Idea · carried by 1 source
Financial Friction Is a Feature, Not a Bug
The slowness and friction in banking UX — the very things fintechs try to eliminate — are deliberate protections for the most vulnerable users. Making money movement instant and frictionless sounds great until your grandmother falls for a romance scam.
Where it comes from
William Hockey, explaining why banking isn't as broken as it seems, in highlights/william-hockey-bet-on-yourself (~1:09:08): “People think like oh my gosh, my bank is hard to use. My bank is hard to move money. It's slow to move money. That's actually a feature, not a bug.”
How it works
- What fintech gets wrong: “I think what fintech sometimes start with is they start with like hey, we're going to make it super easy to super free to move money all over the place. It actually starts to slow down.”
- Why it slows down: “The reason it slows down is because fraud is super expensive. And if you make it really easy for your grandma to send money to somebody in Nigeria, like yes, that's great for remittances, but that's really bad for romance scams.”
- Friction protects the vulnerable 5–10%: “All the friction is actually built to protect the 5 to 10% of consumers that can't get hurt. And people kind of forget that.”
- We already have the technology: “We have the technology right now to make financial services like almost entirely instant and like entirely friction free.” The friction is intentional.
- “With AI we can actually build those detection models a lot better. And so it's probably less likely your grandma is going to fall prey to elder abuse.”
- “If the banks don't have to optimize so much for that and it comes a little bit for free, we can actually make the UX better for everybody else.”
Before you “disrupt” a system, understand why the friction exists. Banking slowness isn't technological incompetence — it's a deliberate trade-off protecting vulnerable users. AI may finally let us remove the friction without removing the protection.