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Posts Tagged ‘Fintech’

Cry for Richard Li

In Insurance, Uncategorized on 08/07/2019 at 4:54 am

He sold too soon a huge stake in Tencent.

From an FT reader commenting on an article on Richard Li who is now in the biz of building a major Asian life insurer (FWD) to challenge the likes of AIA. (Btw, his insurtech, subset of fintech, biz is based here.)

Richard Li never made it as a tech investor. But he came tantalizingly close, once. Back in the late 1990s his company PCCW happened to invest in a small nobody company in what was then the Wild West Chinese border town of Shenzhen. This nobody company was called Tencent. At one point, Mr Li owned something like 40% of it, for which of course he paid peanuts. But then, in 2001, he sold his entire stake to a bunch of nobody South Africans that no one had ever heard of, doubling his amount of peanuts in the process. We know the South African buyer today as Naspers, whose investment in Tencent entered the record books as the most successful venture capital investment ever made.

Really unlucky chap despite being born with a silver spoon in hisa mouth.

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SingPass technical support versus that of OCBC and HSBC

In Banks, Internet on 11/06/2019 at 7:00 am

But first, HSBC is boosting the headcount of its wealth management team in Asia. The focus is here, where the banks says it will launch new digital initiatives this year.

The bank should ensure that staff are trained in PR as well in the technical details. I have e-banking accounts with OCBC and HSBC. The OCBC staff are not that good in technical support as the HSBC staff, who really know their stuff. But when it comes to telling client about the features, the OCBC staff are really great.

As for SingPass support, what can I say? I had another bad experience yesterday. Gal hadn’t a clue. Worse gal never called back despite promising to call back later in the day: still waiting. Btw, a tech mole helped me solve the problem I had, a problem caused by the SingPass system. I’ll provide details later this week.

But for now, I can use SingPass: no thanks to the staff or the system.

Related post:  SingPass sucks, really sucks (Cont’d)

China’s emerging fintech giant

In Banks, China, Insurance, Internet, Investment banking on 21/03/2019 at 1:53 pm

But first, why China is great again: Chinese insurer Ping An once had HSBC as a large shareholder but is now the largest shareholder in HSBC.

Besides insurance, it’s into banking, securities broking, asset management and has a trust biz.

In recent years Ping An has invested heavily in the development of new technologies including artificial intelligence, facial recognition and cloud computing.

So it’s becoming a tech co, like Goldman Sachs (At least that is what ex-CEO claimed that is what Goldie is).

Secret behind DBS’s fintech success

In Banks on 14/03/2019 at 1:28 pm

DBS is now the ang moh investors’ favourite SE Asian bank. It has a successful digital strategy that has the both the buy and sides saying “Buy”. UOB or OCBC can’t match DBS’s fintech skills.

Well the dirty secret is that there are almost no S’poreans in its much  deservedly vaunted fintech team. They are mostly FTs from achar land or PRC land. Locals (top young STEM grads from NUS or NTU) feel lonely and that they are working in Bangalore, Mumbai, Beijing or Shanghai.

Interesting that Peenoys not smart enough to work there. but the Peenoy HR personnel team in DBS are working on getting their fellow Peenoys employed there.

Downside of banks heavy IT spending

In Banks, Japan on 23/09/2018 at 5:39 am

All three local banks are spending big time on sophisticated IT investments to build digital platforms to among other things win customers, and lower credit costs and loan defaults. DBS has won awards and, better still, a premium rating vis-avis other regional banks for its efforts.

But Suruga Bank shows what can go badly wrong.

Suruga Bank was the poster gal in Japanese banking. It spent money on sophisticated IT inves tments to lower credit costs and loan defaults. And it had lower credit costs and loan defaults compared to its peers despite being an aggressive lender. But this IT spending resulted in higher running costs.

Well a recent report found that the bank was riddled with office bullying, fraudulent activity and impossible sales targets. These were all related to the need for revenue to fund its higher running costs.

 

 

A gd reason govt is pushing for cashless society

In Banks, Economy on 22/09/2018 at 11:35 am

I’ve been sceptical of the the PAP’s govt attempts to get us to use less cash and more e-payments instead, thinking that this as a way to better monitor and screw (i.e.tax) us.

