Future of Finance

By Quartz | Exploring the "new normal" in global finance

Wall Street’s backwards rewards system gives executives a direct incentive to commit crimes

The public scourging that the US senate banking committee gave Wells Fargo CEO John Stumpf on Sept. 20 was cathartic to watch. Senator Elizabeth Warren particularly summed it up when she said, “You should resign. You should give back the money you took while this scam was going on and you should be …

Financial Markets

The US Congress now has a caucus dedicated to bitcoin and blockchain

Blockchain is permeating the world’s spheres of influence. A U.S. Congressional group dedicated to studying the technology underpinning the bitcoin cryptocurrency was set up today (Sept. 26) by two congressmen. The Congressional Blockchain Caucus was formed by Jared Polis, a Democrat congressman …

Congressional Caucuses

China’s risk-loving mom and pop investors have abandoned local stock markets for bitcoin

China’s individual investors are known for their huge appetite for new assets. The government’s strict currency controls make it difficult for them to invest overseas, so their money has traditionally had to go somewhere inside the country’s borders. That’s why from property to copper to domain …

China

Developing nations would be $3.7 trillion richer if more people could use financial services from their mobile phones instead of going to the bank, McKinsey says — Quartz

When was the last time you went to a bank branch to make a payment? Digital finance has transformed rich countries, where many now take for granted paying our bills online, sending money to our friends and family from our phone, and not having to wait in line at the bank.<p>In developing nations, …

Finance

Researchers have found that the best human traders can out-earn robots by using their gut instincts

For those who fear that robots are coming for their job, here’s some heartening news: There’s reason to believe that humans still have a leg up on machines in at least one regard.<p>As it turns out, the fuzzy feelings that unwittingly guide our everyday decisions are a key component to being a …

Trading

Market clones are trouncing professional stockpickers—and it’s only getting worse

The case for investing in actively-managed mutual funds is withering.<p>Over the last year, 90.2% of US equity funds guided by money managers posted lesser returns than the market, according to the S&P’s semi-annual report of fund manager returns released on Sept. 16.<p>In Wall Street parlance, that …

Investing

Blockchains are so important the Bank of England is future-proofing its payments system

The Bank of England announced Sept. 16 that it’s upgrading the payments systems that move over $600 billion a day for British traders and banks. By 2020, the Real-Time Gross Settlement system will be made more easily accessible by smaller institutions, and constantly online, instead of only during …

Bank of England

Soon you’ll Venmo stores to buy things

Venmo, the adored millennial app that lets friends send money to each other, wants people to start using it to pay for purchases in stores.<p>Venmo and its parent company, PayPal, are adding in-store payments to their mobile apps in the first half of 2017, a PayPal exec has confirmed to Quartz. The …

PayPal

Goldman Sachs wants to put foreign exchange trades on the blockchain

Trading currencies is costly and slow for traders at major financial institutions—transactions need to go through a bunch of middle men, each of which take a slight fee. A new patent application from Goldman Sachs hints at how the blockchain technology that is behind bitcoin could revolutionize …

Patents

Visa has launched a mobile money platform to challenge M-Pesa in Kenya — Quartz

Visa, the world’s largest payments network, is taking on the world’s largest mobile money platform, M-Pesa, in its home country. The credit card company has launched its Mvisa app that allows users to make purchases or transfer money on their cellphones in Kenya.<p>Visa admits that one reason for …

Money

An ingenious method for getting foreigners the jobs in Germany that Germans don’t want

Germany has one of the lowest unemployment rates in Europe, and one of the highest job vacancy rates. A Dutch venture philanthropy fund is trying an unusual method to fill the jobs that Germans don’t need with people who do.<p>The Start Foundation has teamed up with ABN Amro, one of the largest banks …

Germany

There’s a $500 billion remittance market, and Bitcoin startups want in on it

At just over six years old, Seoul-based KakaoTalk has more than 170 million registered users on its flagship chat app, and enjoys nearly 93% market penetration in South Korea. But when the $2.9 billion company made its first-ever overseas investment this spring, it was a surprising one: a 40% stake …

Bitcoin

It’s time to get serious about Apple’s corrupted business model

<i>There is much for US authorities to learn from the European example of forcing corporations to pay their fair share of taxes, but more far-reaching oversight of executives’ allocation of resources is also required.</i><p>The European Commission’s decision to serve Apple with a €13 billion ($14.5 billion) …

Apple News

Nigeria's Central Bank is relaxing a ban on money transfer operators which allowed only Western Union, Moneygram and Ria to operate in the country — Quartz

Nigeria’s Central Bank has reversed a controversial decision which severely curtailed small to medium sized money transfer companies from operating in the country and favored only the biggest players.<p>On Aug. 2, Nigeria’s Central Bank issued a new directive (pdf) limiting the operations of money …

Nigeria

How bitcoin was brought down by its own potential—and the banks

The best that can be said about bitcoin right now is that it still exists.<p>Split by internal divisions while its most useful aspects are harvested by the very financial behemoths it once hoped to destroy, bitcoin is fast becoming the tech world’s version of <i>Waiting for Godot</i>, wherein a hermetically …

Bitcoin

Fed up with steep fees for pitiful performance, investors are pulling billions from hedge funds

Investors in hedge funds have had enough. These funds charge notoriously high fees to manage their money, but have performed dismally in relation to low-cost alternatives. As a result, global investors have pulled $56 billion from hedge funds in the first seven months of 2016, according to …

Hedge Funds

Investors are buying emerging-market assets like they’re going out of style. Are they nuts?

