The Finanser’s Week: 28th September – 4th October 2015

Our main stories this week include ...

Do banks need to change so fast?

An interesting report from the BBC:  “Banks in the UK and across Europe could lose their best customers if they fail to make massive investments in mobile banking and marketing.  Traditional 'retail' banks are most at risk, according to a survey by Deloitte Consulting, which talked to senior executives of 133 banks and insurance companies around the world.  These banks, which provide High Street customers with loans, mortgages and current accounts, could lose up to 25% of their profits over the next five years.”

The Challenging State of British Banking

We were honoured to host Anthony Browne, CEO of the British Bankers’ Association at the London Club, who outlined some of the challenges on the banking landscape today.  And there are many.  He bucketed them into a number of key areas and, bearing in mind that this is under the Chatham House Rule, I thought that I would give my own interpretation of these major areas of challenge.

Social lending is not so social

This post was first published on SAP for Banking

Many markets are being 'disrupted' by peer-to-peer (P2P) connectivity and new open marketplaces.  Think Uber for taxis and Airbnb for hotels.  These are the new marketplaces for personal transport and accommodation.   Some say that P2P lending is the new marketplace for financial credit.  From mortgages to trade finance to personal lending, P2P crowdfunding is changing the game but, in this update, I content that it is not disruptive at all.  Instead, it is just a shift from traditional institutions funding consumers and businesses to a new form of risk mitigation through an additional third party layer. 

Banks make a corporates' first experience, the worst experience

We had an interesting dinner this week talking about customer onboarding.  The focus was on counterparty banks and corporate account opening processes, and the ongoing challenges therein.  In a nutshell, due to the documentary and regulatory requirements for proof of identity and trust, the account opening process is the worst part of banking and can take months for a corporate to get this done.  Once it is done, then all is tickety-boo but it is pretty clear that banks make their worst customer experience the first one.

Is a Financial Transaction Tax (FTT) inevitable?

I was honoured to present at a conference in Washington just before Senator Elizabeth Warren, the leading voice in America for changing the bank system.  Senator Warren made a strong-worded speech condemning big bank mentality.   A few choice comments included a condemnation of Jamie Dimon, who apparently was personally calling congressmen to get amendments to Dodd-Frank to suit JP Morgan, and threatening to bring government and the economy to a standstill if they didn’t. 

This week’s major news headlines include … 

RBS spin-off Williams & Glyn applies for banking licence - The Telegraph
Challenger bank set to appear on the high street next year and float by the end of 2016

SoftBank leads $1 billion investment in U.S. fintech startup SoFi - Reuters
TOKYO (Reuters) - SoftBank Group Corp said it had led a $1 billion investment in U.S. financial technology startup SoFi, calling it the largest single financing round in the fintech space to date.

RBS trader: bank fired me to disguise its own failings - The Telegraph
Ian Drysdale tells a London court he was made a scapegoat folloiwng the currency-rigging scandal

Pension system 'needs reform' - BBC
The pension system in its current form fails to provide an incentive for people to save, accountancy firms PwC argues.

McKinsey warns banks on finance services - Financial Times
Rise of digital disrupters to strip 60% of earnings from areas such as credit cards and car loans

Banks 'are past the worst on fines and punishments' - The Telegraph
Record-breaking fines for finance firms are likely to be a thing of the past, as the regulators cut back on huge financial penalties in the City

RBS could buy back its own shares to aid Government sell-off - The Telegraph
Government is slowly selling off its 73pc stake in Royal Bank of Scotland

Google search chief looks to the future - BBC
Google's search chief explains how his firm is trying to provide results without asking users to type in requests.

Deutsche Bank predicted to cut 10,000 jobs - The Telegraph
The German investment bank's London arm could be particularly hard hit as new chief executive John Cryan slashes costs

Strategies in the spotlight for trio of new European bank CEOs - Reuters
LONDON (Reuters) - Thousands of jobs cuts, business closures and billions of euros of capital raising are all on the cards as the new bosses of three of Europe's biggest banks respond to pressure to devise new strategies to revive them.

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