But the explanation of the CEO of Mizuho, a leading Japanese bank, on why Japan should go cashless also makes sense here. Mr Sakai said

said that greater productivity would be a key factor in Japan’s quest for sustainable growth as the nation grows older and the population shrinks. Critical to that, he said, would be the creation of a cashless society. The current cost to Japan of storage and management of cash, he said, runs at around ¥8tn ($71.8bn) a year, but that could be halved by significant advances in electronic payment systems.

 

 

Robo advisers underperform

In Financial competency, Financial planning on 29/08/2018 at 5:15 am

Recently, on the same day that I read OCBC had introduced robo investment advice here, I read

Low-cost robo advice companies billed as investment services for the masses have failed to deliver market-beating returns over the last year according to new research,

Companies such as Nutmeg offer ready-made investment portfolios of low-cost passive funds and have boomed in popularity in recent years amid a growing need for financial advice in the UK. Investors are automatically placed into portfolios based on an online risk assessment.

But according to research by consultancy Boring Money, customers would have earned more from a fund tracking the FTSE 100 than even the best-performing high-risk portfolio, and low-risk investors could have earned more in a cash [special tax account]

FT.

Even prestigous UK unis joining blockchain “gold rush”

In Uncategorized on 14/07/2018 at 6:29 am

Sad.

The Oxford Blockchain Strategy Programme, run by the University and its Said Business School, offers you a six-week online course for just £2,200, promising you will emerge with “a comprehensive understanding of what blockchain is and how it works”.

On top of that, you get a certificate of attendance from the Said Business School as well as “access to a global network of like-minded business leaders and innovators”.

The Financial Times has been reporting on an even more exciting opportunity, a London School of Economics course in “Cryptocurrency, Investment and Disruption” – and this comes with a bargain price tag of just £1,800 for the six-week online programme.

When the reporter has the temerity to suggest that the programme seems to be lacking in academic rigour and may be tempting people into the unregulated world of crypto-trading, she is told this by one of the course leaders: “Stop being a journalist and just think. You’re citing marketing material as if that were the ultimate truth.”

https://www.bbc.com/news/technology-44778022

Great if my bank offers this service

In Banks, Property on 27/06/2018 at 4:44 am

In early June, the govt released the Digital Readiness Blueprint to help every Singaporean navigate a digital future of cashless payments and other innovations.

Great if my bank, HSBC, offers this service

For people looking to buy or sell a home, it offers to research neighbourhoods, move furniture, remove garbage, paint a house and even decide which bins to take out each week.

FT

Here’s what RBC, a Canadian bank, is attempting to do

RBC aims to offer more end-to-end services — or “ecosystems” — covering wider customer needs than only financial, such as when they want to start their own business, sell their house, or find a new car. For instance, the bank is offering a service for entrepreneurs to register their start-up company with the government, provide it with cloud-based accounting software, supply a branding service and send it letterheads and business cards, all before it has lent the company a cent. For people looking to buy or sell a home, it offers to research neighbourhoods, move furniture, remove garbage, paint a house and even decide which bins to take out each week. Many of these services are supplied by partners integrated into RBC’s digital platform.

FT

 

 

Blockchain useless for settling payments

In Uncategorized on 07/03/2018 at 4:53 am

Here I wrote Practical uses of blockchain that one of the most promising uses of blockchain is in settling int’l transactions between banks.

But recently I read

In practice, central bank experiments show that DLT-based systems are very expensive to run and slower and much less efficient to operate than conventional payment and settlement systems.”

This is the GM of Bank of Int’l Settlements speaking on blockchain, or as he calls it, distributed ledger technology (DLT).

He should know. BIS settles transactions that central banks make to one another.

Practical uses of blockchain

In Uncategorized on 04/03/2018 at 11:02 am

Blockchains are electronic databases of transactions, whereby new deals are added to the chain and then stamped and protected with a mathematical equation.

Chain gang

Blockchain projects have the potential to reduce, and possibly eliminate, settlement times due to their digital nature, ensuring the timely and secure processing of these operations. Other uses for bank-backed blockchain projects would include secured global currency exchange rate speeds and increased transaction security,eventually allowing for an overhaul of the banking industry, replacing traditional back-office clearing houses and other outdated mediums that exist between asset sellers and buyers, reports Tec.

FT

S&P Global Platts has deployed a blockchain network for reporting oil storage data in the UAE, a first in the energy sector

Commodity players have been hoping that technology could ease the cumbersome process of exchanging contracts, letters of credit, inspection and other paperwork by email or fax when one company sells raw materials to another.

