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Home » Daily Briefing » Daily briefing - 4 November 2016

Daily briefing - 4 November 2016

Lafferty reports this month about 'wounded giants' on the European landscape; Bloomberg meanwhile warns of the 'zombie banks' threatening parts of Africa. "When banks get in tough times, often initiated by economic slowdown, they hold back capital, reinforcing the economic slowdown which bites down harder on bank performance," Adrian Saville, chief strategist at Citadel Investment Services in Johannesburg, told Bloomberg. "In its worst form, this takes the shape of a death spiral." The zombie bank phenomenon may be about to hit China too: another Bloomberg piece suggests that China may be following a path that previously led Japan through two decades of zombie bankdom.

Speaking of wounded giants, this long read from SpiegelHow a pillar of German banking lost its way — is from last week, but well worth a read to learn about the capture of Deutsche Bank by traders and how the bank swapped its prudent German roots for Gordon Gekko-style excess.

Wells Fargo continues its long headline-producing run with new CEO Tim Sloan committing the bank to cross-selling, saying that there was nothing wrong with "cross sell done right". Indeed — when banks put customers first, this is possible. The Financial Times reports Mr Sloan as saying the bank would correct its failings by bringing in "outside independent culture experts". Culture — as Lafferty has written in a recent report — is everything in banking, not something that can be painted onto a bank by an "independent culture expert". Wells executives newly exposed to the spotlight are offering rather baffling analyses of the situation: new head of community banking Mary Mack said workers would be rewarded if Wells customers "use our products — by measuring things like primary customer growth" and "reward us with more deposits, loans and investments", as well as "say good things about us". At the moment, not even Wells Fargo advertising is saying good things about the bank.

Fintech conferences are packed with newly appointed heads of innovation being thrilled that Uber owns no cars and Airbnb owns no rooms — the brave new world of the 'sharing economy'. The regulatory arbitrage enjoyed by these startups is now fading as regulators take a closer look at who's sharing what. Over-enthusiastic heads of innovation are recommended an occasional cold-water douse in FT's Alphaville. In the course of pointing out that SocGen is now in part a giant car rental agency, Izabella Kaminska casts an unimpressed eye over Uber's latest plans to expand its offerings to include "lifestyle tracking".

As if to confirm this point, research from Vocalink, the payments system business, suggests that European millennials have yet to find the "Uber of Payments" and would be quite happy to use a mobile payments service provided by — wait for it — their banks! While Alipay is sweeping the world with its QR code, Apple Pay has been something of a failure, with less that two percent of the 4,000 18-to-35-year-olds surveyed having used Apple Pay, despite 46 percent of millennials using iPhones.

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Wal-Mart to Offer Chase Pay Service
Fintech firms pose no risk to financial system G20 watchdog says
Indian bus counters to go cashless with Paytm
Alibaba's Ant Financial Taps SE Asia's Multibillion-Dollar Mobile Payments Market

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