October 13, 2017
Today’s picks of interesting articles are going to be half-consistent in a good way, with one common thread – outstanding leaders working hard to define the FinServ realm. Startup Ripple is beyond buzzwords with over 100 clients on board, UBS banks half of the world’s billionaires, and JPMorgan’s disruptor-in-chief’s ‘obsession’ with Amazon brings out the best of tech into banking.
For a very long time, people in FinServ have questioned that will blockchain go from theory to reality. This is a major development from Ripple as it not only goes from being science experiment to having a hundred clients but has also done transactions – SEB, the Swedish bank, had used Ripple’s system to transfer $180 million between Sweden and the US in recent months to help manage the cash balances of one of the bank’s large corporate customers.
"The global payments industry really has been ruled by an oligopoly, led by players like JPMorgan and Citi," Ripple CEO Brad Garlinghouse told CNBC during a phone call Monday. "It's certainly not that surprising to see Jamie Dimon's comments recently on Bitcoin given that they (JPMorgan) control that oligopoly."
If you are in the mood to read a long interview, the one conducted by Bloomberg with the UBS' CEO Sergio Ermotti, it is definitely worth the time. UBS is one of the world’s leading institutions defining the wealth management industry with around $700 billion of assets under management, more than a third of which – $250 billion – is passive.
BM: How different are things going to be in, say, three years?
Sergio Ermotti: For sure, it’s not going to be the same as today. I have to tell you that at the end of the day, I’m totally convinced that the battleground of banking is not the front office. The battleground is the back end. There’s no understandable reason why the financial-services industry has not developed a more comprehensive sharing of the value chain. This is partly because we are more regulated than many other industries, but it’s also because of profitability. And this is the first time the industry has gone through a prolonged period of deleveraging and contraction.
A persistent investment approach over the long term to try and do what our clients want and a tailwind of other firms not investing meant that we managed to gain more traction in FX, says Hudson. But at the back of our mind is that problem that it’s very easy to lose all this. Memories can be short and, at a basic level, if all you’re competing on is price and a pretty front end, then any FinTech could put together a platform and generate what seems like a similar experience in spot FX.
I have been somewhat obsessed with Amazon this year, he says. In many respects, it is bigger than JPMorgan – more people, more countries, bigger market capitalization, greater revenue and they probably move more things every day than we do trades. Yet I suspect that Amazon would probably be seen as a more innovative company, so it can’t be that big companies can’t be innovative, although it may be that most big companies aren’t innovative.