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Lemonade, a tech-driven insurance company, soars 132% in trading debut (LMND)

Thu, 07/02/2020 - 2:36pm  |  Clusterstock

  • Lemonade, a tech-driven insurance company backed by SoftBank, soared 132% in its trading debut on Thursday.
  • The company had set its IPO price at $29, representing a market valuation of $1.6 billion.
  • It was valued at $2.1 billion in its 2019 funding round.
  • Lemonade raised $319 million in its IPO.
  • Visit Business Insider's homepage for more stories.

Investors turned lemons into lemonade on Thursday as they bid up shares of Lemonade, a tech-driven insurance company, more than 130% in its trading debut.

Lemonade, which is backed by SoftBank, focuses on digitizing the process of obtaining homeowners and renters insurance.

In late June, it priced its initial public offering at a range of $23 to $26. Lemonade later raised its IPO price and went public at $29 per share, which was also above the expected range of $26 to $28 from early Thursday morning, signaling that investors are hungry for technology companies.

Read more: The No. 1-ranked tech analyst on Wall Street says these 6 stocks have potential for huge gains as they transform the sector

The IPO raised $319 million for the tech company and valued it at $1.6 billion. It was valued at $2.1 billion in its 2019 funding round, representing a 23% decline.

Lemonade began trading at 11:34 a.m. and opened at $50.06.

At its peak on Thursday, Lemonade stock traded up as much as 132%, at $67.46, representing a market valuation of $3.7 billion, well ahead of its 2019 funding round.

Read more: Cathie Wood's firm built 3 of the world's best ETFs, which all doubled in value within 3 years. She told us her 3-part process for spotting underappreciated technologies before they explode.

Join the conversation about this story »

NOW WATCH: What makes 'Parasite' so shocking is the twist that happens in a 10-minute sequence

An app helping families save for college used this pitch deck to raise $9 million from investors like Anthos Capital and NBA all-star Baron Davis

Thu, 07/02/2020 - 1:51pm  |  Clusterstock

  • UNest, an app that allows parents to set aside savings for their children, just raised a $9 million Series A.
  • The round was led by Anthos Capital with participation from investors like Northwestern Mutual Future Ventures and former NBA all-star Baron Davis.
  • UNest, which started as a 592 college savings app, has broadened its product offerings since its founding in 2018. Since February, UNest has added 25,000 accounts.
  • Here's the 15-slide pitch deck UNest used to raise its Series A.
  • Visit Business Insider's homepage for more stories.

Millennials aren't kids anymore. In fact, many have kids of their own. And UNest, founded by Ksenia Yudina, is targeting this cohort of new parents with a savings app.

UNest started as a college savings app, offering 529 college savings plans. Since its launch in 2018, the fintech has broadened its scope to include general savings accounts for kids.

"The feedback that we've heard from our existing users is that they don't want to save just for education," Yudina said. "They want to invest in their kids' futures, but be able to save for their first car or a down payment on a home."

Los Angeles-based UNest, which extended its seed round in January, announced a $9 million Series A on June 16 led by Anthos Capital with participation from investors like Northwestern Mutual Future Ventures and former NBA all-star Baron Davis.

As UNest has expanded its product offerings, its userbase has continued to grow, especially amid the coronavirus pandemic during which many parents are spending more time with their kids. Since February, UNest has added 25,000 accounts. The funding will be used to invest in more marketing and brand awareness as UNest looks to grow its userbase, Yudina said.

And the round was raised entirely remotely amid coronavirus shutdowns.

"The concern that most companies seem to have going into the pandemic is that there would be a lot of down rounds," Peter Mansfield, chief marketing officer at UNest, told Business Insider.

Given the economic volatility over the past few months, it's easy for founders to feel a bit bearish, Mansfield said. Instead, UNest was able to leverage the growth it had already experienced, resulting in a "a very big up round," he added.

"We're at a really fortunate spot because we didn't really need to raise," Mansfield said. "That probably gave us more confidence than the average bear to be able to go in there with our heads held high asking for a valuation that we thought was eminently fair."

While UNest's pitch deck itself has gone through a number of iterations, there are other factors to successful fundraising.

"Fundraising is all about relationship building," said Yudina. "You have to get in front of them, you have to show your energy and drive, and prove why you're the right person to solve this problem."

"The pitch deck follows. It's kind of like marketing materials, it's post-fact," Yudina said.

Part of UNest's confidence came from building out an experienced team after its seed round, Yudina said. While Yudina had prior experience as a financial advisor at Capital Group's American Funds, she didn't have experience at a fintech. Mansfield led marketing in the early days of Marqeta, and Mike Van Kempen, UNest's chief operating officer, joined UNest last year from Acorns. 

"We built a super strong team with actual experience in fintech," said Yudina, "and that's what investors like."

And proving you can deliver on product development and user acquisition is key when fundraising, Yudina said. For example, UNest launched with an iOS app, promising investors to build out an Android app, which it launched in February.

Here's the pitch deck UNest used to win over investors and raise its Series A.

SEE ALSO: College-savings startup U-Nest just added $1.5 million to its seed round. Its founder explains why she's hoping to one day be partnering with the type of Wall Street firm she started at.

SEE ALSO: One-click checkout startup Fast used this pitch deck to nab $20 million from investors like fintech giant Stripe. Here's a look at its vision for taking on Apple Pay.































How Remittances From Petit Senegal, a Diaspora Community in New York City, Build Wealth Abroad by @tareianking

Thu, 07/02/2020 - 1:32pm  |  Timbuktu Chronicles
Tareian King founder of Nolafrique writes:The African diaspora sends more money to Africa than U.S. foreign aid and foreign direct investment. In 2018, sub-Saharan Africa received $25 billion in development assistance. In that same year, immigrants in the United States sent $46 billion in remittances to their home countries in Africa, out of a total of $150 billion sent from the United States globally. In 2017, $85 million in remittances were sent from the United States to Senegal, the seventh-most of any country (France topped the list with almost $650 million). Remittances are the transfer of money, often by a foreign worker, to an individual in their home country. A closer look at a diaspora neighborhood in New York City helps explain that remittances are not only a form of familial aid but also an important investment vehicle that builds wealth...[more]

Here are all the famous people Jeffrey Epstein was connected to

Thu, 07/02/2020 - 1:24pm  |  Clusterstock

  • British socialite Ghislaine Maxwell, the longtime friend and ex-girlfriend of registered sex offender and financier Jeffrey Epstein who accusers say helped him recruit girls to abuse, was arrested on sex trafficking and perjury charges Thursday.
  • Epstein was known for jet-setting with the likes of Bill Gates, President Bill Clinton, and Prince Andrew, the third child of the UK's Queen Elizabeth.
  • Prosecutors in a January lawsuit against Epstein's estate allege that the former wealth manager ran a "trafficking pyramid scheme" from his private island in the US Virgin Islands until 2018.
  • Epstein was found dead of a suicide in a Manhattan jail on August 10 as he awaited trial on charges of sex trafficking minors.
  • Visit Business Insider's homepage for more stories.

Former L Brands CEO Les Wexner may have been Jeffrey Epstein's only confirmed client, but he was far from the ultrawealthy sex offender's only high powered friend.

Epstein ran a years-long "trafficking pyramid scheme" from the US Virgin Islands, prosecutors alleged in a lawsuit against the former wealth manager's estate in January. Meanwhile, the convicted sex offender maintained a vast social and professional network both on and off the Islands, which even included the wife of the US Virgin Islands' former governor. The former hedge-fund manager kept his client list under wraps, but he often bragged of his elite social circle that included presidents and Hollywood stars.

"I invest in people — be it politics or science," Epstein was known to say, according to New York Magazine. "It's what I do."

Now the British socialite who allegedly introduced Epstein and helped him recruit girls to abuse has been arrested on charges of sex trafficking and perjury in New Hampshire on Thursday, The New York Times reported. Ghislaine Maxwell, who is also believed to have been Epstein's ex-girlfriend, worked with Epstein to "recruit, groom and ultimately abuse" children, her indictment states.

Epstein, 66, died by suicide in a Manhattan jail on August 10, as he awaited trial on charges of sex trafficking of minors. He had been in police custody since he was arrested on July 6, shortly after exiting his private jet in New Jersey's Teterboro Airport. He pleaded not guilty on July 8 and was being held without bail in New York City. On July 25, Epstein was placed on suicide watch after a reported suicide attempt that had led to his hospitalization.

In 2007, Epstein pleaded guilty to charges of solicitation of prostitution and procurement of minors for prostitution in Florida.

Here's what we know about the famous people who crossed paths with Epstein.

SEE ALSO: Jeffrey Epstein made $200 million in 5 years after he registered as a sex offender. Here's how the mysterious financier made his fortune

DON'T MISS: From Victoria's Secret to Prince Andrew: Jeffrey Epstein connections just keep derailing the careers of billionaires, royals, and the like. Here's the full list.

Socialite Ghislaine Maxwell, Epstein's ex-girlfriend and alleged madam, was arrested on Thursday on charges of sex trafficking and perjury, The New York Times reported.

Maxwell is a British socialite and the daughter of media tycoon Robert Maxwell.

She started dating Epstein shortly after moving to New York in 1991, Business Insider previously reported. After they broke up, court documents allege that Maxwell started recruiting underage girls for him to have sex with.

The FBI was investigating Maxwell's relationship with Epstein, Reuters reported in December, as the British heiress was reportedly hiding out with armed guards in the United States or the United Kingdom.

Maxwell was ultimately found in New Hampshire, where she was arrested on charges of sex trafficking and perjury in New Hampshire on Thursday, The New York Times reported. The former socialite worked with Epstein to "recruit, groom and ultimately abuse" children, her indictment states.



