Exploring the Future of Money, Banking and Philanthropy

SHANGHAI—Chinese Premier Wen Jiabao told a national audience on Tuesday that China’s state-controlled banks are a “monopoly” that must be broken, in an unusually blunt appeal for a shake-up of the creaky financial system of the world’s No. 2 economy.

Mr. Wen’s declaration on a national radio program on Tuesday represents an 11-hour push for an overhaul by China’s top economic official, who formally came into office in 2003 with a reputation as a reformer but has acknowledged publicly his regrets that he didn’t go far enough. Mr. Wen is expected to step down as premier in a once-a-decade leadership change that begins late this year.In an evening broadcast on state-run China National Radio, Mr. Wen told an audience of business leaders in the export-oriented province of Fujian that China’s tightly controlled banking system needs to change.

“Let me be frank. Our banks earn profit too easily. Why? Because a small number of large banks have a monopoly,” said Mr. Wen according to the transcript of the program posted on the broadcaster’s website. “To break the monopoly we must allow private capital to flow into the finance sector.”

The push is part of a broader set of issues over China’s future growth. The country’s economic expansion is set to slow in coming years after racing ahead at a torrid pace over the past decade, raising questions over whether it can switch from a model based on exports and investment to one that relies more on a rising consumer culture.

That has led to a nationwide conversation over China’s tight grip on its financial system, which favors big state-owned firms but has been criticized by economists and even some reformers in China.

To realize the economic transformation, “private companies should be encouraged to get into the financial-services industry,” said Fang Xinghai, director-general of Shanghai Municipal Financial Services Office and a former World Bank economist, in an interview at China’s Boao Forum for Asia this week.

via China Premier: Considering Breaking Bank Monopoly – WSJ.com.

via China Premier: Considering Breaking Bank Monopoly – WSJ.com.

White label gamification platform BigDoor has raised $5 million in new funding led by existing investor Foundry Group, bringing BigDoor’s total funding to $13 million.

BigDoor’s gamification platform essentially allows online publishers to add game mechanics to web interactions and engagements. BigDoor helps companies build game-like mechanics and loyalty programs into their sites or apps by enabling points, badges, levels, leaderboards, virtual currency and virtual goods.

The company’s newest product, Gamified Rewards Program, is being released today out of private beta, which allows publishers to give users rewards for engagement, such as exclusive content, unlocked powers, exclusive virtual items, as well as tangible rewards. The company says that private beta tests of the BigDoor Rewards program resulted in a threefold increase in the number of website registrations based on the rewards available.

Online publishers have three options for implementing BigDoor: Lite, Plus and Premium. Lite is a free offering for websites with fewer than 25,000 monthly visitors. Plus is a white-label and highly customized solution built for medium-sized websites with up to one million monthly visitors. For enterprise customers, BigDoor creates a fully customizable rewards program as part of the Premium package.

Besides just allowing publishers to implement game mechanics within a website, BigDoor also gives clients reports and analytics on how the program is influencing behavior and web engagement. BigDoor’s dashboard focuses on four key areas of performance to track the overall health of a site including loyalty, engagement, virality, and average revenue per user. This data can be measured in hourly, daily and monthly increments. And customers can also A/B test their program via BigDoor.

BigDoor says that partners realized an average lift of 153% in user loyalty, 672% in engagement, 355X in social sharing, and 9X in average revenue per user.�Customers include MLB.com, Dell, Nickelodeon, Spartz, and Wetpaint.

via Gamification Platform BigDoor Raises $5 Million From Foundry Group | TechCrunch.

via Gamification Platform BigDoor Raises $5 Million From Foundry Group | TechCrunch.

As the cost of a college education continues to rise, a startup called SoFi is offering a way for alumni to offer students financial assistance and more.Co-founder and CEO Mike Cagney describes the current student loan system as a “classic market failure,” resulting in students who are stuck with high interest rates and heavy debt that they struggle to pay off. He says that if you can remove government from the equation specifically government loans and replace it with alumni, then “you create a very virtuous cycle.”So that’s what SoFi tries to do. The company is creating university-specific funds for alumni to invest in, and those are used to make loans to students. SoFi says it’s offering to cover the full cost of attendance for participants, with loans ranging from $5,000 to $200,000. The loans are 6.24 percent fixed rate, and they can drop to 5.99 percent, lower than federal Stafford and PLUS loans and many private loans. So Students get relatively low interest rates, while alumni get a significant financial return.The benefits aren’t purely monetary. Through its website, SoFi tries to connect the participating alumni and students, for example if someone is looking for mentorship or help with their job search. Cagney notes that the loans create a financial incentive for alumni to pitch in — after all, they want students to do well so they can pay off the loans. On the flip side, he says that some alumni don’t care about making money from the investments at all, and want to use the interest payments to a nonprofit organization that will help the students something that SoFi is investigating.Of course, alumni donations are already an important source of funding for university programs. Cagney says these loans can be made from tax-deferred accounts like a 401k, so they shouldn’t divert money from traditional alumni giving.Cagney and his co-founders ran a pilot program at Stanford where they attended the Graduate School of Business last fall, raising a $2 million fund from 40 alumni. This fall, SoFi is expanding to 40 locations and hopes to lend out $150 million.As for its own funding, the company has raised $4 million from Eric Schmidt’s Innovation Endeavors, and board members Joe Chen founder and CEO of RenRen and Steve Anderson founder of Baseline Ventures.

via SoFi Reinvents College Loans With Alumni Funding | TechCrunch.

via SoFi Reinvents College Loans With Alumni Funding | TechCrunch.

