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Home » Retail Banking 2020 Insights » Morning Briefing 02 November 2016

Morning Briefing 02 November 2016

Morning Briefing

Introduced but three short days ago, Zcash may now be the hottest thing in cryptocurrency circles but captures additional interest for two reasons.

  • 1: unlike its much-storied precursor, bitcoin, it was created by identifiable people in an identifiable place, Johns Hopkins University;
  • 2: Zcash has a remarkable quality for a transactional digital entity: untraceability.

Coindesk, with appropriate provisos, estimates that each Zcash unit is trading at about twice the value of a single bitcoin, thus making it worth $1,388. Naturally regulators and law enforcement in the United States are not quite as enthused, alarmed by the privacy feature above all. However, as Bloomberg columnist Matt Levine observes, "if we were living in a fully credit-card-based society, and someone invented the idea of paper cash, we'd probably lock him up forever." The truth of that point just goes to show that our thinking on currency and payments is already much more transformed by digital than we realise.

With the matter of Apple Pay v Big Three Plus One (see the Lafferty article on the case) still very much in play in Australia, the country has become an intriguing battleground in the history of fintech's emergence in banking. Now the regulator in Canberra is keeping a close eye on big banks buying fintech startups: in an interview, Australian Competition and Consumer Commission (ACCC) chairman Rod Sims told Reuters that even small fintech start-ups can be very "disruptive in the future".

Access to financial services is one of the great (and one of the most surmountable) challenges in the developing world...but it is also a major issue in the developed world. Both the United States and United Kingdom have significant unbanked and underbanked populations. As finserv goes digital, the disconnected become ever more vulnerable: up to one in six people in the UK lack digital skills, while a similar proportion remain unconnected to the internet. British regulator, the Financial Conduct Authority, which has significant powers to change matters, has published a paper on the topic, setting out the issues involved. Barriers to bank accounts and insurance access remain areas that need resolute action from both the public and private sectors.

Worries about Deutsche Bank, one of the wounded giants of European banking, should not let us lose sight of the perilous situation in which Monte dei Paschi di Siena continues to find itself: early trade today saw its shares fall by six percent, leading to an automatic halt on trading. Confidence in the troubled bank, the world's oldest, was shaken again by the withdrawal of yet another rescue plan, the third to date.

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