JP Morgan Chase Launches Its Own Health Business Unit Three Months After Haven Implodes

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JPMorgan Chase is staking out its own healthcare venture, after its joint project with Berkshire Hathaway and Amazon failed earlier this year. On Thursday, the financial firm announced the launch of Morgan Health, a business unit focused on improving employer-sponsored healthcare, to be led by Dan Mendelson, founder and former CEO of the Washington, D.C.-based healthcare consultancy Avalere Health.

The move comes a little over three months since the joint venture Haven Health, which also aimed to lower employee healthcare costs and boost quality services, said it would be winding down.

Morgan Health will invest up to $250 million in “promising healthcare solutions” and will also enter into strategic partnerships, the company said. The new division, which will be headquartered in Washington, D.C., will also focus on health equity issues.

“JPMorgan Chase has been focused on improving healthcare for its employees for many years,” Morgan Health CEO Mendelson said in a statement. “We are going to take what we’ve learned and accelerate healthcare innovation in the employer-sponsored healthcare market, partnering with and investing in companies that share our goals, and measuring key health outcomes to show what works.”

Mendelson has a background in both health policy and finance. He was an operating partner at healthtech PE firm Welsh Carson for the past two years and served as the associate director for health in the Office of Management and Budget in the Clinton White House prior to founding Avalere. With 165,000 employees in the United States, JPMorgan Chase provides health insurance to around 285,000 people, including dependents.

Haven was announced with much fanfare in 2018, with billionaire Warren Buffet calling rising employee healthcare costs “a hungry tapeworm on the American economy.” Around half of Americans receive healthcare benefits through their employers, according to the Kaiser Family Foundation. The federal government estimates total national healthcare spending reached $3.8 trillion, or $11,582 per person, in 2019. And health spending continues to outpace inflation, growing 4.6% in 2019.

The implosion of Haven three years later demonstrated how even well-capitalized corporate juggernauts could be thwarted by the complexity of the U.S. healthcare system. “We were fighting a tapeworm in the American economy, and the tapeworm won,” Buffet said at Berkshire’s annual shareholder meeting earlier this month, according to Yahoo Finance.

“Haven was supposed to show how creativity, ingenuity and private sector, entrepreneurship could beat the healthcare sector. And it failed,” David Blumenthal, a physician and president of the healthcare think-tank The Commonwealth Fund, told Forbes in an interview earlier this year.

He said the speculation as to one of the big challenges Haven faced was that each company wanted to make its own choices for its employees, which has been the downfall of many similar coalitions. Amazon has also been making its own big push into the healthcare sector recently with a virtual primary care service called Amazon Care, the launch of its wearable Amazon Halo and its purchase of online pharmacy PillPack for $750 million.

The radical change needed to control healthcare costs requires buy-in on many levels, including some that employees might not be happy about, says Blumenthal. It could mean narrower networks of physicians to choose from or requiring travel for certain surgeries so they take place at top-ranked facilities, as opposed to the comfort of a local community hospital.

But the biggest impediments are structural—the lack of purchasing power for employers and consolidation among health systems, he said. “In the end, controlling costs in almost every other Western country is a responsibility that government assumes,” Blumenthal said. “It’s for precisely this reason that the alternatives are not effective.”

Despite what may be an uphill battle ahead, JPMorgan leadership is giving it another go. “Covid has shed light on both the greatness of our healthcare system and its challenges,” Peter Scher, vice chairman of the company who will be overseeing Morgan Health, said in a statement. “The firm has been investing in developing solutions to address social and economic challenges over the past 10 years. We plan to take what we’ve learned there and apply it to healthcare.”

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I am a staff writer at Forbes covering healthcare, with a focus on digital health and new technologies. I was previously a healthcare reporter for POLITICO covering the European Union from Brussels and the New Jersey Statehouse from Trenton. I have also written for the Los Angeles Times and Business Insider. I was a 2019-2020 Knight-Bagehot Fellow in business and economics reporting at Columbia University. Email me at kjennings@forbes.com or find me on Twitter @katiedjennings.

Source: JP Morgan Chase Launches Its Own Health Business Unit Three Months After Haven Implodes

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References

 

“The History of JPMorgan Chase & Co.: 200 Years of Leadership in Banking, company-published booklet, 2008, p. 5. Predecessor to J.P. Morgan & Co. was Drexel, Morgan & Co., est. 1871. Retrieved July 15, 2010. Other predecessors include Dabney, Morgan & Co. and J.S. Morgan & Co” (PDF).

