Fintech Insider Podcast by 11:FS
00:51:58 · Benjamin Ensor
[00:51:58] S0: Yeah, that's spot on because we've seen a number of firms getting a slap on the wrist in North America and indeed in Europe for not doing all of those crucial pieces well. Maybe one last thing, there's this point here about loyalty schemes that Randy Fernando was making. Kate, how important is that? I mean, if a merchant has already got some kind of loyalty program going on or points going on and so on, tying a credit into that seems like a logical extension. That not a killer app, but is that really compelling for customers, you think?
00:52:37 · Kate Moody
[00:52:37] S2: I think again, it's one of the next big areas where I think we should start to see proper innovation is again, we've got all these very old world loyalty models about collect five stamps or, you know, all these kind of very basic programmes. Actually, what you're looking for is this dynamic way for a merchant or someone that you have a relationship with to incentivize you to interact with them. And that might be through some of the stuff that Jeremy's building out, know, it might be that you can have complete confidence that you can buy and get your money back if it's not the right thing. It might be through a loyalty scheme. It might be through all sorts of other components. Yeah, I think loyalty as a whole space again, I suppose if we go back to what I saying earlier about you have lots of conversations with banks about global expansion being really hard, lots of banks are now sort of saying like, Oh crap, what do we do about loyalty? So I think that's definitely a space where these types of offerings, again, as we start to move some of the power back towards merchants, will put some of those big loyalty providers under the cosh to try and do more interesting things to compete with that.
00:53:43 · Benjamin Ensor
[00:53:43] S0: Well, super interesting story. As you all said, Jeremy and Pranav and Kate, a fantastic achievement by Marquetta. So well done to the team there and wish them every success with that. Okay, now for big click energy, a quick fire roundup of some of the more click worthy news from this week. And I've got the first one, which is that the Consumer Financial Protection Bureau has issued its open banking proposal. The long awaited proposals would see the implementation of the Dodd Frank Act section ten thirty three. This act would put The USA on a par with Europe, Hong Kong, and other regions around the world in driving forward open banking in the country. The proposed rule would provide standards and restrictions on the collection, use and retention of consumer information. Among other things, the rule requires depository entities to make available for consumers and authorized third parties, data relating to consumers transactions and accounts. It establishes obligations for third parties accessing a consumer's data, including privacy protections for that data. It provides basic standards for data access and it's intended to promote fair, open and inclusive industry standards. Initially, the rules will apply to accounts and credit cards, but coverage could be extended in the future. So this is a big deal that people have been waiting for this for, well, pretty much a decade, bringing in some real regulations and some rules around open banking in The States. But there's good news and bad news here. The good news is great. Here's some rules. Fantastic. There's some consumer protections. Fantastic. There's some rights, but there's some things missing. There's nothing here about brokerage accounts, for example, and nor are there really any regulations around standards. And as we've seen across Europe, not having standards makes it so much harder to get Open Finance going. So there's a lot more to unpack and far too much for this episode, but we're going come back to this story because this is a big one. Kate, you've got the next one.
00:55:39 · Kate Moody
[00:55:39] S2: Yeah. Our next story comes from the BBC, but again covered in lots of different places, and that is the FCA, the Financial Conduct Authority in The UK, is to lift the cap on bankers bonuses in The UK. From the October 31, the cap on banker bonuses in The UK will be lifted, allowing financial institutions to once again offer unlimited incentives. The cap was introduced in 2014 by the EU, following a public backlash after the two thousand and eight financial crisis. The government hoped the new rules will support businesses to lower their fixed costs and compete more with The US and Asia. However, the move is not unanimously welcomed by the industry as the cap on bonuses has led to an overall increase in basic salaries. We're running a poll on LinkedIn to hear your thoughts as it stands at the point of recording. 58% of respondents do not think the cap should be lifted, but 42% agree with the FCA. Nice spicy one, I'm sure to put in this section. I can see both sides of this one. Obviously it's a very nuanced decision. I think I'm probably going to risk being unpopular and say I'm at the moment in favor of the 42%. I think bringing a cap in made total sense in the aftermath of 2008, given the damage that the banking sector had created in the wider sort of global economy. But it feels like one of those things that looks good on paper, but it doesn't change the reality that financial services is a highly remunerated sector. So if that money isn't coming from bonuses, you know, it's going to come from basic salary. And I think actually probably the more important thing is to look at, you know, how are those bonuses decided and what are the metrics that drive them? You know, historically, I think one of the biggest issues in the financial services sector has been that incentives are aligned to things which are not aligned to what customers want. So actually, you know, if we see a return to bonuses, but bonuses are driven by good positive customer outcomes in line with what we're seeing in The UK around consumer duty, I think that could be a much better system than just having bankers paid high basic salaries that have no connection to the good that they're creating in society. So yeah, caveated, maybe this could be a good thing, but looking forward to seeing how it rolls out.
00:57:38 · Benjamin Ensor, Kate Moody
[00:57:38] S0: I'm in the 58%. [00:57:41] S2: We can fight about it later.
00:57:43 · Benjamin Ensor
[00:57:43] S0: Alright. And our last quick story is that The UAE's central bank has launched an instant payments platform called Arnie. The new payments platform has been launched by the Central Bank of the United Arab Emirates and its subsidiary Al Etihad Payments. Launched as a mobile app, it empowers its customers with instant and secure payments with an added QR code feature. Eight banks have already signed up to integrate Ania Launch, and the Central Bank of the UAE has ambitions to roll this out to tens of thousands of merchants over the coming months. I think it's fantastic news. We've seen instant payments being rolled out all around the world. It just makes things so much better for consumers and merchants indeed as we were talking about earlier in this episode. Every time money is slowed down, that's costing consumers. It's potentially putting some people at risk. If this enables people to get bills paid faster, fantastic. And The UAE has a big problem actually with late payment by billers causing lots of stress for small businesses and so on. So bringing in instant payments to move money faster through the system is gonna be great news for The UAE's economy. So well done to the central bank there. Sorry, that sounds very patronizing. That's gonna be fantastic news for people in The UAE is what I meant. Okay, Well, now it's time for the and finally section of the show, which is a look at something more offbeat from the news this week. So an attempted WhatsApp scam has gone viral after a man befriends the aspiring criminal. Bored WhatsApp user Chetty Aaron was surprised when someone posing as an HR professional attempted to get his personal information for a fake job vacancy. I have money, but I want love, jokes Chetty as he engages the scammer in a lengthy conversation. The aspiring criminal eventually gave up, but the encounter went viral after Chetty shared the dialogue on social media. We ran our own poll on LinkedIn and 7% of respondents admitted to being scammed on WhatsApp, of which nearly two thirds confessed to being a financial services professional. So have any of you either fallen for or come across a sort of WhatsApp or other social media scam, or have you ever been contacted by a scammer? Who wants to go first?