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THE BLOCKCHAIN IN BANKING REPORT: The future of blockchain solutions and technologies

18 hours 49 min ago  |  Clusterstock

This is a preview of a research report from BI Intelligence, Business Insider's premium research service. To learn more about BI Intelligence, click here.

Nearly every global bank is experimenting with blockchain technology as they try to unleash the cost savings and operational efficiencies it promises to deliver. 

Banks are exploring the technology in a number of ways, including through partnerships with fintechs, membership in global consortia, and via the building of their own in-house solutions. 

In this report, BI Intelligence outlines why and in what ways banks are exploring blockchain technology, provides details on three major banks' blockchain efforts based on in-depth interviews, and highlights other notable blockchain-based experiments underway by global banks. It also discusses the likely trends that will emerge in the technology over the next several years, and the factors that will be critical to the success of banks implementing blockchain-based solutions.

Here are some of the key takeaways from the report:

  • Most banks are exploring the use of blockchain technology in order to streamline processes and cut costs. However, they are also looking to leverage additional advantages, including increased competitiveness with fintechs, and the ability to use the technology to create new business models. 
  • Banks are starting to narrow their focus, and are increasingly honing in on tangible use cases for blockchain technology that solve real problems faced by their businesses. 
  • Regulators are taking an increased interest in blockchain technology, and they're working alongside major banks to develop regulatory frameworks. 
  • Blockchain-based solutions will start to emerge in different areas of financial services. The most successful solutions will solve specific problems for banks and attract a large enough network to create widespread benefits. 

 In full, the report:

  • Outlines banks' experiments with blockchain technology. 
  • Details blockchain projects at three major banks — UBS, Credit Suisse, and Banco Santander — based on in-depth interviews. 
  • Discusses the likely trends that will emerge in the technology over the next several years.
  • Highlights the factors that will be critical to the success of banks implementing blockchain-based solutions.

Interested in getting the full report? Here are two ways to access it:

  1. Subscribe to an All-Access pass to BI Intelligence and gain immediate access to this report and over 100 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now
  2. Purchase & download the full report from our research store. >> Purchase & Download Now

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Top doctor, hospital, and insurance groups release joint statement urging the Senate to reject Graham-Cassidy bill

Sat, 09/23/2017 - 8:56pm  |  Clusterstock

A group of six major doctor, hospital, and insurance groups released a joint statement on Saturday condemning the latest GOP effort to repeal and replace the Affordable Care Act, urging the Senate to reject the Graham-Cassidy bill.

"While we sometimes disagree on important issues in health care, we are in total agreement that Americans deserve a stable healthcare market that provides access to high-quality care and affordable coverage for all," the statement said.

"The Graham-Cassidy-Heller-Johnson bill does not move us closer to that goal. The Senate should reject it."

The groups that issued the statement included the American Medical Association, American Academy of Family Physicians, American Hospital Association, Federation of American Hospitals, America's Health Insurance Plans, and the BlueCross BlueShield Association.

Each of those groups — and more than a dozen others — has already individually condemned the Graham-Cassidy bill, but Saturday's statement marked the first time they had done so as a collective.

The statement said the groups agreed that the bill would undermine safeguards for patients with pre-existing conditions, dramatically cut Medicaid and introduce a future "funding cliff," weaken the individual insurance market, and introduce an unworkable timeframe to implement the bill's changes.

"State and industry leaders will need to completely transform their individual insurance markets and Medicaid programs in little more than a year — an impossible task," the statement said.

The bill — written by Sens. Lindsey Graham, Bill Cassidy, Dean Heller, and Ron Johnson — would set up federal funding in block grants, which states would use to fund healthcare. That's different from how funding is distributed now, as a percentage of what states spend, and it could drastically change what states receive.

In the statement, the groups called for senators to work on a bipartisan solution instead.

As of Friday, the future for the Graham-Cassidy bill looked dismal, after Republican Sen. John McCain of Arizona announced he intended to vote against the bill. Sen. Rand Paul of Kentucky, a fellow Republican, had already come out strongly against it, as had Republican Sen. Susan Collins of Maine.

As Republicans control 52 seats in the Senate, they would have to persuade at least one of those three senators to vote for the bill in order to pass it with a simple majority under the budget reconciliation process. The GOP must pass the bill by September 30 otherwise it will be subject to the Senate's usual 60-vote threshold.

But some, including President Donald Trump, have speculated that Paul or Collins could still change their minds before the bill comes to a vote.

"I know Rand Paul and I think he may find a way to get there for the good of the Party!" Trump tweeted on Saturday.

Lydia Ramsey contributed reporting.

SEE ALSO: Trump slams NFL commissioner Roger Goodell over players' national anthem protests: 'Tell them to stand!'

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THE PAYMENTS DISRUPTION REPORT: How digital is upending payments worldwide and what it says about the future

Sat, 09/23/2017 - 7:05pm  |  Clusterstock

This is a preview of a research report from BI Intelligence, Business Insider's premium research service. To learn more about BI Intelligence, click here.

European and North American countries with advanced economies often serve as bellwethers for the payments industry when it comes to introducing new and disruptive technologies.

However, some of the greatest examples of digital payments disruption can be found in developing nations. In some cases, these countries not only adopt certain aspects of a digital payments ecosystem faster, but they also do so with more efficiency than their Western counterparts.