Barclays Sees £900m Growth Opportunity In Payments

Barclays has identified payments as a key growth opportunity worth £900 million over three years thank to areas such as merchant acquiring and the BNPL market.

On an analyst conference call about the bank’s first quarter results, CEO Jes Staley revealed that payment now account for eight per cent of Barclays’ total income – £1.7 billion last year.

Staley says this number can grow by around £900 million over the next three years, with double digit growth in three areas: unified payments, “next-gen” commerce, and wholesale payment fees.

In November last year the bank moved into the buy now, pay later sector through a partnership with Amazon in Germany, offering customers a rolling credit line for future purchases from the e-commerce giant. The initiative is now being extended to the UK.

“This will grow our presence in e-commerce in two of the largest markets in Europe,” says Staley. “Our partnership with Amazon reflects our growing focus on payments.”
Barclays is the only major bank-owned acquirer in the UK and has managed to slash on-boarding times in the last couple of years from 14 days to two days through digitisation.

However, Staley says “we still have a long way to go,” adding that: “Perhaps the most important investment Barclays will make in the next five years is to connect our small business banking and our merchant acquiring business, particularly as it relates to e-commerce.”

Meanwhile, the bank is working on an initiative called Barclays Cubed to better connect merchants and customers.

Staley offers up a scenario: “A merchant is able to connect with a consumer digitally by offering a discount via their Barclays mobile banking app. That consumer can then make a purchase on the merchant’s website and, if they choose to, we can instantly approve them to pay for their shopping using instalments.

“Finally, the digital receipt and the loyalty points are automatically added to their Barclays wallet.”

Source: Barclays sees £900m growth opportunity in payments

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Related Links:

Jul.29 — Jes Staley, chief executive officer of Barclays Plc, discusses recent volatility in financial markets, investment banking market share, and efforts to improve diversity. He speaks on “Bloomberg Markets: European Open” after the London-based bank’s securities division reported a 60% gain in foreign-exchange, rates and credit trading revenue as the aftermath of the coronavirus pandemic whipsawed markets.

America’s Best And Worst Banks 2021

For America’s biggest banks, the past twelve months have been one of the biggest tests of their resilience in history. The Coronavirus pandemic all but shuttered the U.S. economy for months, spurring enormous shifts in business and consumer habits. Lenders big and small, from America’s four megabanks to small regional firms, have passed their test with flying colors.

Despite some of the sharpest drops in gross domestic product and employment ever witnessed, banks were able to serve their customers and remain profitable. In 2020, there were just four bank failures in the U.S., despite the extraordinary economic circumstances. Only about 5% of banks nationwide were unprofitable, according to data from the Federal Deposit Insurance Corporation, and about 53% of banks reported annual increases in profits in 2020. 

The pristine shape is thanks to effective emergency measures implemented by Washington that thawed corporate and mortgage credit markets, offered stimulus and small business aid to Main Street, and allowed for widespread forbearance. These factors helped firms play their role as the financial cog that lubricates the American economy.

Corporations used low rates to issue and refinance debt at record rates in 2020, creating a cash cushion. Homeowners did the same, taking advantage of near-record-low interest rates to purchase homes or cut their interest costs. Technology also played a big role as the banking industry undergoes a digital transformation. Consumers could handle their finances on mobile apps during quarantine, instead of at temporarily closed bank branches, and digital change is helping to bolster profitability.

Not only did the stellar performance help the economy through the pandemic, it has positioned the United States for an enormous economic boom as Americans are inoculated from Covid-19 and the economy reopens in full. Millennials are entering the housing market in droves, industries like software and technology are growing rapidly, and businesses will soon be on the offensive in areas like travel, entertainment and retail.

Click here to see the full list of America’s Best Banks.

There are more than 5,000 banks and savings institutions in the U.S., but assets are increasingly concentrated at the top. The 100 largest have $16.4 trillion in assets, representing over 80% of total U.S. bank assets. Asset quality and profitability vary wildly among those institutions. With that in mind, Forbes examined the financial data to gauge America’s Best and Worst Banks.

Born out of the financial crisis of the late 2000s, this is the twelfth year Forbes enlisted S&P Global Market Intelligence for data regarding the growth, credit quality and profitability of the 100 largest publicly-traded banks and thrifts by assets. The ten metrics used in the rankings are based on regulatory filings through September 30. The data is courtesy of S&P, but the rankings are done solely by Forbes.

