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Home » Daily Briefing » Daily Briefing - 15 March 2017

Daily Briefing - 15 March 2017

The US Federal Reserve's interest rate announcement is expected today at 1400 US East Coast time.

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Ant Financial will not have a clear run at Moneygram, the second-largest nonbank remittance network after Western Union. Payments processor Euronet Payments has stepped in with a $1 billion offer to trump Ant's $880 million. Some analysts are asking why this is a big deal. After all, the remittance business seems to be in the midst of a transformation as new operators from Transferwise to WorldRemit step in to the arena along with dozens of small blockchain and bitcoin operators who are targeting remittances via mobile phone. PaymentsSource notes that one appealing characteristic of Kansas-based Euronet is that the deal won't have to go through a review by the Committee on Foreign Investment in the US. So is it a ploy to keep the Chinese out of the business? Hardly. Moneygram retains a global agent network and hundreds of bricks-and-mortar outlets. "MoneyGram has a vast network of agents, and for a lot of remittance users, in-person transactions and brick-and-mortar are important," said Sarah Grotta, a director with Mercator Advisory Group. In the remittance business, there's something to be said for being on the ground.

European banks look set to be on the verge of a major IT transformation with a series of announcements about moving data to cloud infrastructure. While US tech companies largely dominate data infrastructure, they have been forced to build data centres in Europe to cater for businesses in that continent, but now there's an upside. "Société Générale will start using external cloud services by June for some non-client content, such as financial research and marketing data, said Carlos Goncalves, the head of global technology services. By 2020, the bank intends to have 80 percent of its infrastructure on internal and external cloud networks." Mr Goncalves added: "According to the European Central Bank, we have put in place the benchmark for the industry." Likhit Wagle, general manager of banking and financial services at IBM, told Bloomberg that in many cases banks will gain a ten percent saving by using cloud infrastructure, with some managing to reach 40 percent by working out "what technology systems aren't needed anymore".

Perhaps there's a future for some specialist European bank headquarter relocation business. Nordea has just become the most valuable company in Sweden after reorganising its structure to have headquarters in Stockholm while not being a Swedish bank: according to Nordea officials, it's a Nordic bank. The distinction comes as Sweden's centre-left government pushes new terms for bank resolution. The Social Democratic-led administration already wants banks to contribute more to the country's economy, but now it's insisting on a 40 percent increase in the resolution fee, according to a report in the Financial Times. But with Nordea's balance sheet now in Sweden, and the resolution fee based on the bank's balance sheet, Nordea argues that it's going to be unfairly on the hook for its non-Swedish operations. "The government in Stockholm shows few signs of blinking," writes the FT. "On Tuesday, an ice-cold finance minister, Magdalena Andersson, said there would be advantages if Nordea left the country as 'the risks for the Swedish economy would naturally be reduced'. But Swedish business leaders already bruised from other confrontations with the government — including attempts to limit profits at private schools and hospitals — are shocked by the latest incident. 'Why would you want to chase a successful company out of the country? Nordea has become one of the biggest, and safest, banks in Europe since the financial crisis,' says one leading businessman unconnected with the bank." 

Amex brings its debit card to Russia
TransferWise partners with digital bank Starling
Stricter UAE rules against money laundering hurts SME borrowing
Boston Fed team puts mobile payments to the test

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