President Donald Trump once considered Epstein a friend.

The future president claimed in 2002 that he had a long friendship with Epstein. "I've known Jeff for 15 years. Terrific guy," Trump said, according to New York Magazine. "He's a lot of fun to be with. It is even said that he likes beautiful women as much as I do, and many of them are on the younger side. No doubt about it — Jeffrey enjoys his social life."

According to Counselor to the President Kellyanne Conway, Trump now believes the crimes Epstein was charged with are "completely unconscionable and obviously criminal." She also labeled them "disgusting," according to a July report from the Associated Press.

"The president told me this morning he hasn't talked to Epstein, he doesn't think he's talked to him or seen him in 10 or 15 years," Conway added.



Former President Bill Clinton traveled with Epstein in 2002 and 2003.

A statement released in July by Clinton spokesperson Angel Ureña said the former president traveled to Europe, Asia, and twice to Africa on Epstein's private jet. Clinton's staff and Secret Service agents also went on these trips, which were to further the work of the Clinton Foundation, according to the statement.

At the time, Clinton told New York Magazine through a spokesperson that Epstein was "both a highly successful financier and a committed philanthropist with a keen sense of global markets and an in-depth knowledge of twenty-first-century science."

Ureña also said that Clinton and Epstein haven't spoken in "well over a decade" and that Clinton "knows nothing about the terrible crimes" Epstein was charged with.



Actor Kevin Spacey and comedian Chris Tucker also took trips with Epstein.

Epstein, Clinton, Spacey, and Tucker spent a week in 2002 touring AIDS project sites in South Africa, Nigeria, Ghana, Rwanda, and Mozambique for the Clinton Foundation, according to a New York Magazine report.

Spacey was also charged with sexual assault, but in December, The New York Times reported that the case had been dropped by the plaintiff's estate. The plaintiff, a 62-year-old massage therapist, had died in September.



Prince Andrew and Epstein were close friends, the Guardian reported in 2015.

Maxwell introduced Epstein and the Duke of York in the 1990s, the Guardian reported, and the two became close friends.

The Duke is the son of the UK's Queen Elizabeth. He has also been criticized for frequently taking flights on the taxpayer's dime while serving as the country's special representative for international trade. This earned him the nickname "Airmiles Andy," according to the Washington Post.

Court documents reviewed by the Guardian allege that Epstein instructed Virginia Roberts Giuffre, a 15-year-old employee at Trump's Mar-a-Largo resort, to have sex with Prince Andrew on three separate occasions. Buckingham Palace said in 2015 that the allegations against Prince Andrew were "false and without any foundation," according to the Guardian.

According to a July 22 article from NY Magazine's Intelligencer, a number of royals and royal connections were among Epstein's contacts. That includes Prince Andrew's then-wife, Sarah Ferguson, the Duchess of York; and Charles Althorp, Princess Diana's brother. According to Intelligencer, all three were named in Epstein's black book; Ferguson and Prince Andrew were also named in his private jet log.

In a interview with the BBC in November, Prince Andrew said his relationship with Epstein brought him "opportunities," and that his slowness in ditching Epstein as a friend was because of his tendency to be "too honorable." The interview was widely criticized over Prince Andrew's lack of sympathy with Epstein's victims and his defense of his friendship with the convicted sex offender, Business Insider reported.

Prince Andrew resigned from public royal duties in November, Business Insider reported.



Outgoing L Brands CEO Les Wexner is Epstein's only confirmed client.

Epstein became a trusted confidant of Wexner's while Epstein managed the CEO's fortune, according to Vanity Fair. Wexner has a net worth of $6.2 billion, Bloomberg reported. The magazine reported that Wexner allowed Epstein to take an active role in L Brands, which owns Bath & Body Works, Express, and Victoria's Secret.

In 1989, Wexner used a trust to buy an Upper East Side townhouse that is believed to be the largest private residence in Manhattan for $13.2 million, Vanity Fair reported. Epstein moved in after Wexner and his wife, Abigail Koppel, moved to Ohio in 1996. Wexner's trust transferred ownership of the house to Epstein in 2011 for $0, Bloomberg reported.

Wexner later fired Epstein as his money manager. "Mr. Wexner severed ties with Mr. Epstein more than a decade ago," an L Brands spokesperson told Forbes in July.

In February, L Brands announced that Wexner would step down after nearly six decades as the company's CEO. L Brands also announced that it would sell the majority stake in Victoria's Secret to private equity firm Sycamore Partners and spin-off Bath & Body Works into a separate company. The company has been marred in controversy following reports of the mistreatment of models and plummeting sales.



Former Secretary of Labor Alexander Acosta worked with Epstein's legal team to arrange a plea deal after Epstein was charged with solicitation of prostitution and procurement of minors for prostitution in Florida in 2007.

An investigation by the Miami Herald revealed that Acosta, then a US attorney, had enough evidence against Epstein to request a life sentence. Instead, he reportedly met with one of Epstein's lawyers, who happened to be a former colleague of Acosta's.

In the resulting plea deal, Epstein served 13 months in a private wing of a county prison, which he was allowed to leave six days a week to work in his office.

Business Insider previously reported that Acosta said he was "pleased that NY prosecutors are moving forward with a case based on new evidence," on Twitter.

Tweet Embed:
//twitter.com/mims/statuses/1148618145671917571?ref_src=twsrc%5Etfw
The crimes committed by Epstein are horrific, and I am pleased that NY prosecutors are moving forward with a case based on new evidence.

Acosta resigned on July 12, 2019.



Film publicist Peggy Siegal planned a star-studded dinner party for Epstein and Prince Andrew at Epstein's New York mansion in 2010.

Siegal, known for hosting events to promote films including "The Big Short," "Argo," and "The Revenant" to Oscar voters, invited Epstein to screenings after he was released from prison in 2010, according to The New York Times.

"I was a kind of plugged-in girl around town who knew a lot of people," Siegal told The New York Times. "And I think that's what he wanted from me, a kind of social goings-on about New York."

Siegal also planned a dinner party for Epstein and Prince Andrew at his Upper East Side home. The event was attended by Katie Couric, George Stephanopoulos, and Chelsea Handler. "The invitation was positioned as, 'Do you want to have dinner with Prince Andrew?'" Siegal said. Many of the guests didn't know who the host was or about his criminal history, The New York Times reported.

A spokesperson for Siegal told Business Insider that Siegal's relationship with Epstein was social, not professional. Siegal told The New York Times that she ended her relationship with Epstein at the height of the #MeToo era in 2017.

Netflix, FX and Annapurna Pictures severed their ties with Siegal in July 2019 after her connection to Epstein became public, Variety reported.



Epstein also told the Times that he spoke often with Saudi crown prince Mohammed bin Salman.

Epstein said that MBS had visited Epstein's Manhattan mansion many times and had a framed photo of the crown prince hanging on the wall, according to New York Times reporter James B. Stewart.

Representatives of MBS did not respond to Business Insider's request for comment.



According to the New York Times, Epstein claimed to have advised Tesla CEO Elon Musk.

In an interview published in the New York Times on August 12, Epstein claimed that Elon Musk had sought him out to help manage the trouble he had gotten into with the SEC a year earlier, in August 2018.

Epstein told reporter James B. Stewart that he had promised to keep his work for Tesla private because of his prior conviction. Epstein also warned that both Musk and Tesla would deny their connection to Epstein if it ever became public, the Times reported. In a statement to Business Insider, a spokesperson for Musk denied Epstein's claims of having served as an adviser to the CEO.

Musk and Maxwell were photographed at an Oscars after-party hosted by former Vanity Fair editor Graydon Carter on March 2, 2014, in West Hollywood. The same Musk spokesperson told Business Insider that "Ghislaine simply inserted herself behind him in a photo he was posing for without his knowledge."

Musk has confirmed crossing paths with Epstein at least once, Business Insider reported. Musk, Epstein, and Facebook CEO Mark Zuckerberg were all guests at a dinner hosted by LinkedIn CEO Reid Hoffman sometime after he was released from jail in 2008.



MIT Media Lab director Joi Ito quietly worked with Epstein to secure anonymous donations, Vanity Fair reported.

Ito worked with other directors and staff at the MIT Media Lab to quietly receive large anonymous donations from Epstein after he was convicted of soliciting underage girls for prostitution, a New Yorker exposé published on September 6 reports. The article contains emails sent between Ito and Epstein.

The emails show Epstein also worked as an in-between for other wealthy donors, including Bill Gates and Leon Black, and that Epstein had a role in determining what his donations would be used for at MIT, contradicting previous statements from Ito and the university.

Ito resigned from his posts at MIT, The New York Times Company, and the MacArthur Foundation on September 7, Business Insider reported.



Epstein worked as a go-between for the MIT Media Lab and Bill Gates to arrange donations, Vanity Fair reported.

Emails obtained and published by The New Yorker show former MIT Media Lab Director Joi Ito wrote that Gates was "directed by" Epstein to donate $2 million to the research lab in October 2014.

Gates also met with Epstein at least once in New York in 2013, and flew on one of his private planes to Palm Beach, Business Insider previously reported. "Bill attended a meeting in New York with others focused on philanthropy. While Epstein was present, he never provided services of any type to Bill," a Gates spokesperson told Business Insider.

A spokesperson for Gates told Business Insider that "Epstein was introduced to Bill Gates as someone who was interested in helping grow philanthropy. Although Epstein pursued Bill Gates aggressively, any account of a business partnership or personal relationship between the two is simply not true. And any claim that Epstein directed any programmatic or personal grantmaking for Bill Gates is completely false."

