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Home » Daily Briefing » Daily Briefing - 07 March 2017

Daily Briefing - 07 March 2017

It's time for Australia's parliamentary hearings into the country's big four banks which, according to Bloomberg, is conducted for television cameras in a spirit of high theatre. "Complaints to the country's Financial Services Ombudsman have bounced around between about 30,000 and 36,000 a year in recent times, but don't show the sort of rising trend you'd expect if standards were significantly deteriorating," says Bloomberg. "Versus their global peers, Australia's banks get an unusually low share of their revenue from fees and non-lending activities, with two-thirds or more of total income coming from the traditional business of spreads between borrowing and lending costs." That aversion to fees, and the fact that banks will have to lay out some kind of fee to Apple Pay, has stuck in the craw of the country's banks — despite the fact that Apple is preternaturally popular among their customers, accounting for about 35 percent of phones over a 16 percent global average. Apple Pay has been available in the market since 2015 — but only to Amex card holders. So, in the recent battle over Apple Pay's availability, the banks claimed that Apple Pay would hurt competition in Australia. Let's just say that few people believed that the big four's mission is to protect competition in the market.

Apple Pay arrives in Ireland this morning, with customers of RBS-owned Ulster Bank and digital-first bank KBC allowing their customers to load debit cards to the Apple Pay system. KBC was first to make Android Pay available to its customers in Ireland. Ireland's two main banks, AIB and Bank of Ireland, have not yet enabled their cards for Apple Pay. "A spokeswoman for AIB said that the bank is currently 'in discussion with a number of payment service providers, including Apple' writes the Irish Independent, but that the bank is 'not in a position to confirm timing of such payment development at this time'. Jennifer Bailey of Apple said the company wanted all banks on board. "But even if your primary bank isn't involved today with Apple Pay, you can still use Apple Pay with Boon prepay." This is where Boon by Wirecard has spotted a gap. iPhone users can download the Boon app, top it up via a prepaid digital Mastercard, and then use Apple Pay. (It does sound rather convoluted). The developments all add to the impression that banks continue to be outmanoeuvred by Apple.


Bank tellers look away now: leading Indian bank HDFC has pledged to introduce 20 humanoid robots to its front desks inside two years. At first the simulacra will merely greet customers and direct them to the right window (which seems like overkill, but is very much of a piece with what "Pepper" has been doing in Japanese department stores). What is fascinating is the plan to connect the machines into the core banking system. "We have kept a very open architecture so that we built some capabilities for one set of customers and in some other cases we might have different capabilities," head of digital banking Nitin Chugh told the Economic Times. "I don't see a situation where you will see the same replica everywhere. It may not be in the same shape and form the next time, it may be a different version, but we feel it's better to be in the area of humanoids rather than [non-humanoid] robotic machines."

Chinese smartphone maker Xiaomi will continue to invest in "New Retail" by rolling out new store openings, according to reports in China Daily, with a goal of getting to 1,000 stores in the next three years. "Despite the high rents and rising labor cost, the prices of commodities sold in bricks-and-mortar stores can still be cut to the bone by measures such as optimising the manufacturing process and analysing customers' needs with big data," said Lei Jun, Xiaomi's founder and CEO. "New Retail has become a buzzword after it was raised by Jack Ma, founder and chairman of China's e-commerce giant Alibaba Group Holding, during a conference in Hangzhou in October," says China's English-language paper. Mr Ma pitched 'New Retail' as the growing together of online and offline businesses, but aimed at driving customers into brick-and-mortar stores using data gathered online. It's not a million miles away from Amazon's strategy of moving into bricks-and-mortar stores, building physical bookshops and investing in futuristic grocery shops. Cynics might add that Amazon's destruction of a big chunk of, for example, chains and independent bookstores has cleared the way for its entry to the physical market — but there's another explanation: booksellers have held on by their fingertips while consumers never really adopted the digital copy as a full-time replacement for physical products.

India: Women now have much more say in money matters says survey
Why did Absa take so long to close Gupta bank accounts? Lawyers called in
US banks could earn $332 million from wave of financial services deals
How the world became hooked on social media [FT paywall]

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