Bing and Skype fans have a new reason to rejoice. Microsoft announced today on the official Bing blog that it will be rolling out new rewards for Bing users. Over the next few days, it will be adding Skype Credit to the Bing Rewards redemption center. For 100 Bring Rewards Credits, members can trade them in for up to 60 minutes worth of Skype Credit based on call rates of 2.3 cents per minute for making calls on Skype. With the Skype Credit they can make calls to landlines or mobile phones, send SMS to mobile phones, set up a Skype To Go number or access Skype WiFi though 3rd-party hotspots.In case you’re unfamiliar with Bing Rewards, users basically earn credits by using Bing to perform their searches or trying out new features on the service. With these credits, they can trade them in for different rewards at the Bing Rewards redemption center – it’s basically Microsoft’s incentive program for people to using Bing as their default search engine and more. Definitely a win-win situation for people who already love using Bing anyway. Find out more about Bing Rewards.

via Bing to Reward users with Skype Credit | Ubergizmo.

via Bing to Reward users with Skype Credit | Ubergizmo.

“By 2017, a CMO will spend more on IT than the CIO.” —Gartner GroupFor the first time in history, businesses can leverage big data for the benefit of driving marketing insights. We are at the very beginning of this wave, but this fundamental shift will create several multi-billion dollar winners. And a set of technology companies will emerge as the marketing equivalents of Salesforce and SAP.Based on this thesis, my partner Scott Friend founder of Profitlogic and I have been actively investing in this arena on behalf of our firm, Bain Capital Ventures. BloomReach, CQuotient, HookLogic and TellApart are among our recent early-stage investments in this new category of marketing innovation.At the heart of each of these companies are CTOs and engineers who have experience with big data and modern techniques for data mining, analytics and machine learning. These companies typically charge on a performance basis as opposed to charging traditional enterprise software license fees. And they are having a significant impact on their customer’s revenues and profitability.

via Marketing is the next big money sector in technology — Tech News and Analysis.

via Marketing is the next big money sector in technology — Tech News and Analysis.

For the sixth year in a row, pennies and nickels cost more to produce in 2011 than they were worth. While the depreciation of the cent and the increased cost of producing coins is an old story, the U.S. Mint did reach a new milestone last year: For the first time in history, both the five-cent and one-cent denominations cost double their value to produce. This gap resulted in more than $116 million—roughly 11.6 billion pennies—in negative seigniorage. That’s enough change to fill Shamu’s tank at Sea World twice over.

Defenders of loose change might say this is nothing more than a trivial editorial gimmick, meaningless both in a larger economic context and relative to the $488.8 million in positive seigniorage the U.S. Mint earned on other types of coins. Of course, they would be right. But the costs associated with coins and paper money extend far beyond the Mint. It takes money to pay for armored transport and to hire cashiers to balance cash drawers. There are also opportunity costs for consumers in taking trips to the ATM or waiting in line while someone makes change at the grocery store, not to mention the price of all the change you’ve lost in your couch.

Those are just the tangible costs of cash. We also must pay for the social ills caused by a physical currency system: underground criminal economies, tax evasion, environmental damage, counterfeiting. Banks lost $35 million worth of “loot” (the official FBI terminology) during 5,628 bank robberies in 2010, and that does not include insurance costs, medical expenses for 18 injured victims, and the immeasurable value of lost human life. And that’s chump change compared to Uncle Sam’s tax gap over the past decade, which has been estimated at $3 trillion. More than one half that gap is attributable to underreporting of business income and much of that stems from unreported or underreported cash—that great little cash-only Italian place down the block might not be paying its taxes in full.

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How would it affect the economy if we ditched coins and bills altogether?

via Cashless society: How much would the United States save by ditching paper money? – Slate Magazine.

via Cashless society: How much would the United States save by ditching paper money? – Slate Magazine.

The Currency Cloud has developed a Foreign Exchange FX payments automation platform which supercharges the tired old world of cross-border business payments, aiming to reduce costs for business and make multi-currency payments more frictionless.Why is this interesting? Well, we’re talking about a team from the City of London that built the UBS online FX platform bringing their skills and experience to the combined revolutionary powers of the Cloud and SaaS. Since FX is one of the last great ripoffs in finance, this might actually be a pretty big deal.Obviously Foreign Exchange is a big market to attack. According to the Bank for International Settlements, the average daily turnover in global foreign exchange markets is estimated at over $4 trillion.The startup now has over 100 corporate customers using the company’s SaaS offering and 20+ platform partners using its API. Think Stripe a developer-friendly way to accept payments but geared toward Foreign Exchange and you are close to what The Currency Cloud is.Mike Laven, CEO and veteran of the West Coast tech scene, says “Businesses everywhere need to deal in multi-currencies in every working day. Yet the methods being used are antiquated and expensive to all but the largest corporates and the banks. Our re-design of the industry business model delivers price transparency, risk management and ease of use.”Fred Destin, Partner, Atlas Ventures, says FX remains error-prone, low tech and expensive and think the startup can “take costs out and bring transparency and automation in.” Sean Park, co-founder, Anthemis Group, added: “Selling one currency to buy another should not be that hard. Yet for the millions of companies and individuals doing so today is too often a painful and expensive experience.”It looks like The Currency Cloud is on to something.

via The Currency Cloud Secures $4M To Disrupt The Trillion Dollar Foreign Exchange Market | TechCrunch.

via The Currency Cloud Secures $4M To Disrupt The Trillion Dollar Foreign Exchange Market | TechCrunch.

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