A New York Times investigation published in October found that Gates met with Epstein multiple times after Epstein's conviction in 2011, including at least three meetings at Epstein's Manhattan townhouse. Following the publication of that story, a spokesperson for Gates said Gates regretted the association, but Gates himself hadn't publicly addressed it until November, Business Insider's Aaron Holmes reported.

Gates said at The New York Times' Dealbook Conference in November that he believed "billions of dollars" would come from his meetings with Jeffrey Epstein. "I made a mistake in judgment in thinking those discussions would go to global health," Gates said. "That money never appeared."

"I gave him the benefit of my association," Gates said.



Reid Hoffman defended Ito after news of Epstein's connections to the MIT Media Lab broke.

A "few years ago," Epstein attended a dinner Hoffman hosted to honor an MIT neuroscientist, Vanity Fair reported in July. Mark Zuckerberg and Elon Musk were also in attendance. Both denied having had ongoing relationships with Epstein to Vanity Fair through spokespeople.

Hoffman also implicated himself in the cover up of Epstein's donations to the MIT Media Lab. As pressure mounted on Media Lab director Joi Ito to resign, Hoffman defended Ito to author and fellow MIT Media Lab Disobedience Award jury member Anand Giridharadas in a private email, Giridharadas tweeted in September. "Hoffman basically hid behind bureaucracy and the old 'ongoing investigation' excuse," Giridharadas said in the now-unavailable tweet. "He said it would be complicated to release the correspondence publicly because other names might get dragged in. Someone should tell him about redaction."

According to Giridharadas, Hoffman wrote in a second email that Giridharadas was making the situation "all about you" by threatening to resign. In the end, Giridharadas resigned from the Disobedience Award jury.

Hoffman not only sits on the Disobedience Award's jury, but funds it personally, according to the Media Lab's website. In 2017, MIT awarded Epstein and other donors "orbs" to thank them for their support, according to The Boston Globe. The orb looks similar to the trophy given to winners of the Disobedience Award.



A lawsuit has also shined light on Epstein's connection to former U.S. Virgin Islands Gov. John P. de Jongh while he was in office.

Gov. John P. de Jongh's wife Cecile de Jongh served on the board of Epstein's Financial Trust Co. for most of her husband's time in office, Business Insider's Becky Peterson and John Cook reported. Cecile de Jongh held the titles of secretary and vice president in her decade-long tenure with the company, even staying on board after Epstein was first charged with sexual assault in 2007.

Prosecutors in the US Virgin Islands alleged that Epstein was trafficking women and children through the US territory during that same time, as stated in a January lawsuit. The lawsuit describes one 15-year-old victim who was "forced into sexual acts with Epstein and others and then attempted to escape by swimming off the Little St. James island."

In a statement, a lawyer representing Epstein's estate told Business Insider that some of the allegations in the lawsuit were inaccurate — particularly allegations that the estate to this day engages in "a course of conduct aimed at concealing the criminal activities of the Epstein Enterprise."

"The Estate is being administered in accordance with the laws of the US Virgin Islands and under the supervision of the Superior Court of the US Virgin Islands," the statement said.



Barclays CEO Jes Staley is under investigation by British authorities because of his friendship with Epstein.

Staley had a "professional relationship" with Epstein that dated back to "early in his career," Barclays said in a statement

"In the summer of 2019, in light of the renewed media interest in the relationship, Mr. Staley volunteered and gave to certain executives, and the Chairman, an explanation of his relationship with Mr. Epstein," Barclays stated. "Mr. Staley also confirmed to the Board that he has had no contact whatsoever with Mr. Epstein at any time since taking up his role as Barclays Group CEO in December 2015."

The relationship is the subject of an investigation by the UK's Financial Conduct Authority, according to the bank.

 

If you are a survivor of sexual assault, you can call the National Sexual Assault Hotline at 800.656.HOPE (4673) or visit their website to receive confidential support.



Trump's favorite trade scorecard worsened in May as exports hit lowest level since 2009

Thu, 07/02/2020 - 1:05pm  |  Clusterstock

  • The US goods and services deficit — touted by President Trump as the top trade scorecard — widened to $54.6 billion in May from $49.8 billion, the Commerce Department announced Thursday.
  • Exports plummeted to $144.5 billion from $151.1 billion to hit its lowest level since November 2009. Imports shrank $1.8 billion to $199.1 billion.
  • The US deficit with China swelled $1.9 billion to $27.9 billion, driven by a sharp increase in import activity.
  • "We anticipate that trade activity will stage a slow recovery in the months ahead as global lockdowns ease," Oxford Economics said, adding that new virus hotspots in the US pose significant downside risks.
  • Visit Business Insider's homepage for more stories.

US trade activity plummeted in May as coronavirus lockdowns continued to freeze shipping activity and consumer demand.

The country's goods and services deficit widened to $54.6 billion in May from a revised $49.8 billion, the Commerce Department announced Thursday. The shortfall — often touted by President Donald Trump as the top trade-war scorecard — now sits at its highest since December 2018.

US exports slid to $144.5 billion in May from $151.1 billion to hit its lowest level since November 2009. Imports fell to $199.1 billion from $200.9 billion, the department said.

Read more: The No. 1-ranked tech analyst on Wall Street says these 6 stocks have potential for huge gains as they transform the sector

The US deficit with China swelled $1.9 billion to $27.9 billion as heightened import activity overshadowed a slight increase in exports.

Exports are set to rebound through the second half of the year but sit 18% below pre-pandemic highs by 2021, Oxford Economics said in a note. Imports will similarly remain below early 2020 levels and trade volumes will fall at record rates before the year is out, the firm projected.

"We anticipate that trade activity will stage a slow recovery in the months ahead as global lockdowns ease," Oxford Economics said. "Yet with activity still globally depressed and the US health crisis not under control, downside risks are significant."

US trade collapsed after the coronavirus turned global in February. The pandemic severely disrupted supply chains around the world and stifled consumer spending. While economic data has suggested a V-shaped US economic recovery is possible, soaring COVID-19 case counts across the nation threaten to revive strict quarantine measures and lengthen a deep recession.

Rising tensions between the US and China stand to exacerbate trade damage. President Trump has repeatedly blamed China for spreading the coronavirus. The Asian nation's controversial law enforcement practices in Hong Kong recently ratcheted up concerns of retaliatory measures from the US.

Read more: A 22-year market vet explains why stocks are headed for a 'massive reset' as the economy struggles to recover from COVID-19 — and outlines why that will put mega-cap tech companies in serious danger

Join the conversation about this story »

NOW WATCH: Here's what it's like to travel during the coronavirus outbreak

Jeff Bezos' net worth just hit an all-time high. Here's how the richest person in the world makes and spends his $171 billion fortune.

Thu, 07/02/2020 - 12:44pm  |  Clusterstock

Jeff Bezos' fortune has hit an all-time high — $171.6 billion, according to Bloomberg estimates.

The billionaire's net worth surge comes alongside a jump in Amazon's share price despite the coronavirus pandemic that has upended the American economy and Bezos' agreement to surrender 25% of his Amazon stake to his ex-wife MacKenzie Bezos in a divorce settlement last year.

While Bezos has added $56.7 billion to his net worth in 2020 alone, per Bloomberg estimates, the coronavirus crisis has been an economic disaster for the rest of America, as an unprecedented 49 million Americans filed for unemployment benefits in recent months.

Bezos isn't the only billionaire getting richer during the pandemic. Tesla's Elon Musk and Zoom's Eric Yuan both saw their net worths grow by more than $2 billion between March and June, Business Insider previously reported.

From real estate to space travel, here's how Bezos spends his money.

SEE ALSO: Jeff Bezos and Lauren Sanchez are house hunting in LA — and they've been touring some of the priciest mega-mansions in the state, according to reports

DON'T MISS: Jeff Bezos' space colonization plan was partially inspired by a 1976 book he read in high school that proposed connecting the Earth and the moon via a series of enormous, cylindrical tubes

Jeff Bezos founded Amazon, the source of much of his wealth, on July 5, 1994.

Source: Bloomberg



Bezos' parents were reportedly shocked that he would give up a cushy Wall Street job in order to sell books over the internet.

Source: "The Everything Store" via Business Insider



Bezos' parents eventually came around and invested about a quarter of a million dollars in the fledgling company, a stake that would be worth as much as $30 billion today.

Source: Bloomberg



Bezos also received a lot of support from his then-wife MacKenzie, who negotiated Amazon's first freight contract and did the company's accounting. Per the terms of their 2019 divorce settlement, MacKenzie holds a 4% stake in the company, which forms the majority of her $56.9 billion fortune.

Source: Bloomberg



Amazon made its initial public offering on May 15, 1997. Since that day, the split-adjusted stock price has increased nearly 90,000%.

Source: Yahoo Finance



Amazon's rise left several early internet competitors in the dust. In the company's first post-IPO shareholder letter, Bezos mentioned strategic partnerships with several peers like America Online, Prodigy, and Yahoo that have either gone out of business entirely or been purchased by competitors in the years since.

Source: Business Insider



Amazon has steadily grown over the last two decades, and now sells a wide variety of consumer products, electronics, and digital media.

Source: Amazon



Another big growth area was Amazon Web Services. As of February 2018, the company's cloud services was a $17.5 billion business.

Source: Business Insider



Amazon has also grown through various acquisitions over time. The company's 2009 purchase of online shoe retailer Zappos for $1.2 billion stood as Amazon's biggest acquisition for about eight years.

Source: Visual Capitalist



That record was blown out of the water with Amazon's 2017 purchase of Whole Foods for $13.7 billion.

Source: Visual Capitalist



The Whole Foods acquisition has dramatically boosted Amazon's push into the grocery world. A 2019 study from OneClickRetail estimates that Amazon had an 18% share of the US online grocery market.

