Financial services （6do encyclopedia）

[brief (簡報編譯)]

Financial services refer to the various services and products provided by financial institutions, such as banks, credit unions, investment firms, insurance companies, and other similar organizations. These services are primarily focused on facilitating financial transactions for individuals and businesses.

The financial services industry is an integral part of the global economy, with a multitude of financial institutions operating in various sectors such as banking, insurance, investment, and wealth management. The industry plays a crucial role in promoting economic growth, facilitating commerce, and providing necessary liquidity.

Historically, the financial services industry has undergone significant changes due to technological advancements, changes in consumer behavior, and regulatory reforms. Today, the industry is experiencing another wave of transformation, thanks to the rise of fintech companies and the widespread adoption of digital technologies.

The financial services industry encompasses a vast range of products and services, including banking services, investment services, insurance, and financial advice. These services can be further classified into various subcategories, based on their respective offerings and target customers.

Banking services include checking and savings accounts, loans, mortgages, credit cards, and other financial products and services provided by banks and credit unions. Investment services include brokerage services, investment advisory, trading, and other similar services provided by investment companies, mutual funds, and other financial institutions. Insurance services include life, health, property, and casualty insurance, provided by various insurance companies and brokers. Financial advice services include financial planning, wealth management, and retirement planning, provided by professionals such as financial advisors, wealth managers, and investment managers.

In recent years, the financial services industry has witnessed the rise of fintech companies, which leverage technology to provide innovative financial products and services that are more accessible, affordable, and convenient for consumers. Fintech companies offer a wide range of services such as mobile banking, online investing, peer-to-peer lending, blockchain-based payments, and other digital solutions that disrupt traditional financial institutions.

The rise of fintech has prompted traditional financial institutions to accelerate their digital transformation efforts and adopt new technologies to remain competitive. Many banks and investment firms have invested heavily in artificial intelligence, big data analytics, cloud computing, and blockchain technology to improve their operational efficiency and enhance customer experience.

However, the financial services industry is also subject to various risks and challenges, such as cyber threats, data breaches, fraud, and regulatory scrutiny. Financial institutions must adhere to strict regulations and compliance requirements, such as KYC (Know Your Customer), AML (Anti-Money Laundering), and GDPR (General Data Protection Regulation).

In conclusion, the financial services industry is a critical sector of the global economy, providing essential products and services to individuals and businesses. The industry is undergoing significant transformation due to technological advancements and changes in consumer behavior, paving the way for new players and business models. Nevertheless, the industry must also navigate various risks and challenges, emphasizing the need for strong regulatory oversight and proactive risk management.

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Buffett’s Berkshire bet almost $1bn on credit card issuer Capital One

Financial Times

23-05-15 23:19

Investment group, Berkshire Hathaway, led by Warren Buffet, has placed a $954m bet on Capital One, in the first quarter of 2019. However, Berkshire Hathaway has been dumping billions of dollars worth of stocks at the same time. The investment signals Berkshire Hathaway's comfort with the credit card industry and the health of consumers even as several regional banks have been swept up in financial turmoil. Capital One describes itself as the third-largest issuer of Visa and Mastercard credit cards in the US.

https://www.ft.com/content/d0216077-509f-49dd-9538-1547902de414

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Meteoric rise in power of ‘finfluencers’ sparks concerns

Financial Times

23-05-16 04:35

The recent surge in self-directed investing can be partially attributed to the influence of financial influencers, according to a report. US and UK regulators have already issued investor warnings about social media and investment fraud, and the Financial Conduct Authority has cautioned influencers about promoting illegal get-rich-quick schemes. The report says that distinguishing reliable and unreliable finfluencers is difficult. One risk arises because regulators impose strict rules on finance professionals when it comes to marketing and endorsements. One recent example is the US's Securities and Exchange Commission’s National Financial Capability Month initiative in April. Financial influencers experience an average 8% annual growth rate in the number of followers, compared with 4% growth rate for all other influencers. Newer investment apps rely heavily on finfluencers to spread the word, with one UK app, InvestEngine, spending 40% of its marketing budget on influencers. However, regulators say growth in self-directed investing is highlighting a need for better education.

https://www.ft.com/content/41e88e16-1313-4794-8674-d4feac5efd31

[brief (簡報編譯)]

Should UK boards take Apollo seriously?

