AML/KYC/etc. has utterly destroyed the ability to do anything that isn't "industry standard" and super boring. Do anything whatsoever just a tiny bit interesting and you will find your banking access cut off or severely restricted.
After dealing with that mess, I can absolutely see why founders avoid it. They are there to build a business, not dick around with compliance officers all day.
And this refusal to follow existing rules and practices of how businesses are generally run, opens up an opportunity for all kinds of shady, borderline grifters. Sorry, I meant disruptive start-ups. But hey, it's not my money after all.
You just need to have billions moving around every month, with very high fees, to make it worth the time to take on that risk.
> So rampant was the practice, prosecutors said, that on some days drug traffickers deposited hundreds of thousands of dollars at HSBC Mexico accounts. To speed things along, the criminals even designed “specially shaped boxes” that fit the size of teller windows at HSBC branches, according to the documents.
https://www.reuters.com/article/us-hsbc-probe-idUSBRE8BA05M2...
Now that's financial innovation!
I banked with SVB with my first startup. It got the job done, but the UI sucked, and there was nothing special about it compared to other banks. It was actually a very inconvenient bank to work with because SVB doesn't have any public branches so you can't walk into SVB and deposit a check or withdraw cash, it's all done over the phone, by mail, etc.
When starting my 2nd startup, I applied for an account and was denied. (What kind of bank denies a client an account?)
To be a SVB client, you need to be networked with other SVB clients (e.g. investors banking with SVB). This creates a big bubble where all of SVB clients are interconnected with one another, which might have been a good growth strategy for SVB by being "the exclusive" bank to be accepted into, but at the same time creates major concentration risk when all clients are in the same/similar industry (tech) and backed by the same group of investors.
SVB sounds like one of those start-up like fintechs that constantly advertise on Youtube for everything from insurance to taxes to banking, assuming Youtube users are on average to young to know that solid, legacy solutions for all of this exist already.