Louis Dreyfus has teamed up with ING and ABN Amro of the Netherlands and Société Générale of France to create a blockchain platform for agricultural trading. (Bloomberg)

And finally

It’s being used to verify the authenticity of baby formula, medicines and even to help reduce the harmful trade in blood diamonds. It’s also being used to help keep our fish supply fresh.

http://www.bbc.com/news/business-42152892

 

 

Getting out of Bitcoin

In Uncategorized on 22/02/2018 at 2:49 pm

Further to Bitcoin exchanges are not safe, on the first day of CNY, I heard of a cryptocurrency wannabe trader being made to take out his money (initial investment and profits in weekly tranches).

He stopped trading after this experience.

Bitcoin: Price on Fri

In Uncategorized on 18/02/2018 at 6:02 pm

Just under US$10,000, according to CoinMarketCap.

Bitcoin: Happy days are here again?

In Uncategorized on 16/02/2018 at 11:34 am

On Thurday NYT time

Bitcoin’s up 12 percent over the last 24 hours, at $9,972, according to CoinMarketCap.

NYT;s Dealbook

Mkt that has fallen 50% in a month

In Uncategorized on 10/02/2018 at 5:46 am

The combined value market value of cryptocurrenciies has fallen from more than US$800bn to less than US$400bn in a month, FT reports.

As for Bitcoin, it’s back above US$8,500, having fallen to below US$6,000 earlier in the week. It rose above US$19,000 towards the end of 2017. Now taz real volatility.

Bitcoin falls are worse

In Uncategorized on 06/02/2018 at 6:02 am

Think equity and bond mkts falls are bad?

Well according to Reuters, Bitcoin on Monday fell 8.1% to US$7,524, its lowest level since November 18, 2017.

So far Bitcoin has fallen 40% this yr from its Jan high.

And more UK banks are thinking of joining Lloyds in banning the use of credit cards to buy Bitcoin: UK bank bans Bitcoin purchases on its credit cards.

Banks don’t want the credit and reputational risks involved. BS that they want to protect customers.

Wonder when the banks here will ban the use of credit cards to buy Bitcoin?

UK bank bans Bitcoin purchases on its credit cards

In Uncategorized on 05/02/2018 at 5:23 pm

Lloyds Banking Group, a major UK bank, has banned its customers from today from buying Bitcoin on their credit cards following a sharp fall in the value of the digital currency.

It will not apply to debit cards, only to the banking group’s eight million credit card customers.

Lloyds fears people are buying Bitcoin to make a profit if its value rises but face debts if it falls.

It is concerned it could end up footing the bill for unpaid debts should the price continue to fall.

http://www.bbc.com/news/business-42940728

 

Bitcoin exchanges are not safe

In Financial competency on 04/02/2018 at 5:35 pm

Did you know this?

A third of the world’s bitcoin exchanges were hacked between 2009 and 2015, say US authorities.

FT

The FT reported this in its article about the U$500m theft of XEM coins by an anonymous hacker from Coincheck, a Japanese virtual currency exchange. It claimed the day before the theft that “Cryptocurrency exchanges are already down to 1.5 players. We’re top …”

“Will crypto-crime end the Bitcoin bubble?”

In Financial competency on 04/02/2018 at 10:42 am

But first, did you know virtual currencies lost US$100 billion in 24 hours on thursday?

Coming back to:”Will crypto-crime end the Bitcoin bubble?”

Likely because the marshalls are taking more action because criminals are trying to take advantage of the interest in crypto-currencies.

[T]he cyber-security firm Digital Shadows produced a report on the latest fashion in cyber-crime: profiting from the crypto-currency boom.

The report – titled The New Gold Rush – details the various types of scam, from fake ICOs to raids on exchanges to simple phishing attacks. Its author, Becky Pinkard, tells Tech Tent that cyber-criminals have decided to jump on the bandwagon as the frenzy of popular excitement about the rise in value of Bitcoin has grown.

“We have people all the way down to my grandmother asking about Bitcoin and what it means and whether I can make money from it,” she says.

“What that does is then create the type of exposure that criminals need in order to come in and take advantage of folks who don’t really know what they’re doing.”

Digital Shadows has been scouring criminal forums on the dark web and has found plenty of conversations about ICOs – and how to profit from them.

