Archive for August 18th, 2016

15 August is an important day for monetary economy scholars…

August 18, 2016

It was on 15 Aug 1971 that President Nixon closed the gold-dollar window.


Who brings fish to the table? Markets or firms?

August 18, 2016

Jeffrey Tucker points how technology and markets have enabled people in the interiors to eat fish.


US regulatory industry is growing faster than the real economy

August 18, 2016

Nice article by Matthew Andrews  and James L. Gattuso:


App-only bank Mondo gets a limited banking licence in UK…

August 18, 2016

Mondo started only last February and has got a banking licence:

Startup app-only bank Mondo just made a crucial step in becoming an official bank after being granted a restricted banking licence by UK regulators.

Mondo is claiming the decision makes it the youngest-ever bank to be licensed in the UK, given that it only started up in February of last year.

Mondo aims to create a digital-only bank for the mobile generation that offers things like instant notifications of transactions and balances, a detailed Facebook-style feed of what you have spent your money on, and a breakdown of spending across the month.

Co-CEO and founder Tom Blomfield says in an emailed statement: “This is how the banking market changes, not with 800-page reviews from public bodies like the CMA, but with technology bringing new ideas to the table. We’re creating something that will completely revolutionise the way people think about their money.”

The 45-person company has been operating an early version of its product tied to a pre-paid card. It has proved hugely popular, with 30,000 customers spending £20 million ($25.9 million) on the cards since launch. Mondo also has a waiting list of 200,000 and the startupcrowdfunded £1 million in just 96 seconds earlier this year.

The restricted licence will let Mondo hold customer money for the first time – the crucial thing that makes a bank a bank – and let it test its products and services with a limited number of customers. Once regulators, the Financial Conduct Authority and the Prudential Regulation Authority, are satisfied, they will lift the restrictions.

Blomfield told Business Insider earlier this year that Mondo will alsohave to raise at least £15 million to get the restrictions lifted, as part of capital requirements. Mondo has to date raised £9 million and is valued at £30 million.

Mondo is one of a number of so-called “neobanks” in the UK: app-only banks with no branch network. Three others have so far been granted licences: Atom, Tandem, and Starling. Atom is the only one that has so far launched to the public, releasing a savings account earlier this year.

Mondo is also in the process of changing its name, after a legal dispute over its current one. The startup asked customers for suggestions 2 months ago and an announcement on the new name is expected in the next few weeks.

More on the name change here.

What does the app bank plan to offer?

While technology has changed every aspect of our lives, Blomfield says consumer banking has remained frozen in time. Banks continue to offer customers a static list of deposits and withdrawals rather than providing timely updates or useful tools to analyze spending or saving. In a world of instant messaging, many lenders don’t communicate in real time. Blomfield’s current bank (which he declines to name) took two weeks to alert him he’d overdrawn his account by £800 and then charged him £20. “The banks have their hands in your pockets constantly, taking money out,” he says.

The Mondo app is designed to tell you if you mess up. It lets you set up real-time notifications that say how much you’ve spent daily or whether you’re going into overdraft. If you need £500 to tide you over to payday, Mondo will tell you how much it will cost for a short-term loan instead of charging you after the fact.

Pulling out his phone, Jason Bates, Mondo’s 43-year-old co-founder and chief customer officer, shows his Mondo prototype app. He’d just had a burger with his wife at Five Guys in Soho, which turned up immediately on his account with a map of where he’d used his Mondo card. With a swipe, he demonstrates how you can turn off the card if you lose your wallet and immediately turn it back on if you find it. You can even block your card at pubs to encourage a dry spell.

By tracking your regular bills, Mondo can alert you if something is out of the ordinary, like a utility charge that’s higher than normal. This smarter use of data can help detect fraud, Bates says. “We see your phone is in Manchester but your card was being used in London,” he says. “We can block your card and send you a text saying: ‘Something is fishy. Can you confirm?’”

Though, one can always question the hype:

Blomfield and Bates say Mondo could charge much lower fees and still become profitable because its cost base is a fraction of what major banks shoulder. Old-style lenders are saddled with the expenses of maintaining branches and updating antiquated IT systems. Back-end computer systems that process transactions can date to the 1970s and have had meltdowns, says David Parker, head of banking at Accenture in London. Last year, British regulators fined RBS £56 million for a computer failure in 2012 that left 6.5 million customers without access to their accounts for weeks after a contractor updated software. The problems “revealed unacceptable weaknesses in our systems,” Philip Hampton, RBS’s chairman, said.

“It’s difficult to build an app that’s fantastic when you have an ugly core banking system,” Parker says. “The banks have to change quickly or they run the risk their customers will desert them.” 

Not everyone is convinced tech-savvy banks will lure enough customers from the big four to become major players. New fintech banks may have a hard time attracting more than just “hardcore money geeks,” says James Moed, a consultant to fintech startups and a former director of IDEO,  where he was a London-based financial services designer. “Most people find managing their money boring and regard banking as a utility,” Moed says. “I’m not sure great apps will motivate people enough to switch.”

Even so, mobile bank users globally are forecast to more than double by 2019, according to a 2015 KPMG report. Generation Y, the so-called millennials, born from the 1980s to the early 2000s, may be the most fertile hunting ground. Almost 67 percent prefer mobile apps for banking, compared with 46 percent of baby boomers, aged 51 to 69, according to PricewaterhouseCoopers. A study by Viacom’s Scratch research unit called “Sorry Banks, Millennials Hate You” found 71 percent of 18- to 34-year-olds would rather go to the dentist than listen to what their bank says.

Blomfield acknowledges that Mondo isn’t for everyone. “My grandmother would not use this bank,” he says. “But a big segment of the population would.”

Technology has challenged old banks every once a while but so far they have managed to remain planted. It will be interesting to see whether this time is any different..

More links on Mondo bank here

Jog falls to have perennial flow of water..

August 18, 2016

This was waiting to happen for few years now.

Now a Dubai based entrepreneur Dr. BR Shetty plans to make Jog Falls a perennial fall. Currently people can only see full fall during monsoon months. Now they should be able to see the fall throughout the year:


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