The fact that digital disruption in these regions can be complex and varied, makes it difficult for the industry to devise effective strategies for international expansion — but understanding the drivers of this disruption can significantly aid payments companies. 

Despite each region’s unique attributes, there are shared key conditions that make a market ripe for digital disruption. These include new payments infrastructure, increased access to financial services, and government intervention to drive digital payment capabilities.

In this report, BI Intelligence examines several case studies of digital payments disruption to draw valuable insights for players in developed markets like the US to consider. These include India — which has made itself a laboratory of payments disruption — as well as other developing regions, including Latin America and East Africa. It also analyzes disruption in Australia to show how major digital disruption can be facilitated in a well-developed market. 

Here are some key takeaways from the report: 

  • In November 2016, Indian Prime Minister Narendra Modi announced that 500 and 1,000 rupee notes (worth about $7.50 and $15, respectively, at the time) — which represented 86% of currency in circulation — would no longer be legal tender in the country. Although this move was aimed at curbing corruption and counterfeiting, it had a far more wide-reaching consequence: It forced consumers to change how they pay, making India the largest case study of digital payments disruption in the world.
  • Mobile money services are setting the stage for other forms of digital payments in markets like East Africa. Firms that can integrate their payment products with such services could see tremendous success — in 2016, there were eight countries — including in Kenya, Tanzania, and Uganda —  in which more than 40% of the adult population was actively using mobile money, according to the GSMA.
  • Social media continues to see growth in users, making it a vital platform for payments players to integrate within South America — in this region there was a 30% growth year-over-year (YoY) in active mobile social users, and a 21% YoY increase in the number of active social media users, likely led by millennials.
  • Disruption isn't limited to developing nations. Australia, which already has a well-established payments industry, remains on the verge of digital disruption thanks to a $720 million investment that will overhaul the banking system.

In full, the report:

  • Identifies the biggest drivers that are upending the payments industries in India, East Africa, Latin America, and Australia. 
  • Discusses what pain points digital payment services are solving. 
  • Details what specific technologies and services are being introduced that consumers are embracing, which can be leveraged by companies in these regions that are ripe for disruption.
  • Assesses how leaders in the space can leverage these trends to either improve their capabilities or to identify which markets may be ripe for disruption and worth exploring.
  • And much more

To get the full report, subscribe to an ALL-ACCESS Membership with BI Intelligence and gain immediate access to this report AND more than 250 other expertly researched deep-dive reports, subscriptions to all of our daily newsletters, and much more. >> Learn More Now

You can also purchase and download the report from our research store.

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President Trump attacks John McCain, NFL players, and Steph Curry in wild Saturday — here's the rundown

Sat, 09/23/2017 - 4:36pm  |  Clusterstock

What a day.

President Donald Trump was active on Twitter Saturday, sparking confrontations with major figures in two different professional sports leagues, attacking Sen. John McCain for his announcement that he will vote against the newest GOP healthcare bill, and leaning on other Republicans to support the healthcare plan.

Here's a rundown of Trump's busy Saturday:

And if that wasn't enough, there was even more news:

SEE ALSO: WARRIORS RESPOND TO TRUMP: 'There is nothing more American than our citizens having the right to express themselves freely'

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NOW WATCH: Steve Bannon: Firing Comey was the biggest mistake in 'modern political history'

Traders are betting billions against Disney

Sat, 09/23/2017 - 3:03pm  |  Clusterstock

Disney's stock has had a rough time lately, falling 4.4% in a single day earlier this month after CEO Bob Iger threw cold water on the company's 2017 profit outlook.

And traders don't look like they'll ease up on selling any time soon.

Short interest — a measure of wagers that share prices will drop — now sits at more than $2.7 billion after surging by $696 million in the last month alone, according to data analytics firm S3 Partners. That increase was the fifth-largest out of any American company over the period.

Also adding to pressure on Disney's stock was the company's August 8 announcement that it will terminate its streaming agreement with Netflix in 2019. While the entertainment titan also has plans for its own streaming portal for both Disney and Marvel content — as well as an online-based ESPN network — investors have been less than convinced. They've sent shares 7.6% lower over the past six weeks, badly lagging an S&P 500 that's repeatedly soared to new record highs.

If short sellers want to keep loading up on bets against Disney, they won't be met with much resistance, S3 said. The cost to borrow shares to short is sitting right around normal levels, while there's also "more than enough" stock available to borrow, according to the firm.

Looking at the big picture, while Disney is the biggest target for stock shorts in the movies and entertainment sector, the whole industry is feeling pressure. Short interest in the group is up $1.7 billion, or 29%, this year, S3 data show. And more than $1.1 billion of that increase has occurred in the past 30 days.

So regardless of Disney's own fundamentals, it also looks to be a lightning rod of sorts for sentiment in its industry. Stay tuned to see if the company's reorganization efforts pay off in the long run.

