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For some years now, banks have been grappling with the idea of cloud.
A bit like Big Data, ‘cloud’ is this amorphic term that offers a panacea of solutions and nothing specific.
This is not actually true, but the wide-ranging breadth of cloud and few and far between examples of depth, make it a term that does not sit well with most in the financial markets.
For those who are uninitiated it means outsourcing your data or losing control, and hence it is resisted heavily; for others, it means agility and the ability to react to any processing needs; whilst for a few, it means saving huge amounts of cost on infrastructure and processing.
The core challenge is defining cloud, as few have.
Apparently Facebook has applied for an e-money licence in Europe, according to today’s Financial Times.
That’s no big deal, as Google and PayPal have had bank licences since the mid-2000s in order to operate e-money capabilities. It hasn’t meant that Google and PayPal intend to be banks, although they might in the future. It does mean that, as per our regular dialogue about GAFA (Google, Amazon, Facebook and Apple), these guys want to get into payments processing.
For example, just the other day, Apple’s CEO Tim Cook said that payments is a space they want to get into.
With GAFA clearly focused upon the payments space, what does this leave for the banks?
And, in case you can’t access or didn’t see it, here’s the full Financial Times piece:
I saw a great but scary presentation this week from Kamran Meer, Chief IT Security Officer at Bank Alfalah, the sixth largest bank in Pakistan. Kamran began by asking the audience if they knew about the Stuxnet attack. The Stuxnet video made the point that we live in a world where cyberattacks are becoming more and more targeted …
A fantastic infographic was sent over to me today by the folks at Open Mobile Media. The main headlines include: banks are the most trusted mobile payment providers (43%); half of all smartphone users expect to adopt the use of mobile wallets in the next three years; 1.4 billion people now have smartphones …
I had a really interesting conversation with @Anthemis last week. These are the guys who have co-ordinated much of the funding and investment cycles in Fidor, Moven and Simple. “It starts with community”, said Udayan …
I present all the time and talk about the forces of change for the future: Political, Economic, Social and Technological (PEST). I usually skip over the Political and Economic because it’s booooring, and focus upon the Social and Technological because it’s way sexier. Then we were having a debate the other day, and someone said: “there’s a disconnect between the regulatory and innovation agenda” …
Talking of a two-stream market divided between Political and Economic change and Social and Technological change, there are other undercurrents that ripple in these waters. For example, why is it that most bank conferences are either about regulation or innovation? Why is it that banks only ever respond to two forces of change: regulation and competition? And yet there is something else here …
The major general news stories of the past week include ...
'Heartbleed' computer bug threat spreads to firewalls and beyond - Reuters BOSTON (Reuters) - Hackers could crack email systems, security firewalls and possibly mobile phones through the "Heartbleed" computer bug, according to security experts who warned on Thursday that the risks extended beyond just Internet Web servers.
Dark markets may be more harmful than high-frequency trading - Reuters NEW YORK (Reuters) - Fears that high-speed traders have been rigging the U.S. stock market went mainstream last week thanks to allegations in a book by financial author Michael Lewis, but there may be a more serious threat to investors: the increasing amount of trading that happens outside of exchanges.
I saw a great but scary presentation this week from Kamran Meer, Chief IT Security Officer at Bank Alfalah, the sixth largest bank in Pakistan.
Kamran began by asking the audience if they knew about the Stuxnet attack.
Amazingly, 70% of the audience hadn’t heard of it although maybe it’s not so amazing as this was part of a Middle Eastern conference and the Iran-Israel and MiddleEast-USA frictions are not reported as widely here as they are in the West (or so I was told afterwards).
So, the Stuxnet video made the point that we live in a world where cyberattacks are becoming more and more targeted:
Talking of a two-stream market divided between Political and Economic change and Social and Technological change, there are other undercurrents that ripple in these waters.
For example, why is it that most bank conferences are either about regulation or innovation? Because one forces change to happen whilst the other offers the opportunity to change? Or because regulation is political and economic whilst innovation is about the customer (social and technological)?
Why is it that banks only ever respond to two forces of change: regulation and competition? Because one is political and economic whilst the other is normally social and technological.
I had a really interesting conversation with @Anthemis last week.
These are the guys who have co-ordinated much of the funding and investment cycles in Fidor, Moven and Simple.
Udayan Goyal, co-founder of Anthemis, said to me: “you have to see that digital banks are different by the way they build their business”, and we went into a discussion about how to build a digital bank base.
I was amazed to see the news this morning that Alibaba, the Chinese equivalent of eBay and PayPal, has acquired China Union Pay. This is fantastical news and builds upon the recent announcement that Alibaba will get into banking.
Another day, another challenge. Again, it’s to do with the move from the physical distribution of paper to the digital distribution of data (my favourite mantra of the moment) and the way in which things change. Think of it this way, I’m talking to a company about relationship management.
I received one interesting comment about Google, Apple, Facebook and Amazon (GAFA) and co getting into banking from one bank: why would they? His response was based upon the fact that he’s more worried about Google when they’re not a bank than when they are one. “If they bought a bank – let’s say they acquired Citibank – then this would be good news”, he said, “because that would kill them.”
A week before Zopa launched in Britain in 2005 one of the co-founders, the now late and much missed Richard Duvall, presented the concept to the Financial Services Club. No-one really understood it at the time although now, it makes great sense. An eBay for money. Those who have money get higher interest whilst those who need money pay lower interest, and Zopa manages the risk.
The major general news stories of the past week include ...
George Osborne vents fury over FCA leak fiasco - The Independent The Chancellor ratcheted up the pressure on the UK's financial watchdog yesterday as he declared himself "profoundly concerned" over the damaging leaks that wiped billions off the value of insurance companies.
HSBC has 'much work' to do on anti-laundering fixes, U.S. says - Reuters (Reuters) - HSBC has made some progress in improving its anti-money laundering program as required by a 2012 deferred prosecution agreement with the U.S. Justice Department, but there remains "much work to be done," federal prosecutors said in a Tuesday court filing.