Would users enjoy running their own bank?

[Boltgreywing]

I am just curious from a virtual pet standpoint. Would users which to run their very own bank?

Would users like to deal with run on the bank scenarios?

Edited May 3, 2017 by Boltgreywing

[Anoua]

For myself no. I just don't see the point and what would be the benefit of owning and operating a bank? Would you make money on interest? That is a slow return, and where does the loaned out money come from? Is that money the bank owner has to have? If not then points are just flowing into the economy. Would there be checks on this, can only loan out X amount for example. What length of time do loans span and what happens if someone can't pay back the loan payment?

[kami]

It's an interesting idea, but I think it gets complicated really quickly, especially if you involve loans.  I think Anoua hit most of the points there.

Speaking as a pet site feature, it doesn't really feel /pet/ site-y. I think it could maybe work for other themed typed games, but for pet sites, I don't see it mixing in well. If you're trying to think of new pet site game features, I'd try focusing more on the "pet" aspect of the genre.

"Would you be willing to pay 500,000 points to open a bank?"

This question is irrelevant. Every site has their own system of currency and structured economy. I can't know how much that's worth since it would be different with every game.

[Digital]

2 hours ago, kami said:

Speaking as a pet site feature, it doesn't really feel /pet/ site-y. I think it could maybe work for other themed typed games, but for pet sites, I don't see it mixing in well. If you're trying to think of new pet site game features, I'd try focusing more on the "pet" aspect of the genre.

If you look at this from the point of a pet site mechanic, it doesn't fit in, however I do feel Neopet's did fit this in well in terms of creating a world mechanic. They made their bank useful as a passive way to actually make NP through yearly interest. It encouraged saving. Also add in random events that could "take" points from you, you tended to keep those NP's locked in the bank. It made currency feel actually transactional and a little more "real" in my mind as you had to be a little more aware of it.

I don't play Neopets much anymore - partly because of my history of it, but I still check in to collect my 1,500 NP daily interest from my amassed 5 million NP's sitting in a bank account that I autobought my way into, err.. saved up... yeah.

[kami]

Banks are fine, that's not what this thread is about. It's asking about users actually owning and managing their own bank, rather than having an "account" with a bank that the site controls.

[Digital]

1 minute ago, kami said:

 

Banks are fine, that's not what this thread is about.

 

My apologies, I read the thread too fast  

[kami]

Just now, Digital said:

My apologies, I read the thread too fast  

No worries, happens to all of us

[Digital]

In the correct topic of users running their own bank, the question then becomes what is in it for them, and what is the end-purpose of it?

Loans tend to be dicey if they are not guaranteed to be returned, and many players do not consistently play games. If you removed that feature, and allowed players to have bank accounts that you setup at your bank, allowing you to define interest rates for them, it then in theory costs you to run the bank with no gain.

Banks in the real word can invest your money, and they profit off what they can make off of your money while they have it. It is a very slow process, and again, no guarantee on return. You also have to be able to give players money they deposit with you if they want it back.

As @kami said, not pet-site like, and I don't see it as a profitable feature that would entice any players. I see it as a sink that no one would want to deal with.

[Nate]

I good alternative way to do this, would be to have it so that the users are actually lending their money to NPCs.

 

You could pay to level up your bank, the higher your level, the more money you are allowed to invest. You could then set an interest rate, and manually approve each NPC's loan. They then pay you back over a fixed period of time.
 

[Boltgreywing]

14 hours ago, Anoua said:

For myself no. I just don't see the point and what would be the benefit of owning and operating a bank? Would you make money on interest? That is a slow return, and where does the loaned out money come from? Is that money the bank owner has to have? If not then points are just flowing into the economy. Would there be checks on this, can only loan out X amount for example. What length of time do loans span and what happens if someone can't pay back the loan payment?

@Anoua: The way the user bank would make money would be off of loans. Basically other users would place money into your own bank and then you would loan amount some of that money to other users with a bit of interest attached to it. You would then pay your depositers a small amount of interest to keep the points safe there. I don't really know the length of the time the loan would be and as such would be dependent on what the bank owner sets up. However for small amounts such as 400 - 600 points for example many a few days at most to pay back the loan.

