Crisp Insights into Digital Age ESG Developments – Feb 4, 2021

Paykey Launches Trading Functionality to Compete With ‘Wild West’ App Market

 

The Gamestop saga provides three key insights:

 

a. There are a host of providers, claiming to ‘democratise’ financial access, while essentially providing unregulated access, to what looks a lot like a casino. These firms are heavily marketing to retail investors with little understanding of greater market forces and the concept of implicit (or perhaps explicit) leverage

b. An eye-opening view into the backdoor dealings along the supply chain of market making for these retail financial shops

 

c. The potential for conflicts of interest that can have significant impacts, but largely lurk in the shadows of opacity, complexity and rely entirely on individuals’ ethics

 

Investors should be wary of providing fuel to a part of the sector that looks to bloom and be financially rewarding in the short term, but comes with a considerable sting in the tail.

 

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Robinhood Looks For In-House Lobbyist Amid Backlash From Lawmakers

 

From another viewpoint, Robinhood’s expenditures on lobbying and their advert for in-house support, makes for interesting reading. It shows where their regulatory concerns are focussed and the general escalating risk for fintech companies. With rising scrutiny in China (Ant Group) and now the US, we would expect regulatory costs to continue to rise for the larger fintech players. In addition, their intangibles balance sheets are not inconsiderable and the hits to their perceived value (let alone price volatility) from these travails underscore the challenges of digital age governance.

 

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Microsoft Slams Google Over Threat to Shut Search Engine in Australia

 

The crack along tech company business models is growing, aided by rising regulatory threats, with Microsoft representing revenue from product leasing and Google representing revenue from data and advertising.

 

The move to back the Australian government is a canny play by Microsoft with little downside and much upside: siding it with a government it wants to deepen its relationship with, taking up the hero’s mantle in defending publishers, and sticking it to its search competitor, Google.

 

It does, however, raise an interesting dichotomy for the anti-trust case facing Google: if Bing can easily supplant Google as a search engine option, then does this strengthen Google’s argument that there is there indeed choice for consumers?

 

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It’s Time To Tidy Up Space

 

As we’ve expounded upon at length, space debris is the next ocean plastics disaster waiting to happen. Not only is it going to be challenging to clean space up after the fact, but an agreement on how and when remains a pipe dream. Added to that is the rising potential for an accident with geopolitical ramifications. This is an area that investors and boards of companies in its value chain ought to be bending some thought towards.

 

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HSBC To Close 82 Branches This Year

 

We wrote about the receding future of bank branches last year and it’s coming to pass with increasing frequency, per HSBC’s latest announcement. This was an inevitable direction for banks, even pre-Covid. The interesting challenge is the shift at financial institutions from significant investments in property, to significant investment in digital.

 

Follow-on questions revolve around how the real estate will be repurposed and how this continuing trend exacerbates the hollowing out of high streets and community hubs.

 

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