Systematic calculations

[Dave Birch] I’m reading up to try and learn more about banking as I think this will improve my understanding of the payments business, but I’ve been side-tracked today because I’m considering joining in with the lawsuit to stop CERN from switching on their Large Hadron Collider (LHC). Apparently, there is a concern that when the assorted euro-boffins start their atom-smashing antics, they may create “strangelets” and mini-black holes:

The builders of the world’s biggest particle collider are being sued in federal court over fears that the experiment might create globe-gobbling black holes or never-before-seen strains of matter that would destroy the planet.

[From Atom-smasher fears spark lawsuit – Science-]

These mini-black holes would suck matter out of this universe and send it into other dimensions, where it would never been seen again. I was wondering if this might be what happened to the THIRTY SEVEN BILLION DOLLARS that’s gone missing from UBS recently. It certainly cannot be explained by conventional physics. If the chairman of UBS had stood in front of a roaring bonfire and thrown $100 bills into the flames at the rate of one a second for the last two years, he would have lost a mere $6.3 billion. Oh wait, perhaps he was burning 500 euro notes not $100 bills. They have much higher money density: in that case I stand corrected and he could just about have done it without string theory or 11 additional dimensions coming into play.

All he had to do was resign though. The Hong Kong Standard reports a more robust line on gambling bankers who pick the wrong horse. Two employees of the Agricultural Bank of China came up with a better strategy than UBS. They took about three million quid from the bank vaults. They then used the money to buy lottery tickets: their plan was to replace the missing money with the lottery winnings and hope that no-one noticed (much the same plan as Jerome Kerviel of Societe Generale fame as far as I can tell). Generally speaking, Chinese bank employees are not familiar with the work of Adam Smith:

Adventure upon all the tickets in the lottery, and you lose for certain; and the greater the number of your tickets the nearer your approach to this certainty.

[From Adam Smith Quotes]

In the U.K you get to keep the Porche and the massive pension and take a few weeks gardening leave. In China, the rogue traders with the novel asset management strategy were executed.

Who do you listen to?

[Dave Birch] There have been quite a few stories around this week about American Express’ decision to drop its contactless keyfob as an optional companion for the cards with ExpressPay in the U.S. American Express understand their customers very well, and so its decision must represent a clear mandate from customers. It made me wonder how organisations in the payment space can go about getting a clearer picture of what customer want, since obviously some American Express customer must have — in some early pilot, or test market, or focus group — said that they liked the keyfob otherwise it would never have been launched in the first place.

Yet there’s a problem here because consumers are naturally very conservative about money and therefore find it difficult to imagine or articulate new ways of handling it. I well remember focus groups for a smart card product I worked on many years ago: consumers swore up and down that the pre-paid product needed a PIN to lock and unlock it. This was duly implemented (at great expense) but in practice they never, ever used it. So asking customers what they want can’t be the best way forward. Perhaps the best option is simply to give them new stuff to play with, so they don’t have to imagine it, and then be assiduous about gathering the feedback. There doesn’t seem to be any substitute for having an actual trial and listening to customers.

Eat up

[Dave Birch] I have the results of another interoperability test for you. Yesterday I used my UK Barclaycard OnePulse in a contactless terminal at a coffee shop in Singapore and not only did it work perfectly, it was very fast and very convenient. More, please! My expectations have been raised to the point where I was really disappointed that Ben & Jerry’s didn’t take contactless and I was forced to resort boring old-fashioned cash. The coffee shop was the textbook case for the cash-replacement low-value contactless transaction: why can’t more of the coffee shops in London have it? Oh, wait…

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