The amount of interest that the bank would make would usually be higher then what the depositors are paying probably a 4 to 1 ratio. As to if users that can't pay back the loan maybe some of the items they have get converted to points to help pay off the loan. Of course if all things fail then it is possible that this could happen:

http://www.mobygames.com/game/dos/dune/screenshots/gameShotId,633337/

11 hours ago, kami said:

It's an interesting idea, but I think it gets complicated really quickly, especially if you involve loans.  I think Anoua hit most of the points there.

Speaking as a pet site feature, it doesn't really feel /pet/ site-y. I think it could maybe work for other themed typed games, but for pet sites, I don't see it mixing in well. If you're trying to think of new pet site game features, I'd try focusing more on the "pet" aspect of the genre.

"Would you be willing to pay 500,000 points to open a bank?"

This question is irrelevant. Every site has their own system of currency and structured economy. I can't know how much that's worth since it would be different with every game.

@kami: I changed the question to a question about bank features.

8 hours ago, Digital said:

In the correct topic of users running their own bank, the question then becomes what is in it for them, and what is the end-purpose of it?

Loans tend to be dicey if they are not guaranteed to be returned, and many players do not consistently play games. If you removed that feature, and allowed players to have bank accounts that you setup at your bank, allowing you to define interest rates for them, it then in theory costs you to run the bank with no gain.

Banks in the real word can invest your money, and they profit off what they can make off of your money while they have it. It is a very slow process, and again, no guarantee on return. You also have to be able to give players money they deposit with you if they want it back.

As @kami said, not pet-site like, and I don't see it as a profitable feature that would entice any players. I see it as a sink that no one would want to deal with.

@Digital: Its designed to be a sink initially but the points that users will off of it in the long run from loans will pay out well. Basically I am trying to perform the same idea as what real banks do.

7 hours ago, Nate said:

I good alternative way to do this, would be to have it so that the users are actually lending their money to NPCs.

 

You could pay to level up your bank, the higher your level, the more money you are allowed to invest. You could then set an interest rate, and manually approve each NPC's loan. They then pay you back over a fixed period of time.
 

@Nate.Tube: I do like the idea of lending money to npcs but how does one create an npc? I do like the idea of an incremental upgrade in banking potential. The interest rate and the manual approval of loans. I thought it be kind of nice to have a shifty npc who basically runs a shop that users buy from and will at times steal the points out of users pouches.

Just so there is a bit of variety. I'd like to create a bit of unpredictability in the npc as to its behavior like have some more likely to pay off the loans, others who pay late sometimes and ones who don't back the loan at all.

[Digital]

On 5/2/2017 at 7:36 PM, Boltgreywing said:

I do like the idea of lending money to npcs but how does one create an npc?

I am hoping this helps, after I wrote it I am not sure if it will answer @Boltgreywing directly, but I feel someone will find it useful.

This is strictly how I would build this system. Note, this is less programming and more of game design. This is where you have to sit down and decide how it should work before you dive into the actuals. It's high level.

User Story (This is how I frame my features, those who have worked in Agile teams will understand the verbiage of the next sentence and get it, those who have not: A user story is a basic sentence that describes what someone wants to be able to do. It frames a goal in simple language without complexity.)

"As a player, I want to run a bank that allows me to offer loans to NPC's and make money on interest."

Okay, simple and easy, lets now define what rules we should have.

1. Since we are running a bank, the bank should have a different "account" of currency then the current player. In other words, players should deposit money into their banks. The deposited money is used to give out loans, and loan payments come back into this "account." This means the player can only loan out money that has been purposefully deposited for being loaned out.
2. NPC's in this case are random unique names that are generated, the amounts they want are random (between a low and high amount based on repayment term) based on a scale on repayment. Interest rate is also randomized.
   1. Short-Term Loan: Paid back over 3 weeks, amount varies between 100-3000 currency. Interest is usually 1-3%.
   2. Medium-Term Loan: Paid back over 5 weeks, amount varies between 3000-40000 currency. Interest is usually 2-5%.
   3. Long-Term Loan: Paid back over 8 weeks, amount varies between 40000-500000 currency. Interest is usually 4-8%.
3. A player has a 5% chance an NPC will appear asking for a loan every hour. This means that every user will have different NPC's asking for different loans at different times.
4. If a bank owner does not grant a loan within 72 hours, the NPC leaves.
5. When a loan is granted, the asked for amount is paid out the bank's "account".
6. The loan amount paid weekly will be calculated at (loan amount + (loan amount * (interest / 100)) / repayment term). It is deposited into the banks "account"

