The Financial Services Club is a unique service designed for Senior Executives and Decision Makers from any firm interested in understanding and planning strategies for the future of banking and finance.
Having made the claim many times that banks are not great at multichannel but excel in a single channel, I got into an interesting debate last night with the CEO of one UK bank. He was asking whether branch-based banking had a future. I said branches have a limited future ...
As we approach euro meltdown (join our webinar with GTNews on Tuesday for more on this), I thought it might be worth listening in to the videocall that took place between Italian Prime Minister Mario Monti, French President Francois Hollande,...
The shock news this week is that JPMorgan - that mighty institution of financial stability that has steered through this crisis with ease and made Jamie Dimon, its CEO, the sage of finance - has been rocked by a trading scandal...
Talking with a friend this week, they said that they had found my blog entries a little over the top lately. “Calm down”, she said, “and stop being a rebel without a cause.” But that’s where she’s wrong. I am...
We talk a lot about the threat of mobile carriers and telecom firms moving into banking and eating our lunch. We cite examples such as NTT DoCoMo buying a credit card firm or Safaricom becoming the biggest financial transactor in...
We've just completed our annual survey on SEPA and the PSD, which will be released via a free webinar next week [to register, please visit: http://digbig.com/5bgayr]. The headlines of the survey were released today for EBADay, and so here's the full press release ...
The major general news stories of the week include ...
Once-mighty JP Morgan plunges on $2bn London trading crisis - The Independent Shares in JP Morgan nosedived last night, dragging rival US and British banks with them in the midst of a mounting scandal over vast losses in its London derivative trading.
Fund run by JPMorgan bet against Whale - The Independent Hedge funders were not the only market whiz-kids betting against JPMorgan's disastrous London Whale trading positions. Another part of his own bank was too.
JP Morgan $2bn loss: Q&A - The Telegraph JPMorgan Chase chief executive Jamie Dimon has shocked Wall Street by disclosing the bank racked up $2bn (£1.2bn) of trading losses in the past six weeks and warned they could get worse. Here, we take a closer look at what happened.
RBS investors say Stephen Hester 'not paid enough' - The Telegraph Royal Bank of Scotland's chief executive, Stephen Hester, is not being paid enough for his work, according to some of the taxpayer-backed lender's largest shareholders.
'Pied piper' broker banned from City for life - The Independent The "pied piper" broking chief who lured 10 of his colleagues away from the broker Tullett Prebon to a rival, BGC partners, has been banned from working in the City ever again.
Santander: is my bank account safe? - The Telegraph Fears that Spain will be caught up in the eurozone debt crisis is provoking fears among savers with deposits held by banking giant Santander. But should they act?
EU agrees strict new bank rules - BBC The European Union agrees strict new rules for banks, intended to make them safer and eliminate the need for future bailouts.
As we approach euro meltdown (join our webinar with GTNews on Tuesday for more on this), I thought it might be worth listening in to the videocall that took place between Italian Prime Minister Mario Monti, French President Francois Hollande, German Chancellor Angela Merkel, British Prime Minister David Cameron and European Council President Herman Van Rompuy yesterday.
START OF CALL 15:30 GMT 17/05/2012
David Cameron: “Well, welcome to this video call about the euro crisis. I thought we should have this call to try to solve the issues we see in Greece and the potential issues it raises with a euro breakup …”
Angela Merkel: “I thought we called this video call?”
David Cameron: “Actually, it was my undersecretary who rang your …”
Herman Van Rompuy: “Please, please … we need to start this call as we mean to go on with a unifying approach to our euro problems.”
David Cameron: “I’m sorry, who are you?”
Herman: “Herman”.
David: “Well, if you’re her man, then I guess my undersecretary rang you. So did we call this video conference or not?”
Herman: “I’m not her man.”
David: “Well, whose man are you.”
Herman: “No, I’m Herman.”
Mario Monti: “Look Cameron, is easy, he is not her man, your man, or my man, he is Herman.”
David: “You Europeans.”
