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Joris congratulations, great analysis!

Of course, the ultimate solution to this existential challenge is simple and obvious -- with the introduction of THE central bank digital currency, there won't be much objective need for investment banks (and, as an additional bonus, Dr. Janet Yallen won't be able to talk out of both sides of her mouth).  This will definitely protect THE financial system, once and forever.

Let's assume that the time will come fairly soon (2030?) when at least some central bankers of the world would become digitally literate -- and will thereafter sort it all out.  There is a rumor that in the new virtual paradigm bankers are now allowed to dream 24/7/365 about universal all-encompassing QE.  But perhaps it is just a fake rumor.

Hope you are doing fine.

Kind regards

Nahum Goldmann

Joris, congratulations; excellent review!

An additional way to reduce costs of SME SCF processes is by better aligning them with the supply chain, and also by optimizing corporate supply chains based on  SCF analytics, especially in cases of rapid global expansion.

Carry on the good work!

Regards

Nahum Goldmann

Immensely reasonable posting.  Too bad it has nothing to do with the reality of PEP's regulatory enforcement.  If only...

Cyril, no, neobanks have not lost their DNA, as they have never had any to speak of.  They just do not realize that retail banking has always been and will always remain conceptually unprofitable whatever they do (as postulated by Peter Drucker, who BTW started his working life as a London merchant banker). 

The new business and socioeconomic paradigm that we all live through now (aka "interesting time"), commodizes all transactional delivery of services in a hurry; i.e., it substantially speeds up margin erosion for every globally competing business.  Plus you can't make much money with free checking accounts and negative interest rate.

This of course does not mean that each and every bank is unprofitable at every given moment of time; Peter was talking of a long term process.  It does, however, mean that "novel" banks should be built on the solid foundation of microeconomic analytics; not on the wishful thinking.

Cyril, carry on the good work; unlike challenger banks you have a courage of asking right questions.

Regards

Nahum Goldmann

Peter, so how does good ol' Mike Katchen makes his money?

Tayloe, by far the biggest challenge to blockchain is may be the regulations and not the technology (technology challenge is at most 15%, complex as it is, if even that).  Don't worry, techies could not grasp it anyways.  As we all know, ignorance is a bliss.

The questions that you ask at the last paragraph are all quite valid of course, although you forgot to mention the privacy requirements here, which introduce an additional and very substantial layer of complexity for open blockchain (is proprietary blockchain even viable and cost effective?).  However, any board director or a senior executive of a bank listed by Bloomberg (which usually does not include banks CIOs BTW) would tell you that the only question that really matters under the OECD legal systems is who is personally criminally responsible and goes into prison in case when (not if) something goes wrong.  According to IFRS and all current FI legislation, it is always the directors and non-financial senior officers who are on the hook, even after they retire.

Blockchain could not be implemented untill all the OECD parliaments sort this one out, as the media and the public will always ask for somebody's heads when (not if) a systemic failure occurs.  Note that if Madoff were operating under blockchain, it would be impossible to put him into prison.  No responsible government would ever tolerate such a possibility.

Carry on the good work!

Gary, how does your template guaranty that there are no false negatives?  Isn't it critical to your client?

"I was struck by Constantine Stivaros of Piraeus Bank who seemed driven by ensuring that his ATM’s were the friendliest in the world.  Apparently if you sign on as a customer, your ATM will greet you by name, wish you a happy birthday on your birthday and remind you need to buy flowers for your wife!" 

Many a bank client are intimidated by such unrequited familiarity from their bank, which they see as just another nosy service provider and not as a big brother who should constantly watching them.  Whether a bank or a Laundromat, the last thing many of them want is that a friendly computer builds a personal relationship on the fly - by reminding them of their age or of the birthday of recently divorced wife - to the amusement of the lineup behind them.  Plus privacy concerns are galore.

Yes, Skype is also doing it without one’s permission.  Bad idea. 

One less fad - socializing with my bank!

Not to worry, new ones will appear in no time.

At last I was able to sort out what one needs mobile banking for.