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Via discussions hosted on the Capco Institute Blog, members debate high profile issues, with frequent and provocative contributions from Capco thought leaders. For institutions around the world, how will the changing financial services landscape form the future of finance?

Fedcoin

Fedcoin

Published April 03, 2015

IBM and the Federal Reserve are discussing plans to combine the best of both worlds: Bitcoin technology, that allows for speedy, safe money transactions, and a currency backed by the entire US economy, the US dollar.  Hence the name.  Fedcoins* could be used just the same as US dollars, but instead of physical cash, the owners would have digital tokens that could be used to make transactions at any time.

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Trading Around Volcker; A Trader’s Attempt at Gaming the System

Trading Around Volcker; A Trader’s Attempt at Gaming the System

Published April 01, 2015

Volcker is upon us. With the initial compliance deadline come and gone, the realities of Dodd Frank’s Volcker Rule are beginning to set in on Wall Street. Virtually all trading desks, across business lines, will be impacted, and right now banks on Wall Street are facing the risk of wide gaps between comprehensive compliance programs and everyday business implementation realities on a desk level. How will banks find a way to live with Volcker on a long-term basis?

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The Reality of Virtual Reality; A Mindtrip for Banks

The Reality of Virtual Reality; A Mindtrip for Banks

Published March 30, 2015

Last week a friend told me an interesting story about how she felt going to her local bank.  She explained that on a cold March day, she had to walk to the bank and wait in line to speak to a bank representative.  Seems the new accounts she wanted to open meant her having to show up in person.  She had to explain to a private banker, in a public place,  that she needed a joint account with her ex-husband for the kids, a new checking account with her fiancé’ for the wedding – and a pre-paid credit card so she could rein in her teenager’s emerging expensive tastes.  She felt like she was baring her soul to a banker she never met before.  She was definitely missing the ‘private’ in private banking.  Given the vulnerability she felt – she didn’t even begin to discuss her real financial goals or concerns – like saving with her new spouse, or how to manage established investments individually.

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Putting Your “Self” in Self-Service

Putting Your “Self” in Self-Service

Author Lane Martin Published March 27, 2015

Finding the balance between promoting self-service and delivering stellar customer service

In part two of our blog series on Branch Banking transformation, we shift the focus to convey how we help our financial services clients address the often conflicting dynamic of luring customers into the branch, then directing them to use self-service, versus providing hands on customer service.  Our first blog, Changing the Mind-set from Survive to Thrive, concluded that branches are here to stay, as long as they evolve to be a relevant outlet for customers whose lives are increasingly expecting more convenience. We stressed the idea of making the encounters matter.

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The Shanghai Exchange: China Options In

The Shanghai Exchange: China Options In

Published March 26, 2015

After much speculation and delay, February 9, 2015 marked the day when China launched her first publicly traded stock options exchange in Shanghai. On one hand, the world views China’s quasi free-market development as a “late bloomer” into an already established sector. Others regard China’s entrance as an inevitable outcome from mounting global regulatory trading pressures, including collateral and margin rules, in other areas around the world.

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The Rise of the Chief Risk Officer

The Rise of the Chief Risk Officer

Author Timothy Sakowich Published March 25, 2015

The OCC’s newest approach to safeguarding the economy further solidifies the CRO’s place in the executive suite.

The Office of the Comptroller of the Currency (OCC) has begun the process of forcing large banks to conform to its heightened expectations for risk management. Evidence of what these new standards could mean for banks came earlier this month when Bank of America announced it would realign its compliance function with risk management1. The decision came after Bank of America met with the OCC late last year to discuss the new expectations.

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Ethics and MSBs – De-risking or Risk Shifting?

Ethics and MSBs – De-risking or Risk Shifting?

Author Jason Malcolm Published March 23, 2015

The term “derisking” has been used in the financial services industry for quite some time, most recently, due to increased regulations. Financial institutions and their boards are discussing how they can further derisk themselves from certain high risk divisions. Businesses such as money transmitters, casinos, certain foreign banks and derivative and prop trading are all under the micro-scope. Fear over new risk is also causing banks to refuse taking on new profitable businesses, such as virtual currencies as well as the cannabis industry. With ever mounting regulation, and unclear agendas, financial institutions have become very sensitive to the level of risk each particular line of business represents.

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The Human Operating System – A Weak Link for Happy Hackers

The Human Operating System – A Weak Link for Happy Hackers

Published March 19, 2015

The number of reported Cyber-attacks is going through the roof. Statistics from the FBI, Verizon Breach Report, The Ponemon Institute and nearly every industry source all agree the number of attacks are dramatically increasing. We have all heard of Target, Neiman Marcus and so many others. So the question is….are we becoming more vulnerable?

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Disrupting gender diversity: Are we mistaking progress for success?

Disrupting gender diversity: Are we mistaking progress for success?

Published March 18, 2015

I love this time of year. It’s the IWD (International Women’s Day) season and suddenly gender diversity is THE thing that everyone is talking, blogging and tweeting about.

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PSD2: Can banks take the lead in the mobile payments race?

PSD2: Can banks take the lead in the mobile payments race?

