I've been fascinated by the concept of money for the past 37 years, ever since I began my apprenticeship at Deutsche Bank.

Beyond health, time is life's most valuable resource. Money can buy you time, and to some extent, even health. These are the primary reasons for my interest in money. The more money you possess, the more you can prioritize your life and use your time as you choose.

And I'm deeply interested in the future, because that's where I will spend the rest of my life. This interest drove me to write a book titled 'Tomorrow's Money.'

'Tomorrow's Money' is lighter than paper, faster than PayPal, cheaper than Visa, rarer than gold, and as secure as Fort Knox.

In 19 chapters, I share my views, insights, and beliefs about tomorrow's money, which, in essence, is digital and comes with new features like programmability.

If you haven't encountered this topic yet, my book might be a good recommendation for your summer reading.

It's available in both English and German.

🇬🇧 https://amzn.to/3r97JiG

🇩🇪 https://amzn.to/3mKNyEG

#tomorrowsmoney #crypto #blockchain #bitcoin 

#SundayThoughts 

FrankSchwab.de

Given today's volatile geopolitical climate, for the first time in my life, I feel the need to actively defend the democracy in which I was raised. While we might think individuals can't make a difference, I believe that's incorrect. Through our daily decisions, we can collectively make a huge impact, for example, by directing how we spend our money.

Indeed, we all can support European democracy daily by prioritizing European products and services. Our economic choices as EU citizens carry significant weight. By prioritizing EU-produced goods and services, we directly strengthen our Union's strategic autonomy, reducing dependence on potentially unreliable external sources. This bolsters our resilience against global disruptions.

We, as individuals, uphold the EU's high standards for environmental protection, labor rights, and consumer safety through our purchasing decisions. Choosing EU-made products directly supports these values, fostering a sustainable and ethical economic model.

Significantly, every EU citizen's choice matters. Supporting EU businesses fuels innovation and long-term prosperity. The resulting economic benefits are reinvested within our Union, creating jobs and supporting essential social programs.  

In essence, each purchase we make is a vote. We can each contribute to a more secure, sustainable, and prosperous Europe by consciously choosing EU products and services. This collective action reinforces our shared values and strengthens the European project for future generations.

Now is the time. Support European Values. Buy „Made in Europe“.  🇪🇺🇪🇺🇪🇺

Here a community-driven directory that helps you buy European products and services, based on personal recommendations.

🔗  https://www.goeuropean.org/

#Europe #MadeInEurope 

#SundayThoughts 

FrankSchwab.de

Sir Christopher Kelly's review of the Co-operative Bank's near-collapse blamed the 2009 Britannia merger, citing pre-existing problems in both organizations. The merger exacerbated issues like Britannia's £3.7bn commercial property loan book and the Co-op Bank's risky lending, contributing to a £300m IT project shortfall. The bank also faced PPI mis-selling costs and was impacted by the 2008 financial crisis and subsequent regulatory changes. The Co-op Bank reported a £1.3bn loss in 2013 and required a £1.5bn rescue deal, resulting in US hedge funds taking a 70% stake. Further financial issues emerged, including a £400m black hole, leading to additional share issuance and potential dilution of the Co-operative Group's remaining 30% stake. The Co-operative Group itself faced a £2bn loss and leadership changes, with CEO Euan Sutherland departing.

The Co-operative Bank’s IT failures, particularly the failed replatforming project, significantly contributed to its capital shortfall and overall difficulties. The bank’s decision to embark on an ambitious IT transformation project without adequate expertise and resources, coupled with poor program management, led to significant cost escalations and ultimately the project's failure. This failure hindered the integration of the bank with Britannia Building Society and resulted in substantial impairment charges, further weakening the bank's financial position. The IT failures also highlighted broader issues with the bank’s culture and decision-making processes, including a lack of challenge and a tendency to underestimate risks.

The Top 10 Findings on IT Failures

1️⃣ Failure of the IT Replatforming Project: The Co-operative Bank's ambitious project to replace its core banking system and upgrade other IT applications ultimately failed, contributing almost £300 million to the capital shortfall.   

2️⃣ Underestimation of Replatforming Complexity: The bank underestimated the complexity and risks involved in the replatforming project, particularly in light of the simultaneous merger with Britannia Building Society.   

3️⃣ Lack of Expertise and Resources: The bank lacked the necessary expertise and resources to successfully execute such a complex IT transformation program.   

4️⃣ Poor Program Management: The replatforming program suffered from unstable leadership, poor coordination, and inadequate planning.   

5️⃣ Impact on Integration Efforts: The failure of the replatforming project hindered the integration of Britannia and the Co-operative Bank, as many integration tasks were dependent on the new IT platform.   

6️⃣ Lack of Contingency Plans: The bank did not have adequate contingency plans in place in case the replatforming project failed, which left it with limited options when the project ultimately did not succeed.   

7️⃣ Underinvestment in Legacy Systems: The bank underinvested in its legacy IT systems while waiting for the replatforming project to be completed, which left it with outdated and inefficient systems.   

8️⃣ Impairment Charges: The failure of the replatforming project resulted in significant impairment charges, further contributing to the bank's capital shortfall.   

9️⃣ Missed Opportunities: The bank missed opportunities to improve its IT systems through less ambitious alternatives, such as remediation of its legacy systems.   

