The Economist has a special report on international banking, and the section entitled Retail Renaissance was a trip down memory lane.  Then some lessons learned for banks. First the memory lane part.  I was with mbanx in Canada since 1996 and then Wingspan in Chicago emulated in 1999 (ok my opinion) Retail renaissance | Economist “IF YOUR BANK could start over, this is what it would be,” trumpeted the marketing campaign for the launch in 1999 of Wingspan, an internet bank. The following year the bank was gone. In September 2000, a few months after the dotcom bubble burst, it … Continue reading Retail banking is the backbone of bank profitability but can it evolve and innovate under current leadership

I have covered here since the banking crisis the scale of ‘notional’ derivative activity in the banking economy.  That last time I saw a number was Dec 2010 and world derivatives totalled $600 trillion.  To place in perspective that number is 10 times world GDP.  That number has grown since the banking crisis by 10%. According to Fortune Magazine (below), the derivatives at JP Morgan account for more than 10% of all world derivatives, and might well account for a chunk if not all of the growth in notional contract amounts.  Growth in all derivatives since 2009 is $43 trillion, … Continue reading JP Morgan derivative update | Fortune

The Canadian Bankers Association have released an important document outlining standards for integrating mobile payments into the Canadian Payments networks.  Its reasonably detailed at 133 pages.  Page 40 outlines Square requirements for electronic receipts, suggesting some reasonable new thought has gone into this.  It has flow charts for standard payments, refusals, and even loyalty points treatment.  There is some security stuff including key management. The flow charts that outline how cards would integrate into the current payment networks are well laid out. http://www.cba.ca/en/component/content/category/89-mobile-payments-in-canada http://www.cba.ca/contents/files/misc/msc_20120514_mobile_en.pdf Continue reading “Canadian NFC Mobile Payments Reference Model” released by Canadian Bankers Association

It was just a week ago when I wrote an open question to banks; “Banks – Why can we not have same day money transfer?” Well today I came across new Dwolla offerring they name FiSync.  They characterise the new service as real time money transfer through their cloud service and are oferring it free to banks. Unfortunately, and sorry Ben, but I predict this will not succeed at least not as currently offerred.  The reason banks won’t accept as offerred is one word – float. The post notes the value of ACH transactions annually at 33.9 trillion.  If we … Continue reading Dwolla offer real time money transfer for banks | but is this this the right model?

America has introduced a JOBS act designed to remove many of the truth and informational requirements that funding requests must address under securities law.  The title here is the final phrase in Esthers piece and it is a deep one. This article is a highly insightful piece from Esther that captures the essence of the role and responsibility of government as it applies to the free marketplace.  The words “unintended consequences” leap off the page here.  It is far to easy to design a solution that apparently attacks the problem directly but in fact has effects that were not even … Continue reading Sometimes friction has a purpose

FSA managing director Martin Wheatley spoke at the Chartered Institute of Bankers May 4th, 2012 and it is something of a clarion call to the financial services industry everywhere.  He raises gaps in bank service levels based on complaints received at the FSA. But there is nothing new here and the example of sending money for receipt by next day exemplifies his speech. Rebuilding trust and confidence in banks and bankers | FSA Martin Wheatley Even where we have brought issues to the attention of industry, such as the requirement to ensure payments reach the payee’s account by the end … Continue reading Banks – Why can we not have same day money transfer?

Square is getting a lot of attention these days.  Banks are sitting by while Square eats their lunch, and this is quite typical.  This happened with eCommerce where banks let PayPal and others take that space.  At the pace mentioned in this Bloomberg piece, Square is looking at up to 8% of the market which seems high but here is the quote. Square Payment Pace Rises 25% in Niche Coveted by EBay | Bloomberg Square, founded in 2009, is processing transactions at an annualized rate of $5 billion, up from $4 billion a month ago, as more consumers embrace mobile … Continue reading Square beat the competition by crediting merchants next day