Francois Holllande: “Monsieur Cameron, let’s move along as we all know you should not be on this call anyway.”
David: “What?”
Francois: “Well, I do not know why you British are even on this call when you are not part of Europe.”
David: “We jolly well are, you know.”
Francois: “You just called us 'Europeans' a minute ago, so you obviously do not think of yourself as European, do you?”
David: “Come on. I enjoy a cappuccino and pain au raisin like the rest of Europe.”
Francois: “That does not make you European, especially when you support le petite Napoleon Sarkozy instead of moi.”
David: !
Angela: “Thank you Herr Hollande, and to the point. What do you think we should do about Greece, the euro and a potential Eurozone breakup.”
Francois: “Why should I tell you, ma mere?”
Angela: “What did you call me?”
Francois: “Mother.”
Angela: “I am not your mother.”
Francois: “Well, don’t they call you mutti in Germany, which means mother does it not?”
Herman: “What has any of this got to do with solving the crisis in the Eurozone.”
Francois: “Well, it could be very important to know who is the mother and who is the father of the euro.”
David: “Oh god.”
Mario: “Look, the main thing that people want is not some sort of family in Europe, but unity. We need political leadership and I think I can bring that to the table.”
Francois: “And how will you do this?”
Mario: “Well, if she is mother mutti then I am father Monti.”
Angela: “Who are you calling a mother?”
David: “Look, stop this. It’s getting us nowhere and we need some form of announcement about how we are going to stem the Greek and Spanish tragedy for the G8 summit at Camp David this weekend.”
Mario: “Yes, I like Camp David.”
Francois: “Oh, I have never been. What’s it like?”
Mario: “It’s a presidential retreat for that tanned guy who leads America.”
David: “Did you just say what I thought you said?”
Mario: “What?”
David: “That Barack Obama is some ‘tanned guy who leads America’.”
Mario: “Yes, so?”
David: “Well, I thought you were different to that chap before you. You cannot say such things in public as it is not politically correct.”
Mario: “And who are you to talk about correctness when you are not correct.”
David: “What?”
Mario: “Well, you veto the European treaty, you make comments about the Eurozone breaking up, you are always against Europe, so how can you even talk to me about correctness?”
Herman: “Look, this call is getting us nowhere. What are we going to do about Greece.”
Talking with a friend this week, they said that they had found my blog entries a little over the top lately.
“Calm down”, she said, “and stop being a rebel without a cause.”
But that’s where she’s wrong.
I am a rebel (?) with a cause: the disruption of banking as we know it.
Now it’s not me that’s trying to disrupt banking, but my approach to studying the future of banking is to track what might disrupt the industry and never before has there been so much potential change.
The change that most of us are tracking within the industry is the regulatory agenda.
I recently made a list of what’s on the regulatory agenda and who’s driving it, and the non-exhaustive list below gives you a little clue as to how challenging this space is.
Things the regulator is focused upon:
Macro-economic risk
Credit risk
Liquidity
Capital availability
Political interference
Regulation
Profitability
Derivatives
Corporate governance
Quality of risk management
…
Key players involved in new bank regulations:
Chris Dodd
Barney Frank
Paul Volcker
Dick Durbin
John Vickers
Michel Barnier
Christine Lagarde
Tim Geithner
Ben Bernanke
Mervyn King
Mario Dragi
…
Some of the regulations:
Basel III
CRD IV
MiFID II
PSD II
Solvency II
UCITS IV
FATCA
EMIR
T2S
Bribery Act
…
This is only a partial list - it doesn't even mention half the changes in the FSA - and so you can see from the above that we could spend days discussing the regulatory cause and probably still be left with many questions unanswered.
In fact, this one chart from JPMorgan’s annual report shows the situation at its best and worst (doubleclick image to enlarge):
This chart (page 20) shows how challenging the regulatory regime has become, with many new rules and agencies layered on top of or replacing old ones.
The regulations aren’t joined up much either, as the US ones are not quite the same as the European ones, and you need a Magellan regulatory nerd to navigate you through the waters of such complex change.
