Weekly Briefing №104 | Spooky Special Edition

By FinRev | Fin Rev | 30 Oct 2020

In honor of Halloween, All Saints’ Day, All Souls’ Day and Día de los Muertos (our favorite), this issue is dedicated to ghosts and spirits. Our spooky stories include:

  • Wonder Woman vs. AI omens
  • One grisly sum-of-the-parts analysis of sell-side analysts
  • A séance for Teddy Roosevelt
  • Theodora Lau’s scary-good opinion piece; The vanishing fintech sector
  • Nike, Apple and ING seek to slay boring retail; Prince Al-Waleed’s Bitcoin fright
  • Company of Note: Greenlight (Even the Grim Reaper likes this start-up)

The frightening possibility of a male-dominated AI fintech future.

When it comes to gender parity in financial services, Israel, where three of the nation’s leading banks are run by women, is doing a better job than the US. That’s one takeaway from a post penned by Bank Leumi’s Rakefet Russak-Aminoach, which borrows inspiration from actress Gal Gadot. To be sure, there are plenty of Wonder Women today who could and should serve in leadership roles at US financial firms. But rather than focus just on today’s sorry state, perhaps another way to promote greater gender diversity is to look at where financial services is going. As the great article furnished to us by Sultan Meghji shows (See below), Deep Learning specialists are in huge demand by Big Tech. That demand will likely spill over to financial services in the years to come as AI works its way into everything financially-related. Hopefully, fintech-minded women will take advantage of this trend, train in AI-related roles and seize money and leadership opportunities whether men like it or not. When they do, men should thank them. Why? Just look at social media, where the algos that define the industry were mostly built by young men. Unsurprisingly, biases were reinforced, thanks to the ways the dude demographic thinks. But when it comes to AI, the stakes of making sure the algorithms of tomorrow are trained by women as well as men couldn’t be higher. Imagine how the future will look if gender biases are fully baked into our AI-driven economic future. Today, you can fire a misogynist for bad conduct, but tomorrow, it will be tough to fire a powerful algo with a neanderthal mindset.


The grisly economics of sell-side research.

The race to zero is a dynamic affecting not just brokerage trading, ETF expense ratios, cloud storage, online courses, the cost of pasta last Wednesday (World Pasta Day) and McDonald’s, which just announced the relaunch of its Dollar Menu. For better or worse, Wall Street compensation is also likely to feel the squeeze again this year (unless you’re a software engineer). One reason is the MiFID II directive, which will spread to the US one way or another (even as the SEC takes action to delay its impact for a while). Inspired by the hourly prices that sell-side firms are placing on analyst’s time in response to this regulation, Bloomberg Gadfly’s Shelly Banjo recently did a sum-of-the-parts analysis on the worth of a senior analyst. Her opinion of a typical analyst’s true worth: $377,000. For most people on the planet, that’s a very attractive wage, but for a senior analyst, that’s Dollar Menu territory. It also makes the idea of an analyst jumping over to an IR role more attractive.


Teddy’s ghost.

Facebook’s presence within the financial services sector continues to grow. This week, for example, Visa announced that Facebook would be joining its Visa Token Service, TD Ameritrade said that you can now trade stocks and ETFs via Messenger and Alberta’s ATB Financial said that its 700,000 customers can now bank through Messenger. Looking beyond financial services, Facebook’s headlines were less rosy. Notable occurrences include a Palestinian man who was arrested after Facebook’s auto-translation algorithm interpreted “Good morning” as “Attack them,” and a temporary tweak of Facebook’s news feature that profoundly disrupted the news and information ecosystems in six countries. To end the week on a positive note, Facebook gave in to pressure and announced changes to promote more political advertising transparency. This news should help general counsel Colin Stretch defend his company’s possible role in undermining 241 years of American democracy during his congressional testimony next week. But it doesn’t negate the fact that, contrary to Facebook’s claim, it’s become one of the world’s most powerful media companies. We can appreciate that left unhampered, a juggernaut is allowed to keep juggernauting. We also acknowledge that government interference can often do more harm than good. Still, we hope that at some point, someone shows up with the pumpkins necessary to do something smart before the global economy, democratic institutions and start-up innovations are sherlocked beyond repair.


