WWN#23 – Wanted: New Uber CEO as Travis Kalanick Resigns

What’s Been Happening?

In February, a 3000 word blog post was written by former Uber engineer Susan Fowler which detailed Uber’s toxic company culture. It’s a story of a company that was portrayed as a global start up success in public but revealed as an organisation in complete, unrelenting chaos by the author. She alleged that there was constant harassment and discrimination and when she raised the issue with management, they were dismissed.

Around the same time, a video emerged of Mr Kalanick arguing with an Uber driver about lowering prices for its black car service. He later issued a profound apology in which he stated that he must “fundamentally change as a leader and grow up”. It was a bit too late though, as the damage was done.

In the wake of controversies, a number of senior Uber staff resigned in March, including Uber President Jeff Jones, SVP of engineering Amit Singhal and Uber VP product and growth Ed Baker.

Earlier this month, Mr Kalanick said that he was taking an indefinite leave of absence. One of the reasons cited was the loss of his mother in a recent boating accident. Another reason could have been to facilitate the transition of responsibilities from Kalanick to other members of senior management, in line with recommendations issued by US Attorney General Eric Holder in his report to Uber to overcome its ethics and leadership troubles.

What Now?

A shareholder revolt led by five of Uber’s most prominent investors has resulted in Kalanick agreeing to resign. In a letter titled, “Moving Uber Forward” the investors wrote to the CEO that he must immediately leave and the company needed a change in leadership. In addition, improved oversight was requested by filling two of the three empty board seats with independent directors and that a new CEO and experienced CFO be found immediately. Although Travis has resigned, he will remain on Uber’s board of directors and still hold a significant stake in the company.

What’s Next?

As the search for a new CEO commences so does speculation. One rumour is that US Ex-President Barack Obama may become the new CEO and may be just what Uber needs to stop the company from completely falling apart. There has already been speculation that Obama wanted to enter the tech industry and a connection between Obama and Uber is David Plouffe who was the campaign manager for his 2008 presidential campaign. Later on, he became a policy advisor for Uber.

Sheryl Sandberg is another name that is on the candidate list for CEO of Uber. Sandberg has extensive experience in the tech industry, having served nine years as COO at Facebook. Uber directors, including Arianna Huffington, are increasingly convinced that a woman at the helm would be well suited to fix Uber’s mess. However, sources close to Sandberg say that she’s not interested and will be staying with Facebook.

The search for the CEO and the CFO is more complicated than it would seem, as finding the right individual with experience leading a disruptive business model like Uber’s is far and few between. Once the leadership team has been restructured, Uber may have a chance of being in the spotlight again for all the right reasons instead.


WWN#22 – U.S. Federal Reserve Raises Interest Rate to 1.25%



Credits: Historical Federal Funds Rate

What’s Been Happening?

The Federal Reserve hiked up US interest rates by 25 basis points for the first time in March, its third upward move since the 2008 financial crisis. At the time, Janet Yellen who is the chair of the Board of Governors of the Federal Reserve System, expected rates to be increased twice more this year. Some economists are sceptical of this however, including global economist Anna Stupnytska from Fidelity International. She said that their base case is only for one more hike to occur this year, as a cyclical peak is being reached soon and the likelihood of a China slowdown weighing on “global inflation, markets and growth is fairly high”.


What Now?

At the latest Federal Reserve meeting on Wednesday, it seems Janet and policymakers were ‘feeling good’ about the economy and have forged ahead with an interest rate increase despite growing concerns of weak inflation. The target range for the federal funds rate is now between 1% – 1.25%.

A statement issued by the Federal Reserve indicated that “On a 12-month basis, inflation has declined recently and is expected to remain somewhat below 2 percent in the near term but to stabilise around the committee’s 2 percent objective over the medium term.”

One of the barometers that the Fed monitors is unemployment which dropped to a 16-year low at 4.3 percent in May. This may have given them the confidence to keep gradually lifting the low borrowing rates towards their historic norms.

Whilst the Federal Reserve maintains an accommodative stance on monetary policy, Yellen has said that it will be appropriate to move to a more neutral stance if they continue to move along the path [of interest rate rises].

What’s Next?