Financial Times

23-05-16 04:35

Apollo Global has developed a reputation in the UK for abandoning deals at the eleventh hour. That has only been underscored after the US investment giant saw two possible take-privates collapse in the past four days. On Monday, Apollo said it wouldn’t follow through with its offer for UK oil engineering company Wood Group, causing the company’s share price to fall by more than a third. Taking publicly traded UK companies private has proven a lucrative source of deal flow for some of Wall Street’s biggest names in recent years. But Apollo hasn’t capitalised on the trend. Instead, the Wood Group and THG represent Apollo’s latest failed efforts to buy UK companies. The $598bn investment firm has also failed to follow through on deals for publisher Pearson, gambling company William Hill and packaging business RPC Group.

https://www.ft.com/content/1f598dc2-7156-4196-90e3-d05e6ad1d634

[brief (簡報編譯)]

Xavier Niel-led group to lift stake in Swiss asset manager GAM

Financial Times

23-05-16 08:18

An investor group, headed by French billionaire Xavier Niel, is to increase its stake in asset manager GAM beyond 10%, jeopardising the sale of the firm to UK competitor Liontrust. GAM reached a deal with Liontrust last month for £96m, however, Niel’s group argued that the takeover unfairly favoured the acquirer and contravened Swiss takeover regulations. GAM was forced to find a buyer following difficulty in the five years following an investments scandal involving risky debt. GAM's shares rose 5% following the recent announcement, however, they have fallen by over 95% since 2018.

https://www.ft.com/content/303d5742-a651-4415-b2a4-fc6289cc9ace

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MPs call on UK ministers to regulate crypto like gambling

Financial Times

23-05-16 23:19

The UK government should class cryptocurrencies as gambling instead of a financial service, the Treasury select committee has suggested. While calls have been made to regulate the industry more strictly, the committee's report stated that it would give the impression it is "safer than it is". Harriett Baldwin, the committee's chair, said cryptocurrency trading is more similar to gambling than a financial service. The report also criticised the government for the Royal Mint NFT and warned against expending public resources on supporting cryptoasset activities without a clear, beneficial use case.

https://www.ft.com/content/ee3d354a-3d57-44b3-bdad-175a69dbf7f8

[brief (簡報編譯)]

Scottish Mortgage defends strategy after shares take beating

Financial Times

23-05-17 07:19

Scotland's Baillie Gifford has advised shareholders of its Scottish Mortgage Investment Trust to stay patient and adhere to discipline following a tough year in which their shares dipped by a third. The company has incurred a drop in stock prices as its strategy is to nurture high-growth corporations that may "transform" society, which has resulted in a sell-off as higher inflation and rising interest rates materialise over the past year.

https://www.ft.com/content/d5b7153a-0d7b-4542-a7fa-7f4199d77035

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Fund groups race to launch first US ether futures ETF

Financial Times

23-05-17 04:34

Five ETF issuers have filed applications to launch ether futures ETFs, according to analysts. Grayscale was the first to file, with Valkyrie lodging an application last week. The new ETFs have investment strategies similar to each other and will trade primarily in ether futures traded on the Chicago Mercantile Exchange, if approved. Last month, bitcoin futures ETFs in the US allowed advisers to make trades on behalf of clients investing in cryptocurrencies for the first time. The new ETFs will operate almost identically to their bitcoin futures counterparts, the analysts said.

https://www.ft.com/content/29333bd5-7b69-4887-a1d8-05718f618f80

[brief (簡報編譯)]

How do I keep my children grounded financially?