Metrics include return on average tangible common equity, return on average assets, net interest margin, efficiency ratio and net charge-offs as a percentage of total loans. Forbes also factored in nonperforming assets as a percentage of assets, CET1 ratio, risk-based capital ratio and reserves as a percentage of nonperforming assets. The final component is operating revenue growth. We excluded banks where the top-level parent is based outside the U.S.

CVB Financial, the parent company of Citizens Business Bank, was the top-rated bank in America for a second consecutive year, The Ontario, California-based small business lender was in the top-20 across every metric Forbes tracked, and it shone brightest in its efficiency ratio (39.%), operating revenue growth (41.5%) and posted a negative net charge off ratio. The median bank on Forbes’ list, by contrast, had a 57% efficiency ratio, posted operating growth of just 5.4%, and experienced a charge off rate of 0.17% of average loans. CVB, founded in 1974 and with over $13 billion in assets and over 50 branches across the state of California, has been profitable for 174 consecutive quarters, though a long streak of rising profitability was temporarily broken.

Smaller banks, and those focused on commercial lending, continued to dominate the top levels of the Forbes Best Banks list. Just one bank inside the top-20 had more than $100 billion in assets.

Houston-based Prosperity Bancshares ranked at #2, rising six spots from our 2020 list, thanks to its surging growth. Operating revenue rose 54% in 2020, and the lender performed well in efficiency and capitalization. Rounding out the top-5 were Kalispell, Montana-based Glacier Bancorp, Colorado Springs-based Central Bancorp and Conway, Arkansas-based Home BancShares. Average assets in our Top-5 was just $20 billion.

In the top-10 were McKinney, Tx-based Independent Bank Group, #6, DeWitt, NY-based Community Bank System, #7, Bank of New York Mellon, #8, Santa Clara, CA-based SVB Financial Group, #9, and Wilmington, DE-based WSFS Financial. Bank of New York Mellon was one of our biggest risers, gaining 44 spots, and outperforming on loan quality.

For the first time ever, the Big Four of U.S. banking—JPMorgan Chase, Bank of America, Citigroup and Wells Fargo—saw their combined assets exceed $10 trillion, or more than half the U.S. total. None of these banks finished in our Top-50, generally falling due to below-average growth as they set aside massive provisions to deal with the pandemic and were hit by plunging interest rates. JPMorgan Chase ranked highest at #51, dropping eight spots. Citigroup gained 10 spots to place at #65. Bank of America and Wells Fargo both slid, placing at #74 and #98, respectively.

JPMorgan, led by CEO Jamie Dimon, ended 2020 on a high note, reporting a record $12 billion profit as it released reserves built up to handle Covid-19 related economic stress. Despite the extraordinary circumstances, the lender saw average loans and its capital position rise to end the year, and it reported a surge in bank deposits. During 2020, the bank raised over $2 trillion of credit and capital for its clients, spanning ordinary U.S. households to the biggest corporations on the planet.

“In general, the banks have so much capital, so much liquidity and so much capability,” Dimon recently told investors in a December conference, weeks before the bank reported record annual revenues. While Dimon remains concerned about the pandemic as vaccines are distributed, and sees a varied recovery for consumers and businesses, he added of the banking industry, “I think we’re coming out of this looking great.”

Wells Fargo continued to fall in Forbes’ rankings in the wake of a 2016 fake accounts scandal that has cost the bank billions of dollars and led to dramatic change atop the lender. Wells dropped twelve spots in 2019, placing #98, due to a pronounced slump in revenues as the Federal Reserve limits its asset growth.

Over the past 12-months, JPMorgan’s stock has fallen 0.4%, making it the best performer among big banks, which all saw their stocks drop and underperform the S&P 500 Index. Citigroup shares have shed 19%, while Banks of America dropped 7%. Once more, Wells Fargo was the big laggard, falling by a third in value over the past year.

Rounding out the top-100 was Texas Capital Bancshares, #99, and CIT Group, #100.

New York-based business lender CIT Group is in the process of acquiring family-controlled First Citizens Bancshares, which ranked #62. The merger that will create a new diversified consumer and business lender with over $100 billion in combined assets, and a large presence in booming Sun Belt markets like Florida, Georgia and Tennessee. The merger comes a year after the combination of SunTrust and BB&T, which created $499 billion in assets Truist Financial, #48, which created a dominant lender in the Mid-Atlantic and Southeast.