“Just set it up, people will come and they will drop the money on you,” said one comment.

The mood about ICOs and other manifestations of the crypto-currency boom certainly seems to have shifted this week. Facebook has announced that it is to ban all adverts promoting any kind of crypto-currency product.

Meanwhile there has been a sudden slew of prominent thinkers casting doubt on everything from the value of Bitcoin to the significance of the blockchain technology underpinning it.

The boss of MIT’s Media Lab, Joi Ito, wrote a piece headlined The Big ICO Swindle. The respected economist Nouriel Roubini weighed in with Blockchain’s Broken Promises, casting doubt on a technology that proponents claim has great potential, whatever happens to Bitcoin.

Such downbeat assessments, combined with growing regulatory pressure, seem to be having an effect. Bitcoin and other so-called altcoins have taken another sharp lurch downwards in recent days,. The crypto-bandwagon may not have halted but at least one of the wheels looks like it is coming off.

http://www.bbc.com/news/technology-42917172

“Is Someone Manipulating the Price of Bitcoin?”

In Financial competency on 03/02/2018 at 7:21 am
(Added at 11-05am: Btw it’s down 40% since 1 January. Sorry for the omission.)

Given that the price of Bitcoin price has just fallen below USA$8,000 for first time since November 24, “Is Someone Manipulating the Price of Bitcoin?” (the title of the u/m piece from NYT’s Dealbook) is laughable because price manipulation must have been the other way or failed:

New questions about Bitcoin’s price

Regulators are increasingly worried that Bitfinex, a widely used (and famously opaque) exchange, has been propping it up. The Commodity Futures Trading Commission has subpoenaed the company, whose Tether digital token is often used to buy other virtual currencies.

More from Nathaniel Popper of the NYT:

Hundreds of millions of dollars worth of new Tether were created; almost always when the prices of other virtual currencies were heading down. The Tether were used on the Bitfinex exchange to make big purchases of Bitcoin and other tokens, helping push their prices back up, according to multiple analyses of data from Bitfinex.

“This became more and more concerning, because every time the markets went down, you have seen the same thing happen,” said Joey Krug, the co-chief investment officer at Pantera Capital, which runs several virtual currency hedge funds. “It could mean that a lot of the rally over December and January might not have been real.”

Where we stand: According to CoinMarketCap, Bitcoin is trading at $9,545, down almost 7 percent over the last 24 hours, Ethereum’s Ether at $1,099, and Ripple’s XRP at $1.05, down 7 percent.

The digital money flyaround

• How Goldman Sachs was rushed into supporting Bitcoin. (Bloomberg)

• Meet Bibor, a proposed interest rate for lending Bitcoin. (Bloomberg)

• Samsung is making specialist chips for mining virtual currency. (CNBC)

____________________________

Today’s DealBook Briefing was written by Andrew Ross Sorkin in New York, and Michael J. de la Merced and Amie Tsang in London.

Bitcoin keeps on falling, amid more bad news

In Financial competency on 01/02/2018 at 5:47 pm

January has been the worst month for the virtual currency in three years, with its price down 30 percent. And it’s because of the very thing that Bitcoin and other digital currencies were supposed to be free from: central authorities and regulators.

(NYT Dealbook)

What the central authorities and regulators are doing to make mining or trading virtual currencies a lot harder:

• The S.E.C. froze a $600 million initial coin offering by AriseBank.
• China has continued to clamp down on Bitcoin mining.
• South Korea is still weighing legal checks on virtual currency trading.

Then also Facebook’s ban ads for digital money

But amid all this, NYT Dealbook reports

The Japanese messaging service Line has plans to open its own virtual currency exchange, while the embattled publisher of Penthouse magazine wants to promote its own adult-entertainment-focused token.

Blockchain is the new Internet/ Sell banks?

In Banks on 27/01/2018 at 11:22 am

Banks talk of blockchain technology as something to be tamed and turned into a tool for the back-office, much as the big media companies once saw the internet as merely a useful way to cut their distribution costs.

FT’s Silicon Valley commentator

So banks going the way of media cos and it’s time to sell my HSBC and UOB (via Haw Par) shares?

One big difference is that banks play a biger role in the economy (real and financial) than media cos. So politicans and regulators have a vested interest in looking after them. Think how MAS is protecting our banks and extrapolate to the West.