SEE ALSO: The 'death rate' of America's biggest companies is surging

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NOW WATCH: Watch billionaire CEO Jack Ma dance to Michael Jackson in full costume

Yego Moto for Taxi-Motorcycles

Sat, 09/23/2017 - 2:41pm  |  Timbuktu Chronicles
From Rwanda NewTimes reports:

...Yego Moto is a new technology system that allows taxi-moto operators to charge passengers without bargaining. It is a ‘metre’ service which uses Global Positioning System (GPS) devices installed on motorcycles to deliver information about the journey covered by a passenger.More here

The best charities to give to for victims of Hurricanes Harvey, Irma, and Maria

Sat, 09/23/2017 - 2:18pm  |  Clusterstock

Since the start of 2017, there have been 13 named Atlantic storms, making this year's hurricane season unusually active. In just the past four weeks, three major hurricanes ravaged the Caribbean and the United States Gulf Coast.

First came Harvey, which killed approximately 83 people, destroyed or damaged over 100,000 homes, flooded neighborhoods, and displaced over 30,000 in Texas and Louisiana. Then Irma hit Florida and several Caribbean islands, knocking out power, leaving thousands homeless, and killing at least 41 people.

Maria followed, ripping through Puerto Rico and Dominica and killing at least 17 people. The Category 3 storm, which was approaching the Turks and Caicos islands on Friday, has brought torrential downpours and powerful winds that have uprooted trees, demolished homes, and inundated roads on several Caribbean islands. 

In Puerto Rico, tens of thousands of people started evacuating the island Saturday morning, after a failed dam cascaded floodwater throughout city streets and knocked out 85% of phone and internet cables. The Associated Press reports that dozens of mayors are arriving to meet with the Puerto Rico's governor, as officials plead for supplies.

Jose Sanchez Gonzalez, the mayor of the north coastal town of Manati, told The AP Saturday that he needs basic resources, including water, ice, and gas immediately. Hysteria is starting to spread, because the hospital is at capacity and people are going to start dying.

You might be wondering how to help.

According to The Center for International Disaster Information (CIDI), which is part of the US Agency for International Development, donating money is almost almost the best way to give aid. Before donating material goods (like blankets, food, or toys), CIDI recommends confirming with relief organizations there is an actual need for them. 

If you want to assist in person, nonprofits both international and local are looking for volunteers.

Reputable, local charity organizations to donate to after Hurricanes Harvey, Irma, and Maria are listed below, followed by larger nonprofits that operate on a national or global scale.

Note: It is not clear whether all these organizations will spend 100% of donations received on hurricane relief and associated expenses. But in past large-scale disasters, they have given high percentages of donations directly to victims, especially if there is a specific fund set up. To avoid scams, it's always good to research a group before donating by checking scores from independents groups like Charity Navigator and Charity Watch.

SEE ALSO: Hurricane Maria is ravaging the same Caribbean islands that Irma just devastated, and lashing Puerto Rico — here's what it looks like on the ground

Hurricanes Maria and Irma: Local organizations in Puerto Rico

General relief: 

ConPRmetidos, a Puerto Rican organization, is hoping to raise $150,000 for relief and recovery after Maria and Irma.

The Fondos Unidos de Puerto Rico is working with the Red Cross and United Way on relief efforts, including an emergency hotline service. It was started by Beatriz Rosselló, the first lady of Puerto Rico.

GoFundMe, a crowdfunding site, a list of verified campaigns collecting donations for victims of the storms.

The following groups are raising money to rebuild homes and infrastructure, as well as give food, medical supplies, clothing, and social services to Maria and Irma victims: ConnectReliefHurricane Maria Recovery Fund, Taller Salud, Unidos Por Puerto Rico, and the Puerto Rican Hurricane Relief Fund

If you have additional recommendations of local relief funds or organizations for hurricane-affected areas, please email me at lgarfield@businessinsider.com. 



Hurricane Maria and Irma: Local organizations in the Caribbean

General relief:  

The government of Dominica is collecting donations for the Dominica Hurricane Relief Fund through JustGiving, a crowdfunding website. The funds will go toward temporary roofing, blankets, and non-perishable foods.

The British Virgin Islands launched the BVI Recovery Fund that will help provide food, clothing, and housing for those affected by Irma. 

The Virgin Group, the conglomerate founded by Richard Brandson, launched the Disaster Recovery Marshall Plan for the British Virgin Islands that will address a range of community needs. 100% of the proceeds will go to Irma victims.

The Friends of Caritas Cuba will focus on relief efforts for children (including those with disabilities), the elderly, and those living with HIV/AIDS.

Anguilla Beaches started a disaster fund that's raising money for emergency supplies. The money will be given to the local Anguilla Red Cross chapter to carry out these efforts.

Adopt a Family USVI is accepting care packages for families in the US Virgin Islands, especially St. Thomas. Register on this Google Doc.



Hurricane Irma: Local organizations in Florida

General relief:

Volunteer Florida has an open call for volunteers and donations. 

The Neighborhood Health Clinic is addressing storm victims' medical needs.

The Heart of Florida United Way and United Way of Miami-Dade are providing food, shelter, and health services.

Food:

The All Faiths Food Bank and Second Harvest Food Bank of Central Florida are collecting food items and monetary donations for Irma victims. It's best to call and ask what they need.

Shelter:

The Gulf Coast Community Foundation established a disaster relief fund that will support immediate relief and long-term recovery efforts to rebuild the region.

The Habitat for Humanity of Key West and the Lower Florida Keys is working to rebuild destroyed homes.

