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AI IN BANKING: Artificial intelligence could be a near $450 billion opportunity for banks — here are the strategies the winners are using

Mon, 08/12/2019 - 10:01pm

Discussions, articles, and reports about the AI opportunity across the financial services industry continue to proliferate amid considerable hype around the technology, and for good reason: The aggregate potential cost savings for banks from AI applications is estimated at $447 billion by 2023, with the front and middle office accounting for $416 billion of that total, per Autonomous Next research seen by Business Insider Intelligence.

Most banks (80%) are highly aware of the potential benefits presented by AI, per an OpenText survey of financial services professionals. In fact, many banks are planning to deploy solutions enabled by AI: 75% of respondents at banks with over $100 billion in assets say they're currently implementing AI strategies, compared with 46% at banks with less than $100 billion in assets, per a UBS Evidence Lab report seen by Business Insider Intelligence. Certain AI use cases have already gained prominence across banks' operations, with chatbots in the front office and anti-payments fraud in the middle office the most mature. 

In this report, Business Insider Intelligence identifies the most meaningful AI applications across banks' front and middle offices. We also discuss the winning AI strategies used by financial institutions so far, and provide recommendations for how banks can best approach an AI-enabled digital transformation.

The companies mentioned in this report are: Capital One, Citi, HSBC, JPMorgan Chase, Personetics, Quantexa, and U.S. Bank

Here are some of the key takeaways from the report:

  • Front- and middle-office AI applications offer the greatest cost savings opportunity across banks. 
  • Banks are leveraging AI on the front end to smooth customer identification and authentication, mimic live employees through chatbots and voice assistants, deepen customer relationships, and provide personalized insights and recommendations. 
  • AI is also being implemented by banks within middle-office functions to detect and prevent payments fraud and to improve processes for anti-money laundering (AML) and know-your-customer (KYC) regulatory checks. 
  • The winning strategies employed by banks that are undergoing an AI-enabled transformation reveal how to best capture the opportunity. These strategies highlight the need for a holistic AI strategy that extends across banks' business lines, usable data, partnerships with external partners, and qualified employees.

In full, the report:

  • Outlines the benefits of using AI in the banking industry.
  • Details the key use cases for transforming the front and middle office using the technology.
  • Highlights players that have successfully implemented AI solutions.
  • Examines winning strategies used by financial institutions that are leveraging AI to transform their entire organizations. 
  • Discusses how banks can best capture the AI opportunity, including considerations on internal culture, staffing, operations, and data.

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

  1. Purchase & download the full report from our research store. >> Purchase & Download Now
  2. Subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to this report and more than 250 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
  3. Current subscribers can log in and read the report here. >>Read the Report

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A man posted video of his 'private jet' experience when he was the only passenger on his Delta flight

Mon, 08/12/2019 - 9:15pm

  • A Delta passenger experienced the private jet life when he was the only customer on his flight from Aspen, Colorado, to Salt Lake City, Utah.
  • Vincent Peone posted a video to Twitter showing how personalized and surreal the whole experience was.
  • Because the FAA requires all commercial flights to follow certain procedures, the flight attendants still went through the normal welcome and safety presentations — with a few little modifications for Peone.
  • Visit Business Insider's homepage for more stories.

A man got to fly on a "private" jet last week when he turned out to be the only passenger booked on his Delta flight.

Vincent Peone, a New York City-based writer and director, was taking a 7 a.m. Aspen, Colorado, to Salt Lake City, Utah. In a video posted to Twitter, he chronicled the unique experience of being the only passenger booked on flight DL3652, a Delta connection flight operated by SkyWest Airlines.

Last week @Delta gave me my own private jet...kind of.

— vincent peone (@vincentpeone) August 12, 2019


The video starts with unique announcement at the boarding gate. 

"Will the only passenger on this flight kindly board at this time," the Delta gate agent said.

As Peone walked from the terminal to the plane, he asked the attendant whether she had ever seen a flight with just a single passenger.

"Yes, I have," she replied.

The fact that it had happened before didn't seem to put a damper on Peone's experience, though. After he walked up the steps to the boarding door of the CRJ-700 plane, he filmed ramp workers loading what appeared to be sand bags into the plane's cargo hold.

"We're just adding weight to the plane because there are no people," he narrated.

The flight attendant's welcome announcement was also modified for the unusual situation.

"Good evening, Vincent, and welcome aboard," she said (likely misspeaking, as the flight number shown in the video is a morning flight). "We look forward to taking care of you today."

"To ensure an on-time departure, please remain in your assigned seat," she added, as Peone panned the camera down to show himself in what appears to be a first class seat.

He ended the video by visiting the cockpit and thanking the pilots, and filming a bit more from the safety announcement.

While one might expect an airline to simply cancel a flight with just one paying passenger, flights like this usually proceed as scheduled so that the airline can get the plane and its crew to the destination, in order to operate later flights. Cancelling the one flight would cause a complex set of logistical challenges as the airline would have to find a way to cover later flights without the equipment or staff in the right place.

SEE ALSO: I flew first-class in Delta's 6-month-old A220, the plane Boeing tried to keep out of the US

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Jeffrey Epstein told a reporter he saw Silicon Valley notables doing drugs and 'arranging for sex'

Mon, 08/12/2019 - 8:20pm

  • Jeffrey Epstein told a reporter for The New York Times last year that he had damaging information about notable Silicon Valley figures.
  • He said he had witnessed tech leaders doing drugs and "arranging for sex," according to an article published Monday.
  • The article doesn't name any names.
  • Epstein died by suicide on Saturday.
  • Visit Business Insider's homepage for more stories.

Jeffrey Epstein, the disgraced financier who died by suicide in jail on Saturday, told a reporter last year he had dirt on some of Silicon Valley's elite.

The stereotypical tech entrepreneur is a nerdy guy who works all the time. But according Epstein, the truth was much different, The New York Times' James B. Stewart said in a report on Monday. Epstein said he had seen prominent tech figures doing drugs and "arranging for sex," according to the article.

"They were hedonistic and regular users of recreational drugs," Stewart reported, paraphrasing Epstein.

Stewart doesn't name any particular people whom Epstein said he witnessed doing illicit or hedonistic things.

The article focuses on Epstein's claim that he was asked by Tesla CEO Elon Musk to help him find a new chairman for the electric-car company. Epstein told Stewart that Musk had authorized him to help find a new chairman after Musk got in trouble with the Securities and Exchange Commission last year over an ill-advised tweet about having "funding secured" for the company to go private.

In a statement to Business Insider, a spokesperson for Musk said it was "incorrect to say that Epstein ever advised Elon on anything."

Read more: Jeffrey Epstein allegedly boasted about advising Elon Musk in the wake of his bungled attempt to take Tesla private

Stewart later thought about "how little information Mr. Epstein had actually provided" in the interview. "While I can't say anything he said was an explicit lie, much of what he said was vague or speculative and couldn't be proved or disproved," Stewart said in his report.

Epstein had asked Stewart to keep the interview on background, meaning that Stewart couldn't attribute any facts to or quote Epstein in a subsequent article about what they discussed. With Epstein's death, Stewart considered that agreement to have ended.

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SEE ALSO: A legal fight over Jeffrey Epstein's multi-million dollar estate could drag on for years

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Elon Musk denies Jeffrey Epstein advised him or Tesla during the company's bungled attempt to go private (TSLA)

Mon, 08/12/2019 - 8:18pm

  • Jeffrey Epstein told a New York Times reporter that he had advised Tesla CEO Elon Musk during the frenetic few weeks in summer 2018 when Musk had sought to take the electric-car company private.
  • According to the newspaper's James B. Stewart, he asked Epstein about rumblings that he had also been approached by someone close to Musk who sought his help to find a new chairman for the electric-car company. A spokesperson for Musk denies this.
  • The alleged anecdotes from Epstein, among others reported on Monday, add to the picture of the disgraced financier who had been held in federal lockup in New York on sex-trafficking charges until he died of an apparent suicide on Saturday.
  • Visit Business Insider's homepage for more stories.

Jeffrey Epstein claimed to have been an adviser to Tesla and its CEO Elon Musk, a New York Times reporter said on Monday, two days after Epstein was found dead of an apparent suicide while in federal lockup on sex-trafficking charges.

Epstein allegedly said he had been looking for people to invest in Tesla. The Times' James B. Stewart wrote that he heard a rumor that Epstein had an email from someone close to Musk who sought help finding a new chairman.

