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Finextra Research: Latest financial technology news, analysis, jobs and features.

Finextra Research: Latest financial technology news, analysis, jobs and features.

The Financial Services Club's Blog Our biggest stories of the past week are ... The Age of the Password is over I saw a great but scary presentation this week from Kamran Meer, Chief IT Security Officer at Bank Alfalah, the sixth largest bank in Pakistan. 1,4 billion people have smartphones increasing at 44% per annum (infographic) A fantastic infographic was sent over to me today by the folks at Open Mobile Media. There's a big difference between KYC and KNOWING your customer I had a really interesting conversation with @Anthemis last week. Bankers and regulators: do you want a Red or a Blue Pill (Matrix)? I present all the time and talk about the forces of change for the future: Political, Economic, Social and Technological (PEST). Laughing at the banks and all the way to the bank? Talking of a two-stream market divided between Political and Economic change and Social and Technological change, there are other undercurrents that ripple in these waters. The major general news stories of the past week include ...

C'est pas mon idée ! The Finance 2.0 Manifesto - Umair Haque - Dear G20, It’s confusing. Should you tax bankers’ bonuses, or limit their pay? Should you nationalize banks, or let public-private partnerships bid for bad assets? The answer is: all may be necessary, but none are sufficient. Where are all the customers’ yachts? Bankers have got society, communities, and depositors by the throat. Banks don’t need to be bailed out of bad debt. Finance 1.0 has the same relationship with society as Godzilla does with cities. Finance 1.0 isn’t fit for economics 2.0. Finance 1.0 is built on a long-obsolete set of organizing principles. Today’s bankers, investors, and traders will never build a better finance. It’s time to put Wall Street’s business as usual out of business. Here are nine paths to igniting the next financial revolution. Edge funds. Macro and microcurrencies. Social banks. Fair markets. Stakeholder communities. Whisper bullhorns. Googlizing financial instruments. Anti-ratings. Open source modeling. Finance 1.0 cannot power growth 2.0. Luv,

Testé Pour Vous - Banque des particuliers : le bilan de 2011 2011 a d'abord été, dans le domaine de la banque des particuliers, l'année de la mise en œuvre d'une démarche engagée fin 2010 par l'ex-ministre de l'Economie et des Finances, Christine Lagarde. Objectif ? Réguler les tarifs bancaires et améliorer leur visibilité. Depuis le 1er janvier 2011, les banques doivent en tout cas présenter, en tête de leurs plaquettes tarifaires et sur leurs sites Internet, une liste de 10 tarifs standard censée faciliter la comparaison des offres par le consommateur. Une autre mesure s'adresse à la clientèle fragile : il s'agit de l'inclusion dans les offres bancaires de "forfaits sécurité", appelés également gammes de paiement alternatif au chèque (GPA) et proposés à des tarifs accessibles. Au vu de certains sondages, cette démarche vers plus de transparence et de lisibilité des tarifs n'avait rien de superflu. En face, les établissements bancaires ont semblé faire preuve de bonne volonté. With IT budgets finally rebounding, BS&T identifies the eight trends that will shape tech spending in 2012 and determine banks' competitive positions for years to come. For the past several years, bank IT budgets generally remained flat. The financial crisis and ensuing fallout forced belt-tightening across the industry. In 2011, however, bank IT executives finally enjoyed some breathing room thanks to some revitalized spending power. And in 2012, bank technology budgets should continue to increase, if ever so slightly. Mobile banking started as a novelty, something only techies and first adopters felt comfortable using. Initially, many banks' mobile offerings consisted of their online banking model ported to an iPhone or Android device. "Mobile banking, when it first became a hot topic, was very much an offshoot of the online channel," says Jacob Jegher, senior analyst with Boston-based Celent. Jegher points to several high-profile acquisitions, such as Brookfield, Wis. 2. 3. 4. 1 of 2

Monetary policy for the 21st century Twentieth Century monetary policy can be understood very simply. One can imagine that, prior to the 1980s, the marginal unit of CPI was purchased from wages. That made managing inflation difficult. Then came the “Great Moderation”. Regular readers know that I am not a fan of the Great Moderation. Still, if Great Moderation monetary policy sucked, pre-Moderation business cycles sucked as well. It’s no good when the marginal unit of CPI is purchased from wages. Here’s my proposal. Of course we will still need investors. There are details to consider. Then there are more interesting problems, like how routinizing transfers from the central bank to citizens might reshape society. There is also a kind of macro-level justice in combating depressions with flat transfers of cash. The most obvious hazards of monetary policy transfers have to do with dependency and incentives to work.

Bank to the Future - Financial Services Information - Searching Finance by Simon Dixon Overview We are in a time like no other. Those who play the game by the new rules understand that seven highly disruptive new technologies are changing the rules of work. Those who understand the rules of money and finance also know that we are sitting on a debt trap that is proving increasingly hard to finance. We are also living in a time when technology is replacing jobs at a fast rate. So how do we thrive in such unique times? Those who do not understand the new rules of finance, technology and money will lose out. This book explains the rules, how you can use them to overcome the problems you will face, and how you can prosper, during and after the massive change ahead. Bank to the Future was published in February 2012 in print, PDF and e-book formats. E-book £15.99 PDF £15.99 + VATPaperback £9.99 + post and packingEuro and dollar prices are illustrative and will be calculated using current exchange rates at checkout. Contents

You cannot buy innovation In a previous series of articles we discussed the capital Apple expends on equipment, real estate, leasehold improvements and data centers. Cost structure analysis reveals subtle shifts in strategy and the CapEx analysis demonstrates Apple’s increasing integration into its supplier network and integration into the distribution and service infrastructure that sustains its ecosystems. Another form of investing (spending now, reaping benefits later) is the spending on research and development (R&D). Let’s have a look at Apple’s R&D expenses by quarter since Q1/2006. Apples R&D expenses as percentage of sales have been declining from almost 4% to close to 2% in the last six years as shown in the following chart: While Apple’s absolute R&D expenses have grown at an annual rate of 33% they have not kept up with the far higher sales growth rate. Apple’s R&D/sales ratio is between Dell and HP, companies which do not develop their own software or hardware. In fact, sometimes it’s nearly free.

