Shoshana Zuboff's Surveillance Capitalism is resonating with journalists and citizens. The model describes a business model that thrives equally in Hangzhou, Cape Town and Silicon Valley. It seems that banks now have a golden opportunity to declare their business model is fundamentally different from tech companies which loom as the biggest threat to the banking industry. Banks can declare that their principal relationship with the customers is one of trust: your bank will take care of your money and your data. Instead, many banks are looking at Facebook or Google or Amazon and thinking "I want to be like that". (How many neobanks have declared themselves to be the 'Amazon of Banking'?)
Ms Zuboff's ideas have been around for several years before she formulated them in a book that was finally released just last month. But in the summer of 2017, American Banker asked: Should banks be in the business of surveillance capitalism? "These questions are relevant to banks because they are complicit in the march toward "surveillance capitalism" -- a world where consumers' every move is recorded without their knowledge and the information is monetized. Although it is seldom talked about, some banks sell customer data to third parties. Banks also feed customer data to data aggregators such as Yodlee, which anonymize and sell that information to third parties such as hedge funds. The hedge funds use it to predict company performance and make trading decisions. Mastercard and Visa also sell card transaction data to third parties." The answer is a qualified yes — acknowledging that banks are already participating in the process, even if at a level that uses anonymised data. However, as the revelations around Facebook and Cambridge Analytica showed, it is possible to de-anonymise data to identify its origins. Banks offering up anonymised data could find this to be a problem in the not-too-distant future. So promises of anonymity are overwrought.
European regulators have been most aggressive in focusing on this business model, with the EU's data protection and competition commissioners are taking a dire view of Google, Facebook et al, and will surely take an equally dire view of China's surveillance capitalism. To date, EU regulators tackling this issue have been largely dismissed in the US as jealous of Silicon Valley. "We are blazing a trail in this case," said Andreas Mundt, head of the Federal Cartel Office to the FT last year. "We are looking very closely at the connection between data and market dominance, data and market power, and the possible abuse of data collection."
The chief executive and chairman of NAB are stepping down after both were criticised by Australia's Royal Commission report on banking. "National Australia Bank Ltd.'s chief executive officer and chairman both resigned Thursday, becoming the highest-profile casualties of a sweeping inquiry into misconduct in the country's financial industry," reports Bloomberg. "Andrew Thorburn, 53, and Chairman Ken Henry, 61, announced their departures just days after being the target of withering criticism in the Royal Commission's final report, which questioned whether they were capable of leading the lender's response to a string of scandals." The criticism focused national attention on salaries paid to bank executives, who are among the highest-paid workers in the country.
Mastercard is pivoting hard into digital payments, and has now rolled the Vocalink accquisition through the organisation and out the other side with the appointment of former Vocalink chief executive Paul Stoddart as the president of Mastercard's New Payments Platform. "In this role, Stoddart will oversee the development and strategic integration of Mastercard's real-time payments capabilities beyond traditional card-based solutions," says Mastercard. "Among these solutions are our Vocalink account-based payments, the Homesend joint venture and Mastercard Send."
Subscribe to the Lafferty Daily BriefingSIGN UP
© 1981-2019 Lafferty Group
Toll-free: +44(0) 800 772 3849
83 Victoria Street