Financial Times

23-05-17 04:22

Experts have said that parents passing on significant amounts of inherited wealth to their children should adopt an open approach to money matters, with an emphasis on educating their offspring about money and instilling the right attitudes. While riches can lead to issues with drug addiction, gambling and a sense of entitlement, transparency is seen as the best course of action. After outlining the values and concerns, it is suggested that parents educate their children on the value of money, its proper usage, saving and budgeting. Setting financial goals and devising plans to achieve them in conjunction with pocket money and part-time jobs can be helpful. For larger sums of money which are less immediately accessible, advisers should be appointed to explain different savings and investment options, risks attached to various plans, and the salient benefits of longer-term strategies.

https://www.ft.com/content/0c5634dd-6514-4dda-beb7-6baf5515f108

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M&G European tracker fund closure leaves investors exposed to CGT hit

Financial Times

23-05-17 04:19

The planned closure of the M&G European Index Tracker Fund might incur big potential tax problems for UK retail investors. The fund managers have shut the fund as they believe it is too small to be financially viable. A reader of the Financial Times has raised the issue of tax for retail investors whose stakes are held outside an individual savings account and may have to crystallise capital gains, incurring a tax liability. Morningstar data reveals that close to 4,500 open-ended funds have merged or closed since 2013, indicating an increasing rate of consolidation.

https://www.ft.com/content/00555f82-26e5-46b8-bfd1-7ffec6502e6a

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Euronext extends chief executive Boujnah’s tenure until 2027

Financial Times

23-05-17 10:19

Stéphane Boujnah has been reappointed as Euronext's CEO for another four years. Boujnah, formerly of Santander and Deutsche Bank, joined Euronext in 2015 and has overseen takeovers of various European exchanges, including the Dublin stock exchange, Borsa Italiana, and the Oslo stock exchange. He has promised to boost the group's growth with acquisitions in sectors such as forex, data, power and funds distribution but declined to mention any specific firms. Analysist Ian White said Euronext needed to strike a deal this year to show growth, with the exchange's shares performing badly against its peers over the past 15 to 16 months.

https://www.ft.com/content/4c45e93e-6858-409c-8081-fe21be283b0e

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Live: House committee questions SVB and Signature Bank on failings

The Independent

23-05-17 14:04

Executives from Silicon Valley Bank and Signature Bank will be questioned by the US House Financial Services Committee on "events surrounding the banks’ failure as well as the regulatory and supervisory frameworks for both banks". The collapse of both banks was preceded by a bank run, which resulted in regulators taking over Silicon Valley in March 2021. Witnesses at the hearing in front of the US House will include former CEOs Gregory Becker and Scott Shay, as well as representatives from the New York and California Departments of Financial Services.

https://www.independent.co.uk/news/world/americas/silicon-valley-bank-collapse-signature-house-b2340637.html

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Hong Kong treasury chief stonewalls calls for more relief measures for homebuyers

South China Morning Post

23-05-17 11:59

Legislators in Hong Kong have approved a bill that would reduce stamp duty tax on the sale and purchase of residential properties valued up to HK10m ($1.3m). The move, which would cost the government around HK$1.9 billion ($250m) annually, aims to benefit around 37,000 first-time home buyers by reducing stamp duty payments by up to HK$67,500. Real estate agents believe the new law has boosted sentiment towards the housing market, however, property developers and estate agents will remain under scrutiny over land supply, pricing and transparency.

https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3220904/hong-kongs-treasury-chief-stonewalls-calls-more-relief-measures-homebuyers-legco-approves-stamp-duty

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Alameda seeks millions of dollars from firms including George Osborne’s 9Yards

Financial Times

23-05-18 06:19

Alameda Research is suing individuals and firms to attempt to claw back hundreds of millions of dollars from its former CEO Sam Bankman-Fried’s investment in Embed Financial, which was acquired by Alameda before it entered into bankruptcy. The company alleges that Alameda and other insiders misappropriated FTX money to acquire Embed Financial and have filed two lawsuits to recover millions of dollars from former Embed employees who received “retention” payments from the deal, as well as the company’s former shareholders, including Y Combinator, Bain Capital Ventures and 9Yards, where former UK chancellor George Osborne is a partner.

https://www.ft.com/content/a9c25d59-3c8b-42c8-9c27-64e8a7435b7b

[brief (簡報編譯)]

How fintech can adapt to a tougher environment

Financial Times

23-05-18 04:24

The fintech industry has seen a swift fall in private investment, with private company financing in the sector dropping by roughly two-thirds year-on-year in Q4 of 2022, according to Financial Technology Partners. Total rounds rose slightly in Q1, but remain below the heightened levels seen a year ago. Fintech start-ups, which must battle increasingly cost-conscious customers as well as wary investors, will need to focus on faster paths to profitability if private funding continues to diminish.

