Intelligence

HSBC and Goldman Sachs: Best Buds Behind British Fintech

Best Buds: HSBC and Goldman Sachs have teamed up to put $20M behind the British fintech start-up, Bud. The company allows banks to update their apps in order to give users access to financial services products from rivals, reports CNBC. Bud also lets banks categorize a customer’s spending data to help their clients find more cost-efficient products.

Why? Sharing customer data may seem counter-intuitive for competition reasons but the London-based business is a firm believer in “open banking.” The emerging fintech trend means that banks share their consumer data with third-party providers to help create new financial products. “Proponents of open banking say that it will increase competition in the industry and benefit consumers, giving them more choice over who they bank with,” according to the article.

Slack Goes Public: Slack, the popular work messaging app, is wasting no time now that the government’s back open. It confidentially filed for its IPO on Monday, writes Melody Hahm for Yahoo Finance, and will opt for a direct listing.

“It’s a milestone and it definitely speaks to the maturity of a company or what you’ve built, but if you get your employees all kind of [thinking] ‘this is the goal’ what happens on the other side of that mountain that they’ve climbed?” Slack board member Sarah Friar told Yahoo Finance last week. Friar, who was involved in the IPO for web design start-up Square says of the experience:  “And so that was a very good learning at Square because we did not have a very successful IPO. It was so hard.”

A Prime Audience: Amazon CEO Jeff Bezos is changing his tune when it comes to advertising Amazon. After claiming that advertising was “the price you pay when your product is unremarkable,” Bezos approved a 72.5 percent increase in U.S. ad spending last year to $1.8 billion, according to CNBC.

The shift in philosophy is directly related to Amazon’s transition from an e-commerce marketplace to a fully integrated brand of media and consumer products. And it’s paying off. In Amazon’s most recent earnings statement, it reported a record $1.8 billion marketing expense for 2018. In turn, the spend accounted for nearly 6 percent of Amazon’s total revenue–the highest ratio in 18 years.

Rescinding on the Recession: Jeff Bezos isn’t the only one doing an about-face, according to Bloomberg. The Fed’s announcement to stabilize interest rates was well received by investors, causing the S&P to peak 2.5 percent over three sessions. Now, J.P. Morgan says investors should reconsider their investment cycles–a far cry from the feeling of impending doom just a few months ago.

“If the Fed is less spooked by full employment, more tolerant of an inflation overshoot and less anxious to reach restrictive policy, then 2020 might not be a year to think about recession and so late 2019/early 2020 would be premature to position defensively cross-asset,” strategists led by John Normand wrote in a note dated Feb. 1.

Soaking the Rich: While our Chief Economist Milton Ezrati has a few questions about newly elected Congresswoman Alexandria Octasio-Cortez’s tax proposal, new data shows that plenty of Americans are on board with high taxes for the super-wealthy. According to Politico,76 percent of registered voters believe the wealthiest Americans should pay more in taxes.” A recent Fox News survey indicated similar figures, showing “70 percent of Americans favor raising taxes on those earning over $10 million — including 54 percent of Republicans.”

As we gear up for another heated presidential race, maybe there’s hope for partisanship, after all.

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