Open 24/7/365

We Have A Life-Time Warranty /
Guarantee On All Products. (Includes Parts And Labor)

BofA Is Ready To Compete With “Bank Of Walmart” And Other Tech Startups, CEO Says

Bank of America Corp. is confident in its growth prospects even as competition intensifies from fintechs including Walmart Inc.’s startup. BofA Is Ready to Compete With Bank Of Walmart And Other Tech Startups, CEO Says

“I respect every competitor, I don’t fear any competitor,” Bank of America Chief Executive Officer Brian Moynihan said in an interview Monday on Bloomberg Television. “We study all competitor moves, whether it’s the fintech disruptors or major players.”

Walmart lured a pair of senior bankers last month from Goldman Sachs Group Inc. to run its fledgling financial-technology operation. The move struck fear on Wall Street, which has been urging regulators to halt efforts by retailers and startups to offer core banking products to millions of consumers.

Bank of America has an advantage because of its scale, Moynihan said, citing the company’s 40 million digital customers.

“What makes us unique is we serve all segments of clients,” from mass-market consumers to wealthy individuals and large businesses, he said.

Earlier this month, rival bank CEO Jamie Dimon of JPMorgan Chase & Co. said the company is prepared for intensifying competition.

Here Are Other Takeaways From Moynihan’s Interview:

Consumer spending and credit-card use are rebounding strongly, he said, adding that April data will probably show “massive” growth compared with 2020, when strict lockdowns were imposed during the pandemic.

On the potential for the economy to overheat: “There are people concerned in the market — we all have that concern, because inflation is tough to fight if it gets embedded in there. But there’s a lot of temporary factors.”

On 10-year Treasury yields: “The reason that it’s going up is because people are seeing the economy recover from the health-care crisis,” Moynihan said. “As the economy normalizes and the growth rate comes up and we get above 2%, you’ll see a little higher rate, but it’ll still be, in the grand scheme of things, one of the lowest rates we’ve seen in a long, long time.”

Walmart’s Latest Foray Into Finance Makes A Friend Of An Old Foe

One of Walmart Inc.’s longtime foes conceded the retailer’s latest foray into banking could end well for consumers.

“There are still a lot of people who want a physical location to go to for their banking services, and Walmart could provide that with all its stores,” said Sheila Bair, who oversaw the Federal Deposit Insurance Corp. when the retail giant last applied for a banking charter. Bair placed a moratorium on the application, which Walmart ultimately withdrew in 2007 after years of controversy.

Walmart this week hired a pair of senior Goldman Sachs Group Inc. bankers to run a financial-technology startup it’s creating with the venture capital firm Ribbit Capital. The world’s largest retailer has been pretty tight-lipped about its plans for the fledgling unit, but has said it doesn’t currently have plans to apply for a banking charter.

Walmart last applied for a charter in 2005, at the time arguing it could save $30 million a year from processing credit- and debit-card transactions in-house. This time around, Walmart has said it hopes to offer affordable financial services to the millions who already shop at the retailer.

“We need to know what Walmart plans,” Bair said in an interview on Bloomberg Television. “If they just plan to fatten their profit margins, well good for them but that’s not really a public-policy reason to provide the charter.”

One in four U.S. adults is considered unbanked or underbanked in the U.S., according to the nonprofit Financial Health Network. Together, this group pays nearly $200 billion a year in fees and interest on financial products.

Even for consumers with a bank account, the fees can be substantial. For instance, banks collect roughly $17 billion a year from overdraft-related fees, according to the consultancy Oliver Wyman. Much of that is generated from a small subset of customers who overdraft one or more times a month.

The frequent overdrafters end up accounting for more than half of the profitability of mass-market checking accounts, Oliver Wyman found. That means lower-income consumers often subsidize free checking accounts for their wealthier counterparts.

“If Walmart can democratize — or further democratize — credit and banking services and provide it at the cost that you and I get, then I think that would be hugely beneficial,” Bair said.

Updated: 3-25-2021

What Walmart Can Learn From A Failed British Banking Experiment

The world’s biggest retailer is going where others have gone (and failed) before: financial services. It’ll need a different playbook.

