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Old 01-16-2019, 06:57 PM   #1
WaterAndWindSpirit
 
Join Date: Oct 2014
Default Would it be possible to stablish your own banks?

Hello everyone!

So, here is the following situation:

A dragon lady got portaled to our modern-day Earth along with her hoard in a place where there's poor documentation for births.

Fantastic creatures (elves, dwarves, orcs...) have arrived all over the Earth.

Some kind of cognitive block makes all Terran people who do not have a developed sense of self unable to acknowledge paranormal phenomena. My go to example is a mad magician throwing a fireball into a crowded cafe is gonna be remembered as a terrorist of some description throwing a homemade bomb of some description (likely all descriptions conflicting with each other).

Those who have a developed sense of self can freely learn magic if they have the mental capacity for it.

Dragon lady manages to use her powers, charisma, and followers she gathered along the way to reach Europe.

Dragon lady unifies enough open minded terrans and friendly fantastic creature to start doing research into blending magic and technology through a company that inexplicably (at least to the terrans) experiences extreme fast growth due to a series of technological (or rather technomagical) breakthroughs. Becomes world leader in cutting edge tech like communications and aerospace, and experimental (or rather alchemical) medicine, but officially doesn't do weapons research/manufacturing. Keeps enough computer and weaponry TL 8+1^ tech to her organization to give herself a massive edge.

People with paranormal powers and experience prefer dealing with people who have knowledge of the paranormal.

Current banks don't have said knowledge.

How hard would it be for Dragon lady to create her own banking institutions that, while not taking over established ones, would be as recognized as them and Dragon credit cards being accepted wherever current credit cards and online payment processors are accepted?
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Old 01-16-2019, 07:13 PM   #2
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Default Re: Would it be possible to stablish your own banks?

Not at all difficult. If you've got capital and you follow established regulations, you can create a bank, just like any other business. It sounds to me like the difference between this any other financial services provider is that it'd have specialized products for their specialized clientele: real estate specialists who know how to handle purchase of forests (for elves, fauns, and the like) or have extensive experience with mineral rights (for dwarves), extremely long investment plans vampires and other nominally immortal creatures, special privileges for dragon investors to come and roll around in their money now and again. This can all, I think, be handled within the framework of what banks generally do. They'd just do it a bit weirdly.
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Old 01-16-2019, 07:15 PM   #3
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Default Re: Would it be possible to stablish your own banks?

A bank is just another company -- but one with a lot of regulations. So it's about as hard as starting any company with a few tens of millions in capital, plus getting approval from the regulators. Details will depend on the country you have in mind (your post says "Europe"). Not a gigantic hurdle just to create the company, but getting lots of depositors and customers is another question, which will call for lots of business skills.
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Old 01-16-2019, 07:31 PM   #4
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Default Re: Would it be possible to stablish your own banks?

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Originally Posted by WaterAndWindSpirit View Post
How hard would it be for Dragon lady to create her own banking institutions that, while not taking over established ones, would be as recognized as them and Dragon credit cards being accepted wherever current credit cards and online payment processors are accepted?
Ignoring the peripheral story, I assume the question here is how hard is it to found a bank? Every nation has their own banking laws, but mostly it's slightly harder than setting up a new widget-making company, but not too difficult. Here in the US people open community banks and co-ops all the time.

Credit cards are a more complex issue, because while banking is a two party transaction (the bank and the account-holder/loan applicant), a credit card transaction involves at least 4 (the card issuer, the customer, the merchant accepting the credit card, and the clearinghouse that owns the network). The problem with starting up a *new* one is that the money making part of the point-of-sale side of the operation is individual vendors agree to pay a fee to the clearinghouse for each card their equipment can handle, which they hope to recover because the card holders spend more money there. If there are not many people who have that card (or who would want to use it at your store) getting accepted everywhere that current major credit cards are involves millions of individual store owners deciding to regularly paying a substantial amount of money to the clearinghouse to provide access nobody trying to use to pay them. That won't happen. I suppose the card issuer could pay the fees instead, clearinghouses presumably don't care who pays them as long as the money is good, but then the issuer is either losing a fortune on the deal or needs to figure out a way to pass the cost on to the cardholders somehow (say by charging a large monthly fee whether you use the card or not)
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Old 01-16-2019, 07:49 PM   #5
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Default Re: Would it be possible to stablish your own banks?

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Originally Posted by malloyd View Post
I suppose the card issuer could pay the fees instead, clearinghouses presumably don't care who pays them as long as the money is good, but then the issuer is either losing a fortune on the deal or needs to figure out a way to pass the cost on to the cardholders somehow (say by charging a large monthly fee whether you use the card or not)
How large a fee are we talking about here? I want to know if having their own branches offshore for operatives is worth eating the costs.

Thanks!
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Old 01-16-2019, 08:33 PM   #6
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Default Re: Would it be possible to stablish your own banks?