https://www.ft.com/content/3a98ea54-2636-4438-842c-ad7b30cfac25

[brief (簡報編譯)]

Calpers signals ‘appetite’ to increase bets on private equity

Financial Times

23-05-18 14:19

CalPERS is considering increasing its bets on private equity (PE), with the pension fund conducting a review of its holdings in the sector next month. CEO Marcie Frost said the $442bn in assets retirement fund, one of the world’s largest investors in PE, will carry out an extensive review of its $52bn PE portfolio in the wake of fears higher interest rates will compromise the industry’s returns. The review comes nine months after chief investment officer, Nicole Musicco, said the decision to suspend the pension fund’s private equity program between 2009 and 2018 had led to missed returns of up to $18bn.

https://www.ft.com/content/233204dc-93d7-4cd0-ba06-d699659dbec7

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Top Lebanese official in IMF talks calls for central bank head to resign amid corruption allegations

Associated Press

23-05-18 13:44

The caretaker deputy prime minister of Lebanon has called for Riad Salameh, Governor of the country's central bank, to resign. Salameh is widely blamed for the economic collapse that began in 2019, which has seen the Lebanese pound plummet in value and an estimated 75% of the population fall into poverty. Salameh has also had allegations of corruption levelled against him by a range of international jurisdictions. A French investigative judge recently issued an international arrest warrant for Salameh over corruption charges, which allege illicit enrichment and laundering of $330m.

https://apnews.com/article/lebanon-central-bank-riad-salameh-saade-chami-256c5b64516717593cf57952e89a7fe3

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Italy’s Mediobanca buys UK-based tech advisory firm

Financial Times

23-05-18 12:19

Italian investment bank Mediobanca is to acquire independent financial advisor Arma Partners, which currently works across the software and cloud computing sectors as well as fintech. The purchase will encourage Mediobanca to expand overseas and win more tech clients in Europe and the US. Meanwhile, the move to acquire Arma Partners, which advises clients from around the world, will enhance its wealth management and investment banking capabilities, said the Italian bank. No details have been given on the price of the deal for Arma Partners, which is valued at over twice its €100m annual revenue.

https://www.ft.com/content/e64c2ff5-ad90-47ad-bea8-d0652b828113

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Debt ceiling negotiators rushing for weekend deal, but much work remains

Associated Press

23-05-18 18:19

White House negotiators have had two days of talks with House Speaker Kevin McCarthy and his emissaries over finding a budget-cutting deal that Democrats and Republicans can agree on to raise the US debt limit of $31tn, with a deadline as soon as 1 June drawing closer. In exchange for the limit rise, Republicans want steep spending reductions, devastating cuts inflicting hardships on many Americans, Democrats argued. The parties are racing to devise a budget-cutting deal to avert a looming economic crisis. The contours of a deal that includes some budget cuts, rescinding COVID-19 money that went unused, and a way to discuss new permitting rules for swift energy project developments are taking shape. Republicans want to roll back spending to fiscal 2022 levels and cap annual increases at just 1% over the next decade, leaving out Defense and Veterans accounts. One area both sides agree on is to claw back some $30bn in unspent COVID-19 funds, while Republicans want to attach policy priorities to any deal.

https://apnews.com/article/debt-limit-default-biden-mccarthy-budget-4eff7dd8ad54e0b754dbfbc7c711e3e9

[brief (簡報編譯)]

Ken Jacobs expected to stand down as CEO of Lazard

Financial Times

23-05-18 22:19

The CEO of Lazard, Ken Jacobs, is expected to step down and be succeeded by his deputy, Peter Orszag, as the company announced plans to cut over 300 of its 3,000 employees and after a decline in Lazard’s investments. Jacobs is unaware when he will leave but stated that Orszag is a likely replacement for the CEO role. Losing ‘star rainmakers’ and the switch to passive investing are among the challenges that Lazard has undergone. Additionally, the company’s share price has dropped almost a fifth this year and trades just above its IPO price in 2005.

https://www.ft.com/content/d8ee5569-d612-46ed-8afa-7e2b628ac568