The alleged anecdotes were part of a comprehensive retelling of a confidential August 16, 2018, interview between Stewart and Epstein. Following Epstein's death, Stewart said he considered the "on background" agreement moot.

The reporter visited with Epstein at his New York home, where the financier talked about his connections with the titans of industry and politics. Epstein claimed that he had friends at Tesla, but never went into much detail, according to The Times.

"It is incorrect to say that Epstein ever advised Elon or Tesla on anything," a spokesperson for Musk told Business Insider on Monday.

Read more: The most shocking parts of working at Tesla, according to current and former employees

The multimillionaire financier allegedly cited the fact that his history of sexual misconduct targeting underaged girls made him "radioactive." (He pleaded guilty to two state counts of soliciting prostitution in 2008, and in July of this year was indicted on one count of sex trafficking and one count of conspiracy to commit sex trafficking related to the alleged abuse of underage girls as young as 14.)

The timing of the interview between the newspaper and Epstein last summer — including Epstein's claim that he had spoken to the Saudis about investing in Tesla — coincides with a tweet Musk sent on August 13, 2018, in which Musk said he had met with the Saudis a month earlier.

The Times reporter acknowledged that Epstein was never entirely clear about his claimed interactions with Tesla or Musk.

"While I can't say anything he said was an explicit lie, much of what he said was vague or speculative and couldn't be proved or disproved," he said.

SEE ALSO: FBI agents are livid that Trump is amplifying 'bulls--- theories' about Jeffrey Epstein's death 'that have no basis in reality'

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BANKING AND PAYMENTS FOR GEN Z: These digital natives are the next big opportunity — here are the winning strategies

Mon, 08/12/2019 - 8:01pm

Generation Z, defined as customers born between 1996 and 2010, hold up to $143 billion in spending power, but haven't yet developed brand loyalties that dictate where they store and spend that money.

For banking and payments providers, attracting these customers while they're young could lead to lucrative relationships throughout their lives, with value increasing as they age, earn more money, and expand the number of financial products they engage with. 

Most Gen Zers haven't started using financial products beyond a bank account, which makes them a ripe opportunity for players in the space.

As a result, many firms target millennials and Gen Zers together in a push to attract younger customers, but this could be limiting their ability to effectively capture the interest of tweens, teens, and young adults, because Gen Z differs from their older counterparts. As a group, they're more responsive to influence from friends and peers than they are to traditional advertising, less likely to remember life before the internet, and more open to a wider variety of financial service providers than other consumers.

Understanding what makes Gen Zers tick is critical for marketers, strategists, and developers looking to cater to these younger customers and build out a suite of products, tools, and services that they'll want to adopt. In this report, Business Insider Intelligence will use a six-point framework — developed based on industry research and conversations — to explain the core attributes that Gen Z values in a product.

It will then explain how each of these attributes can be applied to banking and payments products, and offer actionable recommendations, strategies, and examples for how to implement them to grab younger customers ahead of the competition.

The companies mentioned in the report are: Affirm, American Express, Apple, Bank of America, Capital One, Citi, Current, Discover, Instagram, Google, Grab, Greenlight, JPMorgan Chase, Mastercard, PayPal, Uber, Venmo, Visa, Wells Fargo, Zelle

Here are some key takeaways from the report:

  • Gen Z's lack of financial services product adoption offers providers a long runway for growth. While two-thirds of Gen Zers have a bank account, many don't yet use debit cards, haven't aged into credit cards or loans, and aren't responsible for the bulk of their own spending. As they navigate life transitions, like going to college or getting a first job, there's ripe opportunity for providers to engage these customers.
  • Gen Z is more interested in digital payments products and services than any other generation. While adoption of mobile wallets has been tepid among the general population and P2P apps, like Venmo and Zelle, are just now gaining traction among older users, Gen Zers are diving in head first: Over half use digital wallets monthly, and over three-quarters use other digital payment apps or P2P apps in the same time frame.
  • To attract, engage, and retain Gen Zers, financial services firms must develop products that are social, authentic, digital-native, and educational, offer value, and evolve over time. This combination, which emphasizes key attributes that Gen Zers value, serve as a roadmap for developing offerings with features that appeal to these users in both the short and long run.

In full, the report:

  • Explains why Generation Z represents a meaningful and urgent opportunity for financial services providers.
  • Outlines a six-point framework for building services that can attract, engage, and retain Gen Zers.
  • Offers specific strategies that banks and payments providers can implement to build products tailored to this generation.
  • Evaluates examples of tactics that work in bringing Gen Zers into the fold and turning them into lifelong customers.

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

  1. Purchase & download the full report from our research store. >> Purchase & Download Now
  2. Subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to this report and more than 250 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

The choice is yours. But however you decide to acquire this report, you've given yourself a powerful advantage in your understanding of the fast-moving world of Payments.

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Facebook warns its marketing partners against scraping after a startup was caught saving millions of users' data (FB)

Mon, 08/12/2019 - 7:49pm

  • Facebook is warning its marketing partners against illicitly scraping users' data.
  • The warning comes after Business Insider revealed startup Hyp3r harvested millions of Instagram users' data, saved their Stories, and tracked their locations.
  • Instagram failed to notice Hyp3r's actions, and had added it to its exclusive Facebook Marketing Partner list.
  • Click here for more BI Prime stories.

Facebook is warning some of its closest marketing partners against illicitly scraping data after a buzzy startup was found to be saving personal information and tracking the locations of millions of Instagram users.

Late last week, after Business Insider revealed that San Francisco marketing firm Hyp3r had been harvesting huge volumes of data from Facebook-owned Instagram, Facebook emailed some of its Facebook Marketing Partners to reiterate its rules on handling user data.

"You may not access or collect data from us using automated means, without our prior permission. Automated means include harvesting bots, robots, spiders, or scrapers," Facebook wrote in an email seen by Business Insider.

Data scrapping is a controversial practice that uses automated technology to systematically save information that people share publicly on social media, from users' posts and photos to their profile details. Some argue that because the information has been shared publicly it's fair game, but privacy advocates say collecting the data violates reasonable expectations about privacy — especially in the case of Instagram Stories, which are designed to disappear after 24 hours. 

For Facebook, which is trying to repair its damaged reputation in the wake of the Cambridge Analytica scandal, safeguarding its users' data from scraping and other misappropriation is paramount. And, as the case with Hyp3r illustrated, Facebook and Instagram's protections have been somewhat lax.

Hyp3r monitors social media posts made at real-world locations like bars, stadiums, hotels, and gyms, and then uses that data to target people with personalised ads and help businesses engage with customers at their locations. But it built some of this functionality through unauthorized means, taking advantage of a security vulnerability in Instagram's systems and of Facebook's failure to properly vet it. As a result, it assembled detailed profiles on millions of Instagram users, monitoring their movements, and saving their Stories, which are supposed to disappear after 24 hours and not be available to developers.

Facebook failed to notice this activity, and even added Hyp3r to its exclusive list of Facebook Marketing Partners — a directory of vetted companies that "can give you superior insights and data for better marketing decisions."

After Business Insider reached out to Instagram about Hyp3r's activity, it issued the firm with a cease and desist, and Hyp3r has now closed down its platform, it said in an announcement on its website.

Facebook has also reached out to other Facebook Marketing Partners in the wake of the revelations, to inform them that it has removed a marketing partner, and to remind them of the platform's rules. It cites four key rules:

"You may not access or collect data from us using automated means, without our prior permission. Automated means include harvesting bots, robots, spiders, or scrapers. You may not transfer any data, aside from Account Information, outside the app that has collected it, except to your service provider. You may not sell, license, or purchase any data obtained from us. You must protect the information you receive from us against unauthorized access, use, or disclosure."

An Instagram spokesperson declined to comment.

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Salesforce's stock is a bargain right now and will stay that way even after it reports earnings next week, Wall Street analysts say (CRM)

Mon, 08/12/2019 - 7:03pm

  • Salesforce's stock price is down 10% since August 1 when it closed on its $14 billion all-stock deal for Tableau.
  • Investors were also unsure that the company immediately announced another big acquisition, giving rise to fears that its core business may no longer by high growth enough to justify a high stock price.
  • And Wall Street analysts are not expecting great things for the stock after Salesforce reports its second quarter next week either.
  • But they say that all of this adds up to a reason to buy the stock. 
  • Click here for more BI Prime stories.

Salesforce's stock price is down 10% since August 1 when it closed on its massive, $14 billion all-stock deal for Tableau.