11 Bank IT Trends for 2011 - Bank Technology News Article 1.Chris and Barney Regulatory compliance is always a large IT outlay, but the politics of the recovery will make tech that helps banks follow the new rules a goldmine for GRC providers. The Dodd-Frank law is just one of many regulatory changes-RESPA, Basel III and new credit and debit card rules are also on tap-requiring banks that do business in the States to collectively spend billions on data mining, account aggregation, risk management and reporting technology. 2.Transaction Safety Escorts The more the use of the Internet and Internet-enabled technology grows, the more attractive it becomes to fraudsters and hackers. 3.Banks Help Those Who Help Themselves The expansion of PFM as the entry point for Web banking portends a revolution in self-service that includes mobile, dashboards, advanced IVRs, call centers and high-touch branches. 4.Can You Pay Me Now? 5.Socially Acceptable 6.Paper Chase Advances in broadband are making it easier to transmit huge reams of documents electronically.

The banking sector gets its own start-up boom/bubble In 2010 we had a bunch of innovative ideas become mainstream and start to impact the banking arena (for a full coverage see my post in Huffington.) However, 2011 promises to be more disruptive because as the economy finally starts to warm up, we’ll be seeing a lot of new private equity investment into start-ups in the finance arena. A new dot com boom? The intersection of interaction design, mobile technology, mobile payments, social media interactions, geo-location technology and augmented reality is producing a land grab for innovative new start-ups. We’ve already seen quite a few investments in new banking start-ups in 2010, which are the early stages of a new boom in the mobile tech space. Already we’ve seen start-up investments in peer-to-peer lending (Zopa, Lending Club, Prosper, Kiva, etc), payments alternatives (i.e. In September of 2010, Think Finance secured $90 million in start-up funding for their Elastic web-based bank account replacement. Share It:

Drum Roll, Please: The 2011 Bank Innovation Awards Dust off your tuxedo shoes. Schedule your haircut. Get that gown altered. It’s time for the 2011 Bank Innovation Awards presented by — you guessed it — Bank Innovation. If you are looking for Oscars-like certainty for the best of 2010, well, these are not the awards for you. Best Bank Not Yet Launched — BANKSIMPLE While BankSimple spent 2010 in development, it deserves accolades, even before its scheduled 2011 launch. Best Attempt to Revolutionize an Unheralded Banking Niche — USAA Banks often, and stubbornly, ignore the realities of how consumers do things in favor of providing the services they want in the way they want it. Best Acquisition by a Non-Bank — GOOGLE August was a busy month in the world of cutting-edge payments. Best Mobile Strategy — PAYPAL Google might have won the coveted Best Acquisition by a Non-Bank Award for 2011, Bank Innovation doesn’t want PayPal to feel spurned, so we are pleased to present it with the Best Mobile Strategy Award. Best Joint Venture — AMEX-ZYNGA

Where banks and socials can agree I said I would respond to Venessa’s rant in a bit more detail, as she deserves a response and not just a pat on the head to say: “there, there”, which is what she implies most banking folks have done so far. Before I get into that, it’s interesting to see the reaction to yesterday’s blog entry. Most of it is that polarisation does not help which, in this context, is where you get the ‘them and us’ mentality I referred to yesterday. That is very unhelpful and causes wars. What these discussions should remember is that the discussion is more about two parallel systems that run separately, complement and have overlap where appropriate. Anyways, here’s a direct response to what Venessa wants from her bank. First, she wants transparency. “All I know about the way my bank works is that I deposit my money there, and then they take that money and go make money off of it. There are banks that do this, but they are nearly all mutuals, community banks, building societies, credit unions and such like.

The BIG SHIFT to online for financial products: Google Finance research At their annual ThinkBanking event last Thursday (Sept 9th) in Sydney, the Google Financial Services Team released their latest behavioral research supported by Global Reviews’ Customer Experience Benchmarking. The results are a shock to those expecting traditional marketing methods to strongly influence customer behavior in respect to product selection in the financial services space. Barney Pierce, the Head of Industry – Finance for Google in Australia articulated that the research “shows a fundamental shift toward the online channel dominating research for financial products and services. A large part of which is search related activity.” Greg Muller and his team at Global Reviews who assisted with collecting the research explained that the research was conducted across Australia with a sample size of over 900 people from all walks of life – it was directed at all users of financial services products. 88% of customers research online What about the branch? Conclusions

Banks’ Self-Dealing Super-Charged Financial Crisis Employees walk past a sign at Merrill Lynch headquarters in New York on Oct. 30, 2007. (Emmanuel Dunand/AFP/Getty Images) They created fake demand. A ProPublica analysis shows for the first time the extent to which banks -- primarily Merrill Lynch, but also Citigroup, UBS and others -- bought their own products and cranked up an assembly line that otherwise should have flagged. The products they were buying and selling were at the heart of the 2008 meltdown -- collections of mortgage bonds known as collateralized debt obligations, or CDOs. As the housing boom began to slow in mid-2006, investors became skittish about the riskier parts of those investments. Individual instances of these questionable trades have been reported before, but ProPublica's investigation, done in partnership with NPR's Planet Money [2], shows that by late 2006 they became a common industry practice. ProPublica also found 85 instances during 2006 and 2007 in which two CDOs bought pieces of each other.