Source: Business Insider



Amazon's rise is the primary source of Bezos' fortune. Bezos remains Amazon's largest stockholder, owning 11% of the e-commerce giant. According to MacKenzie Bezos' statement on the couple's divorce, Bezos retained 75% of the couple's Amazon stock holdings and the voting power of MacKenzie's shares.

Source: Forbes, Bloomberg



Bezos has made several investments in other companies, both on a personal level and through his venture capital firm Bezos Expeditions.

Source: Visual Capitalist



Bezos personally invested in Google in 1998, and his $1 million early investment would likely have made him a billionaire even without his extensive Amazon wealth.

Source: "The Everything Store" via Business Insider



Bezos Expeditions has invested in several startups, including blood testing biotech firm Grail, popular software developer website Stack Overflow, and Business Insider.

Business Insider was acquired by Axel Springer in 2015. Jeff Bezos is no longer invested.

Source: Visual Capitalist



One of Bezos' more notable purchases was his acquisition of The Washington Post for $250 million in 2013.

Source: Business Insider



Since Bezos' acquisition, the Post has greatly expanded its digital offerings, and readership has exploded.

Source: Business Insider



Bezos' wealth is so massive that, according to Business Insider's 2018 calculations when he had a mere $130 billion fortune, spending $88,000 to him was similar to an average American spending $1.

Source: Business Insider



Bezos is one of the country's biggest landowners, and he and his family own at least five homes across the US.

Source: Business Insider



One estate, with two homes on 5.3 acres of land, is located in Medina, Washington, not far from Amazon's Seattle headquarters.

Source: Business Insider



Business Insider's Harrison Jacobs visited Medina in 2017 to get a sense of what the haven for Seattle's mega-wealthy was like.

Source: Business Insider



Jacobs got a picture of the outside of Bezos' estate, but tall hedges and a gate blocked any view inside.

Source: Business Insider



Bezos also owns a Spanish-style mansion in Beverly Hills, California. He bought the property in 2007 for a reported $24.25 million. He bought another, smaller house right next door a decade later.

Source: Business Insider



He also owns a ranch in Van Horn, Texas, which serves as a base for his Blue Origin space exploration company.

Source: Business Insider



Bezos purchased a townhouse in Washington, DC in 2016.

Source: Business Insider



Bezos owns several condos in the historic Century building at 25 Central Park West in Manhattan.

Source: Business Insider



In June 2019, the Amazon CEO reportedly dropped about $80 million on another three adjacent apartments in a different building at 212 Fifth Avenue in Manhattan. The spread consists of a three-story penthouse and the two units directly below it.

Source: Business Insider



Most recently, Bezos reportedly dropped $165 million on another yet another Beverly Hills mansion — the Warner Estate. The Wall Street Journal reported the sale in February.

Source: The Wall Street Journal



Bezos has traditionally been somewhat frugal with his ground transportation. As recently as 2013, he was still driving a Honda Accord, according to the book "The Everything Store."

Source: "The Everything Store" via Business Insider



However, Bezos also owns a $65 million Gulfstream G650ER private jet.

Source: Business Insider



Bezos sometimes has a taste for exotic cuisine. The founder of e-commerce startup Woot recounted a breakfast with Bezos shortly after Amazon acquired the company at which the billionaire ordered octopus.

Source: Business Insider



The founder recounted Bezos explaining similarities between Amazon's acquisition of Woot and his offbeat breakfast order. "You're the octopus that I'm having for breakfast," Bezos said. "When I look at the menu, you're the thing I don't understand, the thing I've never had. I must have the breakfast octopus."

Source: Business Insider



Bezos has not engaged in public philanthropy to the same extent as many of his hyper-billionaire peers like Warren Buffett and Bill Gates, who have both pledged to donate the majority of their fortunes to charity.

Source: Business Insider



Bezos' ex-wife MacKenzie did sign Gates' Giving Pledge in May 2019, pledging to donate more than half of her fortune during her lifetime.

Source: Business Insider



Bezos has, however, supported Mary's Place, a Seattle organization that provides shelter and employment training to those who are homeless, and TheDream.US, which supports people who were brought to the US as undocumented immigrants when they were children.

Source: Business Insider



According to CNBC, Bezos has also donated significant sums to Seattle's Fred Hutchinson Cancer Research Center, the University of Washington Foundation, and Princeton University.

Source: CNBC



Bezos also supports some more unusual ventures, like the Long Now Foundation, which seeks to build a giant mechanical "10,000 year clock" underground in West Texas.

Source: Business Insider



The clock is intended to be a "symbol for long-term thinking," according to a tweet from Bezos.

Source: Business Insider



Bezos has been fascinated and inspired by NASA and space travel since watching the Apollo moon landings in his childhood. In 2013, Bezos funded and led an expedition to recover one of the rocket engines from the Apollo 12 mission from the floor of the Atlantic Ocean.

Source: The Seattle Times



Bezos' most ambitious venture may be Blue Origin, his space exploration company.

Blue Origin has had several successful test flights of its reusable New Shepard rocket, and is currently developing the larger, mostly reusable New Glenn rocket system, intended to compete with Elon Musk's SpaceX.

Source: Business Insider



In the long term, Bezos intends for Blue Origin to support large-scale human spaceflight, with the goal of colonizing the solar system.

Source: Business Insider



In 2018, Bezos told Matthias Döpfner, CEO of Business Insider's parent company Axel Springer, that he considers Blue Origin "the most important work [he's] doing."

Source: Business Insider



Indeed, Bezos told Döpfner that he plans to spend his entire fortune on space exploration, saying, "I am going to use my financial lottery winnings from Amazon to fund that."

Source: Business Insider



And in February, Bezos announced a pledge to spend $10 billion to fight climate change.

"I'm committing $10 billion to start and will begin issuing grants this summer," Bezos wrote on Instagram. "Earth is the one thing we all have in common — let's protect it, together."⁣⁣⁣

Source: Business Insider



Bezos also spends plenty of cash in his personal life. He threw a star-studded birthday bash for girlfriend Lauren Sanchez in December.

Source: Business Insider



Bezos nearly lost the title of "the world's richest man" to Bill Gates in October 2019, after a disappointing earnings report sent both Amazon's share price and the CEO's net worth on a downward spiral in after-hours trading. Bezos' personal net worth fell $8.2 billion at that point, according to Bloomberg.

Source: Bloomberg



Of course, he's since bounced back in a major way. Even as the coronavirus pandemic upended the American economy in March, Bezos has continued to get wealthier — and now, he's richer than he's ever been.

Bezos' net worth hit a new peak on July 2 — $171.6 billion. That's even richer than he was before his divorce settlement.

Amazon's share price has surged throughout the pandemic as Americans practice social distancing to slow the virus' spread and increasingly turn to Amazon's delivery services for daily necessities.

Bezos doesn't plan to keep all of the $56.7 billion he added to his net worth so far in 2020, however. He announced in April that he pledged to donate $100 million to food banks facing shortages due to the economic crisis spurred by the pandemic.

"My own time now is wholly focused on COVID-19 and how Amazon can best play its role," Bezos wrote in March. "I want you to know that Amazon will continue to do its part, and we won't stop looking for new opportunities to help."

Source: Business Insider



Power Line: Exxon's confusing bet on algae — Rising stars of clean energy — Top oil stocks

Thu, 07/02/2020 - 12:39pm  |  Clusterstock

Welcome to Power Line, a weekly energy newsletter brought to you by Business Insider.

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Now would be a good time to explain that I'm obsessed with algae, AKA pond scum. We all should be.

These organisms are the reason that Earth became a breathable planet. They're also responsible for all the crude oil in the ground. Indeed, petroleum deposits in the Earth's crust are little more than the ancient remains of algae

A group of mostly photosynthetic microbes, algae boast an impressive concentration of lipids, or fats, in their cells. And as researchers learned decades ago, you don't have to wait eons to turn them into oil … 

Why Exxon is still betting algae biofuels are the future a decade after other oil giants abandoned their multimillion-dollar projects

Owing to their high concentrations of lipids and rapid growth, algae are near-perfect candidates for biofuel production. You can grow them in ponds and then process them into fuels like diesel. 

But: Those fuels are really expensive to produce relative to crude oil extracted from the ground. Several companies learned this the hard way including oil majors Shell and BP. 

Exxon remains the only major oil company still betting big on algae biofuels, leading top algae scientists to question the company's intentions. 

Read more in our feature on Exxon's algae biofuel bet

These 21 emerging leaders in the clean-energy industry will give you hope for the future

This week we published our list of rising stars in clean energy. It's a reminder that while it may feels like the world is falling apart, there are a lot of incredible people building it back up. 

  • Gia Schneider is a former Credit Suisse banker who is now building a new generation of river-friendly water turbines with the backing of a Bill Gates-led fund.
  • After witnessing the effects of pollution near her Texas hometown, Etosha Cave has figured out how to turn carbon emissions into stuff we actually want. 
  • Gene Berdichevsky was employee number 7 at Tesla. Now he's leading his own company that's building batteries that promise to give electric cars 20% more range.

Though ultimately motivated by the threat of climate change, these emerging leaders are taking a bite out of a $600 billion industry for clean energy. 

See the full list of 21 rising stars here

Shell and BP are writing down up to $40 billion in assets. Here's what that means. 

BP announced in mid-June that it's writing down oil and gas assets by as much as $17.5 billion. Now, Shell is following suit, with an announcement this week that it would write down its assets by up to $22 billion. 

Write-downs, explained: When companies write down their assets it means they're acknowledging that those assets are worth less than the value they originally ascribed to them.