In spring 2009, as the world reeled from the financial crisis, Terry Leahy, then chief executive officer of Tesco Plc, set out a bold ambition: to transform Britain’s biggest retailer into the “People’s Bank.”

With many lenders’ reputations tarnished, Tesco and rival J Sainsbury Plc spotted an opportunity to capitalize on the trust in their grocery brands and capture a slice of the U.K. banking market. But the two overshot. Fast forward a decade, and Tesco has retrenched from offering mortgages and current accounts. Sainsbury is considering a sale of its bank.

Now Walmart Inc. has its own lofty financial services ambitions. The world’s biggest retailer recently formed a fintech startup in the U.S. and hired the head of Goldman Sachs Group Inc.’s consumer bank to lead it. Its timing may be better than that of the British chains, with financial regulators less worried about fragility in the system and new technology making it easier to offer services outside of traditional banks. Even so, if it’s serious about building a “Bank of Walmart,” the company will need to avoid making the same mistakes.

Tesco and Sainsbury first added products like credit cards, loans and insurance in the 1990s after striking joint ventures with banks. These efforts trundled along for a decade or so until the 2008 crisis, after which the grocers took full control of their financial businesses. This is when things got tricky.

The retailers underestimated the complexity of building a banking arm and the scale needed to compete with incumbents. Going it alone meant investing in all their own systems.

Distracted by this and other ambitions (Tesco wanted to expand globally), they lost sight of their core grocery markets at a crucial time — when consumers (and sales) were migrating to the web and low-cost competitors were stealing market share. Meanwhile, U.K. regulators were stepping up their oversight of banks and increasing capital requirements, making financial services even more burdensome.

Each supermarket has probably invested up to 1 billion pounds ($1.4 billion) in creating a freestanding bank. Yet Sainsbury’s makes an annual operating profit in the range of tens of millions of pounds. Tesco makes more from financial services — between 150 million and 200 million pounds a year, excluding one-off charges — but it’s hardly the dominance that Leahy had in mind.

Walmart has perhaps learned from their experiences. Rather than go it alone, the big-box giant formed its new fintech company with venture capital firm Ribbit Capital. It has also said it expects the startup’s growth “may come through partnerships and acquisitions.”

Although Walmart has offered few details about its ambitions, the breadcrumbs it has dropped suggest there won’t be a big push to open physical bank branches. A spokesperson told Bloomberg News that the company is not planning to seek ILC status, which would allow it to offer services including accepting deposits and making loans.

Instead, Brett Biggs, Walmart’s chief financial officer, said recently that the venture is an opportunity for something “more sophisticated, more digital” than its current offerings, which include check cashing and money transfers. Here, Ribbit’s involvement is telling, as the investment firm has backed fintech disruptors such as Affirm Holdings Inc., which offers the “buy now, pay later” format that has become ubiquitous on online shopping sites.

Walmart will have to work hard to avoid the British supermarkets’ biggest misstep: getting distracted from new competitors entering their core retail business. In the years after the financial crisis, the cash-strapped middle-classes turned to the no-frills German grocers Aldi and Lidl that had expanded across Europe.

The risk of distraction is even higher for Walmart, given that it’s in the throes of transforming its primary business to compete against Amazon Inc. This year it is plowing billions of dollars into efforts such as opening more microfulfillment centers — areas in its stores where robots help workers assemble online grocery orders.

It is also looking to bolster its Walmart Connect advertising business, which it hopes will become a significant revenue stream.

This is a lot to manage on top of launching a fintech startup, though it should help that this entity will be a separate company. And Walmart’s core U.S. grocery business is firing on all cylinders.

Walmart should also take heed of what the U.K. supermarket banks did right: They were brilliant at leveraging the customer data tied to their loyalty programs. Tesco’s Clubcard, for example, has 20 million members. As long as customers give the supermarket permission to use their information, it knows what they buy, whether they visit the same store every week and how much they spend — pretty useful intelligence for determining how reliable they will be in making loan repayments or how far they drive to price car insurance.

