Daily briefing - 2 February 2017
Ronan Lynch: 2nd February 2017 10:44am
The Lafferty News team has just returned to base following a sensational Lafferty Councils event in Cape Town last week, where we confirmed that there is indeed something special about South African banking. Regular followers of this publication will know that the country's banks have stood out in Lafferty Bank Quality Ratings, with Capitec and Barclays Africa at one point taking first and second place. So what's behind the allegations by supporters of President Zuma that banks are pushing racial inequality? "Partly this is related to various factions within the ANC trying to pressure the banks politically in retaliation to the banks' actions against the Guptas and their related entities last year," said Rowan Williams, director of Nitrogen Fund Managers in Johannesburg, with 1.4 billion rand ($104 million) under management, according to Bloomberg.
Let's talk synergies. Is there a place that Google is not? Even within Facebook (accessed more often than not through mobile, probably on Google's Android OS), videos are usually served by Google (through its YouTube service). People are now paying vast amounts of money to go to remote places where there's no wifi access. But that won't worry Google, whose brand value has jumped 24 percent to $110 billion, according to MarketWatch, displacing Apple at the top. One of the themes to emerge from the Cape Town Councils was the stunning success of Silicon Valley businesses in driving the software business to the top of the world — and what finance businesses can learn from Facebook's impact on the news business, where Facebook and Google have been hoovering up digital advertising revenue at an amazing rate, leaving news publishers to fight over the leftovers. Facebook's active user numbers continue to climb, along with revenue, now tipping $9 billlion, up by 50 percent from the previous year. Founder Mark Zuckerberg has correctly flagged video as a "megatrend" driving mobile advertising revenue, as his firm builds additional advertising space into its mobile platforms, which of course include Instagram and Snapchat. No doubt Whatapp's users will soon find some kind of advertising dropping into that space, whether through Alerts or Notifications.
"We proved our resilience in a particularly tough year," claimed Deutsche Bank CEO John Cryan as the bank released its 2016 results. "We finished 2016 with pleasingly strong capital and liquidity ratios and we are optimistic after a promising start to this year." It's hard to imagine what Mr Cryan's reaction will be if Deutsche Bank ever makes a profit again. The bank lost roughly $1.5 billion during 2016 as it continues to deliver huge fines and settlements on past misdeeds, and its shares dropped this morning on the news. On the positive side, the bank has improved its core tier one capital ratio to 11.9 percent, its best position in three years.
Lafferty News is increasingly convinced by the arguments of designers who say that "digital is human" and that digitisation or digitalisation should start with the goal of serving customers. The logic of this position is that the equation of digitalisation with globalisation is incorrect — and, indeed, students of history will remark that the world has seen previous great waves of globalisation rising and falling. So this new Harvard Business Review piece, "Even in a digital world, globalization is not inevitable", is worth a look.