This is why Jamie Dimon has been so outspoken against Dodd-Frank and Volcker, which prompted Mad Money’s Jim Cramer to label Jamie Dimon a ‘whiner’ when he saw this chart in the JPMorgan annual report … but the whiner is now whining all the way to the bank as his bank’s $2 billion trade failure has led to Dodd-Frank being bolder and stronger than ever before.
The regulatory regime is not a deal-breaker for banks however, as it can be negotiated, debated, discussed and determined in advance.
What cannot be negotiated, debated, discussed and determined in advance is customer change.
But it can be foreseen and forecast, which is what I try to do and why I go off on one every now and again.
You see, we all grew up in a world where governments and corporations determined technology directions.
Large systems would be implemented in back office rooms, and would grind and steam away data for administrative cost savings gains.
That’s where the fundamental change is happening because today’s world reflects the consumerisation of technology.
No longer is technology direction determined by governments and corporations, but by children and consumers.
That is why it is too easy to dismiss the technology change being influenced by the iPad generation, as just being froth on the cake as the back office steam machine will stay the same.
Of course, the infrastructure may change, but the consumerisation of technology has already meant that steam machines that are non-responsive to change are being replaced by cloud machines.
Of course, some organisations get this and are rapidly rearchitecting their infrastructures to be responsive to unpredictable demands.
Today, you may have 400 downloads of your bank’s mobile app; tomorrow, 400,000; and 4 million the next.
You may see huge upward spikes in transactions and interactions as a result, with no control of peaks and troughs.
That’s why the consumerisation impact of technology on the front and back office is of so much interest to those who are looking for disruption to the banking system.
Sure, the regulators will disrupt the system, but that’s predicable; the consumer is not.
We talk a lot about the threat of mobile carriers and telecom firms moving into banking and eating our lunch.
We cite examples such as NTT DoCoMo buying a credit card firm or Safaricom becoming the biggest financial transactor in Kenya, and what that will mean to banking in the future.
We see O2 and others launching mobile wallets and fear for the worst.
We worry about Vodafone, Telefonica and China Mobile moving into core banking.
It’s all complete claptrap of course.
Just scaremongering amongst ourselves by whispering the worst.
Mobile carriers just aren’t cut out for banking because they are just like banks.
They carry transactional services, and monitor minutes and seconds on the network at a price point of a fraction of a cent.
These are bank-like activities.
They issue monthly statements with detailed breakdown of every second you’ve been texting, talking and transacting.
These are bank-like activities.
They offer global, standardised, interoperable infrastructures to ensure that you can work worldwide with a single device.
These are bank-like activities.
And they are licensed and work together to ensure pricing, tariffs and products compete on a rate churn basis.
These are bank-like activities.
In fact, the most bank-like activity of the telco industry is their customer service which is typically awful.
You call a Vodafone, Virgin Media, O2 and ask about why their billing is so high that month, and get fobbed off with excuses.
You ask for a better price plan, and they mumble and kick their feet, saying you have the best they can do (when you know it is not).
And you wonder why they charge such high rates for overseas calls when voice over internet is free, and they have no answer.
Yet they spend millions on heavily advertising their brand and products via sponsorships of stadiums and motor racing.
It’s a dire industry and one that is not fit to compete in the banking world, because they are just like banks.
Like banks, customers resent their charges, see their detailed price plans as customer punitive and hate their roaming and data usage fees.
Like banks, customers do not understand how mobile carriers calculate their statements and why one month can see a bill balloon to three times the normal rate, purely for receiving a couple of calls abroad.
And like banks, customers hate the lengthy periods of sitting on the phone waiting for a call centre agent to pickup, only to find it’s the wrong call centre agent.
What we need to shake up banking, if anything, is not more bank-like operators but different ones.
Ones that have vision, customer-centricity, differentiation and a different business model.
Not firms that offer the same service cheaper and worse.
This is why, when scouting around the world of competition, the Apples, Amazons, Googles and Facebooks stand out as far more interesting potential competition than the AT&Ts, Verizons or T-Mobiles.
The internet based service providers are data leveraged organisations with vision, customer-centricity, differentiation and a different business model.
This does not mean that they have different business goals to the mobile carriers and the banks - these are, after all, shareholder proprietary organisations - but they work from the data rather than from the price.
That’s why they’ll win … if they want to.
Postnote: SWIFT has just produced a white paper on how banks can win in the mobile space. Take note!
Having made the claim many times that banks are not great at multichannel but excel in a single channel, I got into an interesting debate last night with the CEO of one UK bank.
He was asking whether branch-based banking had a future.
I said branches have a limited future, with the megastore branch being the modus operandi and then automated satellite stations for transaction servicing.
He disagreed and reckoned that the only need for branches today is purely down to our culture and background.
That’s why boomers, Gen X and Gen Y like branches as they were raised with the idea that that’s where you went to do banking.
Even then, most adults move towards self-service after age 35, and the branch is therefore only relevant for the 18 to 35 year old generation.
With millennials growing up in a world of mobile internet, he believed that the next generation of customer would not understand why a branch was needed at all.
Visionary?
Maybe, although I replied that branches are required for complex product sales, like mortgages and pensions.
He disagreed and said that video servicing would take over much of the human contact that currently takes place in a branch for advisory services and complex product sales. So branches will not be needed.
I actually concurred, as I’ve said this before, although we both then could not work out whether branches are purely required by most people as a reassurance of a physical place to go to get money out in a crisis.
The most interesting aspect of the debate was the idea that rather than having multichannel banks, we should consider multibrand banks that brand by channel.
Some banks have already started such process – HSBC with first direct, albeit that was by accident due to the acquisition of first direct through Midland Bank; Cahoot! with Abbey (now Santander); and Smile with Cooperative Bank.
Lloyds is a multiplicity of brands – Scottish Widows, Cheltenham & Gloucester, Halifax, Bank of Scotland, Clerical Medical, Birmingham Midshires … - but most of these are the result of acquisitions.
But the idea of a bank that brands by channel is not yet a clear strategic market move, and maybe it should be.
A bank that has a branch based bank brand (HSBC); a call centre based bank brand (first direct); an internet based bank brand (Smile); and a mobile based bank brand (mobank).
Now that flies directly in the face of a previous assertion on this blog, that there is no channel separations just digitally augmented realities.
The challenge with that assertion is that each bank brand is launched at a different moment of time: branches (pre-1970s); call centres (1980s); internet (1990s); and mobile (2000s).
Each launch therefore has a layer of legacy, which is the challenge of the traditional branch based bank to keep up.
The pre-1970s branch based bank is hamstrung by heritage. Even the 1990s internet based bank is challenged by mobile, as their existence is not designed for that channel.
Branding by design for channel is possibly a way to ensure that banks can keep up with innovations, as each iteration of the bank will be launched with fresh infrastructure and a fresh start.
The downside is obviously that the cost overhead of new brands and new banks is onerous, but at least it means: (a) each bank is fit for the future; and (b) if the bank fails, it can close down the failing parts far more easily.
We've just completed our annual survey on SEPA and the PSD, which will be released via a free webinar next week [to register, please visit:http://digbig.com/5bgayr].
The headlines of the survey were released today for EBADay, and so here's the full press release:
SEPA will survive even if the Euro doesn't according to banking industry
Strong drive from community for faster payments
Differences of opinion between Bankers and Corporates increase
Increase in the numbers expecting SEPA to succeed with end dates set
A new survey of the banking industry unsurprisingly shows with the Sovereign debt issues still raging across Europe nearly 70% of respondents believe that the Euro will not survive in its current form, however overall sentiment with regards to the Euro and Single Euro Payments Area (SEPA) was still more positive. Interestingly the views around the impact of the Payment Services Directive (PSD) are less clear, with the majority not seeing much impact yet.
The fourth State of the European Payments Marketplace survey, with over 350 participants from 53 countries, shows an increasing expectation of success for SEPA. The largest payments survey of its kind, conducted by the Financial Services Club and sponsored by Euro Banking Association and Logica also highlights the growth in real time payments across the board.
"In 2011, Europe's markets were even more challengedby the Eurozone's issues but, surprisingly, the progress of the PSD and SEPA were seen as positive," says Chris Skinner CEO at the FS Club. "This year we have also continued our analysis of the relationship between banks and their corporate clients, which highlights some interesting differences".
Simon Bailey, Director Payments & Transaction Banking Logica commented, "SEPA provides significant benefits including increased visibility of cash along with a reduction in risk. However, SEPA also means more competition for the banks with pressure on their payment revenues; they need to seek ways to provide enhanced services to corporate clients and createa more positive banking experience for their customers."
The survey also reviews issues around liquidity risks, where 86% of bankers were in agreement that pressures on balance sheets for banks and corporates as well as new regulations, are driving increased activity around liquidity with a new technology helping the drive to real-time liquidity management.
Full results of the survey and further discussion around the impact will be through a webinar, hosted by Logica and the FS Club, on 22 May at 3pm BST/ 4pm CEST/10am EDT. To register, please visit:http://digbig.com/5bgayr.
Research Background
The survey was conducted between during between March and April 2012, and was completed by over 350 participants across 53 countries. Almost a third of respondents participating in this year's survey were from banks. Consultants and technology providers are the next largest groups, also representing over a third of the votes.
The shock news this week is that JPMorgan, that mighty institution of financial stability that has steered through this crisis with ease and made Jamie Dimon, its CEO, the sage of finance … has been rocked by a trading scandal on the scale of a Nick Leeson, Jerome Kerviel and Kweku Adoboli.
This time the culprit is Bruno Michel Iksil.
Iksil struck fear into other bankers, for being the biggest better in London. Known as the London Whale – or within banking circles he was often referred to as Voldemort after the evil wizard who cannot be named in the Harry Potter series – he reportedly was earning around $100 million a year.
And yet the share price of JPMorgan was savaged over the weekend – dropping over 10 percent – as news was released of a $2 billion loss on his trading operations.
The losses were made in the last six weeks as investments made by Iksil went wrong, and may actually be significantly greater.
What had Iksil done that could go so wrong?
Well, his job was to hedge JPMorgan’s investments, which he achieved with credit default swaps (CDS). However, as his overblown position became so clear, hedge funds and other investment firms targeted Iksil’s investments and bet against them.
In other words, everything that Iksil was hedging against would go wrong as others invested in the opposite direction.
The fact that one trader could amass such losses raises big question about the role of JPMorgan’s internal investment office and the Chief Investment Officer, Ina Drew, whose department has built up a portfolio of securities worth $361 billion in the last few years.
According to the Financial Times, one banker who recently left JPMorgan’s investment unit said:
“It’s embarrassing that we had hedge funds openly complaining about the big whale – clearly this was a position that was too big. Either the CIO should have found other ways to hedge, or reduced the underlying position, or this was a directional bet, which wasn’t in the mandate.”
In an interview with American television network NBC, Jamie Dimon said: “we got very defensive and people started justifying everything we did ... we told you something that was completely wrong a mere four weeks ago.”
Doesn’t look so good now and the real downside is that Dimon himself has been leading the march against the Volcker Rule to close down proprietary trading, claiming that there is no such thing as “casino capitalism”.
Just a few months ago, in an interview with Fox Business Network, he dismissed Volcker as possibly creating regulations that “destroy” U.S. capital markets or let it “go overseas”. The usual scaremongering, and followed it up by saying that monitoring hedging risks through trading would mean that every trader would have “a lawyer, compliance officer, doctor to see what their testosterone levels are, and a shrink”.
Maybe they should!
He also says: “we don't make huge bets” when being a market maker.
