Tech Beckons: Ruth Porat's move from Morgan Stanley CFO to the same role at Google was the career switch heard round the world this week. Industry observers were eager to weigh in on what Porat's defection reveals about the relationship between Wall Street and Silicon Valley. "You can't blame them for the exodus," financial advisor Josh Brown wrote of bankers hanging up the mantle and heading to California. "In tech, there are no regulations and everything you invest in is automatically worth $9 billion." Several pundits pointed out that Porat's move leaves even fewer women in the upper echelons of finance, with JPMorgan Chase CFO Marianne Lake and JPMorgan asset management chief Mary Callahan Erdoes emerging as some of the most prominent ones left standing. "So JPM has all of Wall Street's top women? Wow," writes Bloomberg columnist Katie Benner.
Speaking of the finance-tech divide: Banks that want to compete with financial technology startups need to think like venture capitalists, according to Bain & Company's Mike Baxter and Richard Fleming. That means investing in a wide range of initiatives and hoping that a few will pay off. And look to startups, along with nonprofits, for fresh ideas about affordable ways to help Americans bridge the gap between paychecks, write Janis Bowdler of JPMorgan Chase and Sarah Gordon of the Center for Financial Services Innovation.
Don't Unfriend It: Compliance makes social media tricky for financial institutions, and future regulations and guidance will likely further drive up its costs. But author Jennifer Openshaw says the benefits of social media are often worth the trouble. Meanwhile, banks should take a cue from the recent code-cracking World War II film "The Imitation Game" and assemble their own specialized teams to interpret social media data, writes risk and compliance expert Andrew Waxman.
Eagle-Eyed Consumers Wanted: The best way to ensure the accuracy of consumers' credit reports is to persuade more people to check them, writes Michael Staten, director of the Take Charge America Institute for Consumer Financial Education and Research. "Credit agencies have both a responsibility and an economic incentive to assemble accurate credit reports," he writes. "But the fact is that only consumers can easily recognize mistakes." Similarly, a recent court decision lets banks off the hook for processing checks past the "Void after 90 Days" notation. It's up to customers to review bank statements and flag problems to their financial institutions, write attorneys Eric J. Gribbin and Julia R. Lissner.
Complaints Squared: Consumer Bankers Association chief Richard Hunt took aim at the Consumer Financial Protection Bureau's policy of allowing unverified consumer complaint narratives into its public database. This "does nothing to help consumers make more informed financial decisions," he writes, arguing that the CFPB should follow the lead of other government agencies that check out complaints and provide context to help users understand them. Commenter "teknoscribe" disagreed, writing that the expanded database "may increase the pressure on prosecutors to begin convicting those who engage in such criminal activity."
Also on the blog: Consultant Paul Schaus makes predictions about the fate of new mobile payments offerings from Apple, Samsung, Google and advises banks to develop their strategies accordingly.