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Antoine Gara

Antoine Gara

I’m a staff writer and associate editor at Forbes, where I cover finance and investing. My beat includes hedge funds, private equity, fintech, mutual funds, mergers, and banks. I’m a graduate of Middlebury College and the Columbia University Graduate School of Journalism, and I’ve worked at TheStreet and Businessweek. Before becoming a financial scribe, I was a member of the fateful 2008 analyst class at Lehman Brothers. Email thoughts and tips to agara@forbes.com. Follow me on Twitter at @antoinegara

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Clark Howard: Save More, Spend Less

Some of the biggest banks in the country were also ranked with some of the worst customer service in a recent survey. Clark tells you who ranks the worst, and which banks are the best.

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Santander Salvages Wirecard’s Technology

Spanish-owned bank Santander has acquired the technology assets from disgraced payments firm Wirecard – but it’s not taking on legal liability for the collapsed business.

Wirecard caused enormous financial turmoil in the summer when an accountancy fraud led to the swift collapse of the firm. The knock-on effects saw millions of banking customers across Europe unable to access their money for days, as Wirecard provided payment processing for companies such as Pockit, Payoneer and many others.

Wirecard filed for insolvency in June after the accounting scandal came to light, and now the administrators have announced that Santander will pick up “several highly specialized technological assets” from the defunct company, as well as around 500 of Wirecard’s staff.

The technology and the staff will be subsumed into Santander’s Getnet business, which provides a range of payment and e-commerce solutions.

Santander is keen to stress that the deal does not leave the bank liable for Wirecard’s past misdemeanors. “The acquisition does not include Wirecard companies and Santander will not assume any legal liability relating to Wirecard AG and Wirecard Bank AG or its past actions,” Santander’s statement states.

The Wirecard Wreckage

The disposal of the technology to Santander may at least provide some small return for investors who lost their money in the Wirecard collapse. The deal is reported to be worth €100 million. However, Wirecard collapsed with €3.2 billion of debt on its books, which makes the technology proceeds a mere drop in the ocean. MORE FOR YOUCovid Vaccines Face Delays Due To Data-Spoiling HackersNaim Challenges The BBC With New And Higher-Quality Radio StationsWhy The New Macs Are So Short Of Memory

Wirecard’s creditors are expected to find out more details of the winding-down process this week, with the administrators having to deal with dozens of lawsuits from investors.

It was the suspension of Wirecard’s U.K. subsidiary, Wirecard Card Solutions (WCS), that prompted the banking crisis in the summer. The U.K.’s Financial Conduct Authority (FCA) suspended activity at WCS for several days until it was reassured customers’ money wasn’t being transferred out of the business, leaving millions of banking customers unable to access their funds.

WCS has since sold many of its card technology and other assets to Railsbank, although many of the banking services that previously used Wirecard have since moved to alternate payment providers or have set up such services themselves.

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Barry Collins

Barry Collins

I have been a technology writer and editor for more than 20 years. I was assistant editor of The Sunday Times’ technology section, editor of PC Pro magazine and have written for more than a dozen different publications and websites over the years. I’ve also appeared as a tech pundit on television and radio, including BBC Newsnight, the Chris Evans Show and ITN News at Ten. Hit me up if you’ve got a tech story that needs breaking at barry@mediabc.co.uk.

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Wirecard

By installing the ePOS App on a mobile device, you can handle all types of payments quickly and easily – from popular credit cards such as Visa or Mastercard, to cash or even alternative payment methods such as WeChat Pay and Alipay. Download it directly from the following link: https://play.google.com/store/apps/de… Wirecard’s ePOS SDK for iOS and Android: https://www.youtube.com/watch?v=Pmxdg… Visit us: https://www.wirecard.com/ Join us on social: Twitter: https://twitter.com/wirecard LinkedIn: https://www.linkedin.com/company/wire… Facebook: https://www.facebook.com/wirecardgroup/

The Global Network Report: How 26 Upstarts Are Winning Customers & Pivoting From Hyper Growth To Profitability In a $27 Billion Market

Neobanks — digital-only banks with industry-leading capabilities that don’t operate physical branches or rely on legacy back-ends — have exploded onto the global scene in recent years.

Increased consumer interest in neobanks is stimulating competition globally, creating an increasingly competitive landscape which has driven neobanks to roll out extravagant features, like overdraft protection and sign-up incentives. 

Beyond scaling rapidly by user count, neobanks are navigating the best route to profitability. Today, the average neobank loses $11 per user, per Accenture, and though neobanks’ expenses are partially offset by not operating costly branch networks, they still need to find sustainable business models.

