[KaiserPro]

A traditional bank used to take people's deposits and loan them to other for a fee. the fee would then be returned on aggregate to depositors less the cost of business and profit. this is so called fractional reserve banking.

But that doesn't really provide that much interest to depositors, in this age of loose money supply.

So there are more exotic functions that "investment" banks fiddle with. Ie trading on the stock market (regulated betting) buying companies, and trading on futures and other pure bets.

The problem is that banks are bigger, and have more depositors. So when one pops, other go because they are all doing the same shady shit to make profit.

In the UK there are still a few building societies that offer traditional, boring, consumer banking and mortgages. But they are now large national behemoths.

But to your point, Brex is a payment manager/facilitator. Its not really offering banking, its more a service to manage expenditure. This might seem like pedantry, but its different enough to make the point.

[konne88]

I would disagree that Brex (and many others in the space) aren't offering banking. I can deposit money, I can withdraw it, I have a credit card, I earn interest, etc, they seem to offer everything a traditional bank would.

To your point about risky investments, like stocks, I agree that that's very sketchy. But I think even very prudent banks that don't invest in stocks etc still take on a lot of risk, like we see with the bank collapses caused by the high interest rates these days.