[leereeves]

Banks are heavily regulated and the government forbids such investments.

> The FDIC permits insured state banks and their subsidiaries to undertake only safe and sound activities and to make investments that do not present a significant risk to the deposit insurance funds

https://www.fdic.gov/regulations/laws/bankdecisions/InvestAc...

[bunderbunder]

There's still room for innovation and partnerships with startups, though, even if they can't do something wildly disruptive*. For example, I originally found out about CreditKarma because my bank had partnered with them in order to incorporate a credit monitoring widget into their online banking portal.

[jonwachob91]

They don't have to make risky investments in these companies. They could collect the deposits and provide them to betterment/wealthfront, while they split the fees. The robo-advisors could cut their acquisition team and focus on the algorithms and the small banks could cut their advisor staff. It's basic synergy.

It's a risk free method for partnering small banks with innovative companies.