Fintech: the reality behind the hype

 

MAS not walking the talk on Initial Coin Offerings

In Casinos on 26/01/2018 at 11:01 am

The head of the central bank has been KPKBing about the dangers of crytocurrencies and Initial Coin Offerings (or ICOs): Why S’pore’s fintech ambitions won’t go far


ICOs enable companies to raise money for blockchain projects, without selling equity, by issuing virtual tokens or coins which can be bought by investors.

______________________________________________________________

But did you know that S’pore is third after US and Switzerland in ICO funds raised between Jan to Oct 2017? FT has a diagram showing that ICOs in S’pore raised US$184m. ICOs raised US$580m in the US and US$550m in Switzerland. Russia was juz behind us with US$111m.

Sounds like the central bank is trying to have its cake and eat it.

Let’s hope retail investors don’t get burnt. But somehow I think pigs will fly first.

Sad,

 

Why S’pore’s fintech ambitions won’t go far

In Economy on 16/01/2018 at 5:33 am

Too much wishful thinking combined with motherhood BS from the authorities.

The head of Singapore’s central bank said on Monday he hoped the technologies underpinning cryptocurrencies such as blockchain would not be undermined by an eventual crash in the digital money.
Read more at https://www.channelnewsasia.com/news/singapore/singapore-central-bank-head-hopes-cryptocurrency-tech-will-survive–crash–9861880

And

Menon added that he would not rule out the possibility of the MAS issuing a cryptocurrency directly to the public but that he was not sure it was a good idea.

This reminded me that in mid November last yr, he told the Financial Times that S’pore only wants good initial coin offerings: MAS was “very keen’’ to facilitate fundraising through “good” initial coin offerings.

HE said it  wanted to use its “regulatory sandbox” approach — created to experiment with financial innovations in a controlled environment with regulatory reliefs for a limited period of time — as a testing ground for good ICOs.

Problem is that the way he defines a good ICO means that there’s no incentive for anyone to want to raise money because the there’s no money to be made by investors or the fund raiser.

Seriously, this is what he said on what is a “goods” ICO.

He identified two kinds of good ICOs that could prosper under an MAS regulatory environment created last year that was designed to support financial innovation. Mr Menon said one type was a transaction that did not promise a return linked to the financial performance of the issuing company, and was not designed as a speculative bet on the cryptocurrency being used.

“What makes a security a security is basically a promise; a promise to share in the economic interest of your enterprise,” he said. “If you can find a model of crowd funding that doesn’t involve that, then you are not regulated at all.”

Wow work for free isit? While ministers ands senior bureaucrats make millions in salaries?Manna ada logic?

AS I said before, in S’pore, fintech is about making the local banks more efficent and entrenched, not diarupting the banks. Bit like the 10% of S’porean voters who vote Oppo to make sure the PAP listens to them.

 

Blackrock votes for robots

In Uncategorized on 22/04/2017 at 2:33 pm
From NYT Dealbook

By Amie Tsang

Laurence D. Fink, the founder and chief executive of BlackRock, has cast his lot with the machines.
BlackRock, the largest fund company in the world, plans to consolidate a large number of actively managed mutual funds with those that rely more on algorithms and models to pick stocks.
The move is the most explicit action by a major fund management firm to try to take advantage of the increasing opportunities in lower-cost computer driven funds.
About $30 billion in assets, or 11 percent of the firm’s active equity funds, will be included. The funds will focus on strategies that adopt a more rules-based approach to investing. Seven of BlackRock’s 53 stock pickers are expected to step down, but some will stay on as advisers. At least 36 employees connected to the funds will leave the firm.
“The democratization of information has made it much harder for active management,” Mr. Fink said.
Could this be the end of the cult of the brainy mutual fund manager?

Fintech app that will kill off second hand car salesmen

In Financial competency on 14/12/2016 at 1:48 pm
Financial Assistants Inspired by Science Fiction
Plenty of software programs can help you with your finances, but the start-up Digit and its competitors are aiming for something more comprehensive: a full-service financial assistant.
When he founded Digit, Ethan Bloch had in mind the “Ender’s Game” character Jane, who uses her artificial intelligence to prepare taxes for the hero Ender and ends up taking over his financial life.
For companies like Digit, Credit Karma and Mint, the goal is to create an assistant that will use machine learning and artificial intelligence to provide proactive analysis and advice.