Interesting dialogue about social media in finance. Social media is so wide and vast today that it’s hard to cover in one blog post. Most people think Facebook and twitter when you say social media (eight and five years old respectively), but it’s far more than that these days. It’s Groupon, foursquare, YouTube, Tumblr …
I was surprised or not to have a long discussion with some bankers and corporates about personalisation last night. My contention was that a bank should know that they have an influential corporate treasurer decision maker as a business client,...
My grumpiness just got ten times worse at this treasury conference, as I stood up and started talking about how I use facebook, twitter, blogging etc to leverage my business. I could see a veil of abandonment enter the faces...
I often use two discussion points by way of background when talking about the future. The first is that kids will show you the way, because children are rushing towards the future whilst most adults are rushing away from it....
It’s always intriguing to see what banks and insurers are doing for marketing purposes. Take current accounts. HSBC offer a whole range of current accounts, but with no obvious gifts or special offers shown on the website. Barclays offer a...
Enlargement is EU´s DNA - European Commission, 9 May 2012
European Commission kicks off public consultation and asks citizens to set future agenda - European Commission, 8 May 2012
Germany drafts national SEPA law – Bundesministerium für Finanzen, 25 April 2012
German investors have confidence in financial markets– Bankmagazin, 4 May 2012
Germans trust online payment schemes – Bankmagazin, 4 May 2012
The major general news stories of the week include ...
JPMorgan reveals $2 billion trading loss, CEO Dimon admits "egg on face" - Reuters (Reuters) - JPMorgan Chase & Co, the biggest U.S. bank by assets, said it suffered a trading loss of at least $2 billion from a failed hedging strategy, a shock disclosure that hit financial stocks and the reputation of the bank and its CEO, Jamie Dimon.
Exclusive: Merrill MVPs earn half firm's revenue, big paychecks - Reuters NEW YORK (Reuters) - The multimillion-dollar signing bonuses that big brokerages are doling out to recruit elite brokers may seem excessive, but internal reports from Merrill Lynch show why firms are willing to pay top dollar for a top broker.
MasterCard unveils ‘digital wallet’ network - Financial Times PayPass is designed to help retailers and banks take advantage of expected growth in electronic payments through smartphones and other devices
MasterCard Mobile Payments Readiness Index (MPRI) - Payments News MasterCard has unveiled the MasterCard Mobile Payments Readiness Index (MPRI), an analysis of 34 countries and their readiness to use three types of mobile payments: person to person, mobile web commerce, and mobile contactless payments at the POS. "Technology infrastructure, a responsive regulatory environment and a robust economy are table
HSBC cost savings gather pace - The Independent Banking giant HSBC has made 1.2 billion US dollars (£741 million) in cost savings in the last year as it cuts thousands of jobs worldwide, including the UK.
I often use two discussion points by way of background when talking about the future.
The first is that kids will show you the way, because children are rushing towards the future whilst most adults are rushing away from it.
Children at 9 and three-quarters and 12 and half, whilst adults are celebrating their 31st birthday for the sixth time.
Adults fear the future because the older they get, the closer they get to the end of their lives. Children rush towards the future as they want to be adults as fast as possible.
Children are also desperate to shape and change the future to their way of life. Adults want it to stay the same.
It is why the teenage years spawn the most innovations, whether it be new music or new ideas; adults try to keep the status quo.
This leads to my second point, which is based upon the tremendously influential book: who moved my cheese?
The basic idea of the book is that there are two basic sorts of people: those who enjoy change and will seek to find new ways of working and creating value; and those that just want everything to stay the same.
It’s told in an entertaining and educational way, and it builds on my first analogy of children wanting to change the world whilst adults want the world to stay just as it is.
Adults don’t want the cheese to move, whilst kids love to find new cheese.
Analogies over, and ruminating a little on my presentations this week to various folks, I then got this little sense of tingling on the back of my neck.
The tingle sparked a voice in my head: who moved my rock?
The rock is far more worrying than the cheese.
Without cheese, we starve; without the rock, our world crumbles.
What the hell am I talking about?
Core banking structures.
I presented to a group of custodians this week and, like the corporate treasurers, I was asked to talk about the fundamental changes being brought around by social media and technology.
