Turbulence and Uncertainty for the Market After ‘Brexit’
The New York Times reports that Britain's exit from the European Union caused the pound to drop to levels not seen since 1985. The decision and the consequent drop is causing deep uncertainty in global financial markets. The Times reports, "Few expect that Britain’s departure from Europe will set off a full financial crisis like the one seen after the collapse of the investment banking giant Lehman Brothers in 2008. But no one knows enough to rule that out, either. The world has never been here before." Most importantly for readers of MoneySummit, commentators such as the International Business Times are wondering whether will London lose its fintech crown.
Bank shares plunge after Britons vote to leave the EU
The Financial Times reports that UK and US bank shares plunged after the Brexit vote. The drop will likely rebound before the end of day, but the damage has been devastating. "More than £20bn was wiped off the market value of the three biggest UK-listed banks in a few hours," FT reports.
Here are the details:
- Barclays and Lloyds: Down more than 30%
- Morgan Stanley: Down 8.6%
- Citigroup: Down 8.3%
- Bank of America, JPMorgan Chase, and Goldman Sachs: Down more than 5%
Biggest developments in fintech in 2016
Wired Insider talked to the international law firm Bird & Bird to cover four major fintech trends in 2016: 1) With the help of startups, banks will make smarter use of the data they're sitting on 2) Digital startups will increasingly use crowdfunding to launch their businesses 3) The ability to store data on the cloud will continue to lower the cost of entry for fintech startups 4) New payments providers, such as Square and Stripe, will increasingly eat into the tradtional payments space.
The John Oliver Effect…On Your Retirement
Sallie Krawcheck, Co-Founder and CEO at Ellevest, summarizes John Oliver's takedown of financial advisers and shows that Ellevest is in line with Oliver's critique. The more that this message of low-cost index funds gets out, the better it will be for the average consumer. It's an urgent topic given that the US is looking at a $53.4 billion retirement shortfall.
The Rise of FinTech in Supply Chains
Harvard Business Review writes about the emergence of fintech companies that act as intermediaries between suppliers and buyers. These companies benefit both parties because suppliers are able to get paid when they want and buyers are able to send the money when they want — smoothing out the procurement and accounts payable process. Because these fintech companies can offer their services for relatively cheap, they are putting pressure on traditional players to lower their margins.
Also check out our latest posts from this week:
- Teaching Students to Be Financially Fit: A Look at PwC’s Earn Your Future Program
- How to Get Account Holders to Willingly Pay Fees: Interview with StrategyCorps
- Projected $53.4 Billion US Retirement Shortfall Shows the Need for Smarter Money Management