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A ghoulish blind spot.

We’re delighted to feature an opinion piece in The FR by our friend Theodora Lau. Using Ross Baird’s book, The Innovation Blind Spot, and Dan Shulman’s keynote address at Money20/20 as inspiration, Lau discusses the consequences of the reality that most VCs invest in companies nearby. The result is that 80% of all start-up money winds up in just three states. Even worse: less than 5% of all money goes to female founders and less than 1% to companies with an African-American or Latino founder. Fortunately, there are some bright spots that Lau highlights (hint: Village Capital).


Fintech is headed for the graveyard (in a spooky-good way).

And speaking of Money20/20, Atlanta’s Steady beheaded its rivals at the Startup Pitch competition with its app that aggregates personalized opportunities in on-demand, gig, part-time and seasonal work. The judges seemed to agree that the so-called ‘independent workforce’ (which one day may represent the majority of workers) needs more solutions to help reduce the drama associated with a portfolio approach to careers. The conference also featured tons of announcements, thought pieces and other materials that are too abundant to highlight. However, we’re happy to highlight a terrific presentation from Kleiner Perkins’s Noah Knauf on the state of fintech. Notable slides include the explosion of financial APIs that looks like a Bitcoin price chart (Slide 30) and the discussion of Chinese fintech rebundling (Slide 37). Our favorite section begins on Slide 45, which is entitled “Fintech eventually disappears.” How spooky.


Keeping the millennial grim reaper away from bricks-and-mortar.

“Undifferentiated, mediocre retail won’t survive… We will be shifting away from this over the next five years.” That’s the new plan of Nike Brand President Trevor Edwards. Apple is also reimagining its retail strategy with the intent of turning its stores into “town squares” that fuel the Apple ecosystem, criticism notwithstanding. Retail banks, of course, aren’t where you buy expensive sneakers or phones, but ING seems to be toying with a similar approach by making their retail experience more enjoyable. For more, check out McKinsey’s take on how retail banking can stay relevant in an increasingly digitized banking environment.


OXFFIN_Heavy Metal_650x603px-2 (1).png Dalio, Fink, Thiel opinions should scare the prince speechless.

“It doesn’t make sense. This thing is not regulated. It’s not under control… I think it’s going to implode.” With those words, Prince Al-Waleed joined the chorus of those who aren’t connecting the Bitcoin dots. Yes, the recent price action in Bitcoin has been ridiculous, but the spot price and the underlying forces buttressing Bitcoin are two different things. To understand those forces in the US, perhaps the prince could review Ray Dalio’s recent analysis (See below), which points to why Americans are losing faith in our institutions. Put Dalio’s analysis together with Blackrock’s Larry Fink’s market view and Peter Thiel’s assertion that Bitcoin’s value lies in the security of math, and you’ve got a great recipe for long-term Bitcoin tailwinds.




At first, the Teams page of Greenlight’s website looks like a normal bio page. But if you hover over a thumbnail, the overlay switches to a picture of a company executive with one or more of his or her kids. This devotion to children permeates the ethos of this Atlanta-based start-up that is working to redefine the relationship between parents, kids and allowance money. That mission is achieved through the company’s smart Mastercard debit card that allows parents to allocate money for their children (via the company’s app) into two categories: money they can spend anywhere, and money that can be used only at a pre-approved store or place. The latter is especially notable, as Greenlight asserts that the store-level control it offers to parents is a core differentiator between its offering and others in the growing fintech-edtech marketplace. “Slowly but surely, other start-ups have emerged to allow parents to monitor and track their kids’ spending,” said co-founder Johnson Cook. “But we worked hard to create a sophisticated solution that enables parents to teach kids about self-control when it comes to spending choices. Thanks to our platform, which enables controlled spending at every business in the world where Mastercard is accepted, we’re proud to have achieved that goal.”



“Monsters are real, and ghosts are real too. They live inside us, and sometimes, they win.”

~ Stephen King

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Fin Rev
Fin Rev

FinTech, Financial Innovation, Industry Disruption.

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