Community support: 

The Boys & Girls Clubs of Miami-Dade is accepting donations of items and money. The nonprofit has requested water, bug spray, baby products, hygiene products, non-perishable food that's easy to open, and pre-sorted clothing for children and teenagers. Supplies can be donated through its Amazon wish-list.

Place of Hope, based in Palm Beach Gardens, provides family-style foster care for abused children. The nonprofit hopes to repair some of its facilities damaged by Irma.



See the rest of the story at Business Insider

Africa Architecture Awards

Sat, 09/23/2017 - 2:06pm  |  Timbuktu Chronicles
Lynsey Chutel writing for Quartz Africa:

The first Africa Architecture Awards will be held this month. It’s easy to be cynical about handing out trophies when so much development still needs to happen on the continent. Still, judging by the shortlist, the awards could help to identify what a uniquely African aesthetic is, while also highlighting the importance of incorporating environmental requirements and cultural identity. If anything, it’s also a welcome celebration of leaving behind colonial-era building.More here

DIGITAL DISRUPTION OF CREDIT SCORING: How developments in the credit scoring space are opening up new opportunities for incumbent lenders

Sat, 09/23/2017 - 1:06pm  |  Clusterstock

This is a preview of a research report from BI Intelligence, Business Insider's premium research service. To learn more about BI Intelligence, click here.

Traditional consumer lenders, like banks and credit unions, have historically served segments of the population they can conduct robust risk assessments on. 

But the data they collect from these groups is limited and typically impossible to analyze in real time, preventing them from confirming the accuracy of their assessments. This restricts the demographic segments they can safely serve, and creates an inconvenient experience for potential borrowers.

This has hobbled legacy lenders at a time when alternative lending firms — which pride themselves on precision risk assessment and financial inclusion — are taking off. These rivals are starting to break into a huge untapped borrower market — some 64 million US consumers don’t have a conventional FICO score, and 10 million of those are prime or near-prime consumers. 

Incumbents can get in on the game by tapping into new developments in the credit scoring space, like psychometric scoring, which use data besides borrowing history to measure creditworthiness, and by integrating new technologies, like artificial intelligence (AI), to improve the accuracy of conventional risk assessment methods. There are still risks attached to these cutting-edge methods and technologies, but if incumbent lenders are aware of them, and take steps to mitigate them, the payoff from implementing these new tools can be huge.

In a new report, BI Intelligence looks at the drivers encouraging incumbent lenders to consider adopting new credit scoring methods or innovative technologies that make the lending process more seamless. It also outlines what incumbents stand to gain from adopting alt scoring, the types of models on the market to choose from, the risks still appended to onboarding them, and recommendations on how to mitigate them to add real value to legacy lenders’ businesses.

Here are some of the key takeaways from the report:

  • Alternative lenders are disrupting the credit scoring space in two key ways: by using alternate credit scoring methods and integrating new technologies.
  • There's a range of methods and technologies incumbent lenders can choose to implement. But the solutions that are best suited for a particular lender will vary based on its specific business needs, the demographics it aims to attract, and its jurisdiction's regulatory landscape.
  • If executed correctly, the payoff can be huge for incumbent lenders. In addition to boosting financial inclusion and enabling lenders to tap into new demographic segments and markets, new methods and technologies can improve returns on existing demographics.
  • However, disruptions carry both short- and long-term risks that both fintechs and incumbent lenders must navigate. These include inbuilt biases, fraud, conflict with third-party data policies, and poor financial literacy among underserved demographics.

In full, the report:

  • Outlines the drivers behind incumbent lenders' growing awareness and adoption of credit scoring disruptions.
  • Looks at the current range of methods and technologies changing the face of credit scoring.
  • Explains what incumbent lenders stand to gain by adopting these disruptions.
  • Discusses the risks still attached to these disruptions, and how incumbents can manage them to reap the rewards.
  • Gives an overview of what the credit scoring landscape of the future will look like, and how incumbents can prepare themselves to stay relevant.

To get the full report, subscribe to an ALL-ACCESS Membership with BI Intelligence and gain immediate access to this report AND more than 250 other expertly researched deep-dive reports, subscriptions to all of our daily newsletters, and much more. >> Learn More Now

You can also purchase and download the report from our research store.

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The 15 best states for job seekers in 2017

Sat, 09/23/2017 - 12:49pm  |  Clusterstock

Everyone knows location is a big deal in the real estate world.

But it's also a crucial factor in the job search, too.

Personal finance site WalletHub found that landing a gig is far easier in some states than in others. WalletHub assigned each US state a score based on numerous factors, including median annual income adjusted for the cost of living, share of employees with private health insurance, and the number of workers living below the poverty line.

The site also assigned each state an employment outlook score using Gallup's job creation index. The score is based on the amount workers say their place of employment is increasing or decreasing the size of its workforce, with the highest score of 42 indicating the best employment outlook.

To read more about the study's methodology, check out the full report here.

Here are the most job-seeker-friendly states in the US:

SEE ALSO: The 15 best states for finding a job in 2017

DON'T MISS: The largest employers in each US state

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Take a tour of Harvey Mudd College, the tiny STEM 'bootcamp' outside Los Angeles whose graduates out-earn Harvard and Stanford alums

Sat, 09/23/2017 - 11:30am  |  Clusterstock

Located in Claremont, California is an 829-person liberal arts college that might go unnoticed to the uninitiated. It's not a member of the Ivy League, nor does it have the celebrity of Stanford University, its neighbor to the north.