Why it matters: The write-downs are another example of the pandemic's toll on the oil and gas industry. They're also a sign that these companies are preparing for a lower-carbon economy. 

  • The pandemic has gutted demand for oil, sending the price-per-barrel tumbling. Cheap oil and an outlook of lower demand makes oil-related assets less valuable.
  • These write-downs suggest that some oil and gas resources may be left in the ground. 
  • BP said it expects the transition to low-carbon energy to accelerate in the wake of the pandemic when it announced the write-downs.
  • Shell made a similar statement: "The Refining asset valuation updates reflect Shell's strategy to reshape and focus its refining portfolio to support the decarbonization of its energy product mix."

We're tracking how 19 top oil and gas companies are responding to the oil price rout. Check it out here. 

Investing: Goldman Sachs shares its top 9 oil stocks

Oil price today: Brent crude started trading at $42 a barrel on Thursday, up about 6% since early June and down about 36% since the start of the year. 

Price in 2021: $55 a barrel, on average, Goldman Sachs said in a note Wednesday. That's roughly $10 below where it was before the pandemic took hold. 

In the note, Goldman analysts also shared their top stock picks for integrated oil companies and refiners, which turn crude into fuel and other products. You can see all of their picks here.

4 big stories from this week
  • Chesapeake Energy, a natural gas pioneer, filed for bankruptcy. (New York Times
  • BP agreed to sell its petrochemical business to the British chemicals company Ineos for $5 billion. (WSJ)
  • House Dems released a sweeping climate-change plan that "laid out policies to help the US work toward net-zero greenhouse gas emissions in all areas of the nation's economy by midcentury," Greentech Media reports.
  • Tesla overtook Exxon in market value "in a sign that investors are increasingly betting on a global energy transition away from fossil fuels," Bloomberg News reports.

That's it! Have a safe 4th of July weekend. 

- Benji 

Join the conversation about this story »

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'We are still in a deep economic hole': 5 economists explain why the June jobs report is weaker than it appears

Thu, 07/02/2020 - 12:13pm  |  Clusterstock

  • The June jobs report, released on Thursday by the Bureau of Labor Statistics, said more jobs were added than economists had estimated.
  • In addition, the unemployment rate declined more than economists expected.
  • Still, economists cautioned that the report captured data from only the first half of June, before spiking coronavirus cases led states to pause or roll back reopenings.
  • Here's what five economists and strategists had to say about the June jobs report and what it could mean for the recovery.
  • Visit Business Insider's homepage for more stories.

The June jobs report surprised to the upside on Thursday, showing that the US added 4.8 million jobs, more than economists had expected, and that the unemployment rate declined to 11.1%.

The report showed that people were going back to work as the US slowly reopens its economy from the sweeping lockdowns many states imposed in mid-March to curb the spread of COVID-19. Jobs were added in almost every industry, with the biggest gains in leisure and hospitality, which has been hardest hit by the coronavirus pandemic.

Still, economists noted that because the pandemic has moved so fast, the jobs report is already out of date. The reference period for the report goes through June 12, so it doesn't capture the second half of the month, when many states began seeing new spikes in coronavirus cases.

In the last two weeks of the month, the surge in new cases led more than 19 states and cities to roll back or pause their reopening plans.

Read more: The No. 1-ranked tech analyst on Wall Street says these 6 stocks have potential for huge gains as they transform the sector

The US is still grappling with the worst economic downturn since the Great Depression; it officially fell into a recession in February. And economists cautioned that there's a long way to go — even with June's job gains, the US is still down about 15 million jobs since the beginning of the pandemic.

"We are still in a deep economic hole," Daniel Zhao, a senior economist at Glassdoor, told Business Insider. "Any improvement is good, but we still have a long way to go before we can return to pre-crisis levels and make up for lost economic ground."

Here's what five economists and strategists had to say about the June jobs report.

1. Glassdoor: "There's no getting around calling it a positive surprise."

"Today's report was better than expected, and I think there's no getting around calling it a positive surprise," Zhao told Business Insider.

"In some ways, today's report is looking in the rearview mirror, because we're now two to three weeks removed from when the report was collecting data," Zhao said. "The through line of this crisis is that things can change on a weekly basis."

The top-line numbers show "how the economy can recover after the initial effects of the public-health crisis recede," Zhao said.

He described the 10.6 million people who were temporarily unemployed in June as both good and bad: While the unemployment rate is still high, those workers will hopefully be able to return to their jobs, he said.

Read more: Cathie Wood's firm built 3 of the world's best ETFs, which all doubled in value within 3 years. She told us her 3-part process for spotting underappreciated technologies before they explode.



2. Schmidt Futures: "It's really important to focus on where we are, not just how much we've improved."

"I was certainly pleasantly surprised by the headline number," Martha Gimbel, an economist at Schmidt Futures, told Business Insider. "The caveat is that this data was collected before the virus started surging again."

She continued: "The real lesson of today's report is that we still have the potential to add these jobs back if we can get the public-health crisis under control."

Going forward, the question is "whether or not that improvement can be sustained and to whether or not it will spread to other workers as well," Gimbel said.

She added that focusing on the change instead of the level is a mistake. "Adding 4.8 million jobs is amazing," Gimbel said. "We are still down 15 million jobs over the course of this crisis.

"So it's really important to focus on where we are, not just how much we've improved."

Read more: A 22-year market vet explains why stocks are headed for a 'massive reset' as the economy struggles to recover from COVID-19 — and outlines why that will put mega-cap tech companies in serious danger



3. Navy Federal Credit Union: The recovery "continues to be shambolic, but overall, the country just booked a second month of multi-million job gains."

"Another surprisingly strong jobs report released today showed Americans were hired back by the millions last month, but as with last month's report, it came with major caveats," said Robert Frick, a corporate economist at Navy Federal Credit Union.

He continued: "The biggest is the surge in COVID-19 cases in many states across the country that may slow hiring significantly this summer. Also a possible drag: the number of weekly unemployment claims remains alarmingly high, having barely dropped from the previous week.

"The jobs recovery continues, and continues to be shambolic, but overall, the country just booked a second month of multi-million job gains"

Read more: Real-estate investor Joe Fairless breaks down how he went from 4 single-family rentals to overseeing 7,000 units worth $900 million — and outlines the epiphany that turbocharged his career



4. Indeed: "The coronavirus crisis moves so quickly that these numbers are already out of date."

"The pace of job creation is almost certainly not going to keep up," Nick Bunker, an economist at Indeed, said in a note. "Yes, the unemployment rate might have declined, but workers are still losing jobs and signs point toward more and more of these losses becoming permanent."

He continued: "The coronavirus crisis moves so quickly that these numbers are already out of date, but the signals we can read suggest the near term future is not bright.

"The labor market was already in a bad place before the recent spikes in coronavirus cases, which could stall economic activity again. The next few weeks will be important to determine where we go next."

Read more: Stock analysts are having a moment in the sun as the market gets flipped upside down. We spoke to 11 of the top-ranked on Wall Street to get their forecasts and single-stock picks.



5. Principal Global Investors: "The US government cannot claim victory just yet."

"Today's number certainly adds to the growing evidence of a strengthening economy in early June," said Seema Shah, the chief strategist at Principal Global Investors. "With all state-wide lockdown orders having been suspended by the time of the survey week, a labor market improvement makes sense."

She continued: "These numbers will inevitably take center stage ahead of the Congressional debate on the next round of coronavirus stimulus.

"However, the US government cannot claim victory just yet. High-frequency data suggests that the labor market strength had started to wane later in the month, perhaps as households and businesses grew increasingly cautious about the rise in infection rates.

"Indeed, now, with the closings having been reversed or paused across 40% of the US, July's job report may paint a much weaker story."



Cyberattacks against financial firms are up 238%. Experts explain why deep-pocketed private equity firms are most at risk.

Thu, 07/02/2020 - 12:02pm  |  Clusterstock

  • Cyberattacks have been on the rise in 2020 due to the pandemic, with financial services being an industry targeted the most.
  • Private equity, in particular, has been viewed as a viable new opportunity for cybercriminals. 
  • PE shops deep pockets and willingness to wire large sums of money make them a prime target for bad actors. 
  • While bigger PE firms have the resources to dedicate to cybersecurity, the process at small to mid-size shops remains a work in progress.
  • Visit Business Insider's homepage for more stories.

Private equity has increasingly come into the public eye in recent years, thanks to big deals and the growing profiles of leading executives

However, increased attention isn't always a good thing. Hackers, too, have noticed the rise of private equity and begun targeting the firms — and their portfolio companies — in hopes of tapping into their deep pockets. 

"I think the reason hackers are identifying PE as a big issue is that, look they're vulnerable because they have lots of money and probably didn't invest previously. And for typical middle-market companies, that could be legacy businesses that also have older systems and insufficient staff," said Patrick Donegan, executive vice president of growth and client services at Performance Improvement Partners, which works with over 200 PE firms on IT solutions.

"They're just focused on much more important things like getting deals and delivering great returns to their LPs. The notion of being compromised from an attack to them seemed probably not like it was happening all the time," Donegan told Business Insider. "I think there was a false sense of security that they were in better shape than they are."

Cyberattacks are up everywhere, but PE is a prime target

Across all industries, cyberattacks are on the rise as corporations have been forced to adapt on the fly to work-from-home environments as a result of the coronavirus pandemic.

In April, The Hill reported an assistant director of FBI's Cyber Division said on a webinar its Internet Crime Complaint Center saw a 300% to 400% uptick in daily complaints. A survey of 411 security professionals by Check Point, a provider of IT security solutions, found 71% of respondents noticed an increase in security threats or attacks since the COVID-19 outbreak. 