China’s economy is inexorably slowing. Turkey’s sprawling post-coup purge continues apace. Western sanctions against Russia will remain in force for as long as Moscow keeps meddling in Ukraine. Brazil’s brief Olympic distraction is over, so it’s back to the business of dealing with a crippling …

Finance

As Jumia launch JumiaPay, Paga says Nigerians are finally using mobile money services but differently from Kenya's M-Pesa — Quartz

It took a while to catch on, but Nigerians are finally using mobile money. Over the past decade, financial institutions and telecoms operators, sometimes in collaboration, and standalone firms have tried to deploy mobile money services in Africa’s largest economy with mixed success. The attraction …

Money

Nigeria's Central Bank is disrupting remittances startups in favor of Western Union, MoneyGram and Ria — Quartz

Iron Law No. 1 of Nigeria: Don’t assume that, just because things are bad they cannot get worse.<p>Consider an international airline that flies to Nigeria. It collects payments from Nigerians in Nigeria in naira. As its bills are in US dollars, it needs to convert its naira to dollars and take them …

Money

Bitcoin is still an inaccessible, obscure experiment—but Bitcoin 2.0 could change our lives

Five years ago, bitcoin was an obscure and esoteric online currency, used by few and understood by fewer. Today, after half a decade of sturm, drang, and drama—not to mention multi-million dollar hacks and grandiose proclamations—it is … an obscure and esoteric online currency, used by few and …

Bitcoin

Funding to fintech startups took a big hit last quarter

Funds aren’t flowing so easily to fintech startups anymore.<p>Funding into the sector fell 49% globally in the second quarter of 2016 from the first quarter of the year, according to a new report from research firm CBInsights and KPMG. Global funding—from venture capital firms and corporates—fell 51% …

Nigeria's tech leaders like Konga, Jumia, Paga and Y-Combinator's Flutterwave are in a race to fix a multi-billion dollar payments problem — Quartz

Three years ago, whenever Larry Eghosa, a Lagos-based sound engineer, tried to pay for products online it was always a crapshoot. After submitting his order he’d typically have to wait for about five minutes to get confirmation of payment being accepted. But, more often than not, the same error …

Nigeria

China’s mobile payment giants are chasing their customers all the way to Europe

China’s consumers are a prized bunch: Where they go, payments providers follow. This summer, that means they’re all going to Europe.<p>Alipay, the payments platform owned by Alibaba spinoff Ant Financial, began offering its service in Europe this summer. To be clear, it’s aimed squarely at Chinese …

The World Economic Forum’s bullish blockchain report is, naturally, quiet on bitcoin

The World Economic Forum published a report yesterday (Aug. 11) that is a ringing endorsement of blockchains, the technology underlying cryptocurrencies like bitcoin, and their potential to reshape modern finance. Predictably, however, the report failed to mention bitcoin, or ethereum, a similar …

Kenya, South Africa, Uganda, Rwanda and Nigeria were top ten emerging markets ready for financial inclusion — Quartz

Implementing nationwide regulatory laws significantly improve financial ecosystems and the spread of digital mobile services, says a new financial inclusivity report. Brookings Institution looked at 26 countries across Africa, Asia and Latin America and assessed those countries’ commitments in …

Africa

The $65 million Bitfinex hack shows that it is impossible to tell a good bitcoin company from a bad one — Quartz

Bitcoin suffered yet another blow last week when Bitfinex, one of the cryptocurrency’s largest exchanges, suffered a hack that cost its users about $65 million. Every one of its investors saw their funds suddenly drop by 36%, as the company decided to “socialize” the losses.<p>The source of the …

Bitcoin

When everyone realizes index funds are the way to invest, the market will suffer

No one loves index funds more than I do. I once worked for a company where I participated (with enthusiasm) in veritable jamborees celebrating their virtues and decrying the lunacy of active management. But even I am starting to worry we may be reaching peak low-fee.<p>What the chart above shows is …

Student loan assistance: The newest workplace benefit for millennials (KRO) — Quartz

Recent graduates are stressed out about student debt. Companies are aggressively competing for top talent.<p>Those two forces are producing a new workplace benefit designed for millennials: student loan assistance.<p>SoFi, a five-year old finance company that originates and refinances student loans, …

Loans

What Europe’s banks earned, how they spun it, and what they said about Brexit

Europe’s biggest banks have been reporting their first-half earnings over the past two weeks. The results aren’t pretty.<p>Profits and share prices are down across the industry, with earnings eroded by low or negative interest rates across the continent. Many lenders are still struggling to …

Europe