Last week, the Consumer Financial Protection Bureau (CFPB), which regulates banks but is not allowed to regulate auto dealerships, delivered a plan to “fix” the unbroken indirect auto finance business -- a plan based on no facts, analysis, or transparency and one timed to coincide with auto industry conferences for maximum media impact. The CFPB wants to protect we, the hapless consumers, from discrimination by ruthless auto dealers trying to turn a profit on auto sales by adding service fees to consumer interest rates on auto loans (government-controlled interest rates, might I add, that are mediocre at best).
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While the plaudits for the U.K.’s Financial Services Authority (FSA) move to implement a new standard to regulate the retail financial services market, namely the Retail Distribution Review (RDR), were many and loud (and even sometimes envious) from the outside, the internal shakeout from the long run up to the regulation’s arrival and implementation were often huge, confusing, and painful. Indeed, one massive -- and unintended -- consequence of the RDR is the resulting advice gap.
Politics and religion: I love those two words together because they make most people in a work environment panic just a little bit. But in this case, I have a perfectly justifiable excuse for saying them. They are the themes that have undeniably dominated the Latin American news over the past few weeks. Our southern neighbors have had a busy March.
UBS, the international wealth management sector leader as measured by assets under management, posted its annual results for 2012 on March 15 and in doing so revealed the growing importance -- and likely driver of future growth -- of its regional business in the Asia-Pacific. While its European reporting region toiled under the bank’s key performance indicator of new money flows, offering up a negative 1.6%, or CHF5.2 billion, outflow of assets, the Asia-Pacific swung the opposite way to deliver a net new money growth total of 11.3% for the year -- CHF18.4 billion in new assets.
A few days ago, Banorte, Mexico’s largest bank, entered into a 10-year strategic agreement with IBM. The relationship is no small change for Banorte, which acquired a de-facto partner in IBM; IBM will benefit from gain-sharing agreements over length of the partnership as the bank improves its operational outcomes with US$1 billion in IBM capabilities and services. Analytics will be a primary focus of the relationship, with the goal being analyses and decisions at the individual customer level rather than the customer segment level. Investments will also be made in technologies that better predict risks such as fraud, money laundering, and loan losses.