The Unsinkable brian cork™

Brian Patrick Cork is living the Authentic Life

bank on Brian

August25

Nicholas Johnson is often found in-and-amongst the companies I’m working with to change the world. I’m not clear what it is he is doing most days. But, some times he’ll haull-off and come up with a pearl worth sharing. For example, in a recent meeting with an uncertain conclusion, he announced the existence of an on-line service called www. billfloat.com. Apparently if you need to pay a utility bill, for example (and entrepreneurs, just like most people, do that) you can convince this shadowy organization to pay your bill up to thirty days in advance for a transaction fee of a mere five dollars. All you need is a viable bank account and the best hopes of the funds being in it by a later, albeit pre-determined, date.

This is different.

Voila!

I feel billfloat is an example of: “being part of the solution, and not the problem”. Five dollars is a reasonable fee for a greater peace of mind. Obviously living paycheck-to-paycheck is living on the veritable edge. But, that is the reality for a growing segment of our national population. Here, someone clearly came up with a solution that is not, in my hardly humble opinion, userous like many of those strip-mall situated paycheck loan (shark) services.

Or, the current banking system, for that matter.

I’m often asked something along the lines of, “If you weren’t running your current business (this is assuming they understand what it is I do), what would you work on, or be doing?”

There’s not a single answer to this question; it can change day-to-day. As I’ve stated on this blog, and through a great deal of public speaking, I could never have planned or anticipated my own career-path. But, in light of our global economic situation, and Johnson’s research, I think if you asked me today, I’d say I would like to start a bank.

There are very few people who really love their bank. I use a private bank and this means I don’t have to suffer the same inconveniences realized by most folk. For example, many are dealing with overage fees that stack up, misleading fine print, and a general malaise born of an apathetic sense of fatalism. However, there’s a unique opportunity in that mainstream contempt for financial institutions. And, concurrent with this is an incredible amount of government backing that essentially makes it a no-risk environment. People are simply hungry for anything different, something contrarian.

A David to the Goliath banking industry. If you will, something heterodoxal. This is where I often realize my best potential and opportunity.

The name of my bank would be something supremely boring, like SmartBank or bank on brian (In my businesses, I typically use small caps for my name because it’s not about me, it’s about what I do). The idea behind it is that bad behaviour in the banking – which is in truth, aligned with Wall Street – world has been largely inevitable because their compensation structures incented people to do overly risky things. the Bank of brian would maintain a reserve level 2-3x higher than Federal requirements, and any other bank. I’ll aspire to World Bank status as well and align myself with European protocols (have you bothered to wonder why the US doesn’t have any World Banks?). Bank of brian would have no bonuses unless goals such as preserving mortgages were met or exceeded and loans made to emerging culture companies based on best practices, carefully monitored milestones and accountability proliferated. I suspect critics would say this would make it impossible to attract top-shelf talent. But, every time the bank gets attacked we’d turn it into an advertising opportunity to emphasize why we’re different.

To wit:

“We can’t attract top-shelf talent? Go on…We take your money and put it in a vault. We don’t need the million-dollar bonus geniuses on Wall Street to do that. SmartBank. Bank, smart.”, would say I.

Bank on brian.

In fact, the first few years of SmartBank would be largely focused on acquisition through every trick in the book. At the very beginning pull a Gmail/WordPress.com strategy ,and make it invitation-only. I’m confident this will create a buzz and also allow you to give amazing white-glove service to the initial customers that want to catch that glassy-fronted wave, who will in turn tell their friends and create a tsunami. That’s called “viral” marketing and that always works when people like what they see and experience. Ironically that would represent a novel experience with banking today where the objective appears to be lining the pockets of bankers while stripping down customers. You can also target certain profitable segments and ultra-safe depositors at first, like Gmail users in San Francisco (using Firefox with an ad-blocker) who make six figures a year. There would be only one style of checks and debit cards and they’d have a distinctive design so if you saw one you’d say, “What’s that?” a-la the American Express Black or Plum card (I have both and everyone’s follow them through every transaction) products which would then start the whole conversation again about how SmartBank is different.