(Do not fact check my interest rates or math, this is used as a high level off the top of my head example to break down how I would do it)

See, not too terrible for a simple system. It is also a system that is beneficial for a player, since they actually make a return. Note, my current design above ignores any chance of non-repayment or a negative transaction. I will leave that to others to add in.

---

So basically a NPC in this case is a Name, an amount in a loan they want, the amount of weeks they want to repay the loan back, and an interest rate. Because in this case, NPC's are randomized, values are different, which makes them feel unique, but they really aren't.

NPC's are data, much like anything else. They are just given the appearance of something to be interacted with for the player. It is possible to add in logic to make them appear more interactive, perhaps a chance to not pay for a week, or other events. At the end of the day though, they are just stored data like everything else.

[Nate]

@Digital It's creepy how close you described how I imagined this would work haha!

That would actually be a really interesting feature that hasnt really been done before!

[Boltgreywing]

10 hours ago, Digital said:

I am hoping this helps, after I wrote it I am not sure if it will answer @Boltgreywing directly, but I feel someone will find it useful.

This is strictly how I would build this system. Note, this is less programming and more of game design. This is where you have to sit down and decide how it should work before you dive into the actuals. It's high level.

User Story (This is how I frame my features, those who have worked in Agile teams will understand the verbiage of the next sentence and get it, those who have not: A user story is a basic sentence that describes what someone wants to be able to do. It frames a goal in simple language without complexity.)

"As a player, I want to run a bank that allows me to offer loans to NPC's and make money on interest."

Okay, simple and easy, lets now define what rules we should have.

1. Since we are running a bank, the bank should have a different "account" of currency then the current player. In other words, players should deposit money into their banks. The deposited money is used to give out loans, and loan payments come back into this "account." This means the player can only loan out money that has been purposefully deposited for being loaned out.
2. NPC's in this case are random unique names that are generated, the amounts they want are random (between a low and high amount based on repayment term) based on a scale on repayment. Interest rate is also randomized.
   1. Short-Term Loan: Paid back over 3 weeks, amount varies between 100-3000 currency. Interest is usually 1-3%.
   2. Medium-Term Loan: Paid back over 5 weeks, amount varies between 3000-40000 currency. Interest is usually 2-5%.
   3. Long-Term Loan: Paid back over 8 weeks, amount varies between 40000-500000 currency. Interest is usually 4-8%.
3. A player has a 5% chance an NPC will appear asking for a loan every hour. This means that every user will have different NPC's asking for different loans at different times.
4. If a bank owner does not grant a loan within 72 hours, the NPC leaves.
5. When a loan is granted, the asked for amount is paid out the bank's "account".
6. The loan amount paid weekly will be calculated at (loan amount + (loan amount * (interest / 100)) / repayment term). It is deposited into the banks "account"

(Do not fact check my interest rates or math, this is used as a high level off the top of my head example to break down how I would do it)

See, not too terrible for a simple system. It is also a system that is beneficial for a player, since they actually make a return. Note, my current design above ignores any chance of non-repayment or a negative transaction. I will leave that to others to add in.

---

So basically a NPC in this case is a Name, an amount in a loan they want, the amount of weeks they want to repay the loan back, and an interest rate. Because in this case, NPC's are randomized, values are different, which makes them feel unique, but they really aren't.

NPC's are data, much like anything else. They are just given the appearance of something to be interacted with for the player. It is possible to add in logic to make them appear more interactive, perhaps a chance to not pay for a week, or other events. At the end of the day though, they are just stored data like everything else.

@Digital: This sounds like the knowledge I am looking for. Thank you digital. I know it is high level but it gives me a basis to work on. For now I should probably concentrate on building npcs for shops first. However I just had a thought what if you could give an npc a job at a shop and then they could go to the bank to deposit points or pick up a loan to help pay for supplies for the shop?