And Wall Street analysts like Morgan Stanley's Keith Weiss and Nomura's Christopher Eberle say that means the time is ripe to buy the stock.

Weiss thinks the stock is a deal at under $150 a share, and will rebound to $178 share over time, with Eberle predicting $180.

"Significant investor concern around a slowdown in the core business creates a strong buying opportunity," Weiss writes in a recent research note. He rates the stock "overweight."

The stock is down for a lot of reasons. The big one is because investors are worried that Salesforce has run out of growth in its main market — cloud software for sales and marketing — and is therefore spending big bucks to go buy growth through pricey acquisitions. MarketWatch's Daniel Newman even said the Tableau acquisition "smacks of desperation."

The stock is also down in part because of the dilutive impact of the Tableau deal — Salesforce issued more shares to help pay for the deal and warned investors that earnings per share would decline 20 cents to 22 cents, with 2020 adjusted EPS now anticipated at $2.68 to $2.70.

It didn't help that Salesforce submitted a bunch of odd corrections after it announced the original $15 billion deal in June with. The original acquisition announcement sent Salesforce's stock tumbling, but in the days that followed Salesforce explained in updated SEC filings that it had made some calculating errors and that it was paying only 840 million of its shares to finance the all-stock deal, not 900 million shares.

That's a good thing for shareholders since it means the hit to Salesforce's earnings per share won't be as bad. But the company's clumsy delivery was not very inspiring, to say the least.

The ink wasn't even dry on the Tableu deal — Salesforce's largest acquisition ever — when it announced another big-ticket deal. Salesforce said last week that it will pay $1.5 billion in cash and stock to buy ClickSoftware.

Although Salesforce's shopping spree is raising eyebrows, this purchase makes a lot of sense on its face. As Morgan Stanely's Weiss explained, Salesforce jointly developed its field service management product with ClickSoftware, whose product helps companies track things like sending repair people to customer sites. Salesforce was licensing some of ClickSoftware's software for this product and it's one of the fastest growing areas in the Salesforce Service Cloud. So it makes sense to bring that in-house, even at $1.5 billion price tag.

All of that is on top of the deal announced in April in which Salesforce said it was buying its own non-profit arm,, for $300 million.

"We see a lot of noise that must be sorted through this quarter, following the [the deal], DATA [Tableau], and, more recently, ClickSoftware acquisitions, as well as multiple FY guidance revisions. We see difficult comps[comparisons] in both F2Q and F3Q. ... We continue to highlight the uncertain impact of the moving pieces created via recent acquisitions and proposed acquisitions (such as ClickSoftware)," Eberle writes. 

MuleSoft proved the naysayers wrong

Yes both Weiss and Eberle believe that Salesforce has proven it can assimilate large acquisitions.

MuleSoft is the main example. That $6.5 billion deal was Salesforce's biggest until the Tableau acquisition, and faced plenty of skeptics at the time that Salesforce was paying too much. But a year later, MuleSoft has been hailed as the company's bright spot, its major source of subscription growth.

With all these short term issues weighing on the stock, Weiss warns that it probably won't skyrocket after the company reports Q2 earnings next week.

"A seasonally weaker quarter, with mounting FX impacts and the messiness of two recent acquisitions, we don't necessarily see Q2 as a compelling catalyst (rather we like the current price levels)," he writes.

They are telling investors to be patient.

 "Nonetheless, we continue to see CRM as a core long-term holding in the software space. Reiterate Buy and $180 TP [target price]," Eberle writes. 

And they are not alone. Out of 39 analysts tracked by Yahoo finance, the average share price target is is $183.31 and the average rating is buy/strong buy.

SEE ALSO: An Amazon Web Services VP explains why it's been successful in convincing Microsoft customers to jump ship

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We compared the Chase Sapphire Reserve and Amex Gold to determine the ultimate dining rewards card

Mon, 08/12/2019 - 5:45pm

  • The Chase Sapphire Reserve offers generous rewards on dining, but a slate of newcomers have been trying to take its place as the best card for dining.
  • Last fall, the American Express® Gold Card was refreshed with new benefits, including an even better rewards earning rate at restaurants.
  • There are a lot of similarities between the two cards, but also some important differences. Here's what you need to know to decide which is right for you.

When it launched in 2016, the Chase Sapphire Reserve was the king of dining rewards. With 3 points for every dollar spent on dining — which was defined broadly enough to include everything from restaurants to cafés and bars — it was the obvious go-to to maximize points anytime you ate out.

Nearly three years later, the rewards landscape has become more crowded than ever, and the Sapphire Reserve, or "CSR," has some heavy-hitting competition. American Express refreshed its Premier Rewards Gold card, rebranding it the American Express Gold Card.

The two cards bear a lot of similarities: They have hefty annual fees but a handful of benefits and credits to offset it, they earn bonus points on dining, and they both have a handful of valuable ways to redeem points. But there are also a handful of differences, some of which are pretty significant. There's also the Citi Prestige card, which offers an incredible 5x points on dining, but Citi's rewards program is trickier to navigate to get top value.

Chase Sapphire Reserve vs Amex Gold: the biggest differnces

The Sapphire Reserve has a higher annual fee than the Amex Gold ($450 vs $250), but perhaps the biggest difference to consider up top is that they earn different rewards currencies. With the Sapphire Reserve, you'll earn Chase Ultimate Rewards points, while with the Amex Gold you'll earn Amex Membership Rewards points. Travel website The Points Guy values the two points currencies equally: at 2 cents per point. However, the two programs have different airline and hotel transfer partners, so you'll want to investigate which points are the most useful to you.

Both cards earn bonus rewards on select spending categories, and some of them overlap. For example, with the Amex Gold, you'll earn 4x points at restaurants, while you'll earn 3x points on dining with the Sapphire Reserve. The Amex Gold also offers 4x points at US supermarkets (on the first $25,000 spent each year; then 1x), and supermarkets aren't included in the Sapphire Reserve's dining category.

Another difference between the Sapphire Reserve and Amex Gold is the type of statement credits you'll get each year as a cardholder. On the Sapphire Reserve, you'll get an annual $300 travel credit that automatically applies to eligible purchases, while the Amex Gold offers an airline incidental fee credit and up to $10 in statement credits toward eligible dining purchases each month. 

With that in mind, which card — the Sapphire Reserve or Amex Gold — is best for you? Read on to find out.

Keep in mind that we're focusing on the rewards and perks that make these cards great options, not things like interest rates and late fees, which can far outweigh the value of any rewards.

When you're working to earn credit card rewards, it's important to practice financial discipline, like paying your balances off in full each month, making payments on time, and not spending more than you can afford to pay back. Basically, treat your credit card like a debit card.

Click here to learn more about the Chase Sapphire Reserve from Business Insider's partner The Points Guy. Click here to learn more about the American Express Gold Card from Business Insider's partner The Points Guy.

SEE ALSO: The best credit card rewards, bonuses, and benefits of 2019

The annual fees — and the credits that offset them

Both the Chase Sapphire Reserve and the Amex Gold have hefty annual fees — the Sapphire Reserve is $450, and the Amex Gold is $250.

However, both cards offer a few annual statement credits on purchases that — if you would have made those purchases anyway — significantly offset the fees.

The Sapphire Reserve comes with a straightforward and easy-to-use $300 travel credit. The first $300 you spend on travel-related purchases every cardmember year is credited back to your account. The "travel" category is expansive, including everything from subways, taxis, parking, and tolls to airfare and hotels.

When you subtract that credit from the annual fee, the Sapphire Reserve only costs $150 per year.

The Amex Gold has two different statement credits.

The first is up to $120 each year in dining credits, broken into monthly $10 portions. These credits only apply to a few participating chain restaurants — specifically Cheesecake Factory, Ruth's Chris Steak House, and some Shake Shack locations — but they also apply to popular food ordering services GrubHub and Seamless. The credits apply automatically to any qualifying purchase.

The Amex Gold also offers up to $100 in airline fee credits each calendar year. Every January, you pick one airline for that credit to apply toward. While the credit doesn't cover tickets, it covers incidental fees like checked bags, seat assignments on basic economy tickets, change fees, and more. Sometimes you can even be reimbursed for airline gift cards that you can apply toward tickets, even though this is an unpublished benefit — do some Googling to see whether that works on your airline of choice.

Assuming you take full advantage of both credits, the effective annual fee for the Amex Gold is just $30.

Rewards: The earning on both cards is substantial

The Chase Sapphire Reserve earns 3 points per dollar spent on every dining or travel purchase (except for the first $300 of travel each year that is covered by the travel credit).

