I've often felt uneasy about high-frequency trading. Contrary to claims from those participating in HFT that it increases liquidity, intuition suggests that having someone jump in and out really, really quickly between trades would end up reducing total market liquidity. But who am I to question these mechanisms? I am little more than a naive observer, unschooled in the dark arts at the confluence of physics and finance.
That's why reading an article like this is so compelling:
Nanex ~ 15-Jul-2014 ~ Perfect Pilfering - A detailed data-centric exposé on how the market is rigged
After taking that in, is it not worth asking a few questions about market fairness when the physical distance of a trading platform from its exchange has a material impact (due to the speed of light) on who gets to buy what, at what price? Especially given that access to said real estate is preferentially dished out by the same exchanges to the highest bidders?
Whoa. My life is complete: Smiths Frazzles. Think: bacon flavored bacon. In a crisp. Or "chip", for the Australians in the audience.
Should the anonymous creator of Bitcoin get the 2016 Nobel Prize for Economics? Bhagwan Chowdry from the Huffington Post thinks so, saying "I (shall happily) accept the 2016 Nobel Prize in Economics on behalf of Satoshi Nakamoto". Maybe Satoshi isn't just one person, but if he is, then the SEK10,000,000 Nobel Prize pales into insignificance compared to the (alleged) one million bitcoins that he is sitting on.
Nasdaq is looking to Estonia for its new blockchain services.
Australia's largest telco Telstra is having a say on mobile identity. There's also an infographic to summarise the report. The report provides details on how security and identity issues are gaining increasing attention, particularly in the Gen-X / Gen-Y crowd. However, there's not much to say on whether or not security concerns are actually changing people's behaviour or preferred financial institution. Banks have done such a great job convincing people that any security problems experienced online will be handled by the banks that most consumers think security is somebody else's problem.
According to Royal Bank of Canada head Dave McKay legacy systems are a bigger threat to banks than startups. This is almost certainly true, but those legacy systems still manage to fund massive profits. So there is little incentive to change, until the profit engines start to come off the boil.
Also Canada related, check out the difference in worldview between the Canadian and Australian banks when it comes to blockchain tech on the latest A16Z podcast: Blockchain vs./and Bitcoin. One is thinking economics, the other about politics. I'll let you decide which is which.
Starbucks is having quite a bit of success with its mobile payments functionality. How? By driving functionality entirely from how it improves the user experience in buying coffee in a Starbucks store. Obvious when presented like that. It's a real shame more product development isn't driven from the glass.
"Approximately 70 percent of consumers across all generations (85 percent of millennials) believe banks that are current with the latest technology are more trustworthy than banks that lag; however, nearly 4 out of 5 Americans say when it matters most, they value people more." An interesting result given the amount of time and money that most banks spend on tech.
Will Apple’s new money transfer idea leave Visa and MasterCard in the dust?. What a great question. Given how much banks (generally) make from their credit card businesses, there will be massive internal resistance to anything threatening. However, there are also those within banks and regulators who are very wary of the card schemes' power, particularly in Europe, given the US-centricity of the three biggest players. Grab some popcorn. This will be a hoot to watch.
Apple Pay finally gets a run in Australia, thanks to Amex. It will be very interesting to see how this plays out in Australia given the much higher penetration of NFC/contactless terminals in retail.
It is astounding that the US has rolled out chip cards, but not PINs. No wonder merchants are up in arms about spending a fortune replacing terminals that cut down only on the fraud shouldered by banks, not merchants.
We have had programmatic infrastructure for a while. Will we ever end up with programmable financial services?
The phrase "cashless society a few taps away" has been uttered so many times, but we are yet to see it. And we won't, until the form factor and user experience of "handing over cash in person" can be replicated electronically. In any case, while the advantages for electronic remote person-to-person transactions are clear (with or without a business model), do we even want to get rid of cash for local person-to-person transactions?
Superannuation is another area where Australia's New Payments Platform may have an impact.