by Rich Edwards Jan 27, 2023

Banking Reads That Will Blow Your Hat Off

Even Wall Street gets the blues battling Fintech, the zen-like approach to becoming a data-driven executive, and pressure on AML warrants

Cyd and Gene showing how it's done, via Giphy

Here are three reads worth your time this Friday. First, a look at why the entire banking sector seems to struggle with Fintech, an honest look at the difficulty in developing data skills as an executive, and Congress pushing back on mass surveillance of money transfers.

1. Banks vs. Fintechs: Culture eats strategy for breakfast

Bianca Chan and Reed Alexander of Insider have a piece on the struggles of the banking industry to compete directly with Fintech. The article covers various examples of failed acquisitions and attempts to woo tech talent.

UBS is one recent example of the problems that can plague these unions. The Swiss bank grabbed headlines with its planned acquisition of the automated-investing app Wealthfront for $1.4 billion in early 2022. But the deal was called off less than eight months later in a move that revealed internal tensions over the CEO’s push to digitize a 160-year-old firm soaked in tradition.

To this point, it’s not technology or even money that’s the barrier, but the seemingly oil and water nature of banking and tech-driven cultures.

It’s just the latest evidence that banks — despite their deep pockets — are poised to lose their battle with fintechs over talent, technology, and ultimately customers unless they wake up to the fact that they are fighting the wrong fight. The battle is not with up-and-comers like Robinhood and Chime. It’s with themselves and their rigid, buttoned-down ways, which limit innovation and drive away the tech talent they so desperately want to recruit.

But in the end, could banking outlast and defy what is a classic industry disruption by sheer mass and the natural patience of it’s capital?

Big-bank bosses never need to raise the white flag. They have the money, smarts, and willpower to fight infinitely, even if all they ever do is tread water — keeping pace with the competition, rather than beating it out.

Meanwhile, bending their culture to meet the demands of their tech staffers stands to be both dangerous and costly.

KPMG said in its report on the matter: “Sometimes the smartest deals are those not done, particularly due to cultural concerns.” And for banks insisting on moving forward, prepare to spend heavily to make it work.

Jamie Dimon, Chairman and CEO of JPMorgan, has vowed to "spend whatever we have to spend" to win the war with fintechs

2. Adding ‘data-driven’ to your management skill set

Janessa Lantz, the VP of Marketing at dbt Labs, writes about her path to becoming a more data-driven leader. Her story follows her career as she progressed from individual contributor to designing and building a high-performing marketing organization. Much like the phases of grief, Janessa shares her journey from the “one correct answer” view of data, to total disbelief in any data, to leaning primarily on qualitative data, to finally believing data is critical despite its shortcomings.

It is through the process of working with data—understanding how a metric is calculated, an opportunity is bucketed, a piece of data is collected—that we build our internal understanding of reality. There is no One Correct Answer that exists in the data. There is no perfect data set that we can just pull from. There is no test we can run that will tell us what decision to make. There never will be. The process is the point.

When we engage with data, build metrics, group things, find patterns—we are not trying to find The One Correct Answer. We are trying to make sense of a complex reality.

The 4 attitudes towards data and their extremes by Stephen Bailey.

3. Mass surveillance of international money transfers under scrutiny

In AML news, Sen Ron Wyden of Oregon has stirred up a brouhaha, questioning the legality of the mass surveillance of money transfers. The specific program of his focus is the Transaction Record Analysis Center (TRAC). While used by many state and federal agencies, it is oddly run by the state of Arizona through a non-profit. At the core of the criticism is the breadth of the collection and weak oversight.

“This unorthodox arrangement between state law enforcement, DHS and DOJ agencies to collect bulk money-transfer data raises a number of concerns about surveillance disproportionately affecting low-income, minority and immigrant communities,” Wyden wrote to the DOJ Inspector General. “Members of these communities are more likely to use money transfer services because they are more likely to be unbanked, and therefore unable to send money using electronic checking or international bank wire transfers, which are often cheaper. Moreover, money transfer businesses are not subject to the same protections as bank-based transactions under the Right to Financial Privacy Act.”

One interesting note is the narrow targeting of Western Union, MoneyGram, Euronet, and Viamericas.

Money transfer apps like Apple Cash, Cash App, PayPal, Venmo and Zelle haven’t provided data to TRAC, Wyden says.

Sen Wyden’s inquiries have already halted a Homeland Security Investigations (HIS) subpoena, but that is probably not the end of it.

The Arizona attorney general’s office hasn’t responded to requests for comment. However, Wyden is already drafting legislation that would bolster privacy for money transfer services and effectively neuter the database. The ACLU, meanwhile, is unequivocal — it says the surveillance system “must be shut down.” If nothing else, the findings could draw attention to privacy issues surrounding money transfers.

So closes the week. I don’t know about you, but my kids have never fought like this on a road trip. Like or hate what we did here? Drop us a line at We love all that juicy feedback, even when it’s mean. And thank you for reading.

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