Matt Atawneh’s Post

Competition works wonders… It’s great what a little bit of competion does. It will be interesting to see whether presumably an even better rate from the Fintechs does actually make Irish customers switch. The experience previously when BoSI, Danske and others competed was that inertia helped the banks, better rates only mattered a little. Whilst I am all for competition there’s also another aspect. While Revolut is often referred to as a “digital bank”, it is important to note that it is not a licensed bank but an electronic money institution (EMI), operating under a different regulatory framework. It is my understanding that unlike licensed banks, EMIs like Revolut do not offer the same level of protection to depositors as traditional banks, lacking features such as deposit insurance and full regulatory oversight. These Fintech’s need to clarify this. The media should make readers aware of these differences and not refer to them as “banks” so that customers understand the level of protection provided by their chosen financial services provider to make informed decisions about their finances.

With all due respect to John Small and the Commerce Commission, this plan to magic up a new competitor to the Australian banks is charmingly naive. The issues with New Zealand's dysfunctional and expensive banking sector aren't going to be solved by Kiwibank becoming a bit larger, or a touch more assertive in the marketplace. The reasons are obvious: the Reserve Bank of New Zealand has created a less-than-level playing field by allowing the Aussie incumbents to realise higher margins at lower cost and with greater leverage. This entrenches their absurdly high profitability and makes it almost impossible for any new challenger to break into the market. So the first step in any genuine reform of the sector is a major regulatory re-think. The Reserve Bank needs to stop picking (Aussie) winners and start providing a neutral platform with a fair set of rules for all banks, not just the big ones. Here's a typical example: despite everyone from the Reserve Bank Governor to independent economists to various Ministers of Finance lamenting that New Zealanders invest too much in property and not enough in businesses, the Reserve Bank allows the Australian banks to write a new mortgage with only 7% equity - yet requires 20% equity for them to write a new business loan. They need only a third of the capital and can make vastly higher leveraged profits by pushing property lending rather than business lending, so is it any wonder the Aussie banks have repeatedly inflated a New Zealand property bubble? So the first obvious step is major regulatory reform, as a matter of urgency. The second step is just as straightforward: break up the big banks. ANZ alone has 40% market share, and that's far too large. The country can't afford "too big to fail" banks, and the simple answer to that problem is to deliberately make them smaller. Thankfully, there's a simple and elegant plan to achieving exactly that, which I'll expound in a bit of detail in coming days. https://lnkd.in/gXawdfU5

Zopa Bank Reports First Full Year Profit Jaidev Janardana, CEO at Zopa Bank said: “2023 was a landmark year as we achieved our first full year of profitability, grew to over a million customers, and maintained our market leading net promoter score. Across all our products, the opportunity is huge and we remain passionate about changing customers’ relationship with money for the better. We are uniquely placed to achieve this due to our customer-centric culture, lending expertise, and use of technology and data. Together, these capabilities create an exceptional experience to help customers reach their financial goals.”   https://lnkd.in/eqaJ3fvm #fintech #finance #banking #paytech #payments #fintechnews #paymentsnews

Why you're probably losing $1500 a year and what you can do about it - AFR: That equates to an average of $1474 per person each year, with a compounded loss per person over five years of $8228, according to a study by fintech ...

Few things from me earlier this week: -- Citi analyst Brendan Sproules has downgraded all the major banks to "sell" in the latest signal that their valuations are getting increasingly out of control. Not only are the valuations stretched, but any expectations they will claw back their profit margins when interest rates start falling are a serious misreading of the current political climate. https://lnkd.in/gm96Ey3p -- The Reserve Bank of New Zealand has rebuked findings from the Commerce Commission, and said reccos it should reduce its capital settings and that more subsidies should go to Kiwibank are ineffective. NZ would benefit more from encouraging the current big four to act as "mavericks", similar to Macquarie Group in Au, the RBNZ says. https://lnkd.in/gmrRWuMs

Things Are Looking Up As OCR Drops! The Reserve Bank of New Zealand announced a 50 basis points decrease in the OCR and banks were swift to follow with immediate decreases to interest rates with Kiwibank calling it even before the OCR announcement. The OCR’s decision is primarily aimed at stimulating economic growth in the face of a challenging economic climate to make borrowing cheaper, encouraging spending and investment across various sectors. The short-term implications of the decrease include: 💰 Increased Affordability: With lower mortgage rates, monthly repayments for home loans will decrease. This increased affordability may lead to a rise in demand for properties, particularly among first-time buyers who may have been previously priced out of the market. 🤩 Boost in Buyer Confidence: The OCR decrease signals to the market that the RBNZ is taking proactive steps to support economic growth. This will hopefully increase buyer confidence, leading to a more active property market as individuals and families feel more secure in making long-term financial commitments. ➡ Potential for Price Stabilisation: Following a period of declining property prices, the combination of lower interest rates and increased buyer activity may lead to a stabilisation in prices. While significant price growth may not be immediate, the market could experience a more balanced dynamic between supply and demand. 🗝 Investor Interest: Real estate investors may see this as an opportune time to enter the market or expand their portfolios. With lower borrowing costs, the potential for positive cash flow increases, making property investments more attractive. With a further OCR cut expected in November things appear to be getting “easier” for those in the property market. If you are thinking of buying, selling or investing - let's catch up.

