Our biggest stories of the past week are …
I’ve talked for some time about component based banking but what about component based pricing? Bank pricing is the most opaque part of the industry, and the part that irritates customers the most. Customers get charged high fees for unauthorised overdrafts as this funds free bank services for those who don’t go overdrawn. Banks focus upon packaged accounts and cross-sell because the core deposit account is their loss leader. It is this area of banking that should undergo the most fundamental change over the next years and it is already happening.
I spent some time reviewing the latest news on M-PESA yesterday. M-PESA is now seven years old, and has transformed the African landscape. Since its launch in 2007, over 18 million of the 43 million people who live in Kenya have opened an M-PESA account and access to the mobile network operator is 40 times easier than accessing a bank (there are 40 M-PESA agents for every bank branch).
I noted the disconnect between the bank community and the technology community some time ago in my Red Pill moment, and as the year passes it becomes more and more obvious to me that we are going through a sea change in finance. Almost every day, I encounter a new start-up who wants to change some part of the banking system.
Blimey!!! When you start debating nuances of things with the Bitcoin community, it doesn’t ‘arf get into a pedants dream. In this case, we clarified some of the dialogue about the blockchain and bitcoin yesterday. The net:net of that discussion is that you have to a have a native currency to use the blockchain. It doesn’t have to be bitcoin, but as that’s the one with five years of development, why would you use another one? This then moved into a discussion of money, and what is money.
The Bitcoin community have been educating me lately in how their currency cannot be regulated. This stems from my assertion that money was created to control people and therefore you cannot have money without government. The Bitcoin guys tell me that once you’ve converted your currency into bitcoins, then you can trade that currency anywhere globally without government control. Once it’s on the blockchain, the money becomes anonymous. So has government, the system and control failed? Can you have an internet system trading commercially without control?
The major general news stories of the past week include …
Authorities are about to crack down on banks again – but it's you who will feel the pain – The Telegraph
The latest wrong-headed proposal will be announced by the Bank of England on Friday
Saudi firm sues Barclays for $10bn – The Independent
A property company controlled by one of Saudi Arabia’s richest men, Sheikh Mohamed bin Issa al Jaber, is suing Barclays for $10bn (£6bn).
Exiting UK is 'absolute priority', says Clydesdale and Yorkshire Bank owner – The Telegraph
National Australia Bank looking at options for UK banks, including floating them on the stock market
Tesco ATM promises 'free erections' – BBC
There's been a rather unfortunate translation error on an ATM outside an Aberystwyth store.
Chris Blackhurst: Pride comes before a fall, as Standard Chartered and its boss, Peter Sands, find out – The Independent
Guy Fawkes, 2010. It may not mean much to most people – 5 November comes round every year, after all. But at the top of Standard Chartered, among the bank’s hierarchy, and for its investors, the date is etched in the memory.
Apple CEO fires back as retailers block Pay – Reuters
LAGUNA BEACH Calif. (Reuters) – Apple Inc CEO Tim Cook fired back at CVS and Rite Aid on Monday after the drugstore chains blocked the iPhone maker's mobile payments service, saying there were plenty of other retailers around the world to sign up.
March of the regulators will destroy banking innovation – The Telegraph
Banks need to hire the right people to help them with a change in customer needs and technology, but regulators are standing in the way
Second Deutsche Bank Executive Found Dead in Suspected Suicide – International Business Times
A senior Deutsche Bank lawyer is suspected of commiting suicide after being found dead in New York. Calogero Gambino, 41, was found hanging by the neck from a stairway banister, reports the Wall Street Journal.
Business Metro Bank Metro Bank loans and deposits surge – The Guardian
New high street lender reports strong growth in customer numbers and business accounts but profit still proves elusive
Vulnerable European banks identified – BBC
Twenty-four European banks fail "stress tests" of their finances, with 14 still needing to raise more capital, the European Banking Authority says.