Law firm Reed Smith, meanwhile, called coronavirus "possibly the largest-ever security threat."

Read more: 40 insiders reveal the meteoric rise of Silver Lake's Egon Durban, the tech-focused PE firm's No. 1 dealmaker who strong-armed his way to the top and is about to get $18 billion more to invest

And while nearly every company has the potential to be attacked, financial services has been a particular hot spot. According to a May report from VMware Carbon Black, financial firms saw a 238% increase in attacks from February to April 2020. 

Banks and hedge funds remain appealing targets for hackers, but private equity firms are increasingly coming into the crosshairs of bad actors, experts say. In many ways, the shift in focus is natural as banks, followed by hedge funds in recent years, have increased spending on cyber defense, making them tougher nuts to crack.

"As you move your way down the totem pole you still have large amounts of money that's being transferred. The shops aren't as big and then some of those [cyber defenses and training] break down," Mark Ostrowski, head of engineering for Eastern US for Check Point, told Business Insider.   

"The reality is that as you move your way down the totem pole you're naturally going to get less and less of that because the budgets and the time that would be associated with that are becoming less," he added.

Portfolio companies represent a big risk for PE

There are plenty of reasons why PE firms are a great opportunity for hackers, experts said.

For one, the group has plenty of money to spend, is accustomed to wiring large amounts of money, and isn't shy about discussing deals, Fred Purdue, infrastructure practice manager the cyber lead at PIP, told Business Insider.

"They are extremely attractive targets because they have a high degree of access to large amounts of capital. It's not uncommon to see a significant transaction occur. And by the way, they tend to issue press releases when they're doing large transactions or when they're doing large deals," he said. 

There's also the added complexity of portfolio companies. It's not good enough for private equity firms to make sure their own house is in order. Every company in their portfolio is essentially an extension of them, and thereby another entry point for hackers. 

That's coupled with the fact that often times companies that receive investment from PE firms need help with their tech.

As a result, PE shops need to take a holistic view of their environment. At PIP there has been a 750% increase on cyber projects related to portfolio-wide initiatives in the first half of 2020 compared to the same time period last year.

"If you're a CEO, there might be a 5% chance that you're going to have a significant cybersecurity event this year. There's a 100% chance the head of sales is going to come in and complain about Salesforce tomorrow. So you might look at it and be like, 'You know what, I'm going to allocate resources based on my risk scenario,'" Purdue said. "If you're a private equity firm and you own 20 of those companies that has a 5% risk each, you have a certainty that you're going to have a significant type of attack. So the risk posture is different."

Increased attacks is drawing more attention to the issue

The response of increasing attacks against PE remains nuanced depending on the size of the firm and its portfolio companies. Most experts agree the largest shops have enough resources to dedicate towards sophisticated cyber programs that rival that of most traditional financial firms.

But for mid-size to smaller shops, no definitive playbooks exists on how best to protect against attacks.

See more: We talked to billionaires, business titans and an NBA star about the Apollo cofounder who wants to buy the New York Mets. Here's how he can apply his private equity turnaround playbook to a team that haven't won a World Series since 1986.

Liron Gitig, a partner for enterprise technology at New York-based FTV Capital, said cyber audits are one tool PE and portfolio companies are both leaning on to shore up defenses and find weaknesses. Prospective companies are also increasingly being proactive when it comes to discussing cyber at initial meetings, he added.

FTV has a specific person tasked with doing due diligence on companies technology and helping portfolio companies with their tech planning, roadmaps and initiatives. 

Insurance companies are also stepping up to the plate. In late May, Alliant Insurance Services announced a cybersecurity offering in partnership with ACA Aponix targeted to private equity managers and their portfolio companies. 

"We're seeing more and more that firms are starting to say we need to have a go-to vendor that does an assessment on every company that we've mapped out with them that meets our requirements so that we can check this box and make sure we're comfortable," Gitig said.

For companies that hold more sensitive data, Gitig said cyber is a topic raised at nearly every board meeting. Short- and long-term strategies are constantly discussed and audits are regular. 

As a result of the additional complexities that come with holding personal identifiable information (PII), Gitig said companies often go to great lengths to not handle such data, lest they make themselves more of a target.

To be sure, Gitig stopped short of saying companies that hold PII would have a tougher time obtaining an investment from a PE firm. Instead, it would need to be more of a consideration earlier in the conversation. 

"I do think that the scrutiny of: What does a company do? How does that raise the level of risk associated with their being targeted and potential breaches?" Gitig said. "When you are evaluating investments in companies that are engaged in those areas, that's something you spend time on pretty quickly with those companies."

Read more:

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CEO confidence climbs in 2nd quarter, with 70% expecting economic improvement by 2021

Thu, 07/02/2020 - 11:44am  |  Clusterstock

  • The Confidence Board's Measure of CEO Confidence jumped to 44 in the second quarter from 34 as optimism for the second half of the year outweighed near-term struggles.
  • One in 10 CEOs surveyed views current conditions as having improved over the past six months, up from just 5% last quarter.
  • However, the share of chief executives expecting overall economic conditions to improve in the next six months leaped to 71% from 50%. Only 16% of respondents see the economy slumping further by 2021.
  • "It comes as no surprise that CEOs feel grim about the current lay of the land," Lynn Franco, senior director of economic indicators at The Conference Board, said, adding that the improvements to economic and industry expectations are "encouraging."
  • Visit Business Insider's homepage for more stories.

A popular gauge of CEO confidence gained in the second quarter as chief executives held out hope for economic recovery through 2020.

The Conference Board's Measure of CEO Confidence jumped to 44 over the three-month period, from 34 in the first quarter, according to a Thursday release. A reading above 50 indicates an overall positive outlook.

Little of the metric's improvement came from present-day outlooks. Only 10% of chief executives see conditions as having improved over the past six months, revealing continued stress around the coronavirus pandemic and its long-term fallout. The share of CEOs saying conditions were worse in their industries fell 10 percentage points to 82%.

Global growth expectations were slightly more optimistic, with CEOs growing more hopeful for recoveries in China, Japan, and India. 

"Amid historic unemployment, business growth challenges, a weak economic environment, and a pandemic that persists, it comes as no surprise that CEOs feel grim about the current lay of the land," Lynn Franco, senior director of economic indicators at The Conference Board, said in a statement.

Read more: A 22-year market vet explains why stocks are headed for a 'massive reset' as the economy struggles to recover from COVID-19 — and outlines why that will put mega-cap tech companies in serious danger

The near-term pessimism was largely outweighed by growing optimism for the second half of 2020. The share of chief executives expecting overall economic conditions to improve in the next six months leaped to 71% from 50%. Only 16% expect the economy to worsen by 2021, down from 44% in the prior quarter. Similarly, 70% of CEOs expect improvement in their respective industries, up from 49% last quarter. 

The gains in forward-looking indicators are "encouraging" and point to economic recovery across a range of industries, Franco said. Still, there are no indications the revived confidence "will translate to a pickup in investment," she cautioned.

Read more: The No. 1-ranked tech analyst on Wall Street says these 6 stocks have potential for huge gains as they transform the sector

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Tesla shares surge 10% to record high after 2nd-quarter deliveries beat estimates (TSLA)

Thu, 07/02/2020 - 10:40am  |  Clusterstock

  • Tesla shares continued their winning streak on Thursday after the company announced second-quarter delivery figures that beat analysts' estimates.
  • Tesla delivered 90,650 vehicles in the quarter, while analysts had estimated 83,000 deliveries.
  • The company's production levels were down 20% as the COVID-19 pandemic halted production at its factory in Fremont, California.
  • Tesla said production at its Fremont factory had since been ramped up to pre-pandemic levels.
  • Visit Business Insider's homepage for more stories.

Tesla surged as much as 10% to record highs on Thursday after reporting second-quarter delivery figures that blew past analysts' estimates.

Tesla delivered 90,650 vehicles in the quarter, well ahead of estimates of 83,000 deliveries. The company delivered 10,600 Model S and Model X vehicles and 80,050 Model 3 and Model Y vehicles.

While Tesla beat delivery estimates, the company's vehicle production at its factory in Fremont, California, took a hit because of the COVID-19 pandemic: It was down 20%, at 82,272 vehicles.

"While our main factory in Fremont was shut down for much of the quarter, we have successfully ramped production back to prior levels," Tesla said.

Read more: The No. 1-ranked tech analyst on Wall Street says these 6 stocks have potential for huge gains as they transform the sector

Tesla added that the delivery numbers "should be viewed as slightly conservative" and could vary by up to 0.5% or more because it counts a car as delivered only "if it is transferred to the customer and all paperwork is correct."

Tesla's Thursday surge helped to solidify its leap past Toyota on Wednesday to become the world's most valuable auto manufacturer.

The Wedbush analyst Dan Ives said in a note published on Wednesday that demand for Tesla cars in China was rebounding.

"The clear standout this quarter is the massive underlying demand coming out of China as we have seen demand surge in China for Model 3's in this key region with Giga 3 firing on all cylinders despite the softness seen earlier in April," Ives said.

Read more: A 22-year market vet explains why stocks are headed for a 'massive reset' as the economy struggles to recover from COVID-19 — and outlines why that will put mega-cap tech companies in serious danger

Ives added that if Tesla delivered close to 90,000 vehicles, it could "put the bottom-line in the area code of breakeven, a jaw dropping feat in a dark macro and COVID backdrop for Musk & Co."

If Tesla managed to break even in the second quarter, it would be eligible for inclusion in the S&P 500. That could create demand for Tesla shares, as passive exchange-traded funds and mutual funds tied to the index would be forced to buy shares of Tesla.