Fintech round the world

In Banks, Internet on 19/11/2016 at 6:15 am
Lawrence Tang of Invest Hong Kong at the recent Money 2020 fintech conference in Las Vegas. “We are at the right place to try to capture some of these high-flying fintech companies,” he said.

Where Finance and Technology Come Together

The new industry mixing finance and technology has no clear capital, but major international cities and lesser ones are vying to attract companies.

Real meritocracy at work, not the PAP version

In Political governance, Public Administration on 18/11/2016 at 6:05 am

Furlong, 30, enrolled in a three-month coding boot camp that usesHackerRank, a web platform that trains and grades people on writing computer code. After earning a top ranking for Java developers globally, Furlong was hired by JPMorgan Chase & Co. in December for its two-year technology training program.

This is Wall Street’s new tech meritocracy.

Wall Street needs coders. Banks need to fill so many programming jobs that elite schools can’t possibly pump out enough candidates. So the industry is looking in places it never did. – Bloomberg

From NYT’s Dealbook

Contrast this with the PAP way.

My posts on meritocracy the PAP way

Meritocracy? No leh Cosiness

Meritocracy’s feet of clay: Ong Ye Kung

Lucy Kellaway, FT’s court jester on management issues, once described what Charles Trevelyan, the permanent secretary to the UK Treasury 1840-59, had in mind when he proposed that meritocracy should be introduced into the civil service.

“He wanted young people to be chosen who had merit – the very best,” says Greenaway. “But he believed that the best were to be found in the gentry, in the professional classes. As the 19th Century went on, the education system mirrored the social system. The universities in Oxford and Cambridge and public schools became the preserve of the gentry and the professional classes – clergy and lawyers and so on.”

Education locked in what used to be patronage, replacing it in a way that was acceptable to the conservatives who had been fearing that these exams would undermine the social fabric of the country.

http://www.bbc.com/news/magazine-23376561

Sounds like the PAP way doesn’t it?

PAP never sleeps, Fintech shows why

In Economy on 11/11/2016 at 1:52 pm

Recently I reported that the authorities seem to understand what fintech is about and I quoted the FT in support of my point.

Here’s another quote from the same FT article which shows why the PAP is so formidable an opponent on the political arena:

In Singapore, Mr Galligan’s colleague, Christopher Wood, refers to “the threat of disruption from government-prompted efforts to promote a new digital economy — be it in fintech, ecommerce, data technologies, transport, cleantech or the so-called sharing economy in general”. Still, Singapore appears to realise that a government that defines its mission as protecting the interests of the establishment will merely accelerate the decline of that establishment. So far, its stance is paying off. “Supportive government policies and the strongest ecosystem in Asia have already spawned the early stages of a new economy,” Mr Galligan says.

Anti-PAPpists are wasting their time?

 

Fintech: the reality behind the hype

In Banks on 09/11/2016 at 1:08 pm

It’s all about automating processes

At Goldman the number of people engaged in trading shares has fallen from a peak of 600 in 2000 to just two today … and another 200 software engineers who work on systems that, in effect, do the job on their own.

And

Goldman has mapped each of the 146 steps of an initial public offering in 51 charts that appear in proper sequence on a five-foot long roll-out. Costly, redundant steps are being cut or, once again, automated.

(Economist)

Based on what Tharman and the central bank say about fintech, they get the bit about automating processes as this MAS wish list shows: http://fintechnews.sg/3268/fintech/mas-100-fintech-problems-to-solve/

And it’s not only me who says that the authorities here get it about fintech

a list of fintech start-ups in Singapore compiled by CLSA using data from website Tech in Asia includes almost 180 firms. By contrast, a comparable list for Hong Kong would have fewer than half that number. Singapore’s local regulator appears “to be highly supportive of fintech and has a clear view of when and under what conditions it will regulate the industry”, says Jonathan Galligan, CLSA’s head of Singapore research.

FT

 

Tech progress and bad times

In Uncategorized on 07/09/2016 at 3:24 pm

Let us go into the weekend with an optimistic, questing spirit. Set aside your macro worries, the flippant or dangerous pronouncements of our political class, or portentous terms such as “secular stagnation”. Sometimes the grimmest times are also the most technologically fruitful, seeding multi-squillion dollar opportunities. Apple launched its iPhone just before the global financial crisis. The dire decade that was the 1930s has been called the most technologically progressive of all time, incubating inventions such as radar, the jet engine and nylon. And capital markets play a part in all this, sluicing funds towards where those great opportunities lie.

