[s73v3r_]

"The critical difference is that in China, the apps effectively are the banks, whereas in the US, regulatory capture ensures that the banks stay the banks and it's the app's problem to figure out how to interface with them."

Are you sure it's that? Or is it that the apps don't want to have the responsibility of safeguarding people's money? Cause really, payments and money are things where you really do not want to "move fast and break things".

[abakker]

This all depends whether you can shift the risk. It is fine to break things if you have managed to get insurance to cover the downside.

[s73v3r_]

I would phrase that another way. It's fine to break things if you can make whole the people who are negatively affected by breaking things. Someone getting their money returned after it was stolen from your startup bank is one thing, but that person missing their car payment and having their car repo'ed because of that missing money, and thus not being able to make it to work and getting fired is another.

[abakker]

Exactly- I was trying, dryly, to be tongue in cheek. As the example you gave illustrates well, covering risk almost never includes second order consequences, it is part of the “limited liability” that companies get. Unfortunately, customers tend not to be informed well enough to reason through these possibilities up front. We never know exactly what will break, or how we might be effected by that breakage.