🔟 Culture and Decision-Making: The bank's culture and decision-making processes contributed to the IT failures, as there was a lack of challenge and a tendency to underestimate risks.   

#megaprojects #banking #itproject #failure 

http://www.FrankSchwab.de

Kaspi Bank, headquartered in Almaty, Kazakhstan, has positioned itself as a leader in digital banking through its innovative Super App ecosystem. The bank integrates financial services, e-commerce, and payments, creating a comprehensive platform that caters to both consumers and merchants. This two-sided model includes the Kaspi.kz Super App for individuals and the Kaspi Pay Super App for businesses, transforming everyday financial and commercial transactions in Kazakhstan. Recognized as the "Best Digital Bank in Central Asia" by Global Finance in 2022, Kaspi Bank has achieved rapid financial growth, with its balance sheet expanding from USD 3.8 billion in 2018 to USD 16.8 billion by Q3 2024. Net profits have similarly soared, growing from USD 245 million in 2018 to USD 1.8 billion by 2023, reflecting a robust compound annual growth rate (CAGR) of 50%.

The bank's revenue model has evolved significantly, with its payments and marketplace segments now driving a substantial portion of its income alongside fintech services. Kaspi.kz has maintained a strong net interest margin (NIM), with the payments segment improving from 25% in 2018 to 65% in 2023. The bank's cost-to-income ratio (CIR) has declined from 70.4% in 2018 to 55.6% in 2023, showcasing operational efficiency through technological advancements and automation. Additionally, asset quality remains high, with the non-performing loan (NPL) ratio improving from 8.3% in 2018 to 5.5% in 2023, backed by a provision coverage ratio of 99%.

Kaspi Bank has expanded its digital ecosystem to include bill payments, peer-to-peer (P2P) transactions, mobile commerce, a shopping club, and a rewards program, making its Super App an integral part of consumers' daily lives. Its marketplace platform, Shop on Kaspi.kz, provides an extensive e-commerce experience, while Kaspi Pay facilitates digital transactions for businesses. The bank has successfully leveraged its extensive data analytics capabilities to drive product development, improve risk management, and enhance customer engagement. The introduction of artificial intelligence-driven financial tools and biometric-based security measures further streamlines operations.

Kaspi's fintech platform remains a key revenue driver, providing instant consumer loans, business financing, and buy-now-pay-later (BNPL) services. Deposits in Kaspi Bank have grown significantly, with an annual increase of 32%, reaching KZT 5,959 billion by Q3 2024. The bank has also extended its reach into government services, allowing users to access digital documents, register businesses, and handle tax payments through its Super App. Its logistics services, including Kaspi Delivery and Kaspi Postomats, enhance customer convenience and marketplace efficiency.

A crucial factor in Kaspi Bank's success is its deep integration of technology into all facets of its operations. The bank has invested in advanced data centers, AI-driven customer support, and automated self-service solutions, such as the Kaspi Kartomat, which issues debit cards in under a minute. This strategic focus on automation has contributed to an increase in productivity, with revenue per employee rising fivefold from 2018 to 2023. The bank has successfully reduced its reliance on physical branches, achieving higher operational efficiency while maintaining strong customer satisfaction.

Kaspi’s financial resilience is evident in its consistent revenue growth, with fintech, marketplace, and payments now contributing almost equally to the bank's net income. The payments segment, initially a smaller contributor, has grown to account for 37% of net income, while the marketplace and fintech segments contribute 31% and 32%, respectively. This balanced revenue mix ensures stability and long-term sustainability. The bank’s capital adequacy ratios have remained strong, providing a buffer against economic fluctuations.

Kazakhstan's economic environment has played a crucial role in Kaspi’s growth. The bank's balance sheet expansion significantly outpaced national GDP and banking sector growth rates. While Kazakhstan's GDP grew at an average rate of 4.1% between 2018 and 2023, Kaspi’s assets grew at a CAGR of over 30%, demonstrating its ability to capitalize on economic opportunities. The bank’s success in deposit mobilization, even during economic downturns, highlights strong customer trust and a well-executed liquidity management strategy.

Kaspi Bank's competitive strengths include its proprietary technology infrastructure, extensive data analytics capabilities, and a deeply embedded Super App ecosystem. With 14 million monthly active users and 732,000 active merchants by Q3 2024, the bank benefits from strong network effects that drive user engagement and business growth. Its strategic focus on customer satisfaction, as reflected in high net promoter scores (NPS), has enabled sustained market leadership. By continuously refining its offerings, Kaspi has built a business model that is both scalable and profitable.

Looking ahead, Kaspi Bank aims to expand its regional presence beyond Kazakhstan, leveraging its scalable Super App model. Recent acquisitions in Uzbekistan and Azerbaijan signal the company’s intent to penetrate new markets. The bank is also exploring opportunities in Central and Eastern Europe, aiming to serve over 100 million users in the coming years. Future growth initiatives include the expansion of B2B services, an enhanced advertising platform, and deeper integration into logistics and e-commerce.

Kaspi’s journey underscores the importance of a customer-centric approach, continuous innovation, and strategic ecosystem development. By prioritizing digitalization and seamless user experiences, the bank has not only revolutionized banking in Kazakhstan but has also set a global benchmark for digital financial services. Its success serves as a valuable blueprint for banks looking to embrace technology and redefine financial services in emerging markets.