Some major strategies are beginning to coalesce: Most neobanks operate under a “freemium” model, in which they offer their product for free, but charge for additional features, while others offer multitier subscriptions with varying levels of premium accounts. Additionally, other players are targeting niche segments, like small businesses or gig economy workers, in their pursuit of profitability.

In The Global Neobanks report, Business Insider Intelligence explores how the neobank market has grown rapidly, and what’s in store as the industry pivots from hyper-growth to sustainability. We discuss how 26 neobanks in key global markets are prioritizing scale versus profitability, identifying best practices to emulate and pitfalls to avoid.

The companies mentioned in the report include: ABN Amro, Adyen, Ant financial, ANZ, Aspiration, Banco Inter, Bank Leumi, Banco Sabadell, Banco Votorantim, Bnext, bunq, Chime, Commonwealth Bank of Australia, Dave, Finleap, ING, Judo, Klar, Kuda, Mastercard, Monzo, Moven, MYbank, National Australia Bank, Neon, Nubank, N26, OakNorth, Open, Pepper, Penta, Revolut, Raising, Rabobank, Santander, Starling, Standard Chartered, Tandem, TD Bank, TransferWise, Tencent, Uala, Uber, Volt, Varo, WeBank, Westpac, Xinja, 86 400.

Here are some key takeaways from the report:

With an estimated 39 million users globally, neobanks’ valuations have skyrocketed thanks to their attractive value propositions which include personal finance management features, low rates, and superior user experiences.
But the same features that have helped neobanks catch on have pushed profitability further out of reach. Neobanks have been forced to roll out flashy features to stand out to users, and marketing these features has driven up expenses. 
There’s no universal path to profitability for neobanks — but a few major categories are emerging. Freemium pricing strategies, multitiered subscriptions, and targeting niche demographics are three strategies neobanks are employing in pursuit of profit.  

Individual neobank landscapes vary by market, but their inherent advantages are allowing neobanks to emerge in markets globally. Regional factors have made certain markets particularly ripe, such as fintech-friendly regulations, negative consumer perceptions of incumbents, and gaps in banking services for underbanked populations. 

In full, the report:

Sizes the neobank market by value, number of users, and number of accounts to 2024. Explores the factors that will propel the neobank market to new heights over the next five …read more

Source:: Business Insider

Dear banks, Game Over. Disruptive challenger banks are here to wipe the floor with traditional banks, who have, according to Chad West, head of comms and marketing at challenger bank Revolut, failed to make their offering open and transparent to customers, and failed to give them control over their money. Digital bank alternative Revolut has scaled to 1.8 million customers in three years – and now offers cryptocurrency processing.

ABOUT WIRED SMARTER Experts and business leaders from the worlds of Energy, Money and Retail gathered at Kings Place, London, for WIRED Smarter on October 9, 2018. Discover some of the fascinating insights from speakers here: http://wired.uk/V29vMg ABOUT WIRED EVENTS WIRED events shine a spotlight on the innovators, inventors and entrepreneurs who are changing our world for the better.

Explore this channel for videos showing on-stage talks, behind-the-scenes action, exclusive interviews and performances from our roster of events. Join us as we uncover the most relevant, up-and-coming trends and meet the people building the future. ABOUT WIRED WIRED brings you the future as it happens – the people, the trends, the big ideas that will change our lives. An award-winning printed monthly and online publication.

WIRED is an agenda-setting magazine offering brain food on a wide range of topics, from science, technology and business to pop-culture and politics. CONNECT WITH WIRED Web: http://po.st/WiredVideo Twitter: http://po.st/TwitterWired Facebook: http://po.st/FacebookWired Google+: http://po.st/GoogleWired Instagram: http://po.st/InstagramWired Magazine: http://po.st/MagazineWired Newsletter: http://po.st/NewslettersWired

IBM and Bank of America Advance IBM Cloud for Financial Services, BNP Paribas Joins as Anchor Client in Europe

ARMONK, N.Y., July 22, 2020 /PRNewswire/ — IBM (NYSE: IBM) today announced that several global banks including BNP Paribas, one of Europe’s largest banks, will join a growing ecosystem of financial institutions and more than 30 new technology providers adopting IBM Cloud for Financial Services. Today’s news also marks a significant milestone in IBM’s collaboration with Bank of America, with the availability of the IBM Cloud Policy Framework for Financial Services.

The IBM Cloud Policy Framework for Financial Services establishes a new generation of cloud for enterprises with common operational criteria and streamlined compliance controls framework specifically for the financial services industry, allowing IBM’s growing financial services ecosystem to transact with confidence.

