Receiving Wide Coverage
Promise kept: American International Group is acquiring Validus Holdings, a Bermuda-based insurer and reinsurer, for $5.56 billion, as Brian Duperreault, AIG’s new CEO, “makes good on a promise to reverse nearly a decade of shrinkage stemming from its near collapse in 2008,” the Wall Street Journal says. He also “turned to an island he knows well. He was born in Bermuda, and two of his previous CEO roles were there.” Wall Street Journal here and here, Financial Times
Look ma, no cashiers: Amazon.com opened its long-awaited cashier-less convenience store on Monday. The Amazon Go store, which is located at the company’s Seattle headquarters, “uses computer vision and machine-learning algorithms to track shoppers and charge them for what they select, thereby eliminating checkout counters,” the Journal says. Dilip Kumar, vice president of technology for Amazon Go and Amazon Books, didn’t says whether Amazon will expand the Go concept, but said it has “developed the technology to scale.” Wall Street Journal, Financial Times, Washington Post
Wall Street Journal
Big investment: JPMorgan Chase plans to spend $20 billion over the next five years to open up to 400 branches around the country, increase mortgage lending to lower-income customers and raise wages for some of its retail employees, CEO Jamie Dimon told the paper. The planned investment is due to the benefits from tax reform, which could boost net income at the bank by $3.6 billion this year.
The times they are a-changing: Bank of America is eliminating its free eBanking checking account. The bank will now require customers to have a $250 or more direct deposit or a minimum daily balance of at least $1,500 in order to avoid the $12 monthly fee. Some unhappy customers launched a petition protesting the change on Change.org, which attracted more than 45,000 signatures.
Coming home: Scott Case, a former chief technology officer in SunTrust Banks’ consumer business, will become CIO of the bank beginning early next month. He will replace Anil Cheriyan, who is scheduled to retire at the end of March. Case most recently was CIO at Ciox Health. He will report to SunTrust chairman and CEO Bill Rogers.
One step ahead?: Beijing-based OKCoin, which previously ran one of the biggest bitcoin exchanges in China before the government banned such markets, is planning to launch a similar exchange in South Korea, just as that country is considering outlawing them. OKCoin Korea has already accepted more than 150,000 preorder registrations since last Friday and intends to trade about 60 digital coins.
Separately, a former Goldman Sachs banker is planning to launch a digital platform that will make it easier for investors to short one cryptocurrency against another. The platform, called Oxygen, could “potentially bring the nascent market one step closer to the financial mainstream,” the paper notes.
Confident: Tiger Global is betting more than $1 billion that Barclays CEO Jes Staley can “turn the British bank from being one of the sector’s worst stock market performers into one of its best.” The U.S. hedge fund, which is now one of the bank’s top 10 investors, “is also giving a vote of confidence to Mr. Staley’s strategy of stripping Barclays back to focus on its U.S.-led investment bank and its U.K.-based consumer banking operation.”
New York Times
It'll cost you: New rules from the Treasury Department’s Financial Crimes Enforcement Network requires financial institutions to undertake greater due diligence to discover the ownership of corporate shell companies when they open accounts in order to discourage money laundering. But who should foot the bill for that, banks and other regulated companies or the government?
“To effectively combat the misuse of these legal entities the government may need to undertake the burden of maintaining a detailed registry of who the actual owners are,” says Peter J. Henning, professor of law at Wayne State University in Detroit. “And that is going to cost a lot of money, which may be the greatest impediment to real change in how assets can be hidden.”
“Banking now requires an omni-channel approach. To ensure an excellent client experience, while maintaining current systems and introducing new technology, requires a tight partnership among IT professionals and the business.” — Scott Case, SunTrust Banks’ new chief information officer.