The journey is not over as the long-run interest rate is 3% which is the median estimate made by policymakers. According to 30-Day Fed Fund future prices, the probability of another rate hike later on in the year is currently at 2.5% for the July Federal Reserve meeting although this markedly increases to a probability of 30% by December. The timing of the interest rate increase would of course depend on the state of the US economy and its continued growth.

The bottom line for American consumers is that there will be an increase in their borrowing costs which may strain some households.


A Summary on Mobile Identity – The New DNA of Trust


About the Author: Rocky Scopelliti – Global Industry Executive – Banking, Finance and Insurance, Telstra

Among Rocky’s series of financial services industry thought leadership reports is one about “Mobile Identity”. The report examines the importance of mobile identity and trust among Gen X and Gen Y who together make up half of the global population. Information was analysed from 318 financial services executives across the Asia Pacific region, Europe and the US and 4,272 consumers across seven countries (Australia, Singapore, Indonesia, Malaysia, Hong Kong, UK and the US). The following is a condensed version of the 70 page report.

Importance of Mobile for Financial Services 

Mobile devices are becoming the gateway to the financial services world. It is increasingly rare to see a financial institution without a mobile application offering in this age that has moved from digital disruption to digital survival. In the last seven years since the smartphone was introduced, these devices have become the primary means for consumers to access financial services. “Both identities and consumption of financial services are now inextricably fused with our mobile device”.

Top Ten Insights

  1. Battle to acquire and digitally engage Gen X and Y is on
  • “Online pure plays” by UBANK and ING Direct have been relatively outperforming other Australian banks. They are both relatively new to playing field – UBANK was established in 2006 and ING in 1999 with both banks using Everification as part of their account opening process.
  • Bendigo Bank and other community institutions (building societies and credit unions) are having a tougher time attracting the younger demographic with the average age for a credit union customer around 51.5 years compared with 42.5 years for banks.
  • Digital channels seems to be a necessary precondition to attract Gen-X and Gen-Y customers.
  1. The basis of identity and security is trust
  • Despite customers trusting their financial institutions more than other types (e.g. government, telecommunications service provider, internet retailer), few are very satisfied with their current institution’s security performance.
  • Trust comes in multiple forms (e.g. knowing that personal information is kept secure, finances are safe and the institution’s reputation for data security).
  1. Consumers are more willing to share personal information with financial institutions than other types of institutions
  • The extent to which consumers share their personal information seems to increase as their wealth increases.
  • 47% of those with a net worth of more than US $1 million would share their DNA profile with a financial provider to ensure security.
  1. Robust authentication methods improve customer satisfaction
  • Only 42% are very satisfied with their financial institution’s authentication methods. Hong Kong had one of the lowest scores with 14% of people being very satisfied.
  • America is a clear leader in this area perhaps due to USAA’s* recent deployment of biometrics (facial and voice recognition technology) across its four million mobile banking app membership base.
* USAA is a San Antonio-based financial services company
  1. Identity theft is impacting Gen X and Y, particularly as their wealth increases and many think it’s the institution’s fault which will inevitably lead to customers defecting
  • 40% of people that have experienced identity theft or felt that their identity has been compromised believe that it was the institution’s fault
  • Over a third (35%) of consumers with a net worth of more than US $1 million have personally experienced security failings with their financial institution.
  • The top consumer concern with identity theft is financial loss, followed by inconvenience of resolving (e.g. setting up new account details & recovering lost funds).
  1. Passwords are a flawed authentication method – and everyone knows it
  • “The whole notion of passwords is based on an oxymoron. The idea is to have a random string that is easy to remember. Unfortunately, if it’s easy to remember, it’s something non-random. And if it’s random, then it’s not easy to remember.” – Bruce Schneirer, Author, 2008
  • Almost half (44%) of consumers have a small number of passwords that they use multiple times across their digital identities, and one in five (18 per cent) use just one common password across all digital accounts
  • 25% of consumers actually write down their passwords
  1. The industry still thinks customer prefer passwords but it’s time to look to authentication methods that garner greater trust
  • Fingerprint scanning is one such method and is perceived as the strongest method of authentication in Australia, Malaysia and Singapore. On the other hand, the United States and Hong Kong rate eye scanning as the most secure method. Indonesia and the UK believe strongly in facial recognition.
  1. The financial services industry recognises that it has underinvested in identity and security-related capabilities but this is expected to change
  • The dominant view in the industry is that the current investment in identity systems is less than appropriate (62%)
  • 87% of respondents anticipate that their institution’s level of planned activity and investment in customer identity will increase
  1. More secure, mobile-based identity is a key part of solution towards mobile as a primary access device for financial services
  • The most important factor when using a smartphone app was the security of access (i.e. only you can access the account). 36% of respondents chose this answer followed by privacy (personal details being protected).
  1. Mobile authentication methods are highly appealing and can have a very strong business impact including acquisition, retention or defection.
  • Gen X and Y are even prepared to pay for this security. An annual fee ranging between US$3 and US$20 (depending on the market) would be acceptable to many.
  • Consumers are split between whether they should be paying for the enhanced authentication methods as more than half consider authentication to be the institution’s responsibility.