IBM is also announcing the formation of the Financial Services Cloud Advisory Council to support this effort and advise on the ongoing advancement of the IBM Cloud Policy Framework for Financial Services. Chief Technology Officer Tony Kerrison will represent Bank of America on the Council, which will be led by Howard Boville, SVP, IBM Cloud. The Council will be focused on bringing major financial institutions together to help drive the strategic evolution of cloud security in this highly regulated sector.

“We have had great success with our proprietary, private cloud, that currently houses the majority of our technology workloads,” said David Reilly, Bank of America’s Global Banking & Markets, Enterprise Risk & Finance Technology and Core Technology Infrastructure executive. “At the same time, we have been looking to identify a financial services-ready solution that offers the same level of security and economics as our private cloud with enhanced scalability. That’s why we’re partnering with IBM to create an industry-first, third party cloud that puts data resiliency, privacy and customer information safety needs at the forefront of decision making.”

Central to the development of the IBM Cloud for Financial Services, IBM collaborated with Bank of America and Promontory, an IBM Services business unit and global leader in financial services regulatory compliance consulting, to establish a set of cloud security and compliance control requirements as the basis of its policy framework, which will allow financial institutions to confidently host key applications and workloads.

The IBM Cloud Policy Framework for Financial Services is now available and aims to deliver the industry-informed IBM public cloud controls required to operate securely with bank-sensitive data in the public cloud. IBM, Promontory and the advisory council will continue to collaborate to assure  that the framework will be up to date to address the latest industry regulations.

BNP Paribas joins IBM Cloud for Financial Services

BNP Paribas has committed to joining the IBM Cloud for Financial Services as an anchor client in Europe to support its first dedicated cloud in Europe to be GDPR compliant, acknowledging that a public cloud informed by IBM’s deep financial industry expertise, controls framework and industry-leading data-protection capabilities, meets their exacting standards. BNP Paribas will utilize a dedicated cloud, developed and managed by IBM, that will leverage IBM public cloud technologies, including Keep Your Own Key (KYOK) encryption capabilities. BNP Paribas could plan to onboard additional banking partners to the ecosystem across Europe in the future.

“As we continue to expand our collaboration with IBM, we’re driving innovation in the financial services industry and are able to partner with a growing ecosystem of technology providers, from small startups to leaders in the industry.  That’s an important step forward for BNP Paribas Group to accelerate its transformation journey and be compliant with European regulations,”  Bernard Gavgani, CIO, BNP Paribas. “IBM Cloud for Financial Services helps us to further our transformation journey to the cloud and migrate mission critical workloads with confidence knowing that we can meet the regulatory standards established for the industry.”

IBM Grows Financial Services Cloud Ecosystem

Additionally, MUFG Bank plans to explore the deployment of IBM Cloud for Financial Services in Japan, continuing its ongoing transformational journey with IBM to accelerate digital reinvention.

“MUFG has been shifting its IT workload to cloud for years, with strong focus on keeping our data secure and mitigating operational risks on this new and fast-changing technology platform. We believe IBM Cloud for Financial Services will be suited to help Japanese financial institutions redirect their efforts to maintain legacy systems toward digital reinvention in the era of new normal. We look forward to continuing discussions around our strategic partnership with IBM to leverage best-in-class technology for our mission-critical workloads, as well as to drive digital transformation across MUFG”, said Mr. Hiroki Kameda, Managing Corporate Executive Group CIO of MUFG.

IBM has also expanded its growing ecosystem of Independent Software Vendors (ISVs) to include more than 30 partners. These technology providers have committed to onboarding offerings and cloud services to IBM Cloud for Financial Services that will help address stringent security, resiliency and compliance requirements and can accelerate transactions with financial services institutions.

“With major financial institutions and technology partners joining our financial services cloud, IBM is establishing confidence within the industry and around the globe that the IBM public cloud, equipped with industry-leading encryption capabilities, is the enterprise cloud for all highly regulated industries, including financial services healthcare, telco, airlines and more,” said Howard Boville, Senior Vice President, IBM Cloud. “IBM is creating a platform with the goal that financial services institutions can address their regulatory requirements, while creating a collaborative ecosystem that helps enable banks and their providers to confidently transact.”

