In the past some fintech companies and financial aggregators have accessed JP Morgan customer data by using user’s passwords; JP...
JP Morgan just shut down its neobank competitor Finn, targeted at Millennials in a smartphone app wrapper. Several other traditional banking incumbents have similar efforts, from Wells Fargo's Greenhouse, Citizens Bank's Citizens Access, MUFG's PurePoint and Midwest BankCentre's Rising Bank, as well as most of the Europeans (e.g., RBS competition to Starling called Mettle). These banks have every advantage -- from product infrastructure, to balance sheet, to regulatory licenses, to physical footprint, to relationships with the older generation. So how is it that players like Chime, MoneyLion, Revolut, and N26 are all able to get millions of happy users and the incumbents are failing?
We are like the hungry at the all-you-can-eat buffet. In the beginning, there is not enough! Let's democratize access to food; to music; to transportation; to healthcare; to finance; to payments; to banking; to lending; to investing. The billions in institutional capital across universities, pensions, and sovereigns are delegated to smart portfolio managers. The day before yesterday, it was allocated by small cap stock pickers (hi Warren!). Yesterday, it was the alternative managers of hedge funds and private equity. Today, it is the trading machine and the venture capitalist. Tomorrow, it is the cryptographic artificial intelligence.
I examine the unbelievable transformation and restructuring happening in high finance. Global bank HSBC is planning to lay off over 10% of staff, looking at reductions of 35,000. E*TRADE is being acquired by Morgan Stanley, integrating its 5,000,000 accounts and $360 billion of assets into the Wall Street investment firm. Legg Mason and its $800 billion of assets are being folded into Franklin Templeton for $4.5 billion, less than what Visa had paid for fintech data aggregator Plaid and half of what Robinhood is likely valued privately. How do we make sense of these developments? How do we appeal to the heart?
I anchor around the issues Libra is seeing in trying to develop a money, and what alternate strategies are available. We also analyze elements of a JP Morgan 2020 blockchain report, which highlights the differences between running a financial products (like a money) and a financial software (like a payments processor). In light of this necessary pivot for the regulated Facebook, we look again at Ethereum's decentralized finance ecosystem and the types of challengers it has created for Jack Henry, Finastra, Envestnet, TradeWeb, and other infrastructure providers.
big techcentral bank / CBDCdecentralized financedigital lendingdigital securities / STOenterprise blockchainexchanges / cap mkts
·This week, we look at:
How the music industry needed The Pirate Bay and Napster
Why J.P.Morgan is paying $1B in fines for allegedly manipulating the precious metals market
Whether DeFi is flirting with self-dealing and veering towards apathy
Why QAnon and 8chan are a bad example for global governance
And how the European Commission’s proposed crypto-market rules are highly productive for blockchain-based capital markets infrastructure
We talk about OnlyFans, and how its bank vendors pressured it to try to ban adult content, and how and why that failed. We also discuss the crypto tax provisions in the Senate version of the $1 trillion infrastructure bill, and their impracticality. These themes are tied together with a metaphysical hypothesis about the role of financial services, anchored in a discussion of the Platonic model of the mind. How are rationality, emotion, and social context involved to define the shape of our industry?
The news marks the first time a major US bank has created a cryptocurrency; the bank plans to start trials...
Dimon noted that new customers can open a new deposit account in less than five minutes and that the bank...
On the heels of the Ant Financial IPO news earlier this week leading Chinese online wealth management platform Lufax is...