Letter from Lex a few months ago

Using bitcoin technology

In Banks on 06/09/2016 at 5:36 pm

Blockchain is the technology behinf bitcon. And banks are studying how to use it to transfer $. Chart: How blockchain works

 

Banks say the greater safety that will come with a “golden record” of trades — one ledger that updates in real time as trades are executed.

There will be cost saving, as a fully synchronised and digitised settlement operation makes cumbersome, labour intensive back offices redundant

There will also be capital saving, as the time delay between transactions being executed and settled is reduced,

The problem: no reversal for honest mistakes, or fraud: transfer is transfer

 

Why Goldie wants to be the people’s bank

In Banks, Internet, Investment banking on 29/08/2016 at 3:26 pm

The maths behind Goldman Sachs move into retail internet finance

As it has done many times in its past to survive and to thrive, Goldman is in the process of reinvention. This explains Marcus, its new online lending business named after the company’s founder, Marcus Goldman, along with GS Bank, its online savings account business with no minimum balance requirements. After all these years, Goldman Sachs has suddenly discovered retail banking. But it is not out of altruism or charity, nor is it nefarious. It is all about making money from money, which has always been Goldman’s specialty. In fact, GS Bank and Marcus fit together elegantly in helping Goldman find new sources of profitability.

And here’s why: In the zero-interest-rate environment that the Federal Reserve has carefully curated for eight years, Goldman and other banks can gather up money — the raw material they use to make more money — at virtually no cost. By opening an online bank, Goldman can gather up billions of dollars in consumer deposits without the cost of a physical branch and pay its customers close to nothing for their money. Goldman is offering to pay savers 1.05 percent annually. That may sound like close to zero, and it is, but the rate is also nearly 17 times more than the 0.06 percent annual interest rate that JPMorgan pays me on my savings account.

Goldman’s idea is to get people like me to move my money, of course. Sure, the 1.05 percent is a teaser rate, created to attract billions of dollars to Goldman’s new venture. And it will no doubt work. Since April, GS Bank has collected $1.8 billion in deposits, essentially by word of mouth.

Goldman will then take that raw material and use it to make more money, in large part by lending it out through its online lender Marcus, which aims at consumers looking to borrow around $20,000. Goldman will charge plenty more in interest for these loans than the 1 percent it is paying savers at GS Bank. Although its terms will not be known until Marcus rolls out officially in October, assume for the moment that the going rate for consumer loans of this nature – if both Lending Club and Prosper are useful guides – is around 12 percent. That difference – the 11 percentage points – is what Goldman will largely rake in as profit.

Day traders v DIY quant traders

In Financial competency on 24/08/2016 at 4:28 pm

 

Illustrarions from FT

The Hedge Fund Robot that Outsmarted Its Human Master

Yoshinori Nomura, a 43-year-old money manager, is setting his software loose in Japan, one of the most turbulent markets in the world. If he succeeds, it would offer hope for AI traders around the world.

NYT Dealbook

Fintech’s greatest impact

In Banks on 02/08/2016 at 1:08 pm
Will be in trading, settlements and general back office.

From NYT Dealbook

We’ve Hit Peak Human and an Algorithm Wants Your Job. Now What? On Wall Street, the still-essential business of banking will go on – but maybe without as many suits. “We have 20,000 manual interventions on trades every day,” said Michael Rogers, president of State Street. “There’s a huge opportunity to digitize that and move it forward electronically.”

 

Fintech I can appreciate

In Banks on 23/06/2016 at 7:01 pm

Goodbye, Password. Banks Opt to Scan Fingers and Faces Instead. Frustrated by thieves stealing personal data from millions of customers, banks are investing in biometric technology to offer better security.

NYT Dealbook

And govt wants to encourage fintech?/ PAP is never wrong

In Banks, Economy, Internet, Political governance, Public Administration on 22/06/2016 at 6:04 am

Is Tharman trying to tell jokes again? (Examples in the past, another recent one?). He’s the leading advocate of fintech here.

But demand for digital services leaves banks and other financial institutions more open to more risk. The majority of top bankers said they were open to more risks than they could manage as a result of digital developments, according to a global survey of bankers by the consultancy Accenture.