New IBM Research Cloud Innovation Lab and Innovative Security Capabilities for Clients

IBM Research has played a central role in the technology underpinnings of the IBM Cloud for Financial Services, taking a holistic approach to security and compliance that spans infrastructure, platform, data, and the developer workflow. For example, developed in collaboration with IBM Research, IBM will launch the IBM Cloud Security and Compliance Center which will allow clients to continuously monitor and enforce their security and compliance posture across their workloads, and provide a seamless, automated and adaptable process for improving cloud security. Following on the heels of its recent acquisition of Spanugo, the IBM Cloud Security and Compliance Center will include the ability to instrument the developer workflow with automated security and compliance checks.

Once the IBM Cloud Security and Compliance Center is available in August 2020, global banks and ISVs with workloads on the IBM Cloud for Financial Services, will be able to define their compliance profiles and manage controls, maintain an extensive data trail for audit, and, in continuous real time, monitor compliance across their organization. Promontory will continue to provide tailored, IT risk advisory services to users of the IBM Cloud for Financial Services.

To enable financial services clients and ecosystem partners to benefit from, and influence, the emerging cloud technologies being created at IBM Research, IBM will launch the IBM Research Cloud Innovation Lab, planned for August, 2020. Clients and industry partners of the IBM Cloud for Financial Services will be able to get a first look at the latest innovations from the IBM Research lab as well as quickly experiment, go deep into the technology and functionality of new cloud solutions and exchange ideas. More information on the IBM Research Cloud Innovation Lab and IBM Cloud Center for Security and Compliance can be found here.

IBM Cloud for Financial Services is built on IBM public cloud, powered by the same industry-leading confidential computing security found in IBM Z. Delivered via IBM Hyper Protect Services, it features ‘Keep Your Own Key’ encryption capabilities backed by the highest level of security certification commercially available, making the IBM public cloud the industry’s most secure and open public cloud for business.

Source: IBM

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Is It Time To Ditch Your Bank? Here Are Some Reasons To Switch

Chances are, you’ve never switched banks. A recent study by Bankrate found that Americans enter long-term relationships with their banks, using the same primary checking account for over 14 years on average. But why do so many of us stay loyal to one financial institution? After all, we shop around for everything else — why wouldn’t we consider the best way to keep our money in order?

With credit unions and online-only banks continuing to rise in popularity, traditional banks with brick-and-mortar branches are far from the only options we have. If you’re not in love with your bank — and who really is? — it might be time to make a switch. Ahead are some signs that you deserve better from your bank. 

Your bank keeps taking your money

Remember the days of free checking accounts? Well, they’re probably not coming back. Nowadays, most big, traditional (as in not online-only) banks expect you to pay them for the great burden of storing your hard-earned money with them — even though they’re making money because of your money. At Bank of America, maintaining a regular checking account costs $14 a month unless you keep a daily minimum checking balance of $1,500 — and that’s daily, not monthly, so it can’t ever fall below $1,500 or you’ll immediately get hit with the fee — or at least $2,000 in a linked regular savings account.

For its Advantage Plus checking account, the fee is $12. Other big banks have maintenance fees too. CitiBank’s monthly charge for a basic checking account is $12 unless you meet their requirements, and Chase charges the same unless you meet slightly different terms. U.S. Bank, for its basic checking account, charges $6.95 a month. Wells Fargo’s is $10. Of the most popular traditional banks, only Capital One charges no monthly fee.
Bank fees often hurt people with low incomes most. What if you’re currently living paycheck to paycheck or are unemployed, as so many are during the pandemic?

An analysis of checking accounts by JPMorgan Chase found, in fact, that low-income families had an average rainy day fund of $700 in 2019, and it’s likely that many people’s bank accounts are even leaner in 2020. Over a third of women who were receiving the $600 enhanced federal unemployment benefits said that they wouldn’t last a month without it. Many banks did waive some fees in light of COVID-19-related hardship, or offer deferrals on credit card or loan payments, but if you want a minimum balance or maintenance fee waived, you’ll likely have to call your bank’s customer service and have your request approved on a case-by-case basis.

There are many other bank fees that can come your way too, whether it’s out-of-network ATM fees, returned deposit fees, or lesser-known ones like “inactivity” fees. But perhaps the most infamous are overdraft fees. In 2019, banks collected around $11 billion in overdraft fees, often from customers with an average balance of less than $350 in their accounts. Bankrate found that the average overdraft fee right now is $33.36, though some banks charge an overdraft fee multiple times a day if applicable, which can net you well over $100 in charges over a day.