Bank shares are too expensive but nothing in the latest round of major #bank reports spooked the horses with Westpac Group completing the season this morning. There are signs of credit issues but bad debts are stable. Commonwealth Bank's result demonstrated it agrees bank shares are too expensive. + some green shoots in the #fintech winter from KPMG Australia latest Pulse survey but not great news for startups Daniel Teper; the Reserve Bank of Australia has kicked off a review of #surcharging and merchant costs Independent Payments Forum while Xero finds merchants are not offering the payment choices consumers want Theo Konstantas; has the government finally got serious on #openbanking WeMoney Dan Jovevski Rehan Mark D'Almeida FinTech Australia? + more in the latest free Capital Gains newsletter from Capital Brief https://lnkd.in/gzevwNGf

Zopa Bank Amasses £4 Billion in Customer Deposits "Launched in June 2020, the milestone makes Zopa one of the fastest digital banks in the UK to turn an annual profit." https://lnkd.in/enJpvDxj #fintech #finance #banking #paytech #payments #fintechnews #paymentsnews

Reflecting on the UK Banking Sector: Year-End Insights The UK banking sector offers a fascinating case study of resilience and transformation. This year has been a rollercoaster, with macroeconomic challenges, rising interest rates, and evolving customer expectations shaping the industry. One statistic that stands out is the increase in net interest margins (NIM) across major UK banks. Barclays, for example, reported a 3.69% NIM in Q3 2024, up from 3.18% in the previous year, reflecting the impact of higher rates. On the flip side, the sector also witnessed a 22% year-on-year rise in provisions for bad loans, highlighting caution amidst economic uncertainty. Digital banking has grown exponentially. According to UK Finance, over 80% of adults now manage their accounts online or through apps, a significant jump from just five years ago. Challenger banks like Starling and Monzo have continued to disrupt the market, capturing younger demographics with seamless tech integrations. For me, the most impressive trend is the banking sector’s commitment to ESG (Environmental, Social, and Governance) initiatives. Lloyds Banking Group pledged £8 billion in sustainable financing this year, reflecting the industry’s role in driving positive change. As we step into 2025, key questions arise: - How will banks adapt to further rate changes? - Will AI and blockchain redefine operational efficiencies? - How will the industry balance profitability with sustainability? What are your thoughts on the UK banking sector’s direction in the coming year? Let’s connect and share insights! #Finance #BankingSector #UKFinance #ESG #DigitalBanking #YearEndReview #FinancialInsights

Or, and look I appreciate this is a mad idea, we could invest some of it. The average real return on cash is typically negative once inflation and tax are taken into account. The spending power of your money slowly declines over time. It is worth less in real terms. This is what we should describe as risk. We don’t but I’ll get to that. Don’t get me wrong, Bank accounts are a great place for short term savings - money you are planning to spend, a convenient way to pay direct debits and receive your salary. But let’s be clear, moving to a higher rated deposit account isn’t investing. Investing is when you take some of your savings from the bank account either monthly or by a lump sum and you consciously and deliberately invest it. That means that it is no longer in cash deposit accounts with some interest added each year and some protection of your nominal principal (your capital) up to €100,000. An investment is for the longer term by which I mean several years and, ideally, more than 10. Investments go up and down in the short term that’s a feature of them and not some sort of bug to be scared of. We call this risk when in reality it’s short term price volatility, the natural movement of prices in the short term is how markets work. It’s great because it means that your investment is doing what it’s supposed to do which is linking your money to global capital markets which is where it is supposed to be longer term. Why do we invest? Because over the longer term, again more than 10 years ideally, investments in real assets like the Stockmarket have historically been a great place to grow your money in real terms above inflation. Over many decades the Stockmarket has beaten cash, bonds, property, commodities into a hat. Since 1970 your average annual real return over inflation has been about 5%pa before costs and taxes. In other words, over my lifetime investing has significantly grown the real value of money. There are costs. There are taxes and your principle investment, your capital isn’t guaranteed in the sense that; in the short term it could be worth less; a lot less, than you started. That’s why you need a bank account for your short term needs. In other words don’t invest money that you need in the short term. That’s what saving accounts in the bank are for. Short term needs. Only invest money that you don’t need for current spending or emergency spending purposes and you should have nothing to fear from short term volatility in market prices. Don’t invest if you have debt. Credit card, car loans and mortgages. Pay those off first. And always look to use a pension as a way of investing with (still) generous tax breaks for investors ahead of making personal investments. Finally, if your financial adviser is asking you to complete a risk profile questionnaire and wants you to invest in a risk 3 or 4 fund based on the results, you are not getting investment advice specific to your needs and circumstances just your fears.