Yet the PAP administration has indicated by its plan to restrict direct access to the internet for civil servants that it is trying to cut cybersecurity risks by cutting internet connections.

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Delinking cicil servants from the internet

‘The Govt’s move to delink computers used by civil servants from direct access to the Internet is “absolutely necessary” to keep govt data and public services secure,’ PM. He cited the possibility of personal data like NRIC numbers, addresses and income tax returns being hacked and put up for sale in the internet.

When this policy takes effect in May next year, civil servants can only access the Internet through dedicated computers or through their own computers. It seems that there have been very determined attacks on the Govt’s IT systems and the threats are getting more severe and sophisticated. Just relying on the system’s defensive measures is looking like a losing proposition? It is best to cut the connections to the minimum?

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So how does the call for more fintech dovetails with the plan to deny most civil servants direct access to the internet?

 

Fintech is all about increasing connections, the civil service delinking initiative is all about cutting connections.

Does the PAP administration think that the banks and other financial institutions can safeguard data better than it can? Or that the data financial institutions hold  is not so impotant?

Or maybe is the delinking policy, is as suggested by Chris K, aimed at avoiding a PR disaster:” PAP must always look good even when PAP goofs”? A variant of “Napoleon is always right”*?

Or is Tharman just joking about the importance of fintech to S’pore?


*Another one of Boxer’s mottoes is “I will work harder”. Sounds so S’porean and something that the PAP encourages. But then why is productivity is so worryingly low. Too many of the PAP’s favoured caste, FTs, isit?

Fintech began in 1860s

In Banks, Internet on 06/06/2016 at 1:48 pm

With the use of the telegraph

Timeline: The Evolution of Fintech Starting in 1865, the structures, networks and ideas that are the foundation for financial technology today began to take shape.
NYT »

More on Fintech and the banks

In Banks, Uncategorized on 03/06/2016 at 6:20 pm

From NYT’s Dealbook

FINTECH VS. BIG BANKS Regulatory concerns have long dogged the banking industry, but these days, senior executives of big banks are keeping a close eye on something potentially more disruptive to the sector, which is financial technology, or fintech, Andrew Ross Sorkin writes in DealBook’s special section “Fintech’s Power Grab.” It’s too early to tell just how much fintech will upend the financial industry, but those who back the start-ups say that the potential is enormous. If these newcomers succeed, “Wall Street as we know it may become an outpost of Palo Alto,” Mr. Sorkin writes.

Of course, there are the skeptics, like the banking investor J. Christopher Flowers, who have dismissed the fintech frenzy as mere hype that defies common sense and will leave a trail of failed companies in its wake. But Mr. Sorkin writes that a third view may have the highest likelihood of coming true: “The big banks, so powerful and yet so anxious about the possibility of being disrupted by the upstarts, will gobble them all up in a spate of mergers and acquisitions that puts the disrupters squarely inside the institutions they were supposed to overtake.”

The banking industry needs to realize that change is coming whether it likes it or not, contends Steve Case, a founder of AOL and an entrepreneur with investments in several fintech businesses, who just wrote a book about the future, “The Third Wave.” “Some banks will be smart and figure out how to partner with some of these entrepreneurs or acquire some of these companies or do joint ventures, but if they just think it’s going to stay the way it is, they will be surprised,” Mr. Case said.

Fintech is fashionable

In Banks on 04/04/2016 at 12:24 pm

NYT Dealbook reports

‘FINTECH’ BOOM SAID TO THREATEN BANK JOBS Up to 30 percent of employees in the banking industry could lose their jobs to new technologies over the next decade, Nathaniel Popper reports in DealBook.

A report by Citigroup said that the number of employees at American banks would drop to 1.8 million in the year 2025, down from 2.6 million last year. An even sharper drop is predicted for European banks.

The jobs would be lost to start-ups cutting into different parts of the financial industry.

The projection comes after Antony Jenkins, the former chief executive of Barclays, said that banking was facing a series of “Uber moments,” in which the jobs in the industry could halve.

Banks are already being forced by volatile market conditions and new regulations to make cuts.

The Citigroup report noted that the banking sector had attracted record investment over the last five years and that new technologies had taken off the fastest in Asia, particularly China.

New financial technologies have been slower to gain traction in the United States. But “given the growth in fintech investment, this isn’t likely to continue for long,” wrote Kathleen Boyle, the managing editor of Citigroup GPS, in the report’s introduction.