Our biggest stories of the past week are …
I’ve written a lot about incumbents versus startups lately and noted with interest that Jamie Dimon’s annual letter to JPMorgan shareholders picks up on this theme (not as a direct result I’m sure?). He talks about “hundreds of startups with a lot of brains and money working on various alternatives to traditional banking” and that “the ones you read about most are in the lending business, whereby the firms can lend to individuals and small businesses very quickly and — these entities believe — effectively by using Big Data to enhance credit underwriting.”
I’ve heard a lot of talk this morning about Big Data at a conference here in Barcelona, and had a realisation half way through. The conversation was all about the move from mass markets and customer segmentation to the market of one and peer-to-peer personalisation. In other words the deep data mining demanded by Don Peppers and Martha Rogers in 1:1 marketing in the 1990s is finally here. It took twenty years, but here it is. Yet this is the heart of the debate about digital disruption, fintech startups and bank responses.
I just finished presenting on Digital Bank strategies and Fintech, and was asked a wide range of questions:
- How do we transform our legacy structures?
- What is the biggest obstacle to becoming a digital bank
- You mention partnerships but all cooperative structures failed in the past, how can we succeed in the future?
- Can you show us someone who is doing this right and making it work?
- What should a bank do when we have millions of customers who trust us?
Building on the discussion of data being key to disruption, I often use the phrase ‘digital core’ in this context. Therefore, I was intrigued when someone asked for a definition of a ‘digital core’ and one of the replies was there isn’t a core anymore.
I get a lot of spam and scam email most of which is deleted but, as it's Friday, I thought y'all might appreciate the phish that follows …
From: Benard Madoff [mailto:email@example.com]
Sent: 08 April 2015 13:54
Subject: Help me Make a difference
The major general news stories of the past week include …
Death of cashback: which credit card perks will be kept? – The Telegraph
EU rules mean banks now make less money from credit cards and may limit perks. Our tables show which banks are cutting back
If a bank seems too big to fine the fine needs to be bigger – The Independent
Outlook It’s one ring-fence that no one in the City, in theory at least, objects to. One of the lessons from the Lehman Brothers’ collapse was that financial institutions need to keep clients’ money strictly segregated from their own funds.
Barclays discovers the value of its depositors – The Independent
Outlook Speaking of the cost of doing business, Barclays has announced that it will pay £7 a month to its loyal current account customers from next week. It’s quite a U-turn. Not long ago both Barclays’ chief executive, Antony Jenkins, and its chairman, Sir David Walker, were mooting imposing charges
Stop bashing bankers? Not just yet, thanks to Clydesdale – The Independent
Outlook Just when you thought banker bashing might finally come to an end, another hideous toad crawls out from under a rock to stir the public’s justified indignation yet again.
Clydesdale Bank fined £21m after doctoring PPI evidence – The Telegraph
Scottish bank failed to give appropriate compensation to as many as 93,100 customers and provided regulators with false information
In Odd European Twist, Banks Owe Borrowers – Wall Street Journal
Subzero rates have put some lenders in an inconceivable position: paying interest to those who have borrowed money from them
Scrapping non-dom tax status would hit bank chiefs – The Telegraph
Bank of England governor and top UK bankers would be hit by Labour plans to abolish non-dom status
Junior trader made to eat 8 burgers in humiliating City initiation ceremony – The Telegraph
Video shows 23-year-old man surrounded by colleagues at Marex Spectron, an international commodities broker, who raucously goad him on to complete the challenge
A new catalyst for positive change across the banking industry – The Telegraph
Millions rely on the banking system every day and 500,000 UK jobs depend on it
‘Dull work, flat pay and lousy colleagues’ – Financial Times
Global survey uncovers deep frustrations at heart of financial services industry