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Home » Daily Briefing » Daily briefing - 01 May 2019

Daily briefing - 01 May 2019

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Can someone please explain what banks have against coffee? The future of finance, according to a lot of people in the know, is a banking app that shows you how to save money by, for instance, telling you not to have another coffee. JPMorgan Chase got in on the wheeze on Monday, tweeting advice to its customers in a particularly tone-deaf manner that mimicked a customer and a robot. ("You: why is my bank account so low? Bank account: make coffee at home".) JPMorgan has since deleted the tweet, but you can see it here. It's so bad that it gave Elizabeth Warren the opportunity to look scathing, warm and witty at the same time: "@Chase: why aren't customers saving money? Taxpayers: we lost our jobs/homes/savings but gave you a $25b bailout."

Kenya's Equity Bank and Atlas Mara will swap some ambitions, as Atlas Mara moves to focus its African businesses on Nigeria, Botswana and Zimbabwe. "The company founded by the former Barclays Plc chief executive officer in 2013 is exiting four of the seven African nations in which it operates in return for 6.3 percent of Nairobi-based Equity Group Holdings Plc," reports Yahoo.com. "That gives James Mwangi, the CEO of Kenya's biggest bank by market value, exposure to markets he's coveted for almost five years, with entries into Zambia and Mozambique." Atlas Mara may look to boost its nearly 50 percent share in Nigeria's Union Bank, said chairman Michael Wilkerson. "Atlas Mara also posted full-year earnings Tuesday. Its profit fell 13 percent in 2018 because of accounting adjustments and higher costs.The stock fell 3.7 percent in London, and has dropped about 85 percent since it began trading. Equity Group rose 2.9 percent, extending its advance this year to 17 percent. Equity is getting the assets at a discount to book value and will combine its existing Tanzanian and Rwandan operations with Atlas Mara's units in the country."

The make-it-up-as-we-go-along nature of Brexit has broken the ranks of banks, who have now in some cases resorted to directly lobbying the government and going around their own trade organisations. The UK's big wholesale banks were keen for an equivalence arrangement, to play along by EU rules. The long-term negative interest rates policy of the ECB has been wreaking havoc with insurance models so for insurers there is an unacceptable long term risk in acting as a 'rule taker' while having no influence in Europe. "Britain's retail banks are 'somewhere in the middle', wanting some rules made less onerous for domestic-focused lenders, bankers said, reports Reuters. Miles Celic, chief executive of TheCityUK, one of the lobby groups behind last year's mutual recognition blueprint, said it was now for individual sectors and companies in some cases to set out their own priorities as it was now clear that a one-size-fits-all template was not viable. 'It's meaningless to try and create some sort of artificial unanimity. It just isn't there and it would not be taken very seriously. It's absolutely right that it's for the Treasury to try and make appropriate trade offs, but industry would expect to be sighted,' Celic said."

Today's quick take on tech psychology comes courtesy of Dark Patterns, a website devoted to showing humans how to avoid being manipulated on your way through the web. Writing about finance and banking as those businesses move into the digital world is often fascinating, as businesses are forced to look hard at themselves and refine their reasons for being. Banks mostly want your money, and promise that you can trust them with it. Tech companies want your money too, but what they really want is your attention, to be re-sold to advertisers. Partnerships with tech companies look to banks like the only alternative to being steamrolled by them, but there's a growing body of research and study suggesting that these business models have very different goals. Facebook and Google use psychological manipulation in order to maintain attention. From the FT: "Tech companies recognise the irrational side of human psychology and exploit that, persuasively designing it to their own end, which is attention," says James Williams, a researcher at Oxford University who previously worked for Google and now studies questions of free will in the digital world. "At the end of the day, that's their business model."

Lloyds Bank to gain from capital relief rules

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