First the group dismissed the change as just being about retail and the consumer (it isn’t).
Then they dismissed it for a more fundamental reason: it’s just the froth on the financial cake.
Mobile payments, Square, the Occupy movement, Molly Katchpole, etc is all just icing.
It’s fast moving consumer retail finance; it’s not core.
It’s not the fundamentals of financial markets.
The custodians basically saw the fast moving changes in future technology as being about front office froth and roll.
An iPad app for wealth management is all well and good, but it doesn’t change the core of financial transaction processing through the clearing and settlement systems of the world does it?
Hmmmm.
In other words, all the front office sexy new consumer technologies of the Apple and Android world is the moving cheese; the back office dull and constant processing infrastructures of the IBM and SAP world is the eternal rock.
The cheese moves often; the rock moves, but infrequently and slowly.
Like tectonic plates of back office reliability and resilience, the rock never rolls.
But it does.
And it has.
The rock rolled from old models of liquidity never moving from core exchanges, to new hi-tech exchanges like BATS and Chi-x.
The rock is rolling away from old domestic clearing systems to new harmonised regional and global platforms.
The rock is rocking from slow moving T+3 to real-time payments and settlements.
It may not seem like the back office is changing, but it is as fundamentally disrupted by the technology of consumers and social media as the front office.
Just in time for 9 May (“Europe Day”), EU Enlargement Commissioner Stefan Fule said that the Commission was determined to keep up the level of progress in accepting new members. He stated that enlargement was "not the cause of the challenges that the EU was facing but a part of the solution". The EU is still growing: Croatia will join soon, Serbia has received candidate status for membership, while negotiations with Montenegro will begin next month.
The Commission is calling on all EU citizens to help set the policy agenda for the next years and shape the future of Europe in the biggest ever EU public consultation on citizens' rights. Until September, the public will be asked about the obstacles they face in exercising their rights as EU citizens, be it when travelling in Europe, when voting or standing as a candidate in elections or when shopping online. The Commission adopted the first EU Citizenship Report in 2010. From 9 May until 9 September 2012, a short questionnaire can be completed online.
In late April, Germany´s Finance Ministry drafted a national law accompanying the new SEPA End-Date Regulation. Under this law, Germany will continue to operate the ELV direct debit product until February 2016, and consumers can still use national domestic bank account and sort code numbers which banks are allowed to convert to IBAN and BIC free of charge.
A survey of investors conducted by Stuttgart Stock Exchange reveals confidence in the German share index DAX . Investors agree that the government debt crisis in Europe is still not resolved but only 9% think that the Eurozone will be terminated. Due to the positive economic environment in Germany, 79% plan to invest in German stocks and funds.
Online payments are the new competitors of payment methods such as direct debit, credit transfers and other classic payment means. 40% of Germans claim they use PayPal or Click&Buy “often” or “very often”. Although security is of paramount importance, 65% trust online services.
My grumpiness just got ten times worse at this treasury conference, as I stood up and started talking about how I use facebook, twitter, blogging etc to leverage my business.
I could see a veil of abandonment enter the faces of the room as they struggled to get what I was saying, so I asked if any of them use facebook, twitter, flickr, tumblr, gropuon et al.
No.
One person piped up and said they use facebook to keep abreast of what their children are doing, and that was it.
I just unfriended the lot of them.
But then I thought, hey ho, they’re corporate treasurers. Why should they be interested in social media?
So I gave it a chance and launched into my spiel about micropayments, bitcoin, facebook credits, the challenge to security and privacy, the world of change from Square and mobile payments and more.
You name it and I tried to ensure it was, at the very least, discussed and debated, illuminated and understood.
By the end of the meeting, I could see a few more concerned faces. It’s the usual reaction to my presentation: oh, I just got the fact that the world is disrupted, or that’s what I thought.
