To disrupt banking, do you need to own the bank?

Marc Andreessen is looking for a new bank.
Marc Andreessen is looking for a new bank.
Image: Reuters/Fred Prouser
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Some of the biggest names in Silicon Valley have been buzzing on Twitter over the last 24 hours about reinventing retail banking with better software.

“I am dying to fund a disruptive bank,” venture capitalist Marc Andreessen tweeted yesterday. Other Valley heavyweights chimed in, including Chris Dixon (a colleague at Andreessen Horowitz), Keith Rabois (Khosla Ventures), and Mo Kofyman (Spark Capital).

In his tweets, Andreessen mulled the importance of owning a bank itself compared to the benefits of an API (application programming interface) that could be used to access bank data and build services on top of it.

That was the mission of a startup called Simple when it was founded in 2009. But unable to overcome the financial and regulatory obstacles to obtaining a banking license, the company partnered with US Bancorp to provide the back-end for its online retail bank.

Andreessen, however, may have the resources to make the full dream of owning the regulated bank, as well, a reality. Other existing startups in this general area include non-bank lenders such as CommonBond and Lending Club.

Eric Ries, a Silicon Valley entrepreneur and author of the The Lean Startup, has focused on another part of the financial system: the stock exchange. Ries has made the case that tech startups should ditch Wall Street and create their own long-term stock exchange. This exchange would have structural impediments to things like high-frequency trading. Ries retweeted Andreessen’s comments yesterday about the pure software bank.