In fact, if you're not familiar with the Claremont Consortium, you've probably never heard of the school.

Harvey Mudd College is a STEM powerhouse. It routinely shows up on lists that rank the best value colleges and, based on median salary, its graduates out-earn those from Harvard and Stanford about 10 years into their careers. 

With a price tag for tuition, room, and board of $71,939 a year, it's the most expensive college in the US. But the sticker price comes with a strong return on investment. Its peer institutions, like the California Institute of Technology, praise its computer science curriculum. 

Business Insider recently had the opportunity to tour Mudd to see for ourselves, from the rooftop classroom to the underwater robotics lab. 

Here's what it's like to attend Harvey Mudd College.

SEE ALSO: The most expensive college in America is a tiny STEM 'bootcamp' outside Los Angeles whose graduates out-earn Harvard and Stanford alums

DON'T MISS: A tiny California college whose graduates outearn Harvard and Stanford grads is changing how we train students to enter the job market

We arrived on Harvey Mudd's campus on a gloomy September day about two weeks into the 2017-2018 school year.

The school is a member of the Claremont Colleges Consortium — which includes Claremont McKenna College, Pitzer College, Pomona College, Scripps College, Claremont Graduate University and Keck Graduate Institute of Applied Life Sciences. Mudd students, called Mudders, can take classes at any of the other member schools.



Not even on campus 10 minutes, we realized Mudd would provide an experience unlike many of the other schools we have toured.

The campus was quiet. We'd come to find out it's due to the highly studious nature of the student body. During our five-hour visit, there was only one 15-minute period where campus seemed busy. Many were hurrying off to their next class or working on laptops.



Board racks are near every door and students grab their longboard, shortboard, or free lines — two separate wooden boards that attach to your shoes with wheels underneath — for the short ride to class. Scooters, bicycles, and even unicycles are also popular on campus.

See the rest of the story at Business Insider

JPMorgan Chase poached an executive from Amazon to lead its customer experience (JPM, AMZN)

Sat, 09/23/2017 - 11:10am  |  Clusterstock

JPMorgan Chase poached an executive from Amazon in a bid to help the bank improve the customer experience.

Chase on Monday announced the hire of Marbue Brown as its head of customer experience for consumer banking and wealth management. He'll report directly to Thasunda Duckett, the CEO of Chase's consumer bank.

"Marbue will partner with my leadership team and other Chase senior leaders to help us define the vision for a world-class customer experience," Duckett wrote in a memo seen by Business Insider. "He'll help guide our Chase customer journey with a focus on deepening relationships."

Brown joins the country's largest bank by assets from Amazon, where he served as global lead of the company's "Andon Cord" customer-experience team, a group that focused on monitoring products that consistently disappointed customers and rooting out the problem. Andon Cord is a manufacturing process originally developed by Toyota to solve assembly-line quality issues.

Hiring an exec from one of the world's foremost tech giants is another sign of JPMorgan's efforts to boost its own technology chops. At Chase, Brown will be tasked with improving customer engagement across platforms — branches, call centers, online, and mobile.

He'll start off from a nice foundation. In June, J.D. Power ranked Chase fourth of the 23 large and midsize banks for customer satisfaction — the top performer of the big-five banks for the fifth year in a row.

In the second quarter, Chase reported deposits were up 10% year-over-year to $507 billion. The company also reported 45 million active digital users, up 14% from the previous year.

Before Amazon, Brown, who is originally from Liberia, spent nearly a decade at Microsoft.

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THE DIGITAL-ONLY CHALLENGER BANKS EXPLAINER: The new breed of bank threatening to beat retail banks at their own game

Sat, 09/23/2017 - 11:07am  |  Clusterstock

This is a preview of a research report from BI Intelligence, Business Insider's premium research service. To learn more about BI Intelligence, click here.

Weighed down by a sluggish global economy, turbulent capital markets, and heavier regulation after the 2008 financial crisis, many big banks have scrimped on innovation.

In doing so, they've failed to keep up with customers' embrace of and demand for all things digital and mobile. That's opened the door to a new breed of banks dedicated to delivering an optimal digital customer experience: digital-only "challenger banks," or "neobanks."

These players' agile, modular, wholly digital systems let them adapt quickly to changing consumer demands and expectations, threatening incumbents. However, the big banks still have the edge in consumer trust. This gives legacy firms a window of opportunity to launch digital subsidiaries of their own to fend off the upstarts.

In a new report from BI Intelligence, Business Insider's premium research service, we look at the features that make neobanks a distinct new competitor, the range of models they're adopting, and the regions in which neobanks are particularly flourishing. We also discuss the challenges neobanks still face, and the opportunity these obstacles present for incumbents to get ahead in the transition to digital banking.

Here are some of the key takeaways:

  • Digital-only challenger banks, also called neobanks, focus on digital delivery channels, either online or mobile. They are dedicated to improving on incumbent retail banks’ weakest point — customer experience.
  • Now that customers have more options focused on a better user experience, incumbents are being forced to raise their game. Challenger banks are finding ways to deliver cutting-edge banking services to consumers, meaning incumbents no longer set the terms.
  • Neobanks' biggest challenge — winning consumer trust and users — is also incumbents’ best chance to fight back. They can use their brand recognition and trust to promote their own digital subsidiaries.
  • Challenger banks' emergence is about banking moving over to digital. The only question is who will win in the race to transition to this new landscape: independent players or incumbents’ digital subsidiaries.