So we go to lunch and I’m chatting away with folks who all start with the soft blow: “I enjoyed your presentation” and then follow it up with the classic “but …”
“But facebook is just a transient thing”
“But people will soon stop using facebook and use something else”
“But isn’t facebook just a fad”
“But why would I use twitter”
“But what’s the point of hearing that someone’s just eaten a cake or posted a letter”
“But what’s the relevance of this to me”
“But who cares what kids are doing”
“But you’re just talking about stuff that’s for someone else who wants to have fun, not me”
No, you don’t want to have fun do you?
We then get into a deeper debate, with some of the folks saying:
“How can you discount the idea of a website that is almost as big as India and China”
“How can you say something that some kids invest days or weeks of their lives building – their profile – can just be dumped like that”
“You need to use twitter to start getting it, as it tells me all I need to know about my competition and clients”
Blah, blah, blah.
It felt a little bit like going back to some kindergarten and teaching children the basics of the alphabet.
That’s fine for a social media education session, but this was supposedly a dialogue about how it would, could and is changing their business models and the models of commerce generally.
Bottom-line: it may not be your job, your colleague’s job, your boss’s job or your CEO’s job to understand social media, but just make darned sure someone in your business does or your business is screwed.
I was surprised or not to have a long discussion with some bankers and corporates about personalisation last night.
My contention was that a bank should know that they have an influential corporate treasurer decision maker as a business client, and be able to use that knowledge to deliver better service to that individual as a personal client.
Not just that individual, but their family and extended connections.
The bank was shocked by this idea, claiming that it was some form of bribery.
Complete baloney of course, as I was just advocating better client data mining and data usage.
After all, most banks find it difficult enough to make the connection between me and my partner, let alone me and my company, and we are a small company.
You would think:
(a) that the firm could make the connections between me and my CFO, COO, etc;
(b) they would see how our wider network affects our financial habits; and
(c) personalise far more of our retail offers to reflect our corporate activities.
What I am really getting at is the use of big data again.
It stuns me that in today’s world, if I were the corporate treasurer for MegaGlobal Corp (MGC) and my major bank relationship was with ABC Bank, that ABC Bank has no idea when Chris walks into their retail branch that I am a client of that bank.
The retail experiential impacts of every day touch for me and my family could colour my whole view of ABC Bank in my dealings with them as treasurer of MGC.
Surely, in today’s world of big data leverage and analytics, this is a mere hygiene factor.
And yet, the bank turns to me and claims it’s potentially unlawful to be influenced in dealings with the individual through their dealings as a corporate.
Interesting.
We then got into a further debate about what stops this, and most of it si down to silo’s.
The bank is segregated between commercial and retail banking and never the twain shall meet or share data.
That Chinese Wall is not a reflection of compliance but more business interests and objectives of the heads of business in the bank.
So be it … the silo debate is one that I’ve explored regularly on this blog.
But what surprised even more is that, as we talked about this silo view of the world within the bank, the corporates said that their silo view was the same, fi not worse.
Corporate treasurers have no single view of the world, but many and multiple views of the world based upon what each division and country is willing to share.
That’s why there is no payments factory as such, but lots of payments factories.
Each country, line of business and operation within the corporate may be running their own little system today for cash pooling and netting, liquidity forecasting, payables and receivables.
This seems archaic as I’ve been talking about single global payment platforms for ages too, but the corporates in the room say that their challenge has been persuading just a few divisions to consolidate towards payment factory platforms, let alone a global platform.
In fact, most corporates in the room last night were honest enough to admit that they have just embarked on the long road towards a payments factory.
Amazing.
Here’s me in the big data, social economy of 2012 and the largest banks and corporates in the world are still just thinking about it.
What it says to me is that banks and corporates are losing billions due to commercial, capital and liquidity inefficiencies caused by their irresponsible and stupid internal political battles.
Ah well, nothing changes there then.
But here's the alternative view: if a bank or corporate overcomes the politics and starts thinking like an Amazon, Google, Apple or Facebook - in other words, really understand how to leverage data as an asset, regardless of the silo's - then they have the opportunity to blow their industry to pieces.
Recent Comments