Both categories are broadly defined: Dining includes things like bars, cafes, restaurants, food trucks and booths, pubs, and in many cases, bakeries or ice cream shops. Travel, meanwhile includes everything from subways, taxis and Ubers, parking, and tolls, to flights, hotels, cruises, and more.

Travel website (and Business Insider e-commerce partner) The Points Guy subjectively values Chase Ultimate Rewards points at 2¢ each (more on that later), meaning you'd earn about 6% of value back on every dollar you spend.

The Amex Gold Card offers a higher 4 points per dollar spent at restaurants, as well as 4x points at US supermarkets (on up to $25,000 per year — 1 point per dollar for anything beyond that) and 3 points per dollar on flights booked directly with the airline or with Amex Travel.

The Amex card's restaurant category is similarly broad as the Sapphire Reserve's — I've gotten the category bonus at restaurants, bars, pubs, and cafes. The supermarket category excludes big box stores where you might buy groceries, like Target or Walmart, but includes most dedicated US supermarkets.

The Points Guy also subjectively values Amex Membership Rewards points at 2¢ each, so going by that metric, you get a huge 8% of value back from the Gold Card — beating the Sapphire Reserve.

The travel category is much more restrictive. If your spending is more split between travel and dining, you may be better off with the Reserve. There may also be room in your wallet for both, especially considering that the Amex Gold's effective annual fee is so low.

Welcome bonuses: Earn a lot of points right away.

When you sign up for the Chase Sapphire Reserve you can get 50,000 bonus points when you spend $4,000 in the first three months — assuming you haven't opened a Sapphire-branded card in the past four years.

That bonus is worth $500 as cash back, $750 when used to purchase travel through Chase's booking portal, or potentially more when you transfer it to airline partners to book flights — more on all of that in a moment. Using The Points Guy's general valuation, which is a subjective aggregate of the realistic potential values you can get from points, it would be worth about $1,000.

The Amex Gold Card offers 35,000 points when you spend $2,000 in your first three months with your new card.

The Gold has a lower bonus, but also a lower spending requirement to earn it. The higher earning rate on restaurants, plus the rate at US supermarkets, might make up for that.

The value Amex offers when you use points for cash back is poor, although you can get around $350 toward flights if you book through Amex travel, but potentially more by transferring to airline partners. Based on The Points Guy's valuation, that's about $700 in value.

There are a ton of different ways to use your points

Chase offers a few different ways to use Ultimate Rewards points

You can use them to make purchases at a handful of retailers like Amazon or Apple, or for gift cards, but since you usually get less than 1¢ per point of value, this isn't advisable.

If you're set on using them for purchases, a better option is to just redeem them for cash back. Each point is worth 1¢, so 1,000 points = $10.

A better option: Book travel through Chase using your points. Normally, each point is worth 1¢ towards travel booked through Chase, but Sapphire Reserve cardholders get a 50% bonus — that makes them worth 1.5¢ each. Redeeming them this way, the 50,000-point sign-up bonus is worth $750.

However, the best option — potentially — is to transfer them to airline frequent flyer partners and book flights that way. You might be able to get a dramatically higher value for points this way.

That's because booking frequent flyer "award tickets" is different than buying reservations outright — you can read more about how it works here. In most cases, the cash price and the miles price of a ticket aren't linked, so it's possible to get exponentially increased value from your points by transferring them and booking an award ticket instead.

That means potentially being able to fly long-haul in first or business class with points, among other things.

For example, my wife and I recently flew first class to Japan and back by transferring credit card points to Virgin Atlantic, then booking flights on Virgin's partner airline All Nippon Airways. You can read about exactly how we booked the flights here.

The only catch is that you may need to search for saver availability — which are lower-priced award tickets. This can be tricky, but there are a ton of helpful guides online. Once you have a flight in mind, if you're having trouble figuring out how best to use your points, just do a Google search for that specific trip.

Chase partners with a few airlines (and hotels), including: Aer Lingus, Air France/KLM, British Airways, Iberia, JetBlue, Singapore Airlines, Southwest Airlines, United Airlines, Virgin Atlantic, Hyatt, Marriott, and IHG. By taking advantage of airline partnerships, you can usually find a way to book any flight at the saver level, even if that airline isn't listed.

Amex similarly offers a few ways to use Membership Rewards points.

Redeeming for anything aside from travel offers a poor value, usually 0.5–0.8¢ each, and is generally a poor use of points.

Like with Chase, you can get a better value by booking travel through AmEx Travel, either online or by phone. However, unlike with the Sapphire Reserve, there's no bonus. Points are only worth 1¢ each towards flights, or 0.7¢ each towards anything else.

Another option is to use points to bid for upgrades on a flight. You'll only get 1¢ per point, but it can be a decent redemption if you want to try for an upgrade but don't want to pay cash.

The best use — like with Chase, again — is to transfer them to frequent flyer partners. AmEx has a different list of partners, although thanks to some overlapping partners you can pool points from each issuer's cards into those airlines' accounts.

AmEx's partners include: Aer Lingus, AeroMexico, Air Canada, Air France/KLM, Alitalia, ANA, Cathay Pacific, Avianca, British Airways, Delta, El Al, Emirates, Etihad, Iberia, Hawaiian Airlines, JetBlue, Singapore Airlines, and Virgin Atlantic, as well as Choice Hotels, Hilton, and Marriott.

Click here to learn more about the Chase Sapphire Reserve from Business Insider's partner: The Points Guy. Click here to learn more about the American Express Gold Card from Business Insider's partner: The Points Guy.

Other benefits and perks

Both cards come with a few other benefits, too.

The Sapphire Reserve comes with a complimentary Priority Pass Select membership, which gets you free access to more than 1,200 airport lounges around the world. While the Platinum Card® from American Express is the absolute best option for airport lounges within the US, the Sapphire Reserve is still incredibly useful.

It also offers a statement credit up to $100 every four years to cover your application fee for Global Entry or TSA PreCheck, primary rental car insurance, trip and baggage delay coverage, travel insurance, and more. You can learn more about the other benefits here.

The Amex Gold Card features a few additional benefits as well, including baggage and travel insurance, secondary rental car insurance, roadside assistance, and shopping protections. You also get a complimentary membership with ShopRunner, a service that gives you free two-day shipping at a wide range of online retailers. It works like Amazon Prime in a lot of ways, but outside of Amazon. You can learn more about the card's other benefits here

Other cards to consider

By redeeming strategically for flights — whether in economy and in first or business class — you can get much more value from a transferable points credit card than you could from a cash back card.

However, if you're not interested in points or travel and want to consider cash back instead, there are two stellar options for dining.

First is the Capital One Savor Cash Rewards Credit Card. The card offers unlimited 4% cash back on dining and entertainment, 2% at grocery stores, and 1% back on everything else. It also offers 8% back on tickets purchased at Vivid Seats through May 2020, and a monthly statement credit to cover a Postmates Unlimited membership through December of this year.

Plus, the card offers a massive $500 cash sign-up bonus when you spend $3,000 in the first three months. All of that is even more impressive considering that the card has an annual fee of just $95.

Next is the Wells Fargo Propel American Express® Card. The card earns 3x points — each worth 1¢, so effectively 3% cash back — on dining, most travel and transit, and 1x (or 1%) on everything else. It's a bit less on the dining category than the Savor card, but the Wells Fargo Propel has no annual fee.

Plus, the Propel offers a welcome bonus of 30,000 points — worth $300 as cash back — when you spend $3,000 in the first three months. This is one of the best-available bonuses for a no-annual-fee card, and led us to argue that the Wells Fargo Propel is one of the best credit cards of 2019.



Bottom line

No matter which card you choose, both the Chase Sapphire Reserve and the American Express Gold Card offer valuable rewards on dining and flights, and a ton of value in benefits.

Click here to learn more about the Chase Sapphire Reserve from Business Insider's partner: The Points Guy. Click here to learn more about the American Express Gold Card from Business Insider's partner: The Points Guy.

The digital trends disrupting the banking industry in 2019

Mon, 08/12/2019 - 5:25pm
  • Business Insider Intelligence is launching its brand new Banking coverage in early September.
  • To obtain a free preview of our Banking Briefing, please click here.
Banking Industry Overview

The banking industry is in a much healthier place now than it was after the financial crisis of 2008. Total global assets climbed to $124 trillion in 2018, according to The Banker's Top 1000 World Banks Ranking for 2018. 