Ives said that he expected Tesla to deliver upward of 450,000 vehicles for the year and that the bull case now calls for Tesla to rise to $2,000, representing potential upside of 64% from current levels.

Tesla is up more than 190% year-to-date. The company's meteoric rise has had investors searching for the next Tesla, leading them into smaller electric-vehicle manufacturers such as Nikola Motors and Workhorse, which owns a 10% stake in Lordstown Motors.

Tesla shares hit an all-time high of $1,229 in Thursday-morning premarket trading.

Read more: Cathie Wood's firm built 3 of the world's best ETFs, which all doubled in value within 3 years. She told us her 3-part process for spotting underappreciated technologies before they explode.

Join the conversation about this story »

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Slide Deck: 6-Figure Jobs in Cannabis

Thu, 07/02/2020 - 10:01am  |  Clusterstock

Despite a wave of recent layoffs at big cannabis companies and venture-backed startups, the industry still has an exciting future ahead. Wall Street analysts estimate cannabis could become an $85 billion industry by 2030.

If you're looking to work in cannabis, whether it's selling a new product or making a complete mid-career change, you can find opportunities to earn a high salary in some of the industry's top roles.

To help you get started, Business Insider has rounded up the six-top earning positions in the cultivation, extraction, manufacturing, and retail sectors of cannabis.

Business Insider Prime is publishing dozens of stories like this every day that go inside the companies and industries that matter most to you. Get started by reading the full list.

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Investors at Point72 and Goldman Sachs believe industry giants like FIS and Fiserv will be the next to be disrupted by fintech. Here's where they are most susceptible.

Thu, 07/02/2020 - 9:57am  |  Clusterstock

  • A partner at Point72 Ventures, the VC arm of Steve Cohen's hedge fund, expects the next wave of fintech disruption to happen in the less publicized back-end tech that powers big banks.
  • Infrastructure giants like FIS and Fiserv have dominated the banking infrastructure space for decades, but fintechs are looking for ways to reimagine these core banking services.
  • "They are all, as it currently stands, very good businesses with large customer bases who trust them, but the fact of the matter is they've fallen behind on technology," Tripp Shriner, partner at Point72 Ventures, told Business Insider. 
  • Shriner isn't alone in his prediction. Goldman's investment banking head of fintech also says that the next trend to watch in fintech is players that focus on banks' core, often dated, infrastructure. 
  • Visit Business Insider's homepage for more stories.

Depending on whom you ask, fintech is, at any point in time, unbundling or rebundling financial services. 

An unbundling fintech might put a tech-forward twist on a particular product or service, like checking accounts or personal financial management. Rebundlers look to do more than single-point solutions, instead aiming to bring a tech-forward approach to a broader set of financial products.

These cycles of venture-backed fintech disruption aren't new, with direct-to-consumer offerings such as Robinhood, Chime or Betterment. 

And while consumer-facing fintechs are often well-funded with VC cash and unicorn valuations, not all investors are convinced. 

In developed markets like the US, about 80% of households are "fully banked," meaning they have bank accounts and access to credit from mainstream banks, according to the Federal Reserve. For direct-to-consumer fintechs, acquiring users that already have established financial services relationships can be challenging. 

"We've had questions around what some of the businesses on the direct-to-consumer side look like long term, both from an economics perspective as well as from valuation perspective," Tripp Shriner, a partner at Point72 Ventures, told Business Insider. 

Instead, Shriner expects the next wave of unbulding and rebundling disruption to come for the not-so-glamorous back-end tech that powers financial services.

Read more: SoFi is buying a payments startup that powers Robinhood, Chime, and Monzo in a $1.2 billion deal that could upend the fintech ecosystem

Point72 Ventures, the VC arm of billionaire Steve Cohen's hedge fund Point72 Asset Management, invests primarily on the enterprise side of fintech. Its portfolio companies like Extend, Mantl, and Roostify, are going after the less publicized, back-end side of financial services, taking on infrastructure giants like Broadridge, FIS, and Fiserv and building new solutions for the banks themselves.

"They are all, as it currently stands, very good businesses with large customer bases who trust them, but the fact of the matter is they've fallen behind on technology," Shriner said.

Financial infrastructure giants are falling behind

Players like Broadridge, FIS, and Fiserv have been around for decades, behind the scenes of consumer-facing banks and asset managers. And they've achieved massive scale, largely through a series of acquisitions. From payments processing to back-office tech to compliance and tax reporting, these firms have products for virtually every aspect of financial services.

But, in part due to their incredible size, these established players cannot move as quickly as startups. Part of the reason they've been slow to evolve is complacency and bureaucracy, but it's also about their technology infrastructure, Shriner said. 

And at such a large scale, there are fewer incentives to invest in modernizing their platforms.

"They have good business models, they're large businesses with fairly captive customer bases. So they haven't had much need to innovate," Shriner said.

Read more: There's never been a better time for banks to buy fintechs, according to a Capital One cofounder. Here's why both sides need each other more than ever.

But the scale of financial technology vendors like FIS and Fiserv doesn't mean they're immune to disruption. And there are plenty of fintechs vying for a piece of the financial infrastructure space.

And many have grown to be sizeable as well. Payments giant Stripe is valued at $36 billion, backed by big-names investors Andreessen Horowitz, GV (formerly Google Ventures), and Sequoia. Card-issuing platform Marqeta is valued at $4.3 billion, and data fintech Plaid was acquired by Visa for $5.3 billion earlier this year

To be sure, the traditional players aren't simply ignoring fintech. FIS, which bought WorldPay last year, just set up a venture fund in April to invest in fintechs. Fiserv runs a fintech accelerator program as well.

"In the near term, if I were the CEO of one of those businesses, I don't know that I'd be particularly concerned given the scale that I have," Shriner said.

"But over time, I do think it's something that they're going to have to figure out a way to react to, whether it's introducing more innovation into their organizations, partnering with more of the startup technology businesses, or acquiring them," he added. 

Shriner's not the only one who's bullish on infrastructure fintech.

Goldman Sachs' Jeff Gido, global head of the fintech for the firm's investment banking division, discussed how the coronavirus pandemic has accelerated the acceptance of fintech in a recent podcast.

And the future of fintech is all about infrastructure, Gido said.

"Going forward, the concept of infrastructure really revolves around the fact that many of these financial institutions are running the core systems and core platforms on tech that may be 20 or 30 years old," Gido said.

And fintechs that help those financial institutions change their core infrastructure are well-positioned, he added, enabling banks to remove some of their "legacy tech debt" and become more innovative.

"We really think that's the next trend," Gido said.

Fintechs are taking on incumbents one piece at a time

While taking on large companies such as FIS and Fiserv is an uphill battle, the potential benefits are undeniable. FIS reported $10.3 billion in revenue in 2019 — a company record. And Fiserv reported $14.5 billion in 2019, a 4% increase year-over-year. 

"When you look at the revenue base and market capitalization of an FIS, I think the positive is that there's a really good opportunity to build a very valuable business just by unbundling one piece of it," said Shriner.

Online account opening, for example, is a crucial part of customer acquisition for consumer banks. And Mantl, a Point72 portfolio company, is one fintech that offers banks a solution to onboard new customers digitally.

Point72 led Mantl's $8 million Series A in February, and participated in its $11 million Series A extension in June.

Mantl helps smaller community banks, which typically would require customers to enter a branch to open an account, compete with big retail banks like Chase and Wells Fargo, as well as digital banks like Chime. Acquiring customers is a huge cost-driver for banks, and can result in losses if prospective customers don't sign up due to difficult account opening processes, Shriner said.

"Any sort of solution that helps incumbents match startups from a technology and innovation standpoint and has an actual impact on the economics for those institutions was very attractive for us," he added.

Once trust is established, fintechs have an opportunity to disrupt more pieces of banking infrastructure

Fintech's push to disrupt back-end tech providers is bolstered by banks' increasing acceptance of them as partners.

"I think big banks, in particular, have seen enough success with their fintech partnerships and have seen enough evolution in their internal mindset where they're more comfortable working with early-stage startups," Shriner said. 

"Because of the growth of cloud and the growth of APIs, it's much easier for a bank to now work with those types of companies," he added. "That has us really excited about the opportunities for those types of businesses."

Read more: Visa's fintech chief lays out how a new program to bring startups on board in just a few weeks will help tap a $185 trillion opportunity

And that trend has only accelerated amid the coronavirus pandemic, with banking and payments becoming more digital. On the financial infrastructure side, Shriner expects that this trend of increased partnership will continue, especially as fintechs build trust with institutional players. 

"We guide our startups quite a bit on building referenceability and therefore trust in the marketplace," said Shriner.

Read more:

SEE ALSO: There's never been a better time for banks to buy fintechs, according to a Capital One cofounder. Here's why both sides need each other more than ever.

SEE ALSO: A fintech disrupting corporate cards just won $11 million in backing, and its CEO says Apple's new credit card is validation of its strategy

SEE ALSO: Visa's fintech chief lays out how a new program to bring startups on board in just a few weeks will help tap a $185 trillion opportunity

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Kenya Accelerator Programme for African Fashion Brands: Open Call for Proposals - Haute Fashion Africa (HFA)

Thu, 07/02/2020 - 8:09am  |  Timbuktu Chronicles
A special mentoring accelerator programme is being launched by the Ethical Fashion Initiative to support African fashion brands in Kenya whose work demonstrate credibility in terms of responsible sourcing and have commercial viability...[more]

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An African Tech Exit - @danbabbles

Wed, 07/01/2020 - 11:25pm  |  Timbuktu Chronicles
Dan Kleinbaum writes:Last month, we signed the paperwork to sell Beyonic to MFS Africa. An eight-year journey ends this phase of the company and I can’t help but feel victorious. Building things is hard. Doing it early, in markets where traditional venture investments hadn’t yet paid off, and being constantly hamstrung by a lack of resources is ludicrously difficult...[more]

Showcasing Digital Models - 'Made' A digital magazine by Tongoro

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REGTECH REVISITED: How the regtech landscape is evolving to address FIs' ever growing compliance needs

Wed, 07/01/2020 - 8:02pm  |  Clusterstock

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

Regtech solutions seemed to offer the solution to financial institutions' (FIs) compliance woes when they first came to prominence around 24 months ago, gaining support from regulators and investors alike. 

