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Home » Daily Briefing » Daily briefing - 08 February 2019

Daily briefing - 08 February 2019

MCard

Bloomberg announced the story as the biggest bank merger in a decade, though most readers outside the US simply wondered: "Who are these banks?" US bank BB&T will merge with SunTrust Banks to create a megabank, with a new name and assets in excess of $440 billion. The stated reason for the merger is to allow more investment in technology, but we wonder how these banks will knit together their cultures and operating systems. The answer will be illustrative. BB&T's digital banking services went down this time last year, despite prior efforts to install a new core banking system with the help of SAP. It abandoned that project late in 2018 in favour of working with new (and as yet unnamed) digital providers, who we assume are instrumental in this deal. SunTrust meanwhile also suffered a damaging service outage last year when its systems went down, taking out its online mobile service. SunTrust uses a combination of IBM, Oracle and other services for its core banking systems. The jamming together of legacy systems this year gave us TSB's unravelling. Maybe the Americans are better at this stuff. Bloomberg noted that the merger announcement was heavy on tech language: "The banks said the deal will allow more investment in technology while cutting more than 10 percent of combined total expenses through eliminating duplicate branches and digital systems. The company will create an 'Innovation and Technology Centre' in its new headquarters, and the statement on the deal used the words technology, digital and innovation more than a dozen times." Indeed, maybe this is true and both banks, once joined together, will embark on a fine technological future.

Compare and contrast with Oak North, the upstart UK-based SME lender that has developed its own lending software. The bank is barely three years old and has shown a confidence in plug-and-play solutions. In 2016, Oak North became the first UK bank to operate its core banking on AWS, running Mambu at the core and nCino for lending decisions. It has since built its own machine learning software called Acorn (yes there is an overwhelmingly oaky bias to this bank) and last year re-branded it to ON AI. It will not provide this software to its UK competitors, but this confidence and wizardry on the software front has attracted the interest of Softbank, which is reportedly investing £440 million in the lender.

'All that is solid melts into air', said Mastercard, which is basing its new strategy on the writings of obscure Prussian journalist Karl Marx. After recently downgrading and finally dropping the name from its logo, Mastercard has launched its sonic signature, which you can listen to here, even though this sound will soon be a doom-looped earworm which you'll hear played every time your Mastercard is accepted somewhere. "That core melody acts as the foundation for our entire sonic brand architecture," says the ad, which is naturally delivered as a video. Daft as this sounds, it's probably based on the fantasy that we'll soon all be ordering online via our in-house robots and that Mastercard's "sonic signature" will be a way of telling you, without any visual output, that your payment has been made and accepted. Mastercard tells us that the core melody will be adapted locally to ensure relevance. Hide the digeridoo.

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