With so much money to manage, major banks such as JPMorgan Chase, Bank of America, Wells Fargo, and more are releasing new features to attract new customers and retain their existing ones. On top of that, startups and neobanks with disruptive technologies are breaking into the scene, and traditional banks are either competing with them or merging with them to improve their service.

So let's dive into the banking industry, the challenges it faces, and the road ahead.

Banking Industry Trends

The most prevalent trend in the banking industry today is the shift to digital, specifically mobile and online banking (more on each of those in a bit). In today's era of unprecedented convenience and speed, consumers don't want to have to trek to a physical bank branch to handle their transactions. This is especially true of Millennials and the older members of Gen Z, who have started to become the dominant players in the workforce (and the biggest earners).

This digital transformation has led to increased competition from tech startups, as well as consolidation of smaller banks and startups. In 2018, overall fintech funding hit $32.6 billion by the end of Q3, up 82% from 2017's total figure of $17.9 billion, according to CB Insights. 

Mobile Banking

To be frank, mobile banking is all but a requirement for consumers at this point. In Business Insider Intelligence's Mobile Banking Competitive Edge Study in 2018, 89% of respondents said they use mobile banking, up from 83% in 2017.

When broken down by generation, 97% of millennials use it (up from 92% in 2017)  91% of Gen Xers (up from 86%) and 79% of Baby Boomers (up from 69%). Critically for the banks themselves, 64% of mobile banking users said that they would research a bank's mobile capabilities before opening an account, and 61% say they would change banks if their bank offered a poor mobile banking experience.

But we've now reached the point where simply having a mobile app isn't enough for banks to attract and keep customers. Additional tools and features – such as the ability to put temporary holds on cards, view recurring charges, or scanning a fingerprint to log into an account –  are becoming increasingly necessary. Take a look at the chart to the right to see how valuable these features and more are to consumers.

Online Banking

Online banking is extremely convenient, and is understandably one of the two main ways that consumers interact with their banks (along with mobile banking). But there is still a significant contingent of banking customers who want physical branches.

Despite an overwhelming reliance on digital banking channels overall, and the resulting decline in branch visits, consumers have maintained a preference for depositing checks in-branch, according to a recent Fiserv study. More than half (53%) of respondents said their top reason for visiting a branch in the past month was to deposit a check, compared with 41% who went to withdraw cash, and 36% who went to deposit cash.

Still, there's no denying the rising prevalence of online banking, which has led to other innovations such as open banking. This system, implemented in the U.K., involves sharing customers' financial information electronically and securely, but only under conditions that customers approve.

Open banking forces lenders to offer a digital "fire hose" of data that any third party can use to get standardized access — provided the startup is registered with the UK Financial Conduct Authority (FCA) and the customer agrees to share their data.

Investment Banking

Investment banking is a type of financial service in which a person or company advises individuals, businesses, or even governments on how and where to invest their money. For decades, this has been a human-to-human process that led to a mutually beneficial relationship.

But now, with the rise of robo-advisors, artificial intelligence (AI) is starting to infiltrate the money management space. Predictive analytics can help investors make wiser and more profitable decisions before the market moves. AI can, in some cases, also help identify M&A targets. Lastly, AI can help validate an investment banker's hypothesis and lead to more informed future decisions.

Banking as a Service (BaaS)

Because of tight regulations (particularly in the U.S.), not everyone can just open a bank. This is where banking as a service (BaaS) comes in to fill the gap.

BaaS platforms enable fintechs and other third parties to connect with banks' systems via APIs to build banking offerings on top of the providers' regulated infrastructure. So, launching BaaS platforms helps banks benefit from fintechs entering the finance space, as it turns them into customers rather than just competitors.

While BaaS technically falls under the umbrella of open banking, it shouldn't be confused with the aforementioned Open Banking system in the U.K.  Open banking encompasses all actions in which a bank opens its APIs to third parties and gives those players access to data or functionality. The UK's Open Banking focuses on providing third parties with data from incumbent banks, while BaaS looks at how these players can get access to banks' services.

Banking Regulations

Banking is involved in almost every aspect of American life, from consumers to businesses to stocks. Because of this, the federal government has instituted numerous regulations on the banking industry, though the severity of those restrictions has waxed and waned in the last decade.

After the financial crisis of 2008, the Obama administration enacted the Dodd–Frank Wall Street Reform and Consumer Protection Act in 2010. Dodd-Frank overhauled the U.S. financial regulation system in the aftermath of the crash. The most sweeping and impactful changes from the act included:

  • The elimination of the Office of Thrift Supervision
  • The creation of the Consumer Financial Protection Bureau (CFPB) to protect consumers against abuses and unfair practices tied financial services and products such as credit cards and mortgages
  • The reassignment of responsibilities for agencies such as the Federal Deposit Insurance Corporation
  • The creation of the Financial Stability Oversight Council and the Office of Financial Research to analyze potential threats to U.S. financial stability
  • The expansion of the Federal Reserve's powers to regulate particular institutions

In 2018, current President Donald Trump signed into law the Economic Growth, Regulatory Relief and Consumer Protection Act (EGRRCPA), which rolled back some of the Dodd-Frank changes. Specifically, EGRRCPA raised the threshold under which the federal government deems banks too important to the financial system to fail from $50 billion to $250 billion.

It also eliminated the Volcker Rule (a federal regulation that largely forbade banks from conducting particular investment activities with their own accounts and restricted their dealings with hedge funds and private equity funds) for small banks with less than $10 billion in assets.

Despite the rollbacks, it's still difficult in the U.S. to get a banking license, which has hampered some banking startups. On the other hand, this has increased mergers and acquisitions activity. As a result, regulation will be a key focal point for the banking industry in the coming years.

Banking Industry Analysis

With so many different facets of the banking industry undergoing change, it's crucial for those connected to the banking industry to be informed and stay ahead. That's why Business Insider Intelligence is launching Banking, our latest research coverage area, to keep you up to date on the latest banking trends and shakeups.

Click here to obtain an exclusive FREE preview of Banking!

Join the conversation about this story »

Capital One Savor card review: a strong option for cash back on dining and entertainment

Mon, 08/12/2019 - 5:05pm

  • An industry-high 4% cash back on dining and entertainment makes the Capital One Savor Cash Rewards Credit Card one of the highest earning cards for those who spend a lot on food.
  • Benefits are redeemable in cash, giving greater flexibility over point systems.
  • New card members get a $300 sign-up bonus after spending $3,000 in the first three months, and $0 annual fee for the first year.  
  • Read on for the full Savor card review and to see how much the average American saves using this card.

There's a general rule when evaluating which rewards credit cards are right for you, and that's how do you earn rewards and how do you "burn," or spend, them. While some rewards cards benefit travelers or small business owners, the Capital One Savor benefits virtually anyone who goes out to eat — with a whopping 4% back on dining and entertainment, earned in straight cash.

Capital One Savor Cash Rewards Card details

Annual fee: $95 (waived the first year)

Sign-up bonus: $300 back after you spend $3,000 on purchases in the first three months

Cash-back earning: 4% back on dining and entertainment, 2% at grocery stores, and 1% back on all other purchases

Foreign transaction fee: None

Learn more: The best cash-back credit cards

How much will I save with the Savor card?

When looking for credit card rewards programs, many people have a deserved skepticism when it comes vague terms — as often times deals can sound much better in theory than their restrictions make them in actuality. However in the case of the Capital One Savor, the 4% earned at "dining" truly means anywhere you'd go out to eat — restaurants, cafes, bars, lounges, fast-food chains, and bakeries.

In the same vein, virtually anything you'd consider as entertainment outside your house — including movies, plays, concerts, sporting events, tourist attractions, or theme parks — all qualify for the high 4% cash-back bracket. Additionally, the card earns 2% at grocery stores and 1% on everything else, making it an excellent all-around spending card.

Based on existing data, by using this card the average 35- to 54-year-old American would be earning $168 a year back on dining, $101 for groceries — and for those who go to sports games and concerts, and additional $108 on venue admissions.The combined $377 a year in cash back is absolutely worth it in the first year when there is no annual fee, and still worth $282 after the fee kicks in.

Sign-up bonus

In addition to the cash back on spending, the Capital One Savor has a nice $300 sign-up bonus when you spend $3,000 or more in the first three months from opening the card. The cash doesn't expire for the life of the account, and there's no limit on how much you can earn.