The good news is that online-only banks usually have fewer fees because they save money on not having physical branches. It’s one of their most attractive perks and a big factor in their rising popularity. Usually, one of the most important factors in choosing a bank is the number of branches and ATMs it offers — so that wherever you go in the country, or possibly even overseas, you’ll have easy access to your money. But times have changed, and COVID-19 may have sped up our adoption of digital banking.

According to a 2020 J.D. Power survey, 30% of people with bank accounts now use online services only. Online-only banks often partner with ATM networks or reimburse ATM fees so you can still have easy, free ATM access. If you can’t remember the last time you visited a bank branch or needed to sit face-to-face with a teller, digital banking can be an attractive alternative. 

You’re always waiting for customer service

In 2018, Consumer Reports found that Chase ranked the highest in customer satisfaction among big banks. But credit unions got the highest ratings overall, with 96% of respondents saying they were satisfied with their credit union. Only 80% of those who banked with the three biggest banks said they were satisfied.

Online-only banks also received high ratings — but maybe it’s still really important to you that you’re able to speak to a bank representative in person, especially if you’ve been finding lately that calling your bank leads to an irritatingly long wait time. Sometimes, the problem is solved quickest by just sitting face-to-face with a representative at your local bank branch.

Your savings account interest rates are too low

In a U.S. News survey on what checking account features people cared most about, interest rates were a lower priority for people compared to things like whether a bank charges fees or whether it offers online banking. Savings account interest rates are much lower than they once were, but you should be aware if your rates are below the average, which is currently around 0.06% APY. A high-yield savings account could offer a rate over 1%. Often, online-only banks offer very competitive interest rates — Varo currently offers 2.80% APY for people with a balance under $10,000, as long as they meet a couple of other criteria.

These days, there are also high-yield checking accounts, which often offer a much higher APY than high-yield savings accounts, but they come with a lot of requirements and only apply up to a certain amount — for example, the first $500 of the money in your account. But overall, a bank account isn’t going to net you an immense return in interest compared to a retirement savings account.

The rewards program is lackluster — or nonexistent

Though rewards programs are most commonly associated with credit cards, some banks offer this perk too. Bank of America, for example, has a Preferred Rewards program that customers are eligible for if they average a balance of at least $20,000 in their accounts over a three-month period, which means you get a boost in interest rate for an Advantage Savings account, a 25% bonus on reward points for eligible Bank of America credit cards, and reimbursement for ATM fees, among other perks. There are also higher tiers with bigger bonuses. Other big banks may have something similar, but with higher thresholds — Wells Fargo’s loyalty program kicks in if you have at least $250,000 in your accounts.

You’re worried about getting hacked

If you’re concerned with how safe your money will be in a bank account, chances are there’s little reason to worry. First, your money won’t disappear if a particular bank or credit union fails, because nearly all of them are insured by either the Federal Deposit Insurance Corp or, in the case of credit unions, the National Credit Union Administration, for up to $250,000 at each financial institution you use. The Bauer Financial star ratings are also a trusted system of determining whether a bank is trusted or likely to fail.

But you might also be concerned with online security. It’s possible for online-only bank systems to face errors and go offline, which would mean you’d temporarily not have access to your money, but it’s not a common occurrence. More likely to happen are data breaches. Last year, a hacker managed to expose banking information and social security numbers of over 100 million Capital One customers. Recently, the bank was ordered to pay $80 million in fines for the breach. There’s no definitive metric showing which banks have the best cybersecurity, though you can definitely do some research on which banks have experienced data breaches and how they addressed it. Regardless, one basic feature you can look for is online banking with at least two-factor authentication.

Your bank is shady

Since the 2008 financial crisis, trust in banks have fallen to extreme lows. You might be more or less satisfied with your individual experience with a bank, but find out that it has done or continues to do something unethical. One of the biggest examples in recent memory is the Wells Fargo scandal; for 14 years, the bank had been instructing its employees to commit mass fraud by opening multiple accounts for customers without their consent. Former employees have said that they tried to target the most vulnerable customers — like the elderly and non-English speakers.

More recently, in light of the George Floyd protests, Bank of America has come under criticism for its donations to police foundations. There’s probably dirt you can dig up on every bank, and sites like BankTrack help you do just that. JPMorgan Chase, for example, was recently found to be the biggest financer of fossil fuel industries in the world, followed by Wells Fargo, Citibank and Bank of America.

Credit unions, because they’re owned by members and not for-profit, generally have better reputations. In recent years, they’ve become an increasingly popular alternative to traditional banks. Your money will be used to help your local community rather than a corporate interest.

By: Whizy Kim

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