Weekly Briefing No. 21 | Signac: James Bond Film or a Credit Suisse Project?

March Madness, Easter and Brexit chatter may be on your mind, but we’re still keeping an eye on financial innovation for you. This past week was especially notable as Palantir, Credit Suisse, Accenture, Bridgewater, a payments hackathon, a blockchain accelerator and a “Nashville problem” caught our attention.

In-depth 

Signac: James Bond film or a Credit Suisse project?

No, Signac in not the third installment of a Bond trilogy that includes Skyfall and Spectre. It’s a new JV between Palantir and CS. And if you don’t already know about Palantir, you should. In a nutshell, it’s an extremely successful, CIA-backed Silicon Valley company that fuses advanced technology with human intelligence to fight terrorism and fraud. The original idea behind Palantir stemmed from the belief that a private company would have greater ability to make effective and fast use of new technologies and techniques than the security apparatus of the US government. That bet has proven correct. And while CS isn’t as complex as the Defense Department, its ability to prevent bad actors from doing bad things under its watch is compromised by the challenges of overseeing a global banking enterprise. That’s where Signac comes in. On paper, this JV represents a novel approach for enabling a firm to identify in-house villains. The verdict on its practical benefit will not be known for some time, but if Signac proves effective (and not overly intrusive), look for every big bank to either cut a deal with this JV or forge its own 007-style gig.

What’s an Uggla?

Uggla means “owl” in Swedish, and at first glance, the merger of IHS and the company that Lance Uggla founded, Markit, is another example of two mid-sized companies building scale amidst the merger mania occurring in the financial data and software sector. But standard analysis of the deal underestimates what may be Uggla’s owlish wisdom. The Markit founder will become chairman and CEO of IHS-Markit on December 31, 2017. Uggla built Markit from scratch in the English countryside — where sheep outnumber people — into a formidable company that has made about 20 acquisitions and completed a large IPO. After being outmaneuvered by Intercontinental Exchange (ICE) for a coveted acquisition last year, Uggla probably concluded that he needed Markit to be brawnier in order to fulfill his ambitions. So while the combined company will be respected in the energy, credit and index markets, we think Uggla intends to steer it into the financial data big leagues occupied by Bloomberg, Thomson Reuters and ICE. And if things go as planned, look for enterprise-focused fintech start-ups and companies like FactSet and Eze Castle to be on IHS-Markit’s shopping list. This owl in no sheep.

Accenture lays out keys to avoiding “Big Brother” turn-offs. 

The Internet-of-Things (IoT) continues to be hot because of its potential to transform just about every industry. Within fintech, consumer banking applications are promising, but insurance applications of IoT are even more compelling.  But while the opportunity is huge, so are the potential risks associated with an insurer appearing to violate a customer’s sense of privacy — especially if the insurer is protected by fine print language buried deep into an agreement. That’s why we like Accenture’s recent writings that address best practices for IoT Insurance products. 

In brief

Bridgewater’s new CEO wasn’t hired for his tech chops.

While at Apple, Jon Rubinstein helped hatch the iMac and iPod. In the years since he left Apple, he has taken on other big tech roles too. Now, he’s joining hedge fund giant Bridgewater Associates as co-CEO. Bridgewater is basically a tech company with management fees and carry, but that isn’t why Rubinstein was hired. We think it was driven by the fact that he thrived under the brutal genius of Steve Jobs. Ray Dalio’s ethos of “radical transparency” isn’t for the fragile. On that basis, Rubinstein is a great choice to relentlessly drive performance and perpetually implement Dalio’s vision. 

What can the Manhattan Bridge teach us about the fintech market?

The FR’s Gregg Schoenberg shared his thoughts on how the bridge’s troubled history can prove instructive for those who care about financial innovation (which should be everybody). See more here.

Four big Swissies and a Brit walk into a bar…

And when they leave, you’ve got a new blockchain accelerator program that will welcome its first cohorts in Zurich this July. Areas of focus will include wealth management, digital identity and smart contract innovations.

The “Nashville problem”… Are you kidding?

While not specific to fintech, we wanted to highlight a recent Lauren Smiley post (https://backchannel.com/) chronicling the “heartache” associated with start-ups like Lyft and Warby Parker relocating customer service personnel to low-cost Nashville. Sure, not working at HQ has its downsides. But paying $4,000 per month in rent for a shoe box in the Mission or Williamsburg isn’t great either — and for those people who care, East Nashville is now widely believed to be one of the trendiest places in the US.

There ain’t no party like a FinApps party.

This week, Atlanta’s Global Payments announced the winner of its espresso-powered interactive hackathon that occurred simultaneously in Atlanta and London. First prize went to Non-Friction Checkout, a mobile app doing interesting things with Near Field Communication (NFC) tech. See more here.

Li Ka-Shing leads new round of funding for P2P Insurance start-up.

With $15.3 million of fresh capital, Berlin-based Friendsurance plans to expand internationally.

Company of note

Mondo. 

This full-stack, digital bank aspirant temporarily broke the crowdfunding platform it used to raise cash. When the small round was subsequently re-launched,  the supply was gone in 96 seconds. Why such enthusiasm? To quote founder Tom Blomfield, “we’ve been called a bank for people who hate banks.”

Comings and goings.

Recently, Cincinnati-based Fifth Third Bank announced that it intends to hire over 200 technology professionals in conjunction with a focus on mobile and digital banking. Maybe the bank heard about Mondo.

Quote of the week.

“Defending the truth is not something one does out of a sense of duty or to allay guilt complexes, but is a reward in itself.”  

~  Simone de Beauvoir.