Big Banks are living on borrowed time


February 12, 2020

What’s in a name? Turns out, kind of a lot. And there are benefits to names as bizarre as “Blue Ivy” and as basic as “Bob.” At the box office, films sometimes flop when they have names that no one can recognize. But on Amazon, brand names that look like straight-up gibberish are sometimes a seller’s safest bet. Today:

  • Mobile banks are almost here despite all they’ve been through
  • Warner Bros. proves that sometimes not even SEO can save you
  • These ecommerce brand names are too weird not to be true
mobile banking gif
Big Banks Borrow Time

Despite Big Banks’ best efforts, the age of e-banks may finally be here… well, almost

Mobile bank Varo just won approval from the FDIC to receive deposit insurance, becoming the first mobile bank to do so. 

For the 5-year-old fintech startup, it’s the first step towards becoming a full-fledged digital bank that can hold cash, give loans, and create credit cards. Now, Varo is winning the mobile bank race, but…

It still has a long way to go

Varo cleared a major hurdle by getting the FDIC’s blessing, but still needs approval from the Office of the Comptroller of the Currency (OCC) and the Federal Reserve. 

Plus, the startup has already spent 3 years — and ~$100m — getting to the point it’s at today. 

Why is it so challenging to become a challenger bank? 

A number of fintech firms such as Revolut, N26, Moven, and Square have dipped their toes into banking, but they’ve had to navigate huge amounts of red tape.

Regulators say they’ve been reluctant to give out licenses to prevent fintech companies from taking reckless moves with customers’ money.

But another reason there are no new banks is that old banks have lobbied aggressively to keep them out of the club.

Big Banking put its mouth where its money is

When the OCC developed a process for startups to get banking licenses, big banks complained — and a federal judge blocked the licensing program. 

Forced back to the drawing board, fintech startups had to find banking partners to stay afloat.

Despite being independent in their home markets, UK-based Monzo Monzo and Germany-based N26 both partnered with American vault-and-teller banks to operate in the US. Even tech giants weren’t exempt: Apple partnered with Goldman Sachs and Google with Citi to enter the banking biz.

Varo partnered with the Bancorp Bank, but also continued working with federal agencies to find a way to operate independently. 

Now it’s a race to the finish

Varo must now clear its final few hurdles to become fully functional.

Meanwhile, Big Banks are using their borrowed time to build out their own online banks to edge out their online rivals. 

Goldman Sachs launched its online bank Marcus in 2016. In 2018, Wells Fargo followed up with an app called Greenhouse, and JPMorgan Chase launched its own app (which has already fizzled out) called Finn.

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Harley Quinn image
SE“Oh no”

Warner Bros. reminds us: It’s SEO’s world, and we just live in it

Last Friday, Warner Bros. released its newest superhero movie: “Birds of Prey: And the Fantabulous Emancipation of One Harley Quinn.”

But 3 days later the movie, which underperformed in a $33m opening weekend, appeared on movie theater websites under a different name: “Harley Quinn: Birds of Prey.”

So, why did the name change?

Because Harley Quinn had better SEO

A Warner Bros. spokesperson told The Verge that “the name change is part of a ‘search expansion for ticket sites,’ making it easier for people to find the movie.”

After moviegoers seemed not to immediately recognize what “Birds of Prey” was about, Warner Bros. decided that leading off with “Harley Quinn” — the recognizable name of the film’s antiheroine — would lure viewers into theaters. 

It’s too soon to tell whether or not the strategy will pay off. But, in any case, it’s a fascinating reminder of the very real ways that search engine indexing shapes the world around us. 

And it’s not the first major movie to make a serious SEO slip-up

“Dark Phoenix,” a movie about a character from X-Men, was also criticized for failing to include important info in its title (the movie, which cost $200m to produce, only grossed $65m domestically).

But since SEO has impacted movie titles for such a long time, many critics wondered: How did Warner Bros. screw this up?

Some critics speculate that the original mouthful of a title may have resulted from a disagreement between the movie’s director Cathy Yan and Warner Bros. studio execs.

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Amazon screenshot
WTFs of Branding

Trademark gibberish is apparently the secret sauce of third-party Amazon sales

Some companies spend ages pondering the name of their brand. Others seem to throw spaghetti at the wall to see what sticks.

That’s apparent from The New York Times’s fascinating review of the wild world of Amazon’s pseudo-brands.

Bezos’s Big Boutique is bustling with barely decipherable brand names like BSTOEM, MZOO, and SHSTFD. (Just us, or does that last one sound a little too much like SHTFCD?).

They’re popping up everywhere on Amazon’s third-party marketplace.

Many of these vendors are based in China — and they sell everything

One brand, called FRETREE, hawks water jugs and inflatable hammocks. Its trademark is linked to an address at a business park in Shenzhen, China.

  • Last year, 14% of all US trademarks were filed by Chinese applicants, according to one expert. That’s up from 10% the year before.

For these overseas vendors, branding takes a back seat to selling.

  • This is especially true when it comes to commodity goods. Who really rules the market for touch-screen gloves, after all?
  • Barely there branding carries another advantage — lower risk. If a seller gets busted farming fake reviews, it’s not like barrels of branding money go down the drain.

The weird names might sound like an accident, but their success isn’t. That often depends on getting the approval of Amazon’s Brand Registry, which helps companies protect themselves from fraudsters.

Want to get registered? Let’s see that trademark

There’s another reason why these oddball names are taking off: If nothing else, they’re unique. So they sometimes have an easier path to approval.

The US Patent and Trademark Office tried to stem the tidal wave by requiring all applicants to be represented by a lawyer licensed in the US. That led to a spike in applications before the deadline, followed by a decline.

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tinder screenshot
RoboCupid

Bots and AI are barging into online dating

Dating apps have arguably made finding a mate more convenient than ever. But for the truly lazy lothario who can’t be bothered to lift a swiping finger, there may be a solution — a bot.

In fact, it may be unfair to call bot-assisted matchmaking lazy. People who’ve tried it say it can help the loneliest among us maximize the chance of finding another fish in the giant, digital sea.

Some bots are crude, but others are suave

As ArsTechnica reported, the technology can take many forms:

  • Some bots learn your preferences and swipe right like the world is ending tomorrow. They might drop a rudimentary message to users who match.
  • Others are smooth talkers, specializing in conversation. But their banter has limits. It probably sounds a bit like getting hit on by Gmail’s Smart Reply. How romantic!

AI-assisted dating also raises plenty of questions. What if the bots just reinforce our biases? How will you know if your match is really Brian, and not just a bot? What if we’re destined to die alone?

The biggest apps are starting to embrace AI — in small ways

Tinder rolled out some new safety features that use AI to filter out harassment.

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