Thursday, December 17, 2015

After Fed rate rise, oil keeps falling; Facebook enters transportation biz with Uber; Wearables set to change banking

1 After Fed rate rise, oil keeps falling (Martin Farrer in The Guardian) Governments and central bankers across Asia Pacific have breathed a collective sigh of relief after stock markets rallied rather than recoiled at the US Federal Reserve’s decision to raise interest rates. South Korean vice-finance minister Joo Hyung-hwan said: “It is a relief that even despite the Fed rate hike, turbulence in global financial markets has not been large.”

But although the decision by the Fed’s chair, Janet Yellen, and her colleagues had provided greater certainty for markets, there was some cause for concern about the longer-term impact of the rate rise. The US dollar rose 1% in Asian trading against a basket of currencies, raising questions about whether investors would redirect capital to higher-yielding US debt and undermine shaky emerging economies.

The fall in the price of oil, which has discomfited markets for several weeks, continued on Thursday. Brent crude fell 21c to $37.18 while West Texas crude was down 12c to $35.40 because of unexpectedly large US inventories.

Analysts at Citibank’s Asian economic team agreed that while equities and credit market had perked up, the response of commodity market suggested caution. “We have long argued that early signs of growth in emerging markets would be seen in commodity markets, so we take heed that neither energy nor metal prices shared the optimism of the equities and credit markets,” the analysts said in a report.

2 Facebook enters transport biz with Uber (BBC) In Facebook's first foray into the transportation business, the firm has agreed to work with Uber to allow users to hail Uber cabs directly from the Messenger app. The new service means Messenger users will be able to ask for an Uber vehicle without leaving the Facebook software. Users will not need to download the Uber app separately.

"Uber on Messenger" began in parts of the US this week, the two firms said. Facebook has some 1.5 billion users globally and Uber is the world's biggest driver-hailing app in terms of financing. If successful, the partnership between the firms will give Uber access to many new and potential clients - Facebook's Messenger app has some 700 million users worldwide.

The social media giant said the new transportation function on its Messenger app was part of its ongoing development. Facebook also said the service would be "super easy". "Driver status updates and payment receipts will get delivered to a private conversation between you and Uber," the firm explained.

"With everything in one place, you can seamlessly keep track of your ride and payment history." Uber and Facebook said they would offer users their first ride for free - for a trip worth up to $20. Facebook said the offer would be in place for a limited time. Earlier this year, Facebook bought the messaging service WhatsApp for $19bn.


3 Wearables set to change banking (Khaleej Times) Misys, the leading financial software company, recently published global research that shows banks need to accelerate their wearables strategies to meet consumer demand.

While 96 per cent of banking professionals agree that wearable technology will impact their industry, only 15 per cent already have, or are currently rolling out, a wearable app. Seventy-two per cent say wearables are on their three-year roadmap, while 52 per cent will have a wearable app in the next 18 months.

Of banks that have no wearables strategy in place, 78 per cent are in the EU and US, demonstrating stronger appetite for innovation from Latam and Asian regions. This does not reflect demand however, as a recent NPD study found that 15.6 million smartwatches and activity trackers are forecast to be sold in North America and 12.5 million in Western Europe in 2015.

Two thirds of banks claim proximity payment is the most attractive wearable capability, while 31 per cent state greater fraud protection through push notifications is a compelling feature. In the future, banks suggest authentication processes (64 per cent) and the ability to send push messaging (47 per cent) will increase adoption of wearable technology among banking customers.

Balazs Vinnai, general manager, Digital Channels, Misys, said: "Banks continue to face challenges with their digital strategies so it is no surprise only a small percentage currently support wearables. We know that today less than two per cent of all sales are conducted via mobile, the stepping stone to wearable technology. It is critical for banks to consider new digital channels as part of an integrated strategy and evolve from first to second generation digital banking: switching digital from a supporting role, to the primary sales and communication channel for banks."

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