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Home » Daily Briefing » Daily briefing - 10 May 2019

Daily briefing - 10 May 2019

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Bright Simons features on the Sounds Robotic podcast

Excited about neobanks? Think N26 is cool but feel conflicted about the profits going into Peter Theil's pocket so he can build another nuclear-proof bunker somewhere in the New Zealand? Worried that banking startups do agile by skipping things like compliance? Tomorrow is one of the non-banks proliferating in Germany with the help of solarisBank, which allows fintechs to operate on its platform and bank. "Germany's latest banking upstart has a message for the millennials it's trying to lure away from giants like Deutsche Bank AG: We're one of the good guys," reports Bloomberg. "Hamburg-based Tomorrow, which offers free current accounts via mobile phones, promises to use customer deposits to finance only sustainable projects such as renewable energy and organic agriculture. The company claims that its strategy provides an antidote to traditional lenders that might finance a new coal-fired power plant or a genetically-modified-food company's expansion." So far, so flowery, but there's something of a sea change happening globally with schoolchildren going on strike, while the adults promise to get around to it. Only two years ago, we pointed out that most banks had zero environmental policies. Indeed, banks are enormous contributors to the fossil fuel economy. So there's definitely room for new entrants with ethical investment goals. Visa has a stake in solarisBank. Albrecht Kiel, Visa's regional managing director for Central Europe, told Bloomberg that Tomorrow's concept has "excited us quickly" (though there may be something lost in translation).

The Reserve Bank of India last year announced that e-payments companies will have to store end-to-end details of transactions in India under a data localisation policy. This prompted think tank such as the Atlantic Council to rush out warnings about this type of carry on, which would damage FDI in India, and was seen as a snub to US companies such as WhatsApp or Facebook that try to do business in India with no physical footprint, while taking data back to the US. India's insistence on keeping the data of its citizens in India is forcing businesses to fundamentally re-think business models. Earlier this week we reported that WhatsApp will build a payments team in England but will store payments-related data in India. Now Mastercard is following suit, announcing it will build in India its first data processing centre outside the US. Porush Singh, division president-south Asia, told Quartz that the company's shift to non-cards-related activities were opening new doors. "Till now, all processing related services were provided from the US centre," he said. "But as more and more services that are not card-or brand-related emerge, we see an opportunity to build a (data) processing centre in India. The opportunity in India is indisputable. The tectonic growth we have seen in digital payments post demonetisation, shows we have just started out on the journey. Our strategy has also shifted a little. We see that a lot of growth coming from smaller towns and cities and there we are trying to build merchant acceptance to propel growth."

Uber goes to IPO today as part of the mad dash for the exit, with Silicon Valley investors hoping to get out before the plebs pile in courtesy of their insurers and pension funds. Uber has been held up as the model for digital finance, what with the seamless payment and visual mapping of the journey. Uber has priced itself towards the lower end of the offering. The genius of Uber was to turn the mobile phone into a taxi marketplace, and the new technologies in smartphones including accelerometers allowed it to do so. But to change the culture of the taxi world is a different matter. That's why Uber and Lyft call themselves ridesharing companies rather than taxi services. But the Uber IPO is also about the driverless future and automation, and many analysts have concluded that a bet on Uber is a bet on robots and automation. Leading thinkers about technology and culture realise that technologically-driven change is a chimera. Technology can't change culture in the way it can change infrastructure. Leapfrogging, for instance, isn't at all about technology. Recommended listening for the weekend, with a hat tip to Michael Kimani, is Bright Simons talking to Charles Kenny on the Sounds Robotic podcast. Essential.

Who uses Tik-Tok? The Chinese video sharing app has become a global phenomenon. It's got 100 million users in the USA and was one of the most-downloaded non-game apps in the App Store. Eh? It's owned by Bytedance, a Chinese startup valued at $75 billion — that's just a few billion shy of the valuation Uber hopes to achieve. Hmm.

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