Walmart doesn’t have a traditional loyalty program, but it has a vast storehouse of data about how customers behave in supermarkets and online. Its new Walmart+ membership, which includes free grocery delivery and other perks, should add to its trove. The company should harness that data to figure out which fintech products make most sense for its customers.

Even with their data advantage, British supermarkets failed to upend the banking industry. This underlines just how challenging it will be to stop the “Bank of Walmart” going the same way as Tesco’s “People’s Bank.”


BofA Is Ready To Compete,BofA Is Ready To Compete,BofA Is Ready To Compete,BofA Is Ready To Compete,BofA Is Ready To Compete,BofA Is Ready To Compete,BofA Is Ready To Compete,BofA Is Ready To Compete,BofA Is Ready To Compete,BofA Is Ready To Compete,BofA Is Ready To Compete,BofA Is Ready To Compete,


Related Articles:

China Throws Shade On Biden’s Bid To Shift U.S. Supply Chains

Biden Pleads For Democracy Over Autocracy, Repudiating Trump

China Has An 800,000-Square-Mile ‘City’ In The South China Sea

Senate Moves Forward With Biden’s $1.9 Trillion Covid-19 Relief Plan

The $2.1 Billion Case For Building A Federal EV Fleet

Cathie Wood Amasses $50 Billion And A New Nickname: ‘Money Tree’

US Productivity Falls 4.8% In The 4Th Quarter To Mark Biggest Drop Since 1981

Senate Democrats Move To Put Biden $1.9 Trillion Stimulus Plan On Fast Track

Biden Lays Out His Blueprint For Fair Housing

McConnell Says He’ll Make Deal, Backs Off On Filibuster

Biden’s Student Loan Freeze Shows Path To Erase Billions Of Debt

Trump Leaves Town An Outcast, Trailed By Record Pandemic Deaths And Job Losses

Trump Turned Republicans Into Losers

Trump Ends Historically Unpopular Presidency With 34% Approval

After Capitols Become Fortresses, Far-Right Protesters Are Mostly A No-Show

Bank of America Sued Over EDD Unemployment Debit Card Fraud #GotBitcoin

Civil Rights Groups Warn Of A Grim Future For Black Voters Without Court Intervention

Internet Detectives Make Up To $1000 Identifying Pro-Trump Rioters. Some Have Already Been Fired

CEOs Consider Ways To Smooth Biden’s Presidential Transition, Including Holding Back Campaign Money

Cash-Strapped Americans Are Drawing Down Savings As Pandemic Divisions Widen

Democrats Take Senate Control With Georgia Wins

Financial Inequality Grouped By Race For Blacks, Whites And Hispanics

Google Staff Launch Union, Escalating Tension With Leaders

China Tells Inefficient Firms To Toughen Up Or Prepare To Fail

Nigerian Stocks Head For Best Annual Run Since 2013

The Goldman Sach’s Solution Could Work Out Fine For Alibaba’s Jack Ma

Investors Double Down On Stocks, Pushing Margin Debt To Record

Trump Signs Virus Relief Bill After Deriding $600 Checks

How The Central Bank Collapse Will Likely Play Out #GotBitcoin

Housing Boom Brings A Shortage Of Land To Build New Homes

Africa’s Richest Man Initiates Nigeria’s First Share Buyback

No Matter What Congress Does, 12 Million Jobless Americans Will Temporarily Lose Unemployment Benefits

Mar-a-Lago Neighbors Tell Trump That They Don’t Want Him To Live There

Trump Strutted Like A Player, Then He Got Played

Meet The Electoral College, America’s Most Important Voters

Supreme Court Rejects Texas Challenge To Biden’s Victory In Presidential Election

Unsold US Hotel Rooms Near 1 Billion As Lodging Crisis Deepens

Hunter Biden Says His Taxes Are Under Investigation

Lawyers Across The Country Urge Bar Associations To Investigate Trump’s Legal Team

Did Rudy Giuliani Fart Twice At A Michigan Election Fraud Hearing?

‘Jim Crow’ Land Ownership Spurs Black Farmers’ Appeals To Biden

Can President Trump Pardon Himself And His Family?

