Our main stories this week include …
I mentioned the Uber example of this cycle, which began as a start-up but, as it grew into an upstart, it started to be attacked by the incumbents. Then the regulators woke up and started to consider the implications of the insurance of drivers, the employment status of the drivers, the safety of the passengers, etc. Then the upstart becomes the incumbent as the regulator restricts its innovation risks to be more in line with the industry it has attacked. Eventually there is a new business model that has evolved the regulations thanks to the innovation, and this new business model has a new compliance structure that must also be adhered to.
During the third phase of the innovation cycle discussed on Friday, the upstart has been noticed by the incumbents and becomes a target to be attacked. We saw this with Uber from the taxi firms; with Airbnb, it’s the unlicensed sub-letting of properties that hits the news; and with Facebook, the target was privacy breaches. PayPal was targeted by banks for its risk and lack of security (falsely); M-Pesa saw incumbent banks saying they were fraudulent (falsely); whilst bitcoin created its own mess with Mt.Gox.
Having written that the start-up soon becomes the incumbent, a great question on twitter was asked: “so how does the incumbent maintain the innovation culture?” The answer is that they can’t. Any start-up will eventually gain momentum and size that means they need structure.
Having attended Sibos since way back when, I was sad to miss it this year. I got double-booked to be in Vegas at the Venetian to keynote with BAI RD2015. Surprisingly, I’ve been back in Vegas (why is it always Vegas, and not Las Vegas?) to speak at Money2020 just 10 days later.
There’s lots and lots of chat about AI, Artificial Intelligence, in banking using deep data analytics to augment our financial lifestyles. This is nothing new. After all, Spielberg made a film about it way back in 2001. What is new is the developments in AI that we’re seeing from firms like Google and IBM.
I seem to be getting more and more interviews out there, and this one was published by Octo after a recent conference in Paris where I keynoted. Many folks seem to like the interview, so I thought it worth reproducing here:
This week’s major news headlines include …
Metro Bank’s billionaire enrichment project – The Independent
National Australia Bank outlines UK exit – Financial Times
NAB also sells 80% of life insurance unit to Japan’s Nippon Life for A$2.4bn
Could we charge our phones through the air? – BBC
Could Meredith Perry really make the world wireless?
Six things firms should do to improve cybersecurity – BBC
Six things we can do to improve cybersecurity
Metro Bank losses rise as it expands ahead of flotation – The Telegraph
The high-profile challenger bank's lending more than doubled in the third quarter, but it has yet to make a profit
Deutsche Bank to rip out IT systems – Financial Times
Cryan decries ‘Horlicks’ of hundreds of different platforms
Barclays customers hit by computer glitch – The Telegraph
Bank hit by computer failure which left some customers unable to withdraw cash or make payments
Deutsche splits asset and wealth arms – Financial Times
Bank announces sweeping overhaul of units and executives
Silicon Valley Bank: The bank dragging Canary Wharf into Tech City – The Telegraph
The UK branch of the California bank has profited from other lenders' reluctance to lend to technology start-ups
Big data killed the private banking star – Financial Times
Blind digitisation will not solve the existing problems of wealth management, says Yuri Bender
If you like the Finanser, buy Chris Skinner's latest book: Digital Bank
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