Author Alexandre Vandeput Published March 17, 2015

When we consider mobile payments, we often misjudge customers’ willingness to embrace adoption. This is because mobile devices are only the start of a new customer journey. Customers are not switching to mobile payments just because they prefer using smartphones. They are doing so because mobile payments offer integrated value-added services, such as reward programs, couponing and ticketing, which substantially enhance the overall customer experience.

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Pruning Bank Branches; Good Business or Bad?

Pruning Bank Branches; Good Business or Bad?

Author Lane Martin Published March 16, 2015

Everybody has their own view of the future of bank branches.  And they all could be right.  The future of branch banking is a topic being hotly debated, from the boardrooms of major financial institutions to the local coffee shops of Main Streets.  Will bank branches become a thing of the past?  Or will branch banks become a new type of meeting place for those interested in financial services? Opinions vary widely, especially at our nation’s top banks. 

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Fintech digest picks up steam

Fintech digest picks up steam

Published March 13, 2015

Digests pick-up steam amidst showers of stories

Financial technology is shaping the future of global economies, by shaping the fabric of people’s lives. It is that simple, and yet, that complex. The way the world trades, exchanges and makes money, wealth and value, will decide how people live, as well as which companies will succeed or fail. Keeping up with emerging technologies and shifting M&A landscapes is becoming increasingly difficult to do, which is why news digests, offering aggregations s of a week’s most important news stories, are becoming increasingly popular. Capco’s Fintech Digest hosted by Futurism.com is one of the industry’s best and here’s what they had to say this week.

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Islamic Banking: to believe or not to believe is not the question

Islamic Banking: to believe or not to believe is not the question

Author Amina Khan Published March 10, 2015

Infographic: Islamic Banking

Islamic Banking industry outperformed growth of traditional banking services by double-digit rates over the last decade (source: The Banker). With total assets amounting to $2.1 trillion in 2014, the sector’s cumulative average growth rate (CAGR) is 17.6% over the last four years. This is two to three times faster than the growth rate of traditional banking, in part due to the global financial crisis.

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Is being yourself going to bring about change? Not if the majority of 'selves' don't purposefully drive it!

Is being yourself going to bring about change? Not if the majority of 'selves' don't purposefully drive it!

Published February 27, 2015

I've blogged before about how firms should find a way to let employees be themselves at work. Although, as one kind reader pointed out, that doesn't further the inclusion agenda if being yourself means working in a way that excludes others! Fair point. I buy into this vision. After all, it's one I created, spearheaded and have very publicly sponsored both within my firm and externally. But recently I got to thinking. If I care about inclusion (and I do) and I am passionate about disruption (which I am) how come we aren't disrupting diversity?

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2015: A wake-up call for European banks

2015: A wake-up call for European banks

Author Jeroen Dossche Published February 24, 2015

“What’s keeping financial services executives awake at night?” In today’s demanding market conditions the question at the heart of our annual EMEA survey is more relevant than ever.

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HR is ripe for disruption, but what IS the future?

HR is ripe for disruption, but what IS the future?

Published February 02, 2015

Everyone’s talking about future workplace. We all know where it’s heading – people-power, social networking, crowdsourcing, limitless connectivity and a workforce that is contingent (self-employed in some form) and virtualized (anytime, anywhere). But what about the HR team - its leadership? In a people-power world, what does it look like?

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Corporate treasurers, how are you tackling negative rates in 2015

Corporate treasurers, how are you tackling negative rates in 2015

Published January 29, 2015

Fears of negative interest rates in the euro zone have become reality. The European Central Bank (ECB), for the first time in its history, in June last year, pushed its deposit rate below zero, effectively charging banks 0.2% to park surplus liquidity.

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5 lessons for online FX brokers from the Swiss Franc moves

5 lessons for online FX brokers from the Swiss Franc moves

Author Luis Del Pozo Published January 26, 2015

On 15 January the SNB (Swiss National Bank) removed the floor on the EUR/CHF rate allowing it to float freely on the market. The Swiss Franc immediately appreciated by almost 20% catching most market participants by surprise both on the timing and the extent of the market reaction. Over the next days it became apparent that many clients of online FX-brokerage operators, with highly leveraged positions trading on margin, had been caught unawares with short Swiss Franc positions and had substantial losing positions. The unique configuration of the online leverage FX brokerage model throws up some intriguing insights.

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My client trusts me… trusts me not… Swiss banks’ digital strategy heartache

My client trusts me… trusts me not… Swiss banks’ digital strategy heartache

Author Christine Ciriani Published January 21, 2015

Digital and mobile banking are the next big thing according to advisors and clients. But is it really where Swiss banks want to go? And should it be their priority? What clients expect from a Swiss private bank is security and discretion. They want a trusted relationship with their advisor and confidence that their wealth is safe and discretely protected. In this sense, digital can be a threat and must be handled with care. Rushing into it may pose risks to security and undermine that vital element of the client -bank partnership – trust.

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The utility model to the rescue of banks' profitability

The utility model to the rescue of banks' profitability

Published January 20, 2015

It’s 2015 and banks are struggling to find pre-crisis levels of profitability. Since 2007, return on equity has been nearly halved and prospects of growth remain uncertain. The result? Banks have no choice but to explore new ways of reducing costs. The utility model, still in its infancy in banking, but already mature in other industries, including aircraft and car parts manufacturing, offers a solution to cutting costs by ‘mutualizing’ them.

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