Happy Friday! I hope the week hasn’t dragged too much after last week’s shortened one. To see you into the weekend, here’s a look at the last few days.
1. Open Banking launches tomorrow. Here’s why it’s actually a bad idea.
The Open Banking scheme is designed to enable customers to give companies that aren’t their bank or building society permission to access their account. It will mean that, if you want, you can use services from lots of regulated companies without needing to share your data with third parties.
You could, for instance, choose to view all your accounts through one provider, which would allow that company or another company to analyse your data and offer things like automated budgeting advice or cheaper overdrafts. The benefits are clear.
The most obvious argument against such a move? The threat to private data. And there’s another reason why Open Banking may not be such a clever idea: it will widen the financial services schism between young, tech-savvy users, and the less computer literate.
You already effectively pay for being offline when it comes to banking, with major banks offering cash for switching and passing on the cost of deals to the less savvy. And if you’re a branch and paper person, you’re more likely to have allowed your savings rate to drop, be offered worse deals, and be more exposed to scammers.
Ultimately, there will always be limits to top-down approaches led by quangos like the author of Open Banking, the Competition and Markets Authority, when it comes to improving the lives of consumers. A consequence of forced cooperation is always more unintended consequences than you bargained for.
2. One third of millennials would rather invest $1,000 in bitcoin than in government bonds or stocks
That’s according to a recent survey of 2,000 people conducted by Blockchain Capital. Unfortunately, it’s hard to imagine that the sentiment actually stems from a libertarian ideal to rid monetary systems of the state.
But here’s the thing. It is true that, if you had bought $5 worth of bitcoin at the beginning of 2012, you would now have almost $20,000. And had you put £10,000 in the FTSE 250 (which has performed better than the FTSE 100), back in 1986, by 2016, you would have made a comparatively meagre £265,035.
However, investing and betting are not the same thing. Of course, when you invest, there is no guarantee that you won’t lose your money, but the odds are not stacked against you, as they are when you gamble. Markets tend to rise over time, and sensible investing will see you build a diversified portfolio, which means it’s unlikely your investment will be knocked out in one go. Bitcoin is still highly volatile, and it’s just one, unbacked, currency.
This week may have been the week that JP Morgan’s CEO Jamie Dimon said he regretted calling bitcoin a fraud, and there are plenty of us who think cryptocurrencies will change the financial system and, therefore, the world. But, for the time being, this tweet from Jeremiah Owyang is worth your attention: “you’d be crazy to spend cryptocurrencies to buy goods, as the promise is as an investment. So will they ever be used as a currency?” If not, where will value come from?
3. Transferwise launched its new borderless account and debit card
Transferwise, which makes it cheaper for people to send money abroad via its online platform, has started rolling out an account linked to a debit card that enables people to spend local currency across the globe – using just that one card. It means anyone working or travelling abroad needn’t open an account with a foreign bank.
The news reminded me of an exciting thought experiment: imagining other areas of life going borderless. Take legal systems. Already, you can set up a company in a different country remotely, or use the English legal system to, say, buy property abroad. Will we get to a point where the rule of law becomes divorced from what jurisdiction you’re in, so people could opt in and out of the systems they use, with a marketplace for legal structures and recourse to the law?
4. We found out what worries Brits most about 2018, and that GDPR was the sexiest business story of 2017
Sixty five percent of Britons think a major terror attack is likely this year – higher than all the other 27 major countries polled by Ipsos Mori. The same poll (of 21,000 people) showed that a quarter of us think stock markets will crash and that we’re now overdue a correction.
Meanwhile, a new survey from media analytics company Signal Media found that the most written about business story of 2017 was the introduction (on the 25 May 2018) of GDPR, the new EU data protection laws designed to give individuals more control over their personal data. It also found that Michael Gove and his work as Environment Secretary was the second-most covered news item across the country, trumped only by Hurricane Irma.
CAUGHT OUR EYE
The Scottish startup with a business model for giving
According to Plan International UK, one in 10 disadvantaged girls in the UK can’t afford sanitary products.
Enter Hey Girls, a Scotland-based company set up by a single mum and her two daughters. Their model is simple: for every pack of their (chlorine and bleach-free) sanitary towels they sell, they give another to a girl or young woman, via partners like food banks and ex-offender charities.
We’ve seen similar initiatives with shoes in the past, and one wonders how many other products – or services – this could be done with. Increase the price point for those who can afford it, and they effectively buy multiple, benefiting others.
The woman who made $2bn in four days
Yang Huiyan, vice chairman of China’s Country Garden Holdings Co, saw her personal wealth jump to $25.6bn by 5 January, according to the Bloomberg Billionaires Index. Then, the country’s largest developer’s shares went up by another 7.4 percent on Monday.
Yang, 36, is the richest woman in China and its youngest billionaire. Her father transferred his controlling stake in the company to her in 2005.
CES: Which of the hundreds of technologies unveiled might actually be of use?
This week, the tech trade show CES took place in Las Vegas. It has felt in recent years like truly radical technologies are difficult to come by – the same familiar expressions keep coming up: AI, VR, smart X Y and Z. That said, there were some very impressive pieces of kit being exhibited this week. Here are just three that I thought I would use right now:-
Lenovo Smart Display with Google Assistant. Apparently better than Amazon Echo, it can do your entire morning routine for you: alarm goes off, lights go on, it makes a tea, throws up your daily schedule and weather, wakes children…
Travis the Translator, a real-time polyglot. Able to translate 80 languages, and 20 in offline mode. You speak into it in one, it speaks to your interlocutor in another.
Noise-cancelling headphones by Orosound. Designed to fade out background noise, so you can hear the conversations/music/voices you need to.
WHAT DO YOU THINK?
Will the rise of robots really mean we do less work? Probably not.
A family member suggested over Christmas that, if he had the money, he’d invest it in leisure – because robots must mean we’ll have more free time in the future. But will they?
Here’s writer Tim Worstall on the changing nature of work in the face of automation. The gist is that automation improves life, but doesn’t necessarily diminish work. The washing machine slashed the time women spent on housework, for example. But they didn’t put their feet up – they went out and got paid work.
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