2013
The banking industry here could benefit from such innovation, but I doubt the problem is creativity; it's regulation. Apple is entirely incompatible with the regulated environment of banking. If red tape weren't in the way, existing banks would make it happen, even if they needed to acquire some additional skills/people/tech companies.
+1 Rank Up Rank Down
Sep 25, 2013
Sell your stock. Now. Or it will get worse.
Sep 24, 2013
As many others here, I would say that banking in U.S. is slightly backward comparing to the rest of developed world. I also can do all transaction on-line, from PC or mobile phone (and I don't need iPhone to do it). Or as a banchmark, I can send money ANYWHERE in the world for the fee about 10 USD (much less within EU, free of charge in my country), but my US clients (big companies with huge cash flow) have usually problems to send me money by wire transfer and preffer sending checks (how diluvial :))
Sep 24, 2013
The idea of unrelated diversification is not new. Giant corporations have tested those waters and most have stayed out. Here's why.

It makes no sense from the "distinctive competency" standpoint. Companies tend to be good at a handful of activities, usually highly related. Apple would be at square-zero in the banking industry and would need to learn the whole thing--and do it right the first time.

It makes no sense from the "shareholder value" standpoint. If I want to enjoy the profits and risks of the financial sector, I'll invest there. In fact, I'll diversify my portfolio any way I want. I don't want my investments dictating my diversification.

It makes no sense from and "organizational behavior" standpoint. Highly successful and innovative computer companies tend to have one type of corporate culture. Banks tend to have a very different culture. Cultural incompatibility has killed many mergers, it would stop a diversification dead.
Sep 24, 2013
I agree that the banking system needs improvements and that the improvements will happen.

Whether an electronics company like Apple could enter the banking industry is disputable.

However please note that the main driving force behind Apple was Steve Jobs. Without Steve, Apple will not do as good as they used to. I wouldn't expect too many innovations from Apple going forward. I predict that Apple will go downhill from here.

It may be the time to sell your Apple stock, Scott.
+1 Rank Up Rank Down
Sep 24, 2013
I'm thinking that if Larry Page is reading this, he's already allocating resources and people to make Google-bank...
Sep 24, 2013
Wired just ran a story on how the fingerprint scanner has already been hacked.
Sep 23, 2013
My biggest !$%*! about banking is that its so hard to switch banks. If they has the same rules and regulations in banking that they had in telephony (i.e., number portability), the banking industry would be a COMPLETELY different thing. Maybe banks would have to treat us nicer for a start. Instead of being the colossal ass holes they currently are allowed to be. They really have to piss you off in order to make you switch all your automatic payments to another bank.
0 Rank Up Rank Down
Sep 23, 2013
Scott: I recommend you purchase a copy of the 2013 Dilbert desk calendar, then look at the entries made for 9/20 through today. Either prophetic, or just amazing synchronicity.

The product is fictional, but it is clearly aimed at the naive who somehow luckily got their hands on money and need to be separated from it. Just like all apple products.

I will never buy an apple product or service. The price, on all levels, is just too high. Google on the other hand...
Sep 23, 2013
Apple has already had enough trouble with the government. The last thing they want to do is to get into an area as heavily regulated as banking, and expose themselves to even more intense government scrutiny than they already have.

Although the thought is intriguing. In some ways, you're right - Apple is set up to do it. I recall reading that Apple now has roughly $145 billion in cash - which happens to be more than our federal government has.

They're already investing it. They also would have to get an entirely new and different infrastructure, and make money by making loans to induhviduals - a tiny amount at a time.

I'd see them more willing to start a vencap spinoff than I would see them wanting to open a bank. Think of the tax implications!

And the lawsuits from Samsung, et. al. when only the iPhone can be used for transactions at the AppleBank? Oh, lordee! I shudder to contemplate it.

So my best guess is that they'll stick to electronics. Hey, maybe you could get Apple to back some of your money-making ideas!
0 Rank Up Rank Down
Sep 23, 2013
Banking and healthcare are the most over-regulated industries. As in so regulated as to be serious barriers to entry. Like estimate the workforce you'd need to operate as a bank ... and then double it and hire the same number of lawyers to fight the never ended compliance nonsense accomplished not least by flinging reflexive roadblocks in front of anything giving off the slightest whiff of innovation. Best bet would be to offer banking-like services without triggering the trip-wires that set the regulators into a frenzy. Not a fine distinction I'd expect Apple to mess with. With or w/o Jobs and his monumental arrogance. Which is the other issue: many many folks - thinking folks - will happily work a tad harder for the freedom to not have Applecrap in their pocket/briefcase/office. As long as we are allowed that is. Happy to have an alternative to Blackberry also - though they did handle email better than the average 'droid.