For the first two years you could also do things like not allow accounts larger than the FDIC-insured limit. No one has ever heard of a bank turning away money (unless you, ironically, have poor credit). But, you’d say that although everything SmartBank does is risk-free, it’s still a startup, and if people have more than the insured limit (today it’s 250k for single and 500k for couples) in an account, they should put the extra somewhere else. Again, statistically (and, those types of numbers in the right hands [like my own] never lie) this will impact a very low percentage of customers… And, everyone; everyone, I say, will think it’s naught less than remarkable. This tactical growth can be phased out after a few years; in fact, it would be yet another PR opportunity:

“We’ve been in business now long enough that we feel comfortable with larger accounts.” Boom, free coverage.

I’m not defined as a “tech guy”, but I am more often identified with successful technology, and the associated leadership. So, of course a lot of focus would be on the Bank of brian website. Imagine, if you will, something along the lines of an old-time vintage design aesthetic combined with a Google-like (web 2.0?) simplicity and attention to speed. All logins would be two-factor, with the default being SMS’d  to you with a one-time code to log in when you gave your email address (Just so we’re clear, I’ve given this a lot of thought, for good reason, done my home work, and already using consultants). A significant part of the website would be the blog. It would have a strong Ben Franklin-like common sense voice, with a Thomas Jefferson oriented pragmatic tone with a few cool savings or home management tips each week. And, in-line with my own cultural architectural views, it would cover at least one financial industry story a day that was relevant to historical examples alined with current events for perspective.

For example:

“Bank of America spent forty million dollars on airplanes last year. We spent forty thousand to develop an iPhone application so you can check your balance from anywhere.”  (the average useful iPhone app costs $2.99.). NOTE: Not Android, at first. I say this because quality control is crucial here – and Apple defines that, while Android is working on it.

“Here’s how to block advertising when you browse the web with Firefox; it makes the web faster and less annoying.”

“So-and-so Bank’s website requires you to use Internet Explorer. We insist that you don’t because there are way cooler and faster browsers like Firefox, Opera and Safari. Here are links to those open source browsers you can switch to today.”

“Goldman Sachs just paid out sixteen billion dollars in bonuses to their employees. If we had an extra sixteen billion dollars lying around, we’d put it in the bank for a rainy day. By the way… If Goldman Sachs had never paid out bonuses they never would have needed government intervention.”

Sixty eight Million Reasons Your Bank Sucks. That’s the amount Bank of America collected last quarter in needless ATM fees.” …well, needless to customers, any way.

That’s all made up, for now. The headlines would almost write themselves, and every time a financial institution is in the news it’d be an opportunity to contrast why SmartBank is different, and what the underlying philosophy is behind why it’s different.

I’m a Social Historian. I study and consider why things happen. And, then I do something about it.

As trumpeted above, all of the marketing would be on the web and viral the verbal, or word-of-mouth part would follow (like eBay and Amazon) – because it’d be an online-only bank like ING Direct. No storefronts (brick-and-mortar) where people have to wait in line, or risk a bad interaction with a disinterested teller, or get robbed and need insurance.

To be clear…Basically, a lot of the historical risk of running a bank could be eliminated. When you sign up it would have a: “tell your friends about SmartBank” address book (like LinkedIN) feature that would connect you to them if they signed up for an account, give you both money (I should make the point that Bank of America actually does have something like this, so I have to keep thinking about it because of the karma thing), and also make it easy to send them money, PayPal-style, if they have an account.

I’ll pause here and offer that you might see a trend in my thinking… I’m picking, showcasing and reflecting products and services that appear to be working, and adopting them as my own for your benefit. This can be referred to as “best practices”. And, we need o be all-in on that.

I suspect SmartBank would make money and reward shareholders and customers alike, which just might separate it from the likes of Bank of America, for example. So… How would the Bank of brian make money and also provide terrific customer service, you ask?

