Payments2 Comments

PayPal + Bill Me Later = disruption for banks’

Colin Henderson

That simple equation spells trouble for Banks.  How long will banks’ watch the likes of PayPal (with Bill Me Later) and Grameen (bankabillion with Obopay) taking away fundamental parts of banking.  The former being small loans (think credit cards), and the latter being payments.  The PayPal acquisition just makes so much sense.  They are shifting from a pure auction model to that of a buy now model.  As part of that buy now, Bill Me Later will finance the purchase.  The dollar value is forecast $1Bn in 2008.  Further commentary here at Netbanker. According to today’s investors presentation the company … Continue reading PayPal + Bill Me Later = disruption for banks’

Canada, UK, US1 Comment

Enormous shifts have occurred in banks’ market capitalisation

Colin Henderson

The degree of shift that has occurred and is occurring as we speak with respect to bank valuations is simply staggerring.  What got me going on this was when I noticed that the combined market capitalisation (stock exchange value of a company) of Lloyds Bank, Barclays, and HBOS was less than several of the Canadian banks.  So with the valuable assistance of Google Finance here are some statistics, with some notes following. the banks picked here have had their value cut in half the UK banks are in terrible shape with low market cap, and reflecting low P/E the Canadian … Continue reading Enormous shifts have occurred in banks’ market capitalisation

Uncategorized1 Comment

HSBC press on with customer experience re-engineering and cost containment

Colin Henderson

In a novel move, HSBC combines the CIO and COO position. Certainly their motivation is appropriate, and their direction makes sense. One system, centralised around the customer experience. HSBC names Harvey chief technology and services officer “By combining our technology and worldwide operations more closely we can re-engineer customers’ experience of HSBC and at the same time drive down the unit cost of production,” says Geoghegan. Harvey will continue to lead the bank’s One HSBC initiative which will see the migration of the bank’s global operations onto a single technology platform. HSBC has said that the programme aims to “re-engineer … Continue reading HSBC press on with customer experience re-engineering and cost containment

Business Models

The essence of banking | Howard Davies – LSE

Colin Henderson

Sir Howard Davies, director of the London School of Economics sums up banking perfectly. New banking rules; tread carefully Banks engage in maturity transformation, turning sight deposits [which can be immediately withdrawn without penalty] into long-term loans. This confidence trick depends on just that – confidence. Depositors must believe their money is safe, even if they are dimly aware that if they all wanted to take it out the cash would not be there. The impossibility of creating this illusion is managed through the interbank money market.  Everything is fine so long as people continue to place their hard earned … Continue reading The essence of banking | Howard Davies – LSE

Canada, sub prime, UK, US

Canada banking sector is avoiding the troubles in US and UK

Colin Henderson

The press is all doom and gloom at the moment.  Not without reason, but the causes and implications are getting blurred.  So I did a simple analysis comparing three stock markets, their fall since mid 2007, and the relative importance of the banking sector in that fall.  The results suggest that it does depend where you live.  There is an all out banking crisis in the US and UK, based on market sentiment.     Somehow Canadian banks are not regarded with such fear as the others.  This no doubt partly due to the early work of Purdy Crawford and … Continue reading Canada banking sector is avoiding the troubles in US and UK

US

Europe act smartly, but some additional information on the US bailout raises questions

Colin Henderson

The Euro governments have agreed on what appears a sensible plan to re-assure depositors, yet keep the pressure on Banks to sort themselves out.  Included are measures to ‘sanction’ institutions that need help, something the Americans had trouble with. Europe agrees bank crisis action Europe’s biggest economies have agreed to work together to support financial institutions – but without forming a joint bail-out fund. French President Nicolas Sarkozy hosted the meeting of the leaders of Britain, Germany and Italy in Paris. … … Mr Sarkozy announced a series of allied measures – including unspecified action against the executives of failed … Continue reading Europe act smartly, but some additional information on the US bailout raises questions

Uncategorized

Something a little bit different | Giles Bowkett

Colin Henderson

Programmers are a little different, and Ruby Programmers extend that idea.  This video has bits about the simple power of meta-programming in Ruby, alongside some practical business principles.  Release early, and release often, for example.  Its a 500 page presentation in about 40 minutes.  Grab a coffee, and have a listen.  The most important video of 2008 Still, nobody really quite expected what happened when Giles Bowkett took the stage to show off his labour of love, Archaeopteryx. Watch “Archaeopteryx: A Ruby MIDI Generator” at InfoQ, now. Lots of threads here, but five things to listen for: computers are everywhere … Continue reading Something a little bit different | Giles Bowkett

US

Wells and Wachovia is a much better arrangement

Colin Henderson

A pleasant surprise this morning to read that Wachovia is being wholly taken over by Wells.  Wells Fargo in a Deal to Buy All of Wachovia | NY Times Wachovia’s deal with Wells Fargo will further concentrate Americans’ bank deposits in the hands of just three banks: Bank of America, JPMorgan Chase and Wells Fargo would control more than 30 percent of the industry’s deposits. Together, those three would be so large that they would dominate the industry, with unrivaled power to set prices for their loans and services. Given their size and reach, the institutions would probably come under … Continue reading Wells and Wachovia is a much better arrangement

Economy

World on the edge | Economist

Colin Henderson

The Economist is often quite pithy in their commentary but thought this weeks leader out today, is worth storing for the record books.  The general theme is that in looking beyond the bailout expect worse to come, as we peer over the brink.  Note the reference to the US Senate not being used to being second guessed, but this time that has occurred conclusively World on the edge | Economist Continue reading World on the edge | Economist