The Bankwatch

Tracking the consumer evolution of financial services

Archive for the ‘Uncategorized’ Category

P2P Lending catches up with Canada


This from the FT highlights the direction of P2P lending is closing in on the direction set in Canada in 2008.

His frustration stems from the consultation paper published just over a week ago by the Financial Conduct Authority, which proposed placing the same restrictions on peer-to-peer lenders that already apply to high-risk platforms, such as equity crowdfunding sites. 

This would mean that to invest in peer-to-peer loans, investors would in future have to be certified as sophisticated, be very wealthy, be advised by an authorised person, or certify they will not invest more than 10 per cent of their net assets. 


Basically the direction says that P2P cannot be made available to regular people becase they are not capable of evaluating the risk due to their inexperience with investing.

i would never challenge that direction.  I would challenge that “sophisticated” investors are capable.  Credit risk judgement is a science and not something easily learned.

Alternatively the regulators are suggesting that sophisticated investors are sufficiently well diversified in their investments that they can absorb the risk of P2P Loans going to zero.  If that is the case why do the regulators not require a diversifcatoin policy for sophisticated investors?  Once you start this type of prescritoive regulation it never ends.

if the final answer is that “sophisticated” investors are sufficiently wealthy to absorb any portfolio loss, that is a fair point.  However it suggests that “non-sophisticated” investors should be restricted not just from P2P, from many other investment types, such as real estate, film, etc.

It is not a convincing argument to restrict P2P.

Written by Colin Henderson

August 5, 2018 at 23:22

Posted in Uncategorized

Finally someone in the community acknowledges Blockchain challenge for Banks

I have done a fair bit of research on Blockchain technologies as an alternative to SWIFT and that is really what we are talking about when it comes to international payments. This story caught my attention.

NEW YORK (Reuters) – Banks are unlikely to use distributed ledgers to process cross-border payments for now because of scalability and privacy issues, according to Ripple, one of the most prominent startups developing the technology

If we look at SWIFT it is no more than a messaging system that is accepted by banks to trust each other a payment has been made and to go ahead and debit/ credit each other using their nostro/ vostro accounts. No money changes hands with SWIFT. That clearing is old school using basically bank accounts that each bank hold with each other amongst the community of Banks who have together agreed to trust each other. Don’t get me wrong, SWIFT handles it well, but it is a messaging system.

What is Blockchain in this context then: it is a messaging system. It is the ability to provide a shared online record of messages that would disintermediate SWIFT. Always good to have competition and propose new more efficient or cheaper alternatives.

Blockchain is currently:

  1. Heavy and resource dependent
  2. Slow
  3. Lacks any method to provide financial clearing

On the third point, Ripple are giving it the old college try and more than anyone else. Other Blockchain applications are dependent on moving your money into bitcoin and moving that coin through a vendors bank account. Yes international transfers still need money to move, and archaic as banking is this is a truism. Show me the money in my account.

There is something there with Blockchain but to me it remains a solution looking for a problem, particularly in a Banking context.

Written by Colin Henderson

June 14, 2018 at 19:13

Posted in Uncategorized

FaceBook challenges run deep and are fundamental

Back in 2007, then in 2016 I looked at the FaceBook business model and compared it to AOL.

Here is the thing. AOL which was the US #1 internet source at one point, lost out because its mission was to retain users within the walled garden. It is not the first time this argument has been used but consider …. AOL strategy was all about building tools within their own garden, and as early as the 1990’s they even had their own browser and their own markup language (think proprietary version of HTML). They had their own CD which let you install AOL on your computer. The AOL ‘platform’ was a CD. Platform, tools, apps; the parallels are remarkably close.

My context then seems narrow now. But FaceBook remains a walled garden which expects to attract users and is required to continually provide reasons to be attractive to users, and yet make money.

The attraction FaceBook provided was to challenge traditional views on privacy and imply that they had that covered. Zuckerberg continually challenged traditional views on privacy and was rewarded with 2 Bn users.

Fast forward to now, and the walls are tumbling. Sandberg comments today tell us Mark will no longer be at the helm in short order.

Relevance to Bankwatch:

I have always been critical of internet and web as a media tool. I remain steadfast on that. I believe in pay as you go subscription models for news. I know who I trust and I know who I mistrust.

Facebook has no attraction for me as media. I understand the attraction of my relatives sharing family pics but I do not understand the relevance for news.

I know and trust Lionel Barber, Rana Foroohar and Gillian Tett (look them up). They carry weight and credibility. That is what distinguishes actual news.

Meantime FaceBook has been attracting users beyond the friends and family people based on spurious information that is not even called news. Those people were attracted under false pretences. Sandberg noted today that “To this day, we still don’t know what data Cambridge Analytica have”

Finally this from 2009 from 2009 where I summarised the coming media crisis using pieces from several others.

In 2004 people were asking about blog business models. Now it is social network business models. I have suggested other ways to deal with business models, but the mob continues to aim directly at advertising as the answer. It will pollute the web, and result in the opposite result than what is desired. It will not bring sustainability for them using advertising.

Written by Colin Henderson

April 5, 2018 at 23:34

Posted in Uncategorized

Open Banking has arrived … what?

The Independent notes the significant change that has crept up on us. Expect more in Canada methinks.

This weekend a major change in the way banks manage your data takes place, one that could completely revolutionise how we bank, who owns our financial data and which companies can offer us targeted financial services.

It’s called Open Banking and it’s driven by a new EU directive and new UK competition rules. Changes taking effect this weekend mean that banks will have to share financial data such as transaction history and spending patterns with other (regulated) third-party providers if the account holder requests it.

That might sound like baffling small print, but it could genuinely shake up the way in which you manage your money.

Instead of your personal data being something jealously guarded by your bank, you’ll be able to request that approved companies can also access it. That will mean they can help you analyse and improve your spending habits or simply just point you at financial services that better meet your needs.

Written by Colin Henderson

January 15, 2018 at 18:23

Posted in Uncategorized

FaceBook finally gets smart and plans exit from news

Good article in Medium about the long time coming shift from FaceBook.

Here is how Zuck defended the move:

“The research shows that when we use social media to connect with people we care about, it can be good for our well-being. We can feel more connected and less lonely, and that correlates with long term measures of happiness and health. On the other hand, passively reading articles or watching videos even if they’re entertaining or informative may not be as good. Based on this, we’re making a major change to how we build Facebook. I’m changing the goal I give our product teams from focusing on helping you find relevant content to helping you have more meaningful social interactions”.

Written by Colin Henderson

January 15, 2018 at 18:05

Posted in Uncategorized

Test Post 3 – final

I have had the hardest time locating a blog tool for Mac. it has been a struggle for 5 years.  This is my latest try.  it has potential.  Cannot paste pics but able to use insert.

Written by Colin Henderson

November 27, 2017 at 00:28

Posted in Uncategorized

Test post 2


added text

Written by Colin Henderson

November 26, 2017 at 23:40

Posted in Uncategorized

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