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Originally Posted by WaterAndWindSpirit View Post
How large a fee are we talking about here? I want to know if having their own branches offshore for operatives is worth eating the costs.
It varies a lot - there's a *lot* of competition - but $50/month per merchant is probably the right range for something nobody is using.

Per transaction fees are usually something like $0.25 plus 1 to 2% of the total, but if somebody actually is using it, the merchants will probably be willing to pay that part. Incidentally this is why vendors hate to take credit cards for small amounts, the flat fee eats the profit margin.

Edit: It's not really clear to me what the goal here is (the bit about operatives makes it sound like it's some sort of espionage cover, but what would a credit card network do for that?). If all you want is a credit or debit card with your logo on it, just cut a co-branding deal with Mastercard, Visa, Discover or AmEx. That usually works out to a net positive cash flow to you (your cut of the fees exceeds anything you pay them) and automatically makes "your" card work anywhere that type of card does. That's what most banks do really - my Bank of America and First Federal debit cards are cobranded with Visa (oddly my Bank of America credit card is cobranded with Mastercard, but I think that's because it was a cobrand with the Georgia Tech Alumni Association when I got it, since bought out by BoA).
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Old 01-16-2019, 09:27 PM   #7
WaterAndWindSpirit
 
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Default Re: Would it be possible to stablish your own banks?

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Originally Posted by malloyd View Post
It's not really clear to me what the goal here is (the bit about operatives makes it sound like it's some sort of espionage cover, but what would a credit card network do for that?).
Credit cards are useful for purchasing stuff. With TL 8+1^ encryption tech, and offshore accounts, you're providing a certain level of untraceability to operatives, even if operatives need dummy cards when overseas. The point is that I don't think you could get away with going through airport security with a suitcase full of cash (for bribes and On Site Procurement), and such a suitcase would inconvenient to carry around anyways. Dummy cards on the other hand, especially if you've got, say a small extra dimensional pocket that can store a few hundred grams of stuff (larger extra-dimensional spaces are possible, but the bigger a space the harder it is to maintain)... The dragon lady is genuinely trying to make the world a better place through having the best minds inventing tech, but there's another organization trying to take over the world by destabilizing governments and recruiting it's own militia, so the dragon lady has to fight on their terms, with covert ops. Think of the dragon lady and her organization as a sort of XCOM that went public as far as being the world leader in peaceful xenotech (Arcanotech, but that's technically xenotech) but not with it's world protection agenda, fighting against an EXALT that has xenotroops and xenoaugmented troops, but no overt alien invasion.
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Old 01-17-2019, 04:50 AM   #8
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Default Re: Would it be possible to stablish your own banks?

If the dragon lady and her followers are fantastically rich and, as a dragon, she is supernaturally skilful in growing her hoard*, I don't see how she couldn't have founded a perfectly legitimate credit card company that competes with VISA, AMEX, MasterCard, etc.

She'll make money on all the millions of ordinary customers who aren't aware of her dragonic nature and she can conceal the activities of her secret credit-card having operatives through cunning financial acumen.

Of course, this all depends on her having supernatural cunning and financial acumen, the sort that allows her to break into a market with fantastically high entry costs and advantage for established market leaders, and then conceal financial irregularities while having to conform to very strict regulations.

*As she should be.
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Old 01-17-2019, 06:05 AM   #9
Celjabba
 
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Default Re: Would it be possible to stablish your own banks?

While creating a new retail bank is possible, it is perhaps easier* to buy one.
*:assuming you can leverage the "cognitive block" to legitimize the funds used.

Either way, joining the local debit card automatic clearinghouse will be a given.

Creating a Worldwide accepted credit card is another story.
There are few players in that field, and gaining a share of the market would be a significant challenge.
Issuing Dragon branded cards co-branded with a major card association is much easier. They would have some oversight on what happen on the network, but regulatory agency would look over your shoulder anyway, so...
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Old 01-17-2019, 09:53 AM   #10
Black Leviathan
 
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Default Re: Would it be possible to stablish your own banks?

It would be so much harder to build a bank with a mountain of gold than it would be with virtually no money and a valid birth certificate. Owning a large corporation, especially one that does business overseas, especially one that manages capital transactions of any degree of risk involves a lot of verification of who you claim to be, what your financial sources are, what business you've done in the past. Some of that can be circumvented with magic but in the modern age there's too much double-entry, too much access to information and too much paranoia of deals that are too good. Also travelling through a gate from one world to another, likely at different tech levels, you'd be facing near-critical penalties to many of the rolls you'd use to establish your bank.

Setting up and overseas financing office or investment group is pretty trivial, especially if it doesn't have to attract large investors.

If you buy a few million dollars of pre-paid Visa gift cards they'll put whatever logo or design you want on them.

But banking institutions where people have checking accounts and auto loans with ATMs and the whole deal, those take a lot of feduciary background and a lot of time to build.
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