In full, the report:

  • Looks at the different business models neobanks are adopting to compete with incumbents.
  • Gives an overview of the neobank scene in different geographies.
  • Explains the biggest obstacles neobanks still face, and how they can navigate them.
  • Examines the opportunity big banks have to win the race to digital.
  • Discusses what the banking scene of the future will look like, and who might come out on top.

Interested in getting the full report? Here are two ways to access it:

  1. Subscribe to an All-Access pass to BI Intelligence and gain immediate access to this report and over 100 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now
  2. Purchase & download the full report from our research store. >> Purchase & Download Now

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Best Buy is the latest victim of the retail apocalypse as pressure from Amazon sends shares plunging 10% (BBY)

Sat, 09/23/2017 - 11:02am  |  Clusterstock

Best Buy's attempts to fend off the looming retail apocalypse took a huge hit on Tuesday.

At its first investor day since 2012, the company issued long-term forecasts that fell short of analyst expectations, stoking fears that mounting competition from the likes of Amazon will eat into future profits.

The reaction from investors was swift and punishing, as Best Buy's stock dropped as much as 10% to $51.61, wiping out roughly $1.7 billion in market value at its lows for the day.

Analysts surmised that it was the company's fiscal 2021 revenue and profit estimates that drew the ire of traders. Best Buy forecasted that sales would hit $32 billion by then, which comes out to a 2.2% compound annual growth rate. Bloomberg Intelligence analyst Charles Allen described it in a client note as "not a great number."

Going beyond sales, RBC Capital Markets analyst Scot Ciccarelli highlighted Best Buy's earnings estimate of $4.75 to $5 a share, which he said implied a growth rate of 8% to 9% that was "somewhat below investor expectations." However, he didn't go as far as to downgrade the stock, keeping it at "sector perform," or neutral.

Also mentioned by Best Buy was a previously-stated plan to reach cost savings of $600 million by the end of 2021. According to Allen, this forecast implied that prices may have to be lowered in the future amid continued competition — a conclusion that investors selling shares may not have liked.

Best Buy's share-crushing forecasts don't stem from a lack of trying. In late August, the big box retailer announced an expansion to its same-day delivery service, a strategic move viewed as a direct response to the aggressive encroachment from Amazon and other competitors.

Even amid Tuesday's stock decline, at least one analyst remained bullish on the stock's prospect: David Schick of Consumer Edge Research. He praised the company's strategy of investing in its own business, saying that it's the "right way" to go about things amid the looming spectre of Amazon.

The company itself also remains confident. It's grown domestic sales in each of the past three years, and beaten analyst revenue estimates in six of the past seven quarters, according to spokesman Jeff Shelman. He also points to Best Buy's "huge" online growth numbers, and notes that the company has already increased its financial guidance for 2017 on two occasions this year.

It remains to be seen if the short-term pain felt by Best Buy following this round of preemptive guidance will serve it well in the longer term. The company is clearly trying to get out ahead of any future slowdown. And now that some pressure has been removed from its stock price, it can drill down on fundamentals and try to claw its way back.

SEE ALSO: The Amazon juggernaut has traders making record bets against America's largest grocer

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NOW WATCH: GARY SHILLING: The Fed is wrong about wage inflation

Investing guru Byron Wien breaks down why market bears will be dead wrong for a few more years (BX)

Sat, 09/23/2017 - 10:31am  |  Clusterstock

  • Blackstone's Byron Wien doesn't see many reasons to be concerned about the US economy right now.
  • "My belief is that we're not going to see a bear market or a recession until at least 2019," he said.
  • That doesn't mean stocks will go to the moon, however. But earnings growth is stronger than he expected at the beginning of this year, and that will continue to drive the market higher, he said.

Forget about the next US recession until at least 2019, says Byron Wien, the vice chairman of Blackstone's private-wealth-solutions group.

Wien is not shy to make big forecasts. Since 1986, he has published an annual list of 10 predictions for the year ahead. In an interview with Business Insider on Wednesday, he outlined his scorecard on President Donald Trump, the stock market, and interest rates.

He says 2017 is a "normal" year — one in which he gets about half the predictions right.

One dislocation in the market is worth watching, however: Stocks continue to make new highs even though the Federal Reserve has ceased its asset purchases and, starting next month, will start slowly shrinking its balance sheet. It's "uncharted territory" for the stock market, Wien said in a recent note.

This interview has been edited for length and clarity.

Akin Oyedele: There's precedent on the impact of rate hikes and cuts on the market, but there isn't much on a Federal Reserve balance-sheet reduction like this. What should investors be looking out for in terms of what the impact could be?

Byron Wien: One thing you should look at is the yield curve. If the yield curve inverts, that's very negative for equities. So far, there's an 80-basis-point gap between the 10-year and the 2-year, so it doesn't look like there's much of a danger of the yield curve inverting right now. But that's a risk.

You also should look at leading indicators. Leading indicators tend to top out a couple of years before the market turns down and a recession sets in. So far, that hasn't happened, but that's a risk.

