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Home » Daily Briefing » Daily briefing - 19 January 2017

Daily briefing - 19 January 2017

What's Handelsbanken's secret? CEO Anders Bouvin believes that the bank's decentralised culture attracts entrepreneurs into the business. Speaking exclusively to Lafferty News, Mr Bouvin said that Handelsbanken is a great opportunity for people who have an ambition to run their own business. "We have local people running local branches and they have discretion to make the vast majority of decisions. So the local managers are focused on doing what is right locally, and the board — when looking at particularly significant credits — can only approve decisions that are already approved locally. That way we're not enticing managers to cut corners. The goal is not product sales but satisfied customers." Mr Bouvin added that the values of the bank are clear to employees and customers. "We have a very strong culture. We manage through values rather than financial targets. These values are based on a humanistic view. We believe that it's human nature to want to do a good job, and to do the right thing. If you encourage colleagues to make decisions within the areas that they overview, they will reward you by making sensible decisions and their decisions will be much wiser than hierarchical decisions." Read the full story in today's Retail Banking Intelligence newsletter.

Bank chiefs attending Davos will meet today with UK prime minister Theresa May, who will continue to insist that Britain will remain open for business, despite the shock of her continental counterparts at London's 'hard exit' strategy. "JPMorgan Chase chief executive officer Jamie Dimon said on Wednesday that 'it looks like there will be more job movement than we hoped for,' while HSBC Holdings CEO Stuart Gulliver said staff generating about 20 percent of London revenue may move to Paris," writes Bloomberg. German daily Handelsblatt reported that Goldman Sachs will move 1,000 jobs to Frankfurt, with Lloyds also eyeing Frankfurt for some of its business. Are the global banks facing a more hostile Western leadership? May previously spoke of a "global elite who sometimes play by a different set of rules", but that will hardly upset the global elite. After all, the prime minister is on their territory today. Will Donald Trump be able to resist having a crack at Davos Man tomorrow?

The traffic in not entirely one-way out of Britain's capital: the Bank of Cyprus provided the City with some cheer this morning as it launched its listing on the London Stock Exchange (LSE). The bank became the first in Europe to bail-in depositors following the financial crisis, and, like the Bank of Ireland, received a large injection of funds from investor Wilbur Ross. "We decided [on the LSE listing] before Brexit, but we reconfirmed post-Brexit," said Bank of Cyprus CEO John Hourican. "This is absolutely a vote of confidence in the continuing existence and importance of the London Stock Exchange. We promised our shareholders that we would at an appropriate moment move the listing out of Athens to 'de-Greek' the bank but also to find the most liquidity that we could find for the stock," Mr Hourican said. "This is that promise being delivered on." The confirmation of Wilbur Ross as US Commerce Secretary will not affect his fund's holding in the Bank of Cyprus, the bank announced on Thursday morning.

Duena Blomstrom writes this week on banknxt.com about Facebook's sideways march towards banking, citing a much-read TechCrunch article last week which looked at Facebook's e-money licence. Blomstrom often speaks in a subtle manner about emotional engagement, and makes the point that Facebook can use its e-money licence and PSD2 to become a de facto bank: "Facebook has already disrupted the classifieds market with the launch of Facebook Marketplace, and with PSD2, Facebook has the possibility of becoming their own payments processor as a PISP (Payment Initiation Service Provider) and connecting to bank accounts directly through APIs. Facebook may then ask consumers for permission to use their bank details as a payment method. Once you give permission, Facebook will be able to securely access your bank account and collect their payment." Facebook already has what the challenger and digital-only banks are chasing — a vast audience and vast amounts of data about that audience. Facebook users know that the service has gradually drawn them in with constantly expanding services offerings such as Messenger, which is already a platform for P2P payments in the US. However, it's not all set to be plain sailing. Social networks have risen and fallen before, and Facebook still faces major challenges in Europe. Facebook's attempts to turn itself into a news service brought unwanted publicity to the company's algorithms. It does well to understand the business one is disrupting. Read more in today's Retail Banking Intelligence newsletter.

The type of class-action lawsuits common in the US is arriving in the UK, with Mastercard as one of the first defendants. The scheme is defending itself against accusations that it overcharged its customers on credit and debit card fees. "The lawsuit alleges that cross-border charges on the use of Mastercard debit and credit cards...were a significant cost for retailers. This cost was then passed on to consumers in the form of higher prices for goods and services." The lawsuit will represent the claims of 46 million people. Paul Harris QC, who is representing the claimants, said that the enabling legislation was designed to help large groups of people with small claims that could not afford to bring individual cases to court.

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