I think it wouldn’t touch anything risky on the financial side. However, it would be a data company. As it turns out, data is a hot industry as evidenced by hiring and investment trends (and, I’m a subject matter expert in both areas). The first three years the focus would be entirely on customer acquisition, marketing, PR, and establishing a world-class tech team building a rock-solid infrastructure. SmartBank would likely make less money than non-customer-centric banks currently do, but it would be more than enough to build an amazing product in a sustainable way, like Craigslist did with newspaper classifieds. After a certain milestone, say one-hundred billion in deposits, I would buy or clone Mint. SmartBank would have more (and accurate) data about its customers than almost any other company in the world other than credit card companies, so the online interface would have Mint-like lead generation offers that are based on accurate information. For example, if you spend one hundred and forty dollars a month on electricity, but if you switch to this new solar provider you’d save two hundred dollars a year. Think of it like Gmail (By the way… I’ll admit to referencing Gmail, consistently in this post, to honor Nicholas Johnson and his possibly being a catalyst for much of this) contextual advertising but based on where you spend your money rather than the words in an email. There also might be aggregate data opportunities for economic research or targeting, but I’m not sure if I like, or have a firm understanding of, the privacy implications there.

SmartBank probably couldn’t, and I wouldn’t want to raise Venture Capital, or anything like it, because having any sort of exit expectations, and the predatory influence that would reflect Wall Street, would completely kill the “safety story”. Like most of my businesses today, I would want to bootstrap, and after a few years would be hugely profitable. I understand the irony in this vision coming from a felon. But, there is yet another example of my being Jeffersonian, a heterodox, and the contrarian, eh.

By the way… The existence of bank of brian would also put significant pressure on existing, more traditional, banks and the Federal Reserve,  because depositors would be leaving in droves, putting pressure on their reserve requirements. Existing banks couldn’t compete in a traditional way because they have such a sordid history of customer apathy and bad PR. SmartBank wouldn’t be trying to capture their profits, so-to-speak. However, we would reflexively be unhinging them while driving much more revenue, but in smaller amounts, but a larger end-result.I think this would end up looking something like a credit union, but for the masses.

Thanks Nicholas. And, the rest you readers can thank us both, at some point.

Peace be to my Brothers and Sisters.

Brian Patrick Cork

extortion: credit card companies caught in the Act

October31

There’s a story floating around, and it’s a true one, that credit card companies are racing to raise interest rates before a new law designed to protect us from that very thing goes into effect February 22nd. You can read more about it here, for more ugly details.

Congress had actually been moving quickly themselves to form probably insipid meaningful legislation around the Credit Card Accountability, Responsibility and Disclosure Act, or CARD Act. But, and I have to add the word oddly, and should also add disappointingly, let’s also consider outrageously, allowed themselves to be lobbied by the credit card companies and approve a “grace period” that would enable the credit card companies to “prepare” for the change in predatory practices.

So, they’re using that grace period to gouge credit card users as hard, deep and quickly as they can.

Thank you, our ever vigilant, inspiring representatives.

The same representatives, mind you, that are voting in a healthcare package that they, themselves, are not required to participate in. Read about that in my post: healthcare is not for You.

The Act actually offers some fairly meaningful protection for credit card users. You can or should research those details elsewhere; it’s worth the time and effort. A meaningful issue at hand, however, is this grace period is going to create a lot of harm and financial chaos in the interim. It’s also going to cause, in many cases the very thing the Act was meant to forestall, if not eliminate.

I’m skeptical Congress could not have seen this coming. And, so, I feel set-up by them again.

We don’t use credit cards much in our household, or in my businesses. We prefer American Express (I certainly have issues with American Express), but when we need to use a credit card we prefer to pay it off. Apparently most Americans can’t or aren’t doing that, for the moment.

Nonetheless, I have a letter from Citibank informing me that they are doubling the interest rate on cards.

Right there in my hands I had written proof that the credit card companies; certainly Citibank, were attempting to extort the American people – and, Congress are their unwitting accomplice. /1

Where’s Aaron Burr when we really need him?

This is all a lot more insidious than the media are letting on, Congress will own up to, and, what most people might understand.

