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Amazon are the most innovative company

Colin Henderson

Thinking about innovation:  other companies including banks talk about innovation and Amazon just do it.  With revenue increases of 32% in areas that most of the population are possibly not even aware that Amazon is involved in (don’t they sell books??) this reflects an approach that levers what they have built to do other things. Read through for Kevin Kelleher‘s views and some facts on Amazon that might surprise you. Why Jeff Bezos is obsessed with waste Amazon Web Services, meanwhile, offers some of the company’s technology to others. Amazon’s “other revenue” — which includes that of AWS — totaled … Continue reading Amazon are the most innovative company

Innovation5 Comments

“Gartner Says Banks Need to Be Ready to Take Advantage of the New Age of Social Banking” | Gartner

Colin Henderson

Interesting new report noted by Gartner.  I haven’t seen the report (hint hint) but the press release is appealing and fits with the general theme bankers need to get beyond their current problems, and look up for new directions and strategies. Gartner make the point that fundamental shifts are occurring online, and while not specific to banking, except in pockets, the directions at play are too fundamental to ignore as being permanent.  Sounds like an interesting report. Gartner Says Banks Need to Be Ready to Take Advantage of the New Age of Social Banking | Gartner “Currently many traditional bankers … Continue reading “Gartner Says Banks Need to Be Ready to Take Advantage of the New Age of Social Banking” | Gartner

Uncategorized2 Comments

“A banking system we can trust” | Forbes

Colin Henderson

An interesting proposal outlined in Forbes by Laurence J. Kotlikoff and Edward Leamer. The proposal is to eliminate bank failures by managing lending at banks through funds provided by mutual funds.  This would place all the risk with the holders of the funds (investor customers who lend money) and gain the risk advantages of a Mutual Fund.  Loans would be funded when the Mutual Fund provided the money. I find this particularly intriguing because this is basically the P2P lending model as it is now playing out, with sophisticated investors providing the funding directly to borrowers – P2P Lenders providing … Continue reading “A banking system we can trust” | Forbes

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Bank of America Needs $33.9 Billion | NYT

Colin Henderson

As predicted yesterday, the amount of capital the banks need is far in excess of the amounts they were negotiating. This news just in from the NYT confirms what had to be the case.  If we do the math based on project bad debts, it had to be in the $20bn + range for the big banks.  Similar results will apply to Wells, Citi,  PNC and others in the group of 19.  Watch out for the stock market tomorrow.  Reality bites. Bank of America Needs $33.9 Billion, U.S. Determines The government has determined that Bank of America will need $33.9 … Continue reading Bank of America Needs $33.9 Billion | NYT

Innovation, Open Finance, Open Source Banking3 Comments

All banks have the same strategy | what happened to the Starbucks strategy?

Colin Henderson

It was refreshing to read this piece, and takes us exactly where innovation in financial services ought to be going – the new (old) grand ideas. Starbucks should start banking | FT What if Starbucks opened an online-only retail bank offering competitive deposit rates and a modest range of loans and mortgages? It could do that by partnering with a finance company such as ING, which has the appropriate banking licences. All it would need to do is install ATM machines in its outlets, which would involve investing some money but would allow it to get more out of its … Continue reading All banks have the same strategy | what happened to the Starbucks strategy?

AI

The ultimate marketing opportunity, right under your banks nose

Colin Henderson

I just noticed this ad on netbanker.  Wow. This summarises something that has frustrated me for several years.  Picture a situation where you have (relatively) perfect information about a customer, and what they might need and want.  Supplement this with what they actually have with you, and what you can safely predict what they have with others, and you have the ultimate marketing opportunity. Continue reading The ultimate marketing opportunity, right under your banks nose

Canada6 Comments

The Canadian bank model secret? | risk aversion

Colin Henderson

The general theme that the ‘Canadian Bank model’ is superior has constantly intrigued me, having been personally involved there. Size and Diversification: They are smaller and less diversified, so some risk mitigation appears there. This is probably the biggest reason. Number: There are only five of them, of any consequence, so a couple of regulators can do a lot of supervision there. Loan restriction: there is a restriction on loan participation relative to capital. Purdy Crawford/ Pan Canadian Investments: The Canadian government did presciently freeze $35 billion in derivatives back in 2007. But no … in aggregate there is no … Continue reading The Canadian bank model secret? | risk aversion

Business Models, Innovation1 Comment

Where are the bank visionaries when we need them?

Colin Henderson

As we watch for bank stress test results in the US and other countries efforts to deal with Banks’ asset valuation and capital levels, its useful to keep a track on the economic back drop, and assess the bank’s efforts to address their real problem, which is over-valued assets. The US stress tests specifically address the impact on banks under certain sets of future assumptions for economic growth and stability. Spring forecasts 2009-2010 | European commission The Commission forecasts a sharp contraction of the EU economy by 4% in 2009 (relative to a positive growth of 0.8% in 2008). Almost … Continue reading Where are the bank visionaries when we need them?

AI

Intuit releases their iPhone app – is yours coming soon?

Colin Henderson

Jim notes the release of the Intuit iPhone app.  Last week we had the Wesabe app released offerring a stronger product and better competition to Mint. In general it continually amazes be that banks are not leaping on this opportunity for a low cost, high visibility ad for their online services.  Which leads me to todays question de jour for bank executives: Have you tried an iphone? If not go to a store immediately and do so.  Whether you buy it or not, you will be left with the impression this is a game changing device, and remember the people … Continue reading Intuit releases their iPhone app – is yours coming soon?

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The US Government displays extraordinary weakness with Banks

Colin Henderson

This is turning into something of a joke.  The whole point of the ‘stress tests’ was to objectively assess the capital requirements of the Banks’.  Surely no-one could have imagined any outcome other than a requirement to raise more capital.  The only debate might be amount and over what period. In any event there can be no reason to delay the production of the results.  The market is living in the false belief that the government will not hold the banks feet to the fire, at least judging by the stock market.  If we do not get this over with, … Continue reading The US Government displays extraordinary weakness with Banks