Historians Sue To Force Trump Administration To Preserve Records

Bribes For Presidential Pardons Scheme Investigated by DOJ

Why Withholding Evidence Until They (Giuliani/Trump) Gets To The Supreme Court Is A Stupid Idea

Pro-Trump Group Donor Sues Administration Over Failure To Expose Election Fraud

Giuliani Drops Sidney Powell As Trump ‘Strike Force’ Splits

Joe Biden The Oldest President Ever Will Help Young Americans Confront A Generational Wealth Gap

Biden Asks For Donations To Fund Transition

Governor Cuomo Gets Emmy For ‘Leadership’ During Pandemic. Trump Gets Nada, Zip, Bumpkis, Zelch!!

Fed To Return Lending-Backstop Funds To Treasury As Requested #GotBitcoin

Thriving New York Times, Fox News Ponder A Post-Trump Scenario

Trump Unveils ‘Platinum Plan’ For Black Americans (BS!!!) #GotBitcoin

The Record Economic Boom Is A Mirage! Just More Trump BS! Keep Moving #GotBitcoin

US States Face Biggest Cash Crisis Since The Great Depression (#GotBitcoin?)

Factory Jobs Still Head Offshore Despite Trump Promises Including Commerce Secretary’s Auto Parts Company

Trump Issues Executive Order Making Some Civil Servants Easier To Hire And Fire

Black Homeowners Pay $13,464 More On Their Mortgages, Study Says

Trump Weighs Prospect Of Defeat After Insulting Both Seniors AND Women

Wealthy Nations Defy Trump With Debt Lifeline To Ailing Cuba

Who Is Helmut Norpoth And Why Does He Say Trump Will Win Big?

Companies Raise Inability-To-Pay Claims Amid Pandemic, Justice Department Official Says

Homeland Security To Grant Millions To Groups To Combat White Supremacists And Other Extremists

Prediction (Betting) Market Doubts Trump Will Complete First Term After COVID-19 Diagnosis

Trump Used Facebook To Try And Convince 3.5 Million Black Americans Not To Vote In 2016

Trump’s Tax Revelation Destroys Successful Business Mogul Image

Cost Of Racism: U.S. Economy Lost $16 Trillion Because Of Discrimination, Bank Says

Bloomberg, Others Rack Up $20M To Register 32K Florida Felons Deeming Them “Time Served”

Some Wealthy Americans Are Already Prepping Their Finances For A Joe Biden Presidency — Here’s How

Kamala Harris Woos Black And Latino Voters As Joe Biden’s Running Mate

Biden Appeals To Florida Latinos As Polls Show Trump Gaining

Poll: Should Trump As A Civilian Face Class-Action Lawsuits For Minimizing Severity Of Covid19?

Trump As A Civilian To Face Avalanche Of Lawsuits!!!!

Trumponomics Forces Amazon Drivers To Hang Cellphones From Trees Desperate To Get Gigs

Trump Is Silent While Russian Navy Conducts Biggest Drills Near Alaska Since Soviet Era

Open Letter To Supporters of The Draft-Dodger-In-Chief!

Right-Wing Facebook MEGA-Troll Wall-Of-Shame

Donald Law And Order Trump Encourages People In North Carolina To Vote Twice, Which Is Illegal

Here’s Why No Bankers Go To Jail (#GotBitcoin?)

Cities With Republican Mayors Also Had Protests Which Resulted In Property Damage

Trumponomic’s Furloughs Turn Into Permanent Job Losses (#GotBitcoin?)

Trump White House Commits Multiple Hatch Act Violations In Re-Election Attempt

After Three Years of Attacking L.G.B.T.Q. Rights, Trump Suddenly Tries Outreach

Scrapping Payroll Tax Without Replacement Would Hit Social Security Benefits By 2021 (#GotBitcoin?)

Boomers And Millennials Facing The Effects Of Trumponomics While Still Recovering From Last Recession

Money Funds Waive Charges to Keep Yields From Falling Below Zero (#Bitcoin?)