The letter I received from Citibank said, in effect, that I had an option to decline the higher interest rate. But, if I do so, they will cancel the credit card. For me, that’s not an issue. But, apparently for 63% of Americans, it just might be. If the credit card companies cancel the credit card, you are still, obviously, responsible for paying down the balance. Maybe that, unto itself, is not such a big deal, but the fact that your credit score will drop precipitously, is. Your credit score is driven by many factors (I suspect many of them subjective). But, an obvious factor is amount of credit card balance against available credit (your credit limit on the card). If you’ve maxed out your card, but are paying, at least the minimum required each month, your credit score will likely stay intact. But, if you have a credit ratio where your balances outweigh the available or potential available credit, your score drops up to 99 points in only one reporting cycle. NOTE: It comes down to algorithms (more profiling) designed by the credit industry exist to punish users if they tried to cancel their own cards.

It’s true; and, you better get pissed! I don’t mean inebriated here, but, that might help some of you that continue to numb yourselves against being bent over your own “American dreams” as they collapse around you.

I wish I had good news today. Maybe a fun story. And, I am trying to come up with a solution – if not a course of action. I honestly don’t know if writing, calling or visiting your Congressman does any good. We could go to Oprah, I suppose. But, she won’t make any move that might shed unfavorable light on Barack Obama. I don’t know if she’s his bitch, or the other way around.

Maybe we should try something like a “Don’t use your credit card for a week” campaign. What do you think?

Peace be to my Brothers and Sisters.

Brian Patrick Cork

1/ From: West’s Law:

  1. The act or an instance of extorting.
  2. Illegal use of one’s official position or powers to obtain property, funds, or patronage.
  3. An excessive or exorbitant charge.
  4. Something extorted.

extortionary ex·tortion·ar’y (-shə-nĕr’ē) adj.
extortionist ex·tortion·ist or ex·tortion·er n.

or,

From the Columbia Dictionary:

“extortion, in law, unlawful demanding or receiving by an officer, in his official capacity, of any property or money not legally due to him. Examples include requesting and accepting fees in excess of those allowed to him by statute or arresting a person and, with corrupt motives, demanding money or property unlawfully under pretense of duty. The taking of money or property is generally an essential element of the crime. In most states of the United States, extortion is more widely defined to include the obtaining of money or property of another by inducing his consent through wrongful use of fear, force, or authority of office; blackmailransom, and threat of force are included under this definition.”

the beast be AMEX: new rules

January31

Apparently American Express profiles shoppers and now evaluates where (not just how) we use their cards – and, will penalize cardholders if they visit certain stores or restaurants.

Good Morning America ran a story about this yesterday.

ABC offers a good summary of the story here

See a list of potential “trouble spotshere.

I use American Express. But, now I need to be careful not to use it at places where other people (and, not necessarily AMEX users) shop.

Pondering if this is evil or smart.

Recently AMEX’s stock went up, even though profits are down (read a story here). American Express has the right to protect itself.  And, as a shareholder I appreciate this. 

I don’t mind being held accountable by people.

However, I don’t want to be responsible for other people’s actions.

Rules enable (in part) informed decision-making. Rules make the community work by uniformly fair application (kids and dogs instinctively appreciate and respond well to rules).

The key here is American Express (and, probably other credit related companies) is changing the rules – and, we don’t know what the rules are.

Peace be to my Brothers and Sisters.

Brian Patrick Cork

 


What’s All This About?

"What am I looking at?", you might wonder.

Lots of stuff.

Meanwhile, here, I discuss events, people and things in our world - and, my (hardly simplistic, albeit inarticulate) views around them.

You'll also learn things about, well, things, like people you need to know about, and information about companies you can't find anywhere else.

So, while I harangue the public in my not so gentle way, you will discover that I am fascinated by all things arcane, curious about those whom appear religious, love music, dabble in politics, loathe the media, value education, still think I am an athlete, and might offer a recipe.

All the while, striving mightily, and daily, to remain a prudent and optimistic gentleman - and, authentic.

brian cork by John Campbell





photos by John Campbell

 

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