Get access to even more events

The Capital One Savor Rewards card also offers exclusive premium access to a variety of events, including VIP packages to sports games and concerts, and access to curate chef collaborations.

These aren't just vague small name events either. A list of previous and upcoming experiences include discounts of up to 10% for Washington Capitals and Wizards games, presales to the iHeartRadio Jingle Ball festival, and exclusive access to the Food Channel's Wine and Food Festival.

Additional Savor card benefits

In addition to cash back, the Capital One Savor card has many of the travel and warranty services associated with all Capital One cards, including:

  • Extended warranty — The Capital One Savor extends warranties for many items with manufacturer warranties of less than three years, and for less than $10,000.
  • Auto rental collision damage waiver — Get automatic collision damage on rental cars when making the entire booking on your Savor card.
  • Travel accident insurance — Get coverage up to $100,000 on medical expenses in the case of accidents that occur while on a trip booked through your Savor card.
  • 24-hour travel assistance — If you lose your card while traveling, Capital One will immediately send you an emergency card with a cash advance.
The bottom line

The Capital One Savor Cash Rewards Credit Card card is a simple and straightforward card, ideal for those who enjoy spending while out, and having their rewards in the form of cash, instead of travel or hotel points.

The 4% cash back on dining and events is as high as we've seen, and Capital One has very fair interpretations as to what constitute those categories. Even average American spending habits justify the $95 annual fee, and the waived annual fee in the first year along with a $300 sign-up bonus make it an enticing card to open.

Click here to learn more about the Capital One Savor Cash Rewards card from our partner The Points Guy.

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2 US senators wrote a letter to Jeff Bezos demanding answers about how Amazon recommends products (AMZN)

Mon, 08/12/2019 - 5:04pm

  • Two United States senators have written a letter to Amazon CEO Jeff Bezos questioning how the online retailer decides which products receive its "Amazon's Choice" recommendation.
  • In the letter, senators Bob Menendez (D-NJ) and Richard Blumenthal (D-Conn.) express concerns over whether Amazon is promoting inferior products through its use of this "Amazon's Choice" badge. 
  • The letter comes as large tech firms like Amazon have come under scrutiny regarding their size and influence and how that impacts competition in the industry.
  • Visit Business Insider's homepage for more stories.

Two United States senators have written a letter to Amazon CEO Jeff Bezos seeking answers about how Amazon chooses which products to stamp with its "Amazon's Choice" recommendation. 

In the letter, which CNBC reported earlier, senators Bob Menendez (D-NJ) and Richard Blumenthal (D-Conn.) express concerns about whether the "Amazon's Choice" badge is motivating consumers to purchase inferior products. For example, the letter cites an infant thermometer that had been marked with the "Amazon's Choice" badge but actually couldn't measure temperature accurately, according to customer reviews. 

"Amazon bears the responsibility of providing its customers with accurate information to ensure they can make informed purchasing decisions," Menendez and Blumenthal write in the letter. "Unfortunately, Amazon has failed to fulfill this responsibility with its use of the 'Amazon's Choice' badge. We are concerned the badge is assigned in an arbitrary manner, or worse, based on fraudulent product reviews." 

Menendez and Blumenthal list a series of questions about Amazon's methodology for issuing the "Amazon's Choice" badge, such as whether or not the firm uses an algorithm to make the decision, whether employees personally review products that receive the badge, and what steps Amazon has recently taken to remove phony product reviews.

Read more: Amazon sells a $24,000 tiny home that expands with the click of a remote — here's what it looks like inside

An Amazon spokesperson said in a statement to Business Insider that it uses investigators and automated technology to prevent and detect fake reviews at scale. Amazon's full comment reads as follows:

Amazon invests significant resources to protect the integrity of reviews in our store because we know customers value the insights and experiences shared by fellow shoppers. Even one inauthentic review is one too many. We have clear participation guidelines for both reviewers and selling partners and we suspend, ban, and take legal action on those who violate our policies.
We use a combination of teams of investigators and automated technology to prevent and detect inauthentic reviews at scale, and to take action against the bad actors behind the abuse. We estimate more than 90% of inauthentic reviews are computer generated, and we use machine learning technology to analyze all incoming and existing reviews 24/7 and block or remove inauthentic reviews. Our team investigates suspect reviews, works with social media sites to stop inauthentic reviews at the source, pursues legal action to stop offenders  from planning reviews abuse, and feeds new information into our automated systems so it continues to improve and become more effective in catching abuse. 
We work hard to enrich the shopping experience for our customers and selling partners with authentic reviews written by real customers. Customers can help by reporting any requests they get to manipulate reviews to customer service. 

The letter comes as Amazon and other large tech companies including Google, Facebook, and Apple have come under increased scrutiny over their size and influence in their respective markets. Less than a month ago, the Department of Justice announced that it would launch a broad probe into market-leading online companies in the search, social media, and e-commerce spaces. Although the announcement didn't name companies specifically, Facebook, Amazon, Google parent Alphabet, and Apple are believed to be the subject of the investigation. 

It also comes after executives from Amazon, Google, Apple, and Facebook were grilled about the impact their respective companies have on innovation in the tech industry and whether these companies are using their size and scale to wield unfair advantages. Representative David N. Cicilline, Chairman of the House Antitrust Subcommittee, questioned Amazon associate general counsel Nate Sutton over whether Amazon uses the data it gathers about third-party sellers to inform its own product strategy. Back in 2016, Amazon also found itself embroiled in controversy after a ProPublica report accused the online retailer of using algorithms to favor itself over sellers. 

While Bezos didn't directly address the discussion around whether tech firms like his own have grown too powerful in his letter to shareholders from April, he positioned Amazon as a "small player" in the worldwide retail space. He highlighted the success that small and medium-sized businesses have experienced on his platform, potentially an effort to combat the narrative that Amazon and other tech giants are harming innovation. 

SEE ALSO: Jeff Bezos just sold almost $3 billion worth of Amazon shares — here's our best guess at why

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A gun-free Vanguard fund unwittingly included gun stocks for a month

Mon, 08/12/2019 - 4:41pm

  • A Vanguard exchange-traded fund focused on socially responsible investing bought shares of a gunmaker after its underlying benchmark included them mistakenly, Bloomberg reported.
  • The mistake happened during the index's rebalancing in June, according to Bloomberg. 
  • Vanguard and the holder of the index fixed the mistake and notified clients right away, Bloomberg reported.
  • Read more on Markets Insider.

Investors looking to put money into companies that align with their values may need to take a more active approach to investing.

Vanguard Group's largest sustainable exchange-traded fund bought shares of gun maker Sturm Ruger after they were mistakenly included in the benchmark it tracks, Bloomberg news reported. The ETF held the shares for more than a month, according to Bloomberg. 

The Vanguard US ESG Stock ETF was developed to give investors an investment vehicle for socially responsible investing. It was benchmarked to the FTSE Russell US All Cap Choice index, which screened US stocks by specific environmental, social and governance criteria.

According to FTSE Russell, the index excludes companies involved in non-renewable energy, vice products like adult entertainment, alcohol, gambling and tobacco, as well as weapons. 

The FTSE Russell index was rebalanced in June, and accidentally included 11 stocks in the benchmark that didn't fit the ESG parameters. The Sturm Ruger purchase, which was 219 shares worth about $9,000, was one of the stocks, Bloomberg found. FTSE Russell said the stocks were "inadvertently included" and that clients were told right away when the mistake was fixed.

"Though the exposure to these holdings was very modest, we regret that the error occurred and apologize to shareholders," Vanguard spokesman Freddy Martino said in a statement to Bloomberg.

While such rebalancing mistakes happen on occasion, this one was particularly stark compared to the mandate of the fund, according to Bloomberg.

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Capri Holdings slides after Donatella Versace apologizes to China for selling T-shirts listing Hong Kong as a separate country (CPRI)

Mon, 08/12/2019 - 4:36pm

  • Shares of Versace parent Capri Holdings sank Monday for a second straight session following backlash over a T-shirt that appeared to list Hong Kong as a country independent from China.
  • Donatella Versace, the brand's chief creative officer, apologized Sunday in a signed tweet.
  • It all happened amid intense protests in Hong Kong as the city fights for independence from China.
  • Watch Capri Holdings trade live on Markets Insider.

The luxury brand Versace sparked anger in China for selling a T-shirt that listed Hong Kong as a separate country.

The backlash helped send shares of Capri Holdings, its parent company, down 5% Friday, erasing gains from the company's first-quarter earnings beat Wednesday.

