A library of snippets
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The rise of tech firms and capital markets is mostly good news. Access to banks can be costly. Some 7m households in America are unbanked, relying on cheque-cashing firms, pawn shops and payday lenders. Credit and debit cards levy fees of 1-4% on merchants, which are remitted to the rich via air miles and credit-card points.
From How fintech will eat into banks’ business | The Economist:
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But most tech firms have opted against banking licences. They are instead skimming the cream off the top. “Core banking”, the heavily regulated, capital-intensive activity of banks, makes around $3trn in revenue worldwide, and generates a 5-6% return on equity (roe). Payments and product distribution, the business of the tech firms, yields $2.5trn in sales but with a roe of 20%.
From How fintech will eat into banks’ business | The Economist:
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The first blow to banks is that both companies earn as little as 0.1% of each transaction, less than banks do from debit cards. Interchange fees around the world have tumbled because of such firms. “It was very lucrative for fintechs to come in and compete these fees away,” says Aakash Rawat of the bank ubs. “In Indonesia they have fallen from 200 basis points to just 70.” But the bigger threat is that payment platforms may become a gateway allowing tech platforms to attract more users. Using data that payment transactions provide, Ant, Grab and Tencent can determine a borrower’s creditworthiness.
From How fintech will eat into banks’ business | The Economist:
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Banks have as a result become providers of any and all financial services that a client needs, from a credit card to a mortgage to investment advice.Yet all these are now under threat.
From How fintech will eat into banks’ business | The Economist:
As many people have observed (and I cannot tell you how many times I have seen someone put this on slide at a conference), the economy needs banking but it does not need banks. But what does this really mean?
A good way to try to understand this, and to get a handle on what it might be for the finance sector, is too look the functions of banking.
How much would you pay for privacy?
(Once again demonstrating the impending explicit pricing of privacy, the Sodinokibi payment website last year began charging 10% more for Bitcoin ransoms compared to the more private Monero cryptocurrency and I understand that the Colonial attackers raised this to 20%.)
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A text scam gang bribed a Lloyds Bank worker to help them launder money stolen in a £30million con, a court heard.
Ayman Touhami, 25, took cash and gifts in exchange for using false information to set up accounts where the criminals could place money.
From Lloyds Bank worker took bribes to launder text scam gang’s stolen millions:
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My question today is: Where’s the natural home for our personal medical and behavioural data?
It comes down to trust, and I think there’s no better, more trusted home than a bank. We trust banks to protect our financial assets, our will and all our essential documents. Sure, there have been hiccups now and then, but nowhere near as severe as those of the tech companies. Among Facebook’s numerous privacy breaches is one involving the data of 533 million users, and Facebook has been glacially slow to admit they have a privacy problem.
As blockchain technologies sneak into every aspect of finance, transforming banking as we know it, we should keep in mind that banking is not about money. At its core, banking is about trust. No trust, no bank: it’s as simple as that. However, if trust is the product, why don’t banks decide to truly own the concept?
I picture our lives as rings in the water. At the centre is our deeply personal data. The next ring is our health data. Beyond that, you’ll see the data we share with our friends on social media. Why don’t banks step up to manage all those data points on our behalf? They could negotiate with Facebook’s efforts to monetise our information, double-check Apple’s small print, and bargain with our health insurance companies as they download our health records from Fitbit.
What I’m proposing is pretty simple, isn’t it? Since banking is the natural home of trust, shouldn’t it be the natural home of the billions of data points we aggregate throughout our lives? Depending on a bank would impart a renewed sense of security, rather than having no choice but to rely on Alexa for advice in a desperate moment. Because guess who Alexa would advise us to trust.
From The future of banks will be more about trust than finance – Transactions & Technology –:
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The big news on this front is that Tile is joining the Sidewalk network
From Amazon’s Sidewalk Network Is Turned On by Default. Here’s How to Turn It Off | Inc.com:
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Silvergate will become the exclusive issuer of the Diem USD stablecoin and will manage the Diem USD reserve. Diem Networks US will run the Diem Payment Network (DPN), a permissioned blockchain-based payment system that facilitates the real-time transfer of Diem stablecoins among approved network participants.
So, the Diem US dollar stablecoin (or the “Facebuck”, FU$ for short) is around the corner.
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Ireland’s health service operator shut down all its IT systems on Friday to protect them from a “significant” ransomware attack, crippling diagnostic services, disrupting COVID-19 testing and forcing hospitals to cancel many appointments.
From Irish health service hit by ‘very sophisticated’ ransomware attack | Reuters:
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