This month's main stories are ...
The challenges of client onboarding (or why bitcoin will be regulated)
I hosted a dinner last night and the conversation was all about client onboarding and the challenge of keeping it fresh. You get the KYC info, and then the customer is onboard. But for how long? Is a 25-year deposit holder still the same person? Still trusted? Do you ever need to onboard again?
Why would a digital bank have branches? (CheBanca! case study)
I just visited with Roberto Ferrari at CheBanca! in Italy. For those who don’t know CheBanca!, it is the digital first bank launched in 2008 by Mediobanca. Mediobanca provides merchant bank services in Italy and had never had a retail bank before. Therefore, it made sense in the post-meltdown digital age to implement a fintech bank fit for Italy, andCheBanca! claims to be that bank.
The branch discussion is a perennial favourite I know, but there’s one thing that is rarely discussed by the ‘no branch’ proponents: culture, demographics, psychographics and geographics. It’s like they say: “there will be no branches in the future, make it so”. I guess that’s because the anti-branch community are (a) over 35, (b) digital first, (c) anti anything last century and (d) fintech.
When you talk non-stop about digital, it sometimes gives you a reality check when you actually live life in a physical world. The frustrations of crashed systems, products that don’t work, call centre operators who aren’t co-operative and check-in staff who can’t check-in. Equally, there are the moments of pure bliss such as the smell of freshly cut grass, the first coffee of the day, the sight of a butterfly and the feel of the hot sun on the back of your neck.
I was talking about the internet of things again today, and realised that I have a grand vision of the not too distant future where everything communicates with everything. We have chips as tiny as nanodots inside every brick, pavement slab, tyre, wall, ceiling … you name it
In this world of choice that emerges from the integration of new technology models and old financial models, we see hybrid systems emerging that bring together the best-of-the-best. A great example was announced today, as Metro Bank and Zopa join forces.
As the internet reinvents commerce on this planet, it’s interesting to see the two things that enter the innovation mix: simplicity combined with connectivity. When you think about the Uber, Airbnb, Facebook, Google, Amazon and more, you realise that they have all simplified some complex things from sharing to finding. Google’s home page has stayed pretty much the same since day one.
I was flicking through the Economist this week and was surprised to see a big quarterly special all about Fintech. Wow, this stuff is hot, hot, hot. That’s what the magazine makes clear:
I’ve been tweeting a while that bankers are all repeating the mantra Bitcoin Bad, Blockchain Good. This rallying cry is now so strong that if you challenge it – is bitcoin really that bad? – everyone quashes the discussion. I’m now of a mind that the majority quash such discussion because they really don’t know what bitcoin is about.
I've been involved in Brett King's new venture, Moven, since its inception and was pleased to see the new renovated version won Best in Show at Finovate yesterday in San Jose. In a key announcement, Moven has partnered with Accenture to roll out their capabilities worldwide and, in what many are referring to as Bank 4.o, demonstrated key new features including links to the Apple Watch and a feature called Impulse that locks up your money unless you explicitly unlock it.
One of my good connections via social media is Huy Nguyen Trieu. Huy writes a regular blog at Disruptive Finance, as well as being a Managing Director for Macro Structuring at Citi. He posted something in the last week that I felt was worth re-posting here as a guest blog. Read and weep.
We think we’ve come a long way with technology, but we haven’t really. Sure we can now ping a message between a router in Hong Kong and London at the rate of 0.239 seconds speed; we can wear a watch that not only tells the time but takes photos, keeps our diary and tells us to stand up every two hours; we can store 1,000s of photos and keep a lifetime of memories on a drive that costs less than $100; we can travel around the world and back as easily as our forefathers travelled the next nearest town; and so on. But it’s nothing yet.
I’m talking a lot about the ValueWeb – how the internet is changing the things we value in banking, trade and commerce as well as life, love and relationships – at the moment, as this is the subject of my new book. One of the most intriguing things about the ValueWeb is the latter – the ability to create value out of nothing but a relationship.
The major general news stories of the past month include ...
Banker accused of rigging markets boasted to traders: 'Libor is high because I have kept it high' - The Telegraph
Tom Hayes told his peers that he had the power to keep crucial interest rate high
Banks face fresh wave of PPI compensation claims after landmark ruling - The Independent
The City Watchdog could be forced to introduce new rules around PPI mis-selling complaints following a landmark court ruling.
Tom Hayes Libor trial: 'Thoroughly dishonest' trader who rigged interbank lending rates was driven by 'greed', court hears - The Independent
A trader was motivated by greed as he acted as “ringmaster” in a “thoroughly dishonest and manipulative manner” to rig interbank lending rates, a court heard today.
Jonathan Hoffman: The former Lehman Brothers banker who is still fighting for his bonus - The Independent
Florida, with its white sandy beaches and sweltering climate, is not the typical habitat of the Wall Street financier. Yet it is where one of the Street’s biggest earners, Jonathan Hoffman, made a fortune trading US Treasury bonds in the years before the global financial crisis in 2008.
Profit at Vatican bank soars 20 times as it moves away from scandals of the past - The Telegraph
The bank, officially called the Institute for Religious Works, earned €69.3m last year
VIDEO: What's the future of high street banks? - BBC
The BBC's Steph McGovern reports on whether there is still a need for banks to have a high street presence, as people can access their account and perform most of their transactions online or over the phone.
The world is drowning in debt, warns Goldman Sachs - The Telegraph
Ageing populations mean countries' debt piles risk growing out of control, warns European head of Goldman Sachs Asset Management
The man who cross-stitched his own bank card - BBC
A man has cross-stitched a debit card and sent it to his bank to express his irritation at waiting for a replacement.
Bankers are still breaking the rules to get ahead. Here's the proof - The Telegraph
Illegal and unethical behaviour is still commonplace in the finance world, according to research
Bitcoin's baby offers new revolution - BBC
The birth of the Blockchain revolution
Five big banks face criminal charges and $5 billion bill over FX rigging - Reuters
LONDON/NEW YORK (Reuters) - Five of the world's biggest banks are expected to be hit with a combined bill of more than $5 billion and criminal charges on Wednesday in a settlement with U.S. and British authorities over rigging of currency markets.
Garda probe as hackers fool the Central Bank into transferring money to bogus online account - Irish Independent
The Central Bank, which is tasked with maintaining the safety and integrity of the Irish banking system, was duped in an elaborate money transfer scam late last year.
7 Habits Of A Highly Successful Digital Bank - The Financial Brand
As part of banking's digital transformation, seven traits must become habits to successfully compete and retain consumer trust and satisfaction.
Should Apple buy Greece? - The Independent
It started as a joke at an Apple investor conference a few years ago. An audience member piped up that Apple should use its mass of cash – which now amounts to $194 billion – to buy Greece.
For one hour every day, the Chinese stock market boom goes bust - The Independent
China’s Shanghai Composite stock index of state-backed companies has looked unstoppable over the past 30 days as it added 545 points or 15 per cent of its value.
Citigroup may plead guilty to currency rigging as banks brace for mega fines - The Telegraph
American bank discloses that it may admit guilt ahead of fines expected on Wednesday
RBS faces large damages bill over 'enormous' mortgage deception - The Telegraph
Judge rules RBS and Nomura made false statements when they sold mortgage-backed securities to Fannie Mae and Freddie Mac
The bizarre banking loophole that has opened up in Malta - The Guardian
Malta throws a spotlight on how secure our bank accounts really are – or aren't
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Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...