30 June 2014

Mention: Smart Investor 6/2014 – London

Smart Investor quoted me extensively in an article about living and working in London, published in June 2014. Here's the article (in German):

14 January 2014

Blog post: The times for banks they are a-changin'

2013 was not great for financial institutions: The British Social Attitudes report revealed that only 19% of the UK population think that financial institutions are well run. This makes the banking sector bottom of the league and is a far cry from 1987 when public trust in banks was higher than 90%, writes Robert Roessler.

It is too simplified to blame Lehmann, Libor and PPI mis-selling alone. Regulators with a focus on increased competition have also created an environment for non-banks to enter financial markets. They connect people and enable them to conduct financial transactions directly with each other, with no more need for a bank to be involved.

There are many examples where this has happened. Leading UK payday lender Wonga has revolutionised access to money at short notice, and in 2012 the company lent £1.2 billion in four million loans, which generated profits of more than £1 million per week. Peer-to-peer lending platforms go one step further and cut out the middle-man completely by enabling individuals to lend money to other individuals. These platforms - the most popular ones in the UK are Zopa, Funding Circle and Rate Setter - have created a win-win situation: they offer better rates to borrowers than banks as well as attractive returns for lenders.

Traditionally, financing a project or business required asking one or a small number of banks for a large sum of money. Crowdfunding reverses the approach by asking a large number of people each for a small amount of money. Even though many projects fail to get funding, there are many success stories. In 2012 an estimated £200m was raised in the UK through crowdfunding, this is likely to increase many-fold this year and the years to come.

Peer-to-peer exchanges such as Kantox and Transferwise have similar positive growth prospects. They enable individuals and companies to buy or sell currencies to counterparts directly, without a central institution exchanging one currency into another before making a payment. They are highly attractive as they charge a fraction of banks' rates, which typically include commissions, transfer fees and receiver fees.

With rising interest in these services, the question is what the banking sector is going to do. Currently they are less concerned: Transferwise's 20-30 percent growth per month and daily transfers of £1 million is impressive, but with global currency markets exchanging trillions each day this is a small drop in a very large ocean. However, disrupting technologies in combination with regulation have the potential to change an industry for good: The EU's Payments Service Directive paved the way for non-banks to offer payments services, and enabled companies such as PayPal to rapidly gain a large share of the market.

The landscape will continue to change, but banks will not give up. They will focus on core areas such as private and investment banking, as well as services such as mobile banking which they will market aggressively to increase customer loyalty. But traditional banking areas such as lending and payments will see even more alternatives to banks. And ultimately the financial revolution will encroach on an area which is so inherently linked to banks that it is hard to believe it will ever be separated: money.

Published 14 January 2014, read the full article here: http://www.thedigitalbankingclub.com/blog/the-times-for-banks-they-are-a-changin/

16 December 2013

Blog post: PC Harrington and what PRs can learn from fraudsters

I nearly became a fraud victim yesterday. Nearly, because I didn’t. But it was very close.
I received a call on my landline at around 11.30pm yesterday from PC Harrington at Holborn Police Station. PC Harrington gave me an internal police identification number and said that they had just arrested two men who skimmed my debit card to raid my bank account. The police found £1,200 when they arrested them. PC Harrington urged me to call my bank straight away and told me to not log in to my online banking account in the next 24 hours, as this would enable the fraudsters to take more money from my account.
I hung up, slightly confused. One minute later I received another call from PC Harrington, he gave me a crime reference number and asked whether I had already called my bank. He urged me to hang up and call the bank straight away, so I did and called the helpline of my bank. I spoke to Adam, who was very friendly and, after taking my name, said that there had indeed been some suspicious transactions on my account in the last two hours. He asked many questions and then asked me to type in my card details on my phone. The line became a bit crackly and when Adam mentioned my Mastercard credit card (whereas I’m with Visa), finally – finally! – the penny dropped.

Published 16 December 2013, read the full article here: http://www.mhpc.com/financial/pc-harrington-and-what-prs-can-learn-from-fraudsters/

13 December 2013

Blog post: The Rise of Bitcoin

Back in March 2013, Bitcoin reached an all-time trading high of more than £21. At that time, this was seen as a major development for the alternative currency which was launched in 2009, largely unnoticed outside the crypto-currency world. Since then, the situation has changed dramatically. What was seen as hype in March has now developed into a frenzy.
By the beginning of April, one Bitcoin was already worth £150. And since a US Senate committee hearing in November backed Bitcoin as a legitimate financial service, its value really took off: following a peak of £755 on 5 December, it is currently trading at around £550.
Why has Bitcoin some attractive so quickly? How exactly does Bitcoin work? And how do regulators see the currency? Here are some facts which describe what Bitcoin is - and what it’s not.

Published 13 December 2013 on entrepreneurcountry.com, read the full article here: http://www.entrepreneurcountry.com/united-kingdom/item/the-rise-of-bitcoin

29 November 2013

Blog post: The week in the media: Trading & Technology

This week was good for Bitcoin as its value soared to an all-time high of more than $1,000 on Thursday. Its worth has doubled since a US Senate committee hearing earlier this month backed Bitcoin as a legitimate financial service. Launched in 2009, the alternative currency can be traded anonymously and freely worldwide and is increasingly seen as an efficient way of handling global money transfers. The increased valuation also means that Exante’s Bitcoin fund is the best performing hedge fund so far in 2013 with a return of 4,847%.
On Monday, five major US banks said they would fund a new electronic bond trading venue on Tradeweb, a company owned by Thomson Reuters and a consortium of banks. This is regarded as an attempt to improve liquidity in the $9tn market for US corporate debt while retaining their control over the way securities change hands.
Published 29 November 2013, read the full article here: http://www.mhpc.com/financial/the-week-in-the-media-trading-technology/

8 May 2013

Blog post: Perception is bitcoin’s biggest battle

Along with the general media attention bitcoin has attracted in recent months, there’s been much talk about whether bitcoin is merely a tool for financial speculation … or is a currency as real as any other, capable of being used to buy and sell goods, as well as for investment purposes.The media frenzy accompanying the bitcoin roller-coaster of late has resulted in a surge of demand. Transaction volumes are steadily increasing and more online outlets now accept bitcoin payments. Consequently, players in the bitcoin ecosystem have fared well: With $120 million (US) in trading volumes in March 2013 (as reported by Mt.Gox, the largest bitcoin exchange) and a trade commission of 0.6 percent, this equates to revenues of around $1 million per month.With low operating costs, that means substantial profits. This has led some to speculate that the bitcoin marketplace could create billion-dollar businesses. Even if this might be exaggerated, bitcoin – and bitcoin exchanges in particular – could in fact become attractive investments for venture capital firms at some point.

Published 8 May 2013 on coindesk.com, read the full article here: