Korva is a scroll of the internet’s best ideas.
What private bankers do
A private banker sees all of a client's accounts, optimizes their deposits, thinks about the right tax-efficient structure, and, when a loan is needed, makes banks compete to offer the best yield. Anyone in the lower 99% gets access to nothing, and the lower the income, the less help there is.
Why education failed
Financial education was supposed to close that gap, and it never worked, because people don't sit down for classes. AI can give every person around the world the intelligence to optimize their financial life on their behalf.
Open banking in practice
Open banking supplies the raw material. Plaid can connect 120 million accounts, and intelligence on top of that can show each customer what fees are coming. In Brazil today, Nubank tells about 50 million customers every day when a credit card at another bank is due tomorrow with no money in the account, and offers to lend the money to pay it. It also offers to refinance a loan at a lower rate.
Why do private bankers get better terms for clients?
A private bank earns fees on the assets it manages, so it works to win and keep clients with large balances. Large borrowers are valuable to lenders, so several banks will bid for their business. A banker who sees all of a client's accounts can ask each lender to match the best offer. Private banks commonly set minimum asset levels, often in the millions, for their clients.
Why did financial education fail to change behavior?
In 2014, Daniel Fernandes, John Lynch, and Richard Netemeyer published a meta-analysis in the journal Management Science covering 201 studies of financial education. They found that interventions explained only about 0.1 percent of the variance in financial behaviors studied. Effects also faded over time, and they were weaker for lower-income participants. The researchers noted that education delivered close to the moment of decision worked better.
How does open banking let apps see other accounts?
Open banking lets a customer give a third-party app permission to read account data from their bank through a secure interface called an API. The customer grants access and can revoke it. The United Kingdom's Open Banking rules took effect in January 2018 after a Competition and Markets Authority order covering the nine largest banks. Plaid, founded in 2012, is one of the companies that connects apps to bank accounts in the United States.
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