Zopa Is The Kwikfit Of Banking
This article on Wired.com reports a speech made by Zopa CEO; Giles Andrews. He starts in combative form.
The banking industry has “forgotten who its customers are”
They would have lost most of them, if people thought hard about their banking.
Giles then says this.
But the banking industry has left itself vulnerable, he says. He compared the need for consumer-focussed disruption in banking to the transformation of the car services industry 40 years ago. KwikFit made car repair faster, more convenient and cheaper. “They provided a product that was better value, offered better convenience and a better customer experience. It was just a better product.”
Zopa is truly the Kwikfit of banking. I just wish I’d started to use them earlier.
The Archbishop Preaches
According to the Sunday Times, the Archbishop of Canterbury, wants to drive payday lenders and loan sharks out of business. He has delivered a speech to the House of Lords on the subject and it’s reported here.
I don’t share his optimism, as there are some bad practices that are impossible to stamp out, save of executing everybody who does them! But even would that discourage smokers? I doubt it!
He says we should encourage the growth of credit unions. It’s a laudable aim, but we have just so many financial illiterates for it to make any difference.
Is This A Real Payday Loan Site?
This site called lolcatloans.com was mentioned in the Money section of The Times today.
Is it real? I certainly wouldn’t borrow any money from them, despite the appealing cats!
The site appears to be registered in Panama, although it does appear to offer loans in pounds.
I would sugest that you laugh at the cats and do no more!
Banks Don’t Do Parties
It’s many years, since I had any hospitality courtesy of my bank. It was probably a meal from David, when we were getting each other out of various scrapes.
But last night, one of the peer-to-peer lenders I use, invited me to a party.
One important thing was said, which addresses one of the problems of the peer-to-peer lending market and that was that the major peer-to-peer lenders had asked the government to legislate and bring them under the wing of the Financial Conduct Authority. It will probably happen in the spring of next year, but as with most government legislation, who knows? How many organisations or groups of companies have actually asked to be regulated? I can’t think of one, even outside of the financial area.
There was also a feeling at the party, that the various high-profile payday and short-term lenders cause confusion in consumers’ minds and this didn’t help. Let’s face it, judging by the number of bus and television adverts for these higher cost lenders, the public might even think that peer-to-peer lending didn’t exist or was a very niche product
It would be interesting to know, how many possible borrowers, never check that they might get a better deal from a peer-to-peer lender than their current bank, simply because they don’t know of peer-to-peer lending or don’t know how to contact the lenders? For instance, it would also be interesting to know such things, as how many people with excellent credit ratings, who regularly borrow money, don’t use the Internet!
If I ran a peer-to-peer lender, I’d get someone like YouGov to do a survey! After all, the party last night was a convention of believers, so anything obtained there would be statistically skewed.
The party was also a great place to exchange ideas and investigate how your money was handled. When did your bank last explain to you personally, why they were giving you such a poor rate on your Deposit Account? No one, probably gets decent service out of their bank these days, until they pop their clogs, as only then will the bank lose the easy money they make from that customer.
Robert Peston On Wonga
Everybody and especially politicians of a certain colour, love to hate Wonga. I have little time for them, every since I saw a presentation by one of their founders at an Internet awards ceremony.
But Robert Peston in this article on the BBC web site, asks whether we look at Wonga through the wrong set of glasses. This is the first two paragraphs.
In many ways Wonga.com is an impressive, even admirable business (and please resist your temptation to send me hate mail – I am feeling delicate).
It is, for example, funded exclusively with equity capital, or £100m genuinely at risk of being lost if things go wrong.
The article also says that as it takes no deposits, it can’t suffer a run and be bankrupted, as effectively happened to Northern Rock. And will probably happen to other banks in the near future.
Remember, I used to part-own a finance company and did a lot of analysis of the dynamics of the loan business. Hence my admiration for the Zopa model, which I think is very stable. I said that here in a lot of detail.
Obviously, Wonga did a lot of analysis on their data and this has led them to their success, as they have the right model and technology. Peston says Wonga’s technology is world class. If banks such as RBS, Northern Rock and Bradford and Bingley had had world-class technology, they might not have gone bust.