Odd that the hand inside the nominally anti-corporate Dilbert puppet is so eager to worship the corporate tree - as long as it bears Apples.
+12 Rank Up Rank Down
Sep 23, 2013
Scott, a little perspective from the Netherlands: over here almost all of the things you want are already a reality. I can do almost all common banking tasks with an app in mere seconds, including transferring money between accounts, paying bills (including scanning paper ones), checking my credits, repeating withdrawals, you name it. I can also budget and save things into buckets, and program saving targets. It's all there.

The only thing a bit more cumbersome is getting a loan, but I think that makes sense. Over here, a credit history is not as well recorded as in the US, so they really want to meet you in person. After all, they're handing over their money to you. It makes sense to have some barriers there (technical note: it's not really their money being handed over, they loan it themselves).

Anyway, just saying that banking in some countries is perhaps more advanced than in the US.

On topic, your prediction is very likely false, for many reasons. Apple is first and foremost a hardware product company, it only has services to compliment the hardware. As for services, banking will seriously contradict Apple's DNA of secrecy.
+3 Rank Up Rank Down
Sep 23, 2013
I prefer cash.
+2 Rank Up Rank Down
Sep 23, 2013
Really?!... Apple wants to register fingerprints of peoples and all you think is BANK?
I expected some theory on government tracking citizens on yet another level
or at least another proof for "moist robots"...
+9 Rank Up Rank Down
Sep 23, 2013
Apple stock up $22 this morning on rumors of Apple's new iBank service.
Sep 23, 2013
Hi Scott - "Banking" per se is passe - plenty of low-cost alternatives with tech-savvy credit unions and on-line institutions. The people who still bank at a "bank" probably still pay by the minute for long-distance :-). Banks are all about getting money under management now, because, didn't you hear? Everyone needs a financial adviser! Why don't you re-publish your 10 simple rules for managing your wealth and disrupt what's left of the industry?

Actually, though - Apple might go into banking - even though there are a lot of low-cost alternatives, they're sort of like MP3 players pre-Apple - hard to find and for the tech-savvy. Apple could "legitimize" low-cost on-line banking the same way they did the MP3 player. That WOULD be cool!

But then, what's Apple's benefit? They don't want to start managing people's money, and there isn't a lot of margin in on-line banking itself. I suppose if they can get the payments business there's a lot of volume there, but the battles against the entrenched interests for that market are already legendary.

Sep 23, 2013
"didn't WalMart try to get into the banking business a while back & got stopped by the feds after incumbent banks played the "look, Mr(s) congress-critter, someone left a briefcase full of campaign cash on your desk!" game? if WalMart couldn't outbid/lobby the banking industry I don't see Apple being able to - sadly, the technology's the easy part... "

Walmart is still in the money transfer business, after a fashion. They are one of the major players in the 'send-a-relative-to-work-in-the-US-and-send-cash-back' game. That game has less regulations associated with it.
Sep 23, 2013
I'm really surprised no one has mentioned Bitcoin. Not that Apple would ever openly support Bitcoin, they have nothing to gain by it. However, and 'Applecoin' of the same vein isn't out of the question, particularly since a federal judge has recently declared Bitcoin to be a 'foreign money' and therefore legally tradable and enforcable in the United States.

We live in interesting times.
Sep 23, 2013
Apple bank. That's an interesting thought. For years, I've thought that the #1 problem online is identity management. Usernames and passwords are cumbersome, insecure, and generally a pain in the rear. However, with the rich-content and participation paradigm of the online world, identity tracking is a semi-necessary thing for web sites to enforce.

I've considered for a long time that maintaining an identity and tracking content would require a "3rd party" service to do authentication. (much like Facebook does it today). But that such a system would almost certainly need to be tied to a bank account to really generate privacy, manage transactions, and so on. Who's poised for this? Nobody. Because banks generally don't care about pioneering internet technology. But Apple would.
Sep 23, 2013
didn't WalMart try to get into the banking business a while back & got stopped by the feds after incumbent banks played the "look, Mr(s) congress-critter, someone left a briefcase full of campaign cash on your desk!" game? if WalMart couldn't outbid/lobby the banking industry I don't see Apple being able to - sadly, the technology's the easy part...
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