I could go through a whole litany of other things to worry about. But the combination of Fed policy, the yield curve, and leading indicators are three important things to watch out for.

Oyedele: There are a couple of upcoming changes to the Fed, with Stanley Fischer resigning next month and Yellen's renomination still a question mark. What's your thinking on the impact of new people atop the Fed at a time like this for the economy?

Wien: I think Stanley Fischer was a positive force — a very knowledgeable guy, and very balanced. I just hope that the replacement is reasonable and understands that aggressive tightening would be deleterious to both the economy and the stock market.

I have no reason to be fearful. This is not something Donald Trump knows a whole lot about, and so I think he'll rely on advisers like Gary Cohn and Steven Mnuchin when he considers appointees. He's already said he's comfortable with Janet Yellen. Maybe he'll replace her, but I don't see him replacing her with anybody who's really a serious threat to the stability we're currently enjoying.

Oyedele: A lot of the fiscal stimulus that was expected earlier this year hasn't come through, and one thing some investors are saying is there's a risk that if we start to see fiscal policy and the Fed tries to front-run that, then you could have a pace of tightening that's faster than needed. Is that something you're thinking about?

Wien: At the end of the last century, the Fed was worried about inflation picking up. They tightened even though inflation wasn't picking up. That contributed to the bear market we had in 2000/2001.

I think they've learned a lesson from that example.

The market was vulnerable on its own because of valuations. And the combination of excessive valuation and the Fed tightening really created the bear market that we experienced in 2000. I don't expect them to do that again. They know that a lot of the good times we're enjoying are in their hands, and I don't think they want to do anything to destroy that.

One of the reasons they don't want to do anything to destroy it is that if we go into a recession, we're going to have a hell of a time getting out of it because ordinarily, when we're in a recession, interest rates are high — the Fed can reduce interest rates and stimulate the economy that way. But now interest rates are very low, and if the Fed reduces rates from here, it won't have much impact. So it will be up to fiscal spending to really get the economy going again. And with a Republican Congress, aggressive fiscal spending is pretty unlikely. So the best policy for the Fed is to do whatever it can to prevent the next recession from ever occurring, not to create it by tightening rates too aggressively.

Oyedele: So you've previously said a recession isn't in sight in the short term. The economy is doing well, and the stock market continues to make new highs all the time. What are you telling clients about what's attractive in this stable, low-growth environment?

Wien: In my opinion, we have a couple more years before the next bear market sets in, and earnings are coming through at double the rate they were projected to at the beginning of the year. So this is an earnings-driven market, and the stocks with the most impressive earnings performance are the ones that are doing well.

Oyedele: In your predictions, you expected the president to tone down his rhetoric, but that doesn't seem to have happened yet. Is there anything else about this president that has matched or defied your expectations?

Wien: One of the things that is different is I think he's independent of the Republican Party. He's a dealmaker, not a partisan, and I saw that in the debt ceiling. I don't think a diehard Republican would have done that deal, but he wanted to get that deal done — he wanted to keep the government open and running, so he did it. And I think you're going to see that in terms of tax cuts. Republicans are going to be concerned with the budget deficit, and he's less concerned with the budget deficit.

He's his own person. He's not a tool of the party. And to some degree, that is unexpected. From my own point of view, it's going to be a normal year for the 10 surprises — a normal year being one that I get five or six of them right.

He clearly is not as aggressive as he was in the campaign. He didn't tear up NAFTA. He didn't tear up the Affordable Care Act. He didn't get out of the Iran agreement; that was No. 1.

On the other 2017 predictions:

I think the economy is moving ahead towards 3%. The S&P 500 is going to earn 130, and the market is already at 2,500.

I was dead wrong on the dollar. I was wrong on inflation, and I think I'm going to be wrong on the European [German] election. I thought Merkel would have trouble, and I don't think she will.

I was right on the price of oil. I didn't think the price of oil would surge.

I was wrong on the Chinese currency weakening, but I was right on Japan. And I don't know if I'm right on No. 10, but there's no question that ISIS is less threatening than it was at the beginning of the year.

So I think it's a pretty good year for the surprises. As I said, five or six of them seem to be working out.

Oyedele: One divergence for me is that you were right on stocks but not on the 10-year yield. What you said sounded like consensus at the beginning of the year, but rates have gone in the opposite direction. Why's that?

Wien: I think globalization and tech have kept inflation low. The Fed hasn't tightened significantly. Also, all that liquidity that's been created since 2008 has influenced the bond market. There's a lot of capital sloshing around the world, looking for a place to hide, and the bond market is the place they can do that. That's contributed to interest rates staying low.

Oyedele: Are you getting questions about bitcoin?

Wien: I am. I'm of the school that bitcoin and cryptocurrencies are not tied to any central bank, and I am skeptical of the concept. But all of my West Coast friends tell me I'm a dinosaur, I'm not embracing it, and I'm wrong. I'm not a buyer or an owner of bitcoin. I still believe in sovereign currencies.

Oyedele: Do you think it's in a bubble?

Wien: I have no idea. I suspect it is, but I don't think I know enough to declare it to be in a bubble.

Oyedele: Is there anything else that's top of mind right now?

Wien: My belief is that we're not going to see a bear market or a recession until at least 2019. So we're in a very favorable environment for investing. I'm not saying stocks are going to go to the moon here, but I could see the market making forward progress for the rest of this year and next year.