Most of the comments on the article, seem to say Wonga and their ilk should be banned.
But you’re going for an easy target, that plays well in the media.
The real problem with Wonga, is the appalling level of financial education in this country, which means that people succumb to the charms of the likes of Wonga.
If people knew how to manage their money better, there’d be no need for Wonga. But that doesn’t happen to people until they’ve had at least one financial crisis!
Velez Malaga Sends Its Trams To Australia
The BBC World today, was dominated by this story, about how Velez Malaga was sending its trams to Australia, as it can’t afford them.
I do wonder who is footing the bill for all these Spanish practices?
A Take On Bankers Worth Reading
This blog post on bankers is worth reading. Two of my least-favourite politicians get the treatment with no holds barred.
Read it! If I paraphrased it, I’d reduce the quality of the criticism.
I Know How Kevin Phillips Feels
It is being reported that Kevin Phillips penalty kick in the Championship Play-Off Final was worth £120,000,000.
I know to a certain amount how he feels today.
I was part of the team that sold Metier Management Systems to Lockheed for a similar sum in 1985., although with inflation it’s probably worth a lot more today.
As we went about the pre-sales process, we realised we had good methods and software, but everything was rather boring. So I was asked if I could create a version of Artemis with style and charisma. I did nothing else for six weeks, except write software, eat and sleep occasionally, but the result was that we received a lot more money, than we had decided we would accept.
It was the software and business equivalent of Kevin Phillips’s spot kick.
I also have two other characteristics that I share with Kevin. We’re both about the same height of 1.70 metres and we both performed our most important feats at just under forty years of age. He also is a man from North Hertfordshire, whereas I was brought up in that part of London, that used to have a Barnet, Herts postal address.
Co-Operative Bank Ditches Business Lending
This story on the BBC web site, says a lot about the state of the Co-Operative Bank. Here’s the first bit.
Co-operative Bank has stopped offering new business loans amid concerns over its capital position.
The bank is continuing to provide lending to existing customers, but has frozen lending to new corporate customers.
I don’t bank there, but if I did, I’d be moving my account for safety reasons tomorrow. If not today!
Bankers Don’t Get It Do They!
My bank, Nationwide, has just made me an offer. If I pay them ten pounds a month, I get a special account, which gives me the following benefits.
- Free worldwide travel insurance for you and your family, including winter sports, golf, wedding and business cover
- Free Worldwide mobile phone insurance
- Free UK & European breakdown cover
- 3% AER (2.96% gross p.a.) variable in-credit interest on balances up to £2,500
Is this a joke?
They say it’s designed to make my life simple.
Let’s take each point.
Starting with the travel insurance.
I don’t have any family, who are dependent on me. I don’t do winter sports or golf. I don’t have any plans to get married and my business, if I have anything is enjoying myself.
I suppose I do need some form of travel insurance, but at the moment, I’ve no plans to go outside of an area, where I get decent healthcare on my EHIC.
The mobile phone insurance is irrelevant, as I use a £10 phone for my communications. If I lost it, I’d just buy another in the nearest O2 shop for a tenner.
Is the third point about breakdown insurance serious? I don’t have a car.
But I reserve my highest condemnation for the derisory interest rate on savings. I’m getting a safeguarded five percent on over a hundred thousand pounds with Zopa. So it’s not government guaranteed, but the company is run by people with intelligence and not a wunch of bankers.
There is no mention of the features I would like.
- Text messages every time, a transaction over a particular amount happens on a credit card or bank account.
- Annotated statements, that allow me to comment on transactions. Taken to its logical conclusion, you could even add a cost code, which could then be used by software to create a simple set of accounts.
- Full tracing on cashpoints, I’ve used. I’ve noticed that the records of those I used in Switzerland are much more detailed than the one I used yesterday in Islington.
- Customisation of my bank account, so that I set levels for alerts, withdrawals etc.
There is an opportunity out there and the first bank to go that way, gets my business.
The Anonymous Widower 