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Home » Retail Banking 2020 Insights » Morning briefing - 29 September 2016

Morning briefing - 29 September 2016

People have described watching a slow-moving but inevitable catastrophe as a 'train wreck' to describe the apparently unstobbale and un-divertable nature of the event. Deutsche Bank and Wells Fargo now both arguably fall into this category. California's banker, aka state treasurer John Chiang — who intends to follow the likes of Arnold Schwarzenegger in running for state governor in 2018 — has said he will stop all state business with Wells Fargo for a year to see if the bank complies with sanctions being imposed by the Consumer Finance Protection Bureau. He also called for the splitting of the chairman and CEO roles currently held by John Stumpf, in an open letter. Mr Chiang seems like the sort of man that Wells could do without having as an enemy. On Wednesday he called for Mr Stumpf to go altogether.

The second ongoing slow-motion horror show is Deutsche Bank, which John Gapper compares with Twitter. They have at least one dilemma in common: "How does it expand profitably and sustainably beyond the business on which it was founded?" asks Gapper. Yet Deutsche Bank is not the only problem in German or global banking, despite losing 50 percent of its value this year. The country's second-biggest bank, Commerzbank, is to shed 9,000 jobs — or one fifth of the workforce — and cut dividends. A shotgun marriage with Deutsche Bank could still happen.

African payments giant Interswitch has completed its acquisition of Vanso and will build Vanso's mobile and security expertise into its payments network. "The mobile banking sector in particular is experiencing rapid growth, with the number of mobile banking customers projected to rise exponentially across the continent within the next 3-5 years," said Interswitch CEO Mitchell Elegbe. Vanso is led by Nigerian-born Denis O'Brien, who is not the Denis O'Brien of Digicel fame.

Is SWIFT too embedded in the past? Ripple has been making loud noises at the SIBOS gathering and upsetting the SWIFT party with tweets questioning the efficacy of the system, which suffered a number of embarrassing episodes over the last year, including the Bangladesh heist. While SWIFT unveiled its global payments innovation, Ripple was questioning its utility and pointing to its own successful trials of its distributed ledger technology.

The pace of innovation in criminal enterprise continues to astound security experts — with 'state-sponsored' crime gangs competing with ordinary criminals to stay ahead of banking security developments. As banks and finance businesses look to a world beyond passwords and PIN numbers, Kaspersky Labs is warning that criminals are selling devices capable of skimming fingerprints. Finextra writes that "thieves are also discussing how to fool facial recognition biometrics, looking into the development of mobile applications based on placing masks over human faces and imposing photos taken from social media."

Bank of England's Quarterly Journal looks at what new metrics may be added to new stress tests
Banks leaving treasurers to manage cash themselves
Auto industry far more excited about self-driving cars than consumers

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