9 hours ago, Nate said:

@Digital It's creepy how close you described how I imagined this would work haha!

That would actually be a really interesting feature that hasnt really been done before!

@Nate: I like these type of ideas.

@Nate, @Digital: By the way do you know what a run on the bank scenario is?

[Digital]

@Boltgreywing I would not have a shop be ran by an npc per se. The amount of micromanaging would not make it enjoyable, and as a player I would probably enjoy that aspect myself.

I am glad my write up helped you out though. I typically do all my high level ideas like that, as it helps me organize the simple sentence into actionable rules.

Not sure what you mean by run?

[Boltgreywing]

5 minutes ago, Digital said:

@Boltgreywing I would not have a shop be ran by an npc per se. The amount of micromanaging would not make it enjoyable, and as a player I would probably enjoy that aspect myself.

I am glad my write up helped you out though. I typically do all my high level ideas like that, as it helps me organize the simple sentence into actionable rules.

Not sure what you mean by run?

@Digital: This might help. Its from wikapedia.

A bank run (also known as a run on the bank) occurs when in a fractional-reserve banking system (where banks normally only keep a small proportion of their assets as cash), a large number of customers withdraw cash from deposit accounts with a financial institution at the same time because they believe that the financial institution is, or might become, insolvent; and keep the cash or transfer it into other assets, such as government bonds, precious metals or stones. When they transfer funds to another institution it may be characterised as a capital flight. As a bank run progresses, it generates its own momentum: as more people withdraw cash, the likelihood of default increases, triggering further withdrawals. This can destabilize the bank to the point where it runs out of cash and thus faces sudden bankruptcy.^[1] To combat a bank run, a bank may limit how much cash each customer may withdraw, suspend withdrawals altogether, or promptly acquire more cash from other banks or from the central bank, besides other measures.

A banking panic or bank panic is a financial crisis that occurs when many banks suffer runs at the same time, as people suddenly try to convert their threatened deposits into cash or try to get out of their domestic banking system altogether. A systemic banking crisis is one where all or almost all of the banking capital in a country is wiped out.^[2] The resulting chain of bankruptcies can cause a long economic recession as domestic businesses and consumers are starved of capital as the domestic banking system shuts down.^[3] According to former U.S. Federal Reserve chairman Ben Bernanke, the Great Depression was caused by the Federal Reserve System,^[4] and much of the economic damage was caused directly by bank runs.^[5] The cost of cleaning up a systemic banking crisis can be huge, with fiscal costs averaging 13% of GDP and economic output losses averaging 20% of GDP for important crises from 1970 to 2007.^[2]

Several techniques have been used to try to prevent bank runs or mitigate their effects. They have included a higher reserve requirement (requiring banks to keep more of their reserves as cash), government bailouts of banks, supervision and regulation of commercial banks, the organization of central banks that act as a lender of last resort, the protection of deposit insurance systems such as the U.S. Federal Deposit Insurance Corporation,^[1] and after a run has started, a temporary suspension of withdrawals.^[6] These techniques do not always work: for example, even with deposit insurance, depositors may still be motivated by beliefs they may lack immediate access to deposits during a bank reorganization.^[7

[Digital]

@Boltgreywing Really no such thing if you were following my template since the only account in the bank is the banks assets. You could limit withdrawals in a day, but really not worthwhile since if the player really wants to profit they need to keep money in their bank to keep giving loans out.

Basically due to the nature of games which players are usually transient by nature and not consistent, we are taking a banks lucritive function and making into something playable as a game feature.

[Boltgreywing]

22 hours ago, Digital said:

@Boltgreywing Really no such thing if you were following my template since the only account in the bank is the banks assets. You could limit withdrawals in a day, but really not worthwhile since if the player really wants to profit they need to keep money in their bank to keep giving loans out.

Basically due to the nature of games which players are usually transient by nature and not consistent, we are taking a banks lucritive function and making into something playable as a game feature.

@Digital: Okay that sounds fair. I want to make my site to be a bit of a challenge for users in terms of playing and earning points. I'd like them to get creative.