On Monday, shares of Capri Holdings fell by as much as 5% after Donatella Versace issued an apology for the gaffe with a signed tweet.

"Never have I wanted to disrespect China's national sovereignty and this is why I wanted to personally apologize for such inaccuracy and for any distress that it might have caused," the tweet on Sunday said.

The T-shirt in question was recalled in July, and unsold shirts have been destroyed, the company said.

The controversy comes at a time when tensions between Beijing and Hong Kong are high as the city calls for independence from the Chinese government.

Protests have been ongoing for more than 10 weeks and have escalated recently.

On Monday authorities at Hong Kong International Airport stopped all flights as protesters occupied the premises for a fourth day. Shares of Cathay Pacific sank as much as 4.9% to decade lows after China demanded the airline prohibit protesting employees from flying to the mainland.

Michael Kors Holdings acquired Versace at the end of 2018 for more than $2.1 billion and changed its name to Capri Holdings. The luxury brand joined Jimmy Choo and Michael Kors in the Capri Holdings portfolio.

Shares of Capri Holdings are down 25% year to date.

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Verizon is selling Tumblr to the owner of WordPress, and it sounds like the sale price is about 2% of the $1 billion Tumblr was once worth (VZ)

Mon, 08/12/2019 - 4:30pm

  • Verizon is selling blogging site Tumblr to Automattic, the parent company of other blogging site WordPress, the companies announced on Monday.
  • The financial terms of the deal were not announced, but according to Axios, the price was less than $20 million — a remarkable discount to the $1.1 billion that Tumblr sold for in 2013.
  • Automaticc will take on 200 Tumblr employees as part of the deal.
  • Visit Business Insider's homepage for more stories.

Verizon is selling blogging site Tumblr to Automattic, the parent company of publishing site WordPress, the companies announced on Monday.

The financial terms of the acquisition were not disclosed, though a source told Axios the price was "well below $20 million" — an astounding discount to the $1.1 billion that Tumblr fetched when Yahoo acquired it in 2013.

Automattic will take on 200 Tumblr employees as part of its deal with Verizon.

Read More: On-demand food delivery app Postmates is set to unveil its IPO filing in September

The deal marks the latest change of ownership for Tumblr, a social-media infused blogging platform that at one time ranked among the web's hottest properties. Launched in New York in 2007 by web enterpreneur David Karp, Tumblr quickly became popular among artists and writers for its niche culture and easy-to-use services. 

Automaticc CEO Matt Mullenweg said in a statement on Monday that Tumblr, which has 475 million blogs on its service, represents an "iconic" brand known for helping people share ideas, culture and experiences. 

But the fire-sale price of the deal underscored how far Tumblr has fallen from its heyday, and the nearly insurmountable challenges facing consumer web companies trying to mount a comeback. 

Verizon, formerly known as Oath, has been reportedly shopping around for a buyer for Tumblr since May as part of the ongoing restructuring of the media portion of its business that includes HuffPost, AOL, and TechCrunch, among others.

Verizon Media CEO Guru Gowrappan described the Tumblr sale as the "culmination of a thoughtful, thorough and strategic process." 

A billion dollar sale and then a downard spiral

Verizon inherited the popular blogging site through its 2017 acquisition of Yahoo, which had itself acquired Tumblr in 2013.

Yahoo paid a premium price for Tumblr in 2013, hoping Tumblr's younger users could revive the fortunes of its aging web portal. But the $1.1 billion deal was deemed excessive even at the time, given that Tumblr barely generated any revenue. And as Tumblr's popularity faded in the folowing years, as larger sites from Reddit to Facebook proved more adept at attract and retaining traffic, Yahoo was forced to write off hundreds of millions of dollars for its acquistion. 

When Yahoo was swallowed up by Verizon, Tumblr's fate only worsened: Many devoted Tumblr users who turned to the site for its lax rules around hosting adult content were outraged over Verizon's decision to ban all adult content from the site in 2018

Automattic CEO Matt Mullenweg told the Wall Street Journal, which first reported the news of the sale, that he intends to keep the ban in place. 

Automattic oversees several publishing companies in addition to WordPress, including long-form site Longreads, a comment filtering and tracking service, and an avatar generator.

The deal is subject to customary closing conditions.

Join the conversation about this story »

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Uber confirms a hiring freeze in the US and Canada as the ride-hailing giant ramps up cost-cutting efforts (UBER)

Mon, 08/12/2019 - 4:29pm

After burning through more than $5.2 billion in the second-quarter, Uber's third-quarter appears to be marked by significant cost-cutting measures.

The ride-hailing confirmed to Business Insider on Monday that it has temporarily paused hiring for some engineering roles in the United States and Canada. Yahoo Finance first reported the hiring freeze.

"We are continuing to aggressively hire talent, including many engineers, all over the world," a spokesperson said in an email. "In the US and Canada, we were ahead of our hiring plans, so we temporarily hit pause on some teams while we ensure we're being both effective and efficient in staffing against our strategic priorities."

Despite the location-specific hiring pause, more than 1,200 roles are still open on Uber's careers website, including 149 engineering roles.

News of the hiring freeze comes less than a month after Uber laid off 400 marketing roles in offices around the world. In an email to staff, CEO Dara Khosrowshahi said the culling was designed to trim excess from teams that had become bloated in the company's first decade.

Read more: Uber marketing employees describe a 'bloodbath' when the company laid off 400 employees in more than a dozen countries

Last week, Uber reported second-quarter earnings that fell short of investor expectations, sending the stock plummeting as much as 8% Those steep losses extended into Monday, where the stock is a few cents shy of a new all-time low price near $37.

Are you an Uber employee? Got a news tip? Get in touch with this reporter at Secure contact methods, including Signal, are available. here

A previous version of this post misstated for how long hiring has been paused for some roles. The company has not said when hiring may resume. 

More Uber news:

SEE ALSO: Lyft is raising prices — and it's going to hurt when you need it most

Join the conversation about this story »

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If you have credit-card debt, the first step toward saving for retirement is clear, according to one financial planner

Mon, 08/12/2019 - 4:28pm

  • Wondering if you should pay your debt or save for retirement first? If you have high-interest debt, one financial planner says you should pay that first then save for retirement.
  • If you have debt that costs you more than 9% a month in interest and fees, it's smarter to pay down that debt before putting your money toward retirement.
  • That's because the debt is so expensive that it's costing you more than you could earn elsewhere, such as in a savings account or in a retirement account.
  • The exception to this advice is if your employer matches retirement contributions. Then, contribute just enough to get the full match and concentrate the rest of your money on your debt.
  • Visit for more stories.

The sooner you start saving for retirement, the better — unless you have high-interest debt, such as credit-card debt.

"I see many clients with high-interest debt who simply don't realize how much they're paying in finance charges," Ryan Cole, a certified financial planner and private wealth adviser at Citrine Capital in San Francisco, told Business Insider.

Finance charges are the costs of borrowing money, including the interest rate and any fees. While fees can add up, Cole said, it's really the interest rates you want to focus on.

Should you pay your debt or save for retirement first?

If you're paying anything more than a 9% interest rate, Cole said, you should press pause on your retirement savings and focus on paying off your high-interest debt.

Paying down your high-interest debt can give you a guaranteed return because you'll be cutting your interest payments, Cole said. In most cases, he continued, this return is more than you'd earn in a savings account or in the stock market.

Are you on track for retirement? Find out with this calculator from our partners:

Citrine Capital provides a free credit-card interest calculator that can make it clear how much interest rates can cost you over time. "You'll likely be surprised at how much money you're paying," Cole said.

There is an exception to the postpone-retirement-saving-until-you've-paid-your-debt rule, Cole said: If your debt isn't that expensive and your employer provides a 401(k) match.

A 401(k) match is when your employer agrees to "match" a portion of your contributions to an employer-sponsored retirement plan. Experts largely recommend taking advantage if your employer offers one because that match can be considered free money — all you have to do to get it is save money for retirement, money you'd hopefully set aside anyway and that you'll ultimately get to use.

"In the event you find that you're paying less than a 9% interest rate and have access to an employer retirement account with a company match," Cole said. "You may want to put in the minimum to get the company match and allocate the rest of your extra money toward your debt."

If you know you'd like to save for retirement but are buried in high-interest debt, the biggest mistake you can make is prioritizing saving money for retirement over paying off your debt, he said. 

Once you've taken care of your debt, you can begin to prioritize retirement savings. "While it may be tempting to save for retirement while you have high-interest debt, doing so can often do more harm than good," Cole said.