However, many of the companies offering these solutions haven't scaled as might have been expected from the initial hype, and have failed to follow the trajectory of firms in other segments of fintech.

This unexpected inertia in the regtech industry is likely to resolve over the next 12-18 months as other factors come into play that shift FIs' approach to regtech solutions, and as the companies offering them evolve. External factors driving this change include regulatory support of regtech solutions, and consultancies offering more help to FIs wanting to sift through solutions. Startups offering regtech solutions will also play a part by partnering with each other, forming industry organizations, and taking advantage of new opportunities.

This report from Business Insider Intelligence, Business Insider's premium research service, provides a brief overview of the current global financial regulatory compliance landscape, and the regtech industry's position within it. It then details the major drivers that will shift the dial on FIs' adoption of regtech over the next 12-18 months, as well as those that will propel startups offering regtech solutions to new heights. Finally, it outlines what impact these drivers will have, and gives insight into what the global regtech industry will look like by 2020.

Here are some of the key takeaways:

  • Regulatory compliance is still a significant issue faced by global FIs. In 2018 alone, EU regulations MiFID II and PSD2 have come into effect, bringing with them huge handbooks and gigantic reporting requirements. 
  • Regtech startups boast solutions that can ease FIs' compliance burden — but they are struggling to scale. 
  • Some changes expected to drive greater adoption of these solutions in the next 12 to 18 months are: the ongoing evolution of startups' business models, increasing numbers of partnerships, regulators' promotion of regtech, changing attitudes to the segment among FIs, and consultancies helping to facilitate adoption.
  • FIs will actively be using solutions from regtech startups by 2020, and startups will be collaborating in an organized fashion with each other and with FIs. Global regulators will have adopted regtech themselves, while continuing to act as advocates for the industry.

In full, the report:

  • Reviews the major changes expected to hit the regtech segment in the next 12 to 18 months.
  • Examines the drivers behind these changes, and how the proliferation of regtech will improve compliance for FIs.
  • Provides our view on what the future of the regtech industry looks like through 2020. Get The Regtech Revisited Report

     

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THE DIGITAL BANKING ECOSYSTEM: These are the key players, biggest shifts, and trends driving short- and long-term growth in one of the world's largest industries

Wed, 07/01/2020 - 7:00pm  |  Clusterstock

The banking industry is in the grips of an identity crisis. Leaders of the world's largest banks — such as Citi, BBVA, and Goldman Sachs — have begun describing themselves as technology companies with banking licenses.

However, this description is still aspirational. Executing the vision will require billions of dollars in investments, the restructuring of teams, a reimagining of the entire banking technology stack, and the adoption of a far more customer-centric business view. 

The stakes of failing to transform are high: Accenture projects that 35% of all bank revenues could be at risk from more tech-savvy competitors like fintechs as soon as 2020 for incumbents that fail to up their game.

As a result, a wave of digital transformation is now sweeping the banking industry, as incumbents shore up against consumer demand and competitive pressures. Major banks have already announced multibillion-dollar, multiyear digitization projects: By 2021, global banks' IT budgets will surge to $297 billion, up 14% from $261 billion in 2018, according to Celent.

Many incumbent banks are opting to decrease their branch budgets and networks and reinvest their resources in digital channels such as mobile instead to cater to current consumer preferences, and are enlisting the help of tech-savvy software vendors to modernize their tech stacks from top to bottom as part of this process.

In the Digital Banking Ecosystem report, Business Insider Intelligence explores the incumbent banking landscape as a whole, and the third parties banks are calling on to help their transition to digital. We then take a closer look at the three biggest drivers for incumbent banks' digitization push: digital-native competitors like neobanks and Big Tech companies; changing consumer behaviors and banking channel preferences; and a growing array of cybersecurity threats.

Lastly, we examine what incumbents are already doing today to transform themselves into digital-first organizations to compete in a customer-centric, data-driven global economy, and how they are learning to meaningfully measure the progress of their transformations. 

The companies mentioned in this report include: Acronis, Amazon, Ant Financial, Apple, Ario, Banco Galicia, Bancorp, Bank of America, Bank of England, Barclays US Consumer Bank, BBVA, BNP Paribas, Caixa Geral de Depositos, CaixaBank, Capital One, China Construction Bank, Citigroup, Citizens Bank, Compliance.ai, CSI, Dave, Detroit Fintech Bay, Deutsche Bank, Diasoft, Emirates NBD Bank, Finastra, Finn AI, Finxact, First Direct, FIS, Fiserv, Flagstar Bank, Forcepoint, ForSee, Forward Networks, Geezeo, Gemalto, Goldman Sachs, Google, Grab, Hello Bank, Help Systems, HotJar, HSBC, IBM, ICBC, Infosys, ING, ING Direct, Intesa Sanpaolo, Jack Henry, JPMorgan Chase, Kenna Security, Lloyds Bank, Lyft, Midwest Bank, Mission Bank, Monzo, N26, Nationwide, NatWest, nCino, ObserveIT, OnDeck, Openbank, Osano, Personetics, PNC, RBS, Reciprocity Labs, Saga, Santander, Sberbank, Square, Starling Bank, Strands, Tanium, Temenos, Tencent, Thomson Reuters, Thought Machine, Tink, TSB, Uber, United Income, US Bank, Wells Fargo, Zelle, and Zopa. 

Here are some of the key takeaways from the report:

  • Incumbent banks are intensifying their digitization efforts in the face of changing consumer demands and growing competitive pressures.
    • The number of US consumers considering switching banks in the next 12 months increased by 86% from a year before, from 6.9 million to 11.9 million, per Resonate, with consumers citing the need for better digital banking services and more personalized products and tools as major motivators.
    • Meanwhile, tech giants like Google and Amazon are poised to grab up to 50% of the $1.35 trillion in US financial services revenue from incumbent banks, per McKinsey, leveraging their tech expertise to lure away customers.
  • Legacy channel usage is steadily dwindling, while digital channel usage is firmly on the rise. This turn to digital is being accelerated by younger, tech-savvy generations like millennials and Gen Zers quickly becoming banks' largest addressable market.
    • Once the most widely used banking channel in the US, branch use will drop at a compound annual growth rate (CAGR) of -2.01% between 2019 and 2024, per Business Insider Intelligence projections.
    • Meanwhile, mobile banking, the least-used banking channel in 2008, is expected to grow at a CAGR of 2.83% between 2019 and 2024, the highest among all channels. 
  • To digitally transform, banks need to join forces with partners, enemies, and frenemies alike. Vendors will be key to the modernization of banks' IT, with specialists catering to each layer: 81% of banking executives surveyed by Finextra and the Euro Banking Association cited working with partners as the best strategy for achieving digital transformation goals. Banks' growing IT budgets reflect their changing priorities: By 2021, global banks' IT budgets will surge to $297 billion, up 14% from $261 billion in 2018, according to Celent.
  • Banks' digital transformations are already well under way, and incumbents are making massive changes to the way they operate and plan for the future to compete in a digital economy. They're doing this by embracing digital-ready innovation models; adopting new business models like open and direct banking; and reorienting their tech stacks around the digital customer experience.

In full, the report:

  • Outlines the incumbent banking landscape and its components, and the structure of the banking tech stack and the vendors supplying each of its layers.
  • Explains the biggest drivers behind banks' digital transformations, especially the rise of tech-savvy competitors, shifts in consumer behaviors, and a growing number of cybersecurity threats.
  • Highlights the steps banks are already taking to turn themselves into digital-first, data-driven, and customer-centric organizations. 
  • Evaluates the progress incumbents have made towards digitization, and how deeply they've embedded themselves in the emerging cross-industry digital banking ecosystem.

Interested in getting the full report? Here's how to get access:

  1. Purchase & download the full report from our research store. >> Purchase & Download Now
  2. Sign up for Banking Pro, Business Insider Intelligence's expert product suite tailored for today's (and tomorrow's) decision-makers in the financial services industry, delivered to your inbox 6x a week. >> Get Started
  3. Join thousands of top companies worldwide who trust Business Insider Intelligence for their competitive research needs. >> Inquire About Our Enterprise Memberships
  4. Current subscribers can read the report here.

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These are the winning strategies for AI in banking

Wed, 07/01/2020 - 6:00pm  |  Clusterstock

Artificial intelligence (AI) applications are estimated to save banks $447 billion by 2023, and front- and middle-office AI improvements could represent more than 90% of these savings.

Leveraging AI tools like chatbots, voice assistants, and personalized insights can transform the customer experience by enabling frictionless, 24/7 interactions. Additionally, in middle-office banking, AI can be used to improve anti-money laundering efficiency and payments fraud prevention.

A recent OpenText survey found that 80% of banks are highly aware of the potential benefits presented by AI, but much fewer have taken the dive into implementation. When mindfully executed, AI can enable cost cuts, risk mitigation, and a better user experience, but what does winning execution look like?

In the Winning Strategies for AI in Banking report, Business Insider Intelligence looks at several effective strategies used to capture AI's potential in banking, and details how financial institutions like Citi and US Bank have successfully implemented some of these strategies.

This exclusive report can be yours for FREE today.

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