For the full report – click here

WWN21# – The Qatar Crisis: Trump Talks & Saudi Arabia Listens


What’s Been Happening?

A few weeks ago, President Trump made his first overseas trip to Saudi Arabia where he delivered an address to at least dozens of Arab and Muslim-majority countries at the Arab Islamic American Summit.

His speech focused on the long-standing fight against extremists as he urged Middle East nations to do more. “Drive them out of your places of worship. Drive them out of your communities. Drive them out of your holy land. And drive them out of this Earth.”

Later on though, his speech turned to harsh criticism of Iran as a government that speaks openly of mass murder, with vows to destroy Israel, America and other nations in the room. The anti-Iran language is likely to resonate well with Saudi Arabia being a largely Sunni Muslim population as opposed to Iran who is the region’s Shia Muslim power.


What Now? Operation Isolate Qatar Commences

Trump’s speech seems to have successfully galvanized some Arab nations into action as Bahrain, Egypt, Saudi Arabia, the United Arab Emirates and Yemen simultaneously severed diplomatic ties with Qatar for supporting terrorism.

Some action points:

  • Saudi Arabia has closed its land border with Qatar through which the tiny nation imports most of its food.
  • All countries have ordered their citizens to leave Qatar and for Qataris abroad to return to their country within 14 days.
  • Diplomatic staff from the Arab nations will be withdrawn from Qatar and Qatar’s diplomats will be ejected.

All nations plan to cut air and sea traffic with some regional airlines having already announced that they would suspend services (e.g. Etihad, Emirates, Air Arabia, Bahrain’s Gulf Air).

Trump congratulated Saudi Arabia and himself, taking some credit for the action by tweeting on Twitter: “So good to see the Saudi Arabia visit with the King and 50 countries already paying off… they said they would take a hard line on funding extremism and all reference was pointing to Qatar”.

All of this however, is actually a big problem for the United States who happens to maintain its biggest concentration of military personnel in the Middle East,at Qatar’s Al Udeid Air Base in its fight against ISIS. It needs everyone getting along for its operations to continue smoothly. U.S Intelligence Officials have said that they believe the diplomatic crisis could instead be the result of a Russian hack involving the planting of a fake news story with Qatar’s State News Agency. The false news item reportedly carried false remarks from Qatar’s ruler that were friendly to Iran and Israel.

What’s Next?

Trump’s twitter messages is likely to worsen the dispute between Qatar and the other countries. In fact, it only adds further to his own credibility crisis as the messages seem to directly contradict his previous praise of Qatar during the summit as a strategic partner in the war on terrorism.

Meanwhile, the Saudis will certainly be hoping that Qatar acquiesces to its demands including: curb its State news agency Al-Jazeera, agree to Saudi positions on various conflicts in Eygpt, Israel-Palestine, Libya and Syria, and most importantly, take a harder stance towards Iran. The last one would be the most difficult to achieve as Qatar and Iran share the world’s largest independent gas field beneath the waters of the Persian Gulf and have played at being friendly neighbours with each other in the past.

In the case of Qatar, they are more than likely hoping for some help from the international community in defusing the dispute and restore diplomatic ties with everyone. It seems that much of it may be up to Trump – whether he will walk the talk or simply talk the talk.