YouTube will be the next new bank

Author:Caleb Shack

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each successful new bank (neobank) follows the same starting path: identifying areas where traditional banks are overcharged or underserved, as an entry point, and thus entering broader banking operations。

SoFi found that FICO credit ratings were a bad way of pricing student debt for borrowers with development potential. On the contrary, they are insured according to income trajectory and disposable cash flows, and their accumulated data are gradually becoming a true moat. When most banks charge 3% for each external brush, Monzo, Revolut and Starling all start with zero foreign exchange charges. In Brazil, where traditional banks charge punitive interest rates and millions of people have no access to the formal financial system, Nubank has won the market with an annual free credit card。

The set is consistent: find entry points, take a vertical breakdown of the scene and then expand to full service。

Today, the provision of cheques and savings accounts has become more simple than ever, thanks to currency stabilization. Infrastructure has been essentially commodified. This led to a wave of stable currency and new banking start-ups, but most of them lacked differentiation. The "no friction" feature, which allows them to start easily, also allows the next number of competitors to follow. There are no moats at the deposit level alone。

The success of the first generation of financial technology companies was largely due to the construction of differentiated products above the recently commodified distribution level (Internet). This gives them an advantage over existing traditional banks. When commodification occurs, it opens the way for new products to be generated through binding. The ease of opening deposit accounts does not trigger 1,000 new independent new banks, but rather makes them an internal function embedded in platforms that already have more valuable assets: sources of revenue。

If you're a producer of money on YouTube or Twitch, you have a deeper relationship with the platform than you do with Chase. The platform knows your cash flow in real time. It understands your growth trajectory. It's deep-rooted algorithms. It gives you credit guarantees in ways that traditional banks can never do. The same logic applies to casual economic platforms such as Uber and Lyft, social utility platforms such as Whop and TikTok, and modern paid service providers such as Deel and Gusto。

The logic of tying the income of creators to financial products is simple. Income paid to creators and casual workers, total market-generated merchandise transactions (GMVs) and wages paid to employees are lost to the platform once remittances are made through ACH transfers. The YouTube family alone paid over $100 billion to the creators since 2021 and opened in DecemberStable currency paymentsfunction. Whop has generated more than $4 billion in GMV and has begun to expand vertically to financial services that support encrypted currency. With only a few lines of code, the Platform is now able to earn transfer charges and short-term national debt returns in the process of payment, making the binding of these services within the Platform a natural option and ultimately providing loan services based on their knowledge of users。

These companies do not need to become real banks in the regulatory sense. They simply need to provide banking services (BaaS), including accounts, bank cards, loans, driven by the deposition of platform data they have generated. The entry point here is no longer product arbitrage or pricing arbitrage, but the entry point is the income relationship itself。

YouTube will be the next new bank. Not because YouTube would apply for a bank license, but because where the money came from, where the financial services were。