Related coverage from How to Do Everything: Money:

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Uber's stock just hit a record low after last week's disastrous earnings report (UBER)

Mon, 08/12/2019 - 4:24pm

Shares of Uber sank more than 7% to a record low price Monday, closing at $37.01.

The stock's previous bottom of $37.10 was hit May 13, two days after the ride-hailing giant's initial public offering.

Last week, Uber reported second-quarter earnings that fell short of investor expectations and catalyzed a sell-off that sent shares down as much as 10%.

Despite the recent struggles, Wall Street remains bullish on the stock, with many analysts recommending the name as a buy.

"While there are considerable risks in ownership across the space given the intense competition, regulatory issues, and operating pressures, we continue to believe the risk/reward in owning the leader in this space is favorable and we remain Buy-rated," Goldman Sachs' Heath Terry told clients following the company's earnings print.

In this third quarter, Uber has begun a series of cost-cutting measures. In July, the company laid off 400 marketing employees worldwide, followed by a hiring freeze on US- and Canada-based engineering roles.

Read more:Uber marketing employees describe a 'bloodbath' when the company laid off 400 employees in more than a dozen countries

SEE ALSO: Uber confirms a hiring freeze in the US and Canada through the end of the year as the ride-hailing giant ramps up cost-cutting efforts

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The Apple Card is a brilliant move by Apple to keep people shackled to the iPhone (AAPL)

Mon, 08/12/2019 - 4:19pm

  • Apple is entering the credit card business this month with the launch of the first-ever Apple Card.
  • The card works very similarly to other credit cards, with one major difference: It's tied into the Apple ecosystem.
  • Apple's new credit card may be Apple's strongest-ever services tie in with the iPhone. If switching to an Android phone means changing credit cards, are you still going to do it?
  • Visit Business Insider's homepage for more stories.

Apple's latest product is unlike anything the company has done before — the Apple Card is a Goldman Sachs-backed credit card that's issued by Mastercard.

This is the same Apple that makes your iPhone, and the same Apple that's been making computers since the late '70s. But now, in 2019, Apple is getting into the credit card business.

Like me, you might be wondering why. It turns out the reason is obvious: Like everything else Apple does, it's about selling iPhones. Here's why:

SEE ALSO: Apple's new credit card, the Apple Card, is available now — here's how it works

Apple Card is an all metal rectangle that looks exactly what you'd expect a credit card from Apple to look like:

The physical Apple Card is, essentially, an analog extension of Apple Pay — the service that allows you to connect your debit and credit cards to your iPhone so you can pay for things without getting out your wallet. 

"If you find a place that doesn't take Apple Pay yet, there's this," Apple's website about the card says above a graphic of the "titanium, laser-etched" rectangle.

You don't need to get a physical card from Apple if you sign up for an Apple Card, but it's a free option when you sign up.

Most importantly of all, Apple Card can only be used if you have an iPhone.

Regardless of whether or not you want a physical credit card from Apple, the only way to sign up for and use an Apple Card is by owning an iPhone.

It's not just that Apple is making the card — an iPhone is outright required just to sign up.

Allow me to be all the way clear here: The only people who can sign up for and use an Apple Card are iPhone owners. 

It's a choice that hard limits the potential number of Apple Card users to the percentage of the population who use iPhones, yes, but Apple isn't making the credit card to compete with other credit cards: It exists to keep people locked to the iPhone.

The Apple Card is intended to keep you locked to Apple's ecosystem.

Do you pay for Apple Music? iCloud? Have you ever bought something on iTunes, or on the App Store? Or maybe you're an iMessage user?

These services are foundational to Apple's ecosystem, and they're critically important for keeping people locked to the iPhone. 

Any iPhone owner who's ever considered switching to Android has no doubt thought about these services. "But what about all the stuff I bought on the App Store?" you might wonder. That stuff doesn't come with you to Android — it stays tied to your iOS account — and that might be enough to keep you from making the switch.

Now try to imagine how you'd feel if switching from iPhone to Android meant abandoning a credit card. This is the entire point of the card's existence: It's the latest hook from Apple that's intended to keep you within Apple's ecosystem, continuing to buy and use iPhones.

The Apple Card is a brilliant business move in an era where switching phones is easier than ever.

In an era where the baseline iPhone costs $1,000, Google sells a $400 competitor, and Samsung has a fleet of gorgeous smartphones, there are more reasons than ever to jump from iPhone to Android.

Apple is keenly aware of this, and declining iPhone sales demonstrate that reality. As such, Apple Card is a strong move by the company to retain the 900 million-some iPhone users it already has.

Though Apple already has several strong hooks for existing iPhone users in services like Apple Music and iMessage, the Apple Card is its strongest hook yet.

The Apple Card is an aspirational luxury item that makes perfect sense for iPhone owners.

Why is the Apple Card made of titanium, and why does it have your name laser-etched on its front? Because it's premium, just like everything else Apple does.

The Apple Card, like the American Express Centurion card before it (aka the "black card"), is intended to demonstrate wealth. It's the credit card equivalent of driving a Ferrari, just as having the latest iPhone is the phone equivalent of driving a Ferrari.

For most credit card users, the Apple Card doesn't really compete with existing credit card programs. Its benefits are meager, and its APR is a relatively standard range.

As The Points Guy's Jason Steele wrote earlier this month, "If you don't have an iPhone, or if you're less interested in its unique features like the card design and Touch ID integration, you have plenty of other strong credit card options, from no-annual-fee cards that can help you build credit like the Petal Card to compelling cash-back options like the Capital One Savor."

Simply put: There are better credit card options out there. But that's not really the point of a card like Apple Card, is it? 

Stocks slide as unrest in Hong Kong shakes already-rattled investors

Mon, 08/12/2019 - 4:18pm

Stocks fell on Monday as flaring political unrest in Hong Kong rocked markets already fragile from a deteriorating outlook for a US-China trade deal. 

Hong Kong's airport was forced to cancel more than 100 flights on Monday after thousands of demonstrators clogged departure and arrival halls preventing passengers from boarding any planes.

The demonstration follows weeks of protests throughout the city that were sparked by an extradition bill introduced earlier this year. Chinese authorities have warned that the unrest could send Hong Kong into a recession and said that the city is at a "critical juncture."

Adding to the concerns of a global recession, Argentina's currency and equities fell after the country's incumbent president suffered an unexpected defeat in primary presidential elections. 

Bond yields fell as investors fled equities for the relative safety of haven assets amid growing concerns of global economic slowdown. The yield on the 10-year treasury fell almost 10 basis points to 1.65%. 

Here's a look at the major indexes as of the 4 p.m. close on Monday: 

The US budget deficit so far in 2019 has already grown larger than the entire deficit for last year. The gap between federal expenditures and government income increased 27% in July from the same period last year, bringing the total deficit to $867 billion for the first ten months of the 2019 fiscal year. 

Shares of cannabis producer CannTrust fell as much as 25% on Monday after Health Canada rated one of its facilities in Vaughan, Ontario non-compliant. The company's stock tumbled as much as 5% last Friday after KPMG, its auditor, withdrew its most recent quarterly and full-year results over 

Shares of Cathay Pacific slid as much as 4.9% to a decade low on Monday after China demanded the airline prevent protesting employees from flying to the mainland. Cathay Pacific, Hong Kong's dominant airline, received a letter on Friday from China's civil aviation agency asking the company to share information on crew members flying to China. 

Within the S&P 500, these were the largest gainers:

And the largest decliners:

Every sector within the S&P 500 declined on Monday. Financial stocks took the biggest hit, with consumer discretionary shares also falling.

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The Future of Payments 2018

Sun, 08/11/2019 - 9:01pm

The payments industry is transforming.

Noncash payments methods are quickly becoming the norm.

Business Insider Intelligence projects digital payments to continue to grow through 2023 and beyond.

This shift has created a battle between incumbents and startups vying to become the leaders of the future of payments.

While incumbents have massive scale to lean on, startups typically offer a much friendlier user experience. Whoever can master both first will win the battle.

That will require navigating four key digital transformations: diversification, consolidation and collaboration, data protection and automation.

In this FREE section of The Future of Payments 2018 slide deck from Business Insider Intelligence, we look at the first key digital transformation: diversification.

Subscribe to Business Insider Intelligence today for full access to the complete deck.

As an added bonus to this FREE section, you will gain immediate access to our exclusive BI Intelligence Daily newsletter.

To get your copy of this free slide deck, click here.

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