SEE ALSO: Fed to unwind financial-crisis emergency measures and begin shrinking its $4.5 trillion balance sheet in October

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NOW WATCH: Amazon's transformation of Whole Foods puts the entire grocery industry on notice

I bought bitcoin at a deli — here's how it works

Sat, 09/23/2017 - 10:22am  |  Clusterstock

At first glance, Mario's Gourmet Deli, a New York City bodega on the corner of West 106th Street and Amsterdam Avenue, looks like a regular corner store.

But inside there's an ATM that gives folks access to what some view as the future of payments and finance: bitcoin.

The recently installed ATM was featured in a New Yorker piece by Ian Parker, who described it as a "machine with the body of a regular ATM but the soul of a lottery terminal."

I paid the deli a visit to buy some bitcoin, the digital coin that's up near 500% over the last year. Here's what it was like. (Please excuse my poor photography skills.)

SEE ALSO: 

Here's a shot of Mario's.

The bitcoin ATM looks like a normal one, but it doesn't work the same. You can't withdrawal bitcoin, as it's not a physical currency, and it accepts only cash.

A Coinsource bitcoin ATM allows you to buy up to $3,000 worth of the cryptocurrency, which is less than one coin. I bought the minimum amount, $5.

See the rest of the story at Business Insider

Here are the world's top 10 most livable cities — and how much it costs to live there

Sat, 09/23/2017 - 10:15am  |  Clusterstock

Calling a concrete jungle home may not bring to mind images of comfort and serenity.

But certain cities around the world are exceptionally livable, according to the 2017 Global Liveability report from the Economist Intelligence Unit (EIU).

To determine the rankings, the EIU evaluated 140 cities based on 30 factors across five categories: stability, healthcare, culture and environment, education, and infrastructure. Topics ranging from humidity to water quality to violent crime were taken into account when compiling the data.

In the top cities, recreational activities are easily accessible, crime rates are low, and infrastructure isn't overused, thanks in part to relatively low population density. Australia and Canada, where six of the top 10 cities were located, have some of the lowest population densities in the world, according to data from the World Bank.

Living with so many perks doesn't come cheap, however. The most livable cities aren't the most affordable. Many of the highest scores in the report went to mid-sized cities in wealthy countries.

For each city on the list, we found the average cost of renting a one-bedroom apartment in the center of town, utilities, and commuting, as well as the price of a cappuccino and a pint of domestic beer, according to global cost of living database Numbeo. All amounts are in US dollars and are current as of September 2017.

Below, check out what it costs on average to live in each of the top 10 most livable cities in the world.

SEE ALSO: The 30 countries that are best for your money, according to expats

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10. Hamburg, Germany

Overall livability rating (out of 100): 95

Monthly costs:

Rent: $895.52

Utilities: $267.17

Commuter pass: $98.20

Cappuccino: $3.40

Domestic beer: $4.17



9. Helsinki, Finland

Overall livability rating (out of 100): 95.6

Monthly costs:

Rent: $1,138.75

Utilities: $162.95

Commuter pass: $65.11

Cappuccino: $4.31

Domestic beer: $7.14



8. Auckland, New Zealand

Overall livability rating (out of 100): 95.7

Monthly costs:

Rent: $1,252.57

Utilities: $134.80

Commuter pass: $146.12

Cappuccino: $3.29

Domestic beer: $6.58



See the rest of the story at Business Insider

The Amazon juggernaut has traders making record bets against America's largest grocer (KR)

Sat, 09/23/2017 - 10:05am  |  Clusterstock

Kroger, the largest traditional grocer in the US, has already seen its stock plummet 30% since Amazon first announced its acquisition of Whole Foods.

Traders are betting that the pain will continue.

Short interest on Kroger — a measure of wagers that share prices will drop — has surged to a record high, increasing 151% this year, according to data compiled by the financial-analytics firm S3 Partners. It now sits at $1.43 billion, nearly triple the next-biggest short position in the food-retailing sector.

S3 figures that short sellers have reaped total profits of $289 million over the past 8 1/2 months, an impressive 40.5% return.

And while Kroger's drop may entice bargain hunters and value investors to buy the stock at its depressed value, S3 warns that pressure from shorts could get even worse. Only 7.5% of Kroger's float is being used, which gives bearish investors plenty of capacity to add to short positions. And they have been — in just the past two weeks, short interest has risen 9%.

Kroger's short-seller woes are just one example of the so-called Amazon effect that has retailers reeling nationwide. Jeff Bezos' ever-expanding retail behemoth has shown the ability to erase billions of dollars of competitor market value with seemingly innocuous corporate announcements, and it's put brick-and-mortar stores and retail bulls alike on notice.

The Cincinnati-based grocery chain most recently saw its stock rocked by Amazon after the company announced that it would start cutting prices at Whole Foods. While the share-price destruction among grocers was widespread, no company was hit harder than Kroger, which dropped as much as 8.3%.

So when will the stock weakness subside? When will the Amazon effect finally and mercifully let up? You'll have to ask the short sellers, who are showing no signs of slowing right now.

SEE ALSO: An Amazon-based retail trade has quadrupled the stock market's return this year

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NOW WATCH: GARY SHILLING: If you don't like your job, you're 'wasting precious time'



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