Millions of US Jobs To Be Lost For Years, IRS Projections Show (#GotBitcoin?)

Kellyanne Conway To Leave White House As Trump Divisiveness Indeed Hits Close To Home

The US National Debt Has Exceeded The Total Value Of The GDP (#GotBitcoin?)

When The Stock Market And Economy Becomes Disconnected (#Bitcoin?)

Donald Trump, Peter Navarro (Trade Adviser) And A $765 Million Loan To Kodak That Deal Blew Up

Steve Bannon Joins Six Other Criminally Charged Ex-Trump Advisers

Trump Calls For Goodyear Boycott Amid Outrage Over ‘MAGA’ Ban

Trump’s Big Donors From 2016 Want Nothing To Do With Him This Year

State Budgets Hit Hard By Trumponomics Create A Drag On U.S. Recovery

Joe Biden-Kamala Harris Ticket Makes Debut After Historic VP Pick

Biden, Obama Release Campaign Video Applauding Their Achievements

Small Businesses Brace For Prolonged Crisis, Short On Cash And Customers (#GotBitcoin?)

Ultimate Resource For Violations of The U.S. Constitution Including “Money” And Coronavirus

Trump Campaign Forced To Use Tele-Rallies As Coronavirus Cases Surge

Roger Stone Uses Racial Slur In Live Radio Interview With Black Host

The Fed Is Setting The Stage For Hyper-Inflation Of The Dollar (#GotBitcoin?)

The Next Phase Of The Retail Apocalypse: Stores Reborn As E-Commerce Warehouses

Famous Economist Mohamed El-Erian Warns Investors To Stay Away From Zombie Companies And Zombie Markets

Republicans Alarmed By Democratic Senate Hopefuls’ Fundraising Haul

American Airlines Plans To Furlough Up To 25,000 Workers This Fall (#GotBitcoin?)

Consumer Appetite For Cars, Homes Bolsters U.S. Economy

Banks Get Ready For Wave of Recession-Led Loan Defaults (#GotBitcoin?)

32% of U.S. Households Missed Their July Housing Payments

What You Need To Know About The New Small-Business Bankruptcy Laws

Police Wrestle With Surge In Crime In U.S. Cities Amid Defunding Efforts

Here’s An Investment That Perfectly Tracks The Economy

Fed, Treasury Disagreements Slowed Start of Main Street Lending Program

When A Texas Oil Boom Goes Busts

Trump Takes Cognitive Test And Can Identify A Rhino vs A Camel

Don’t Know How Much Stimulus Is Needed? Put It On Autopilot, Some Say

Colorado Police Chief Fires Three Officers Over Reenacted Chokehold Placed On Elijah Mcclain

Republicans Give Trump Labor Day Deadline To Turn Things Around. After That, He’s On His Own

Chapter 11 Business Bankruptcies Rose 26% In First Half of 2020

Chaotic Trump Administration Plus Russian Bounty Intelligence Equals Loss Of American Lives

Supreme Court Orders Restructuring of Consumer-Finance Watchdog

Reddit, Acting Against Hate Speech, Bans ‘The_Donald’ Subreddit

Class Action Lawsuit Alleges Visa Subsidiary Violated Privacy And Data Protections Of Venmo, Stripe, Square’s Cash App, Robinhood & More

Private Equity’s Trillion-Dollar Piggy Bank Holds Little For Struggling Companies (#GotBitcoin?)

TikTok Teens Overload Trump’s Online Store With Orders Only To Abandon Shopping Cart

Bill Gates Says Trump’s Lack Of Leadership Is Making Pandemic Picture ‘More Bleak Than I Would Have Expected’

Fed Stress Test Finds U.S. Banks Not Healthy Enough To Withstand “Few Quarters” Economic Downturn

Elizabeth Warren Was Right About Whacky Stockmarket Fundamentals (#GotBitcoin?)

Two Of The Latest High-Profile Trump Resignations

US Banks Have Seen A Record $2 Trillion Surge Of Deposits Since The Coronavirus Crisis Began

Our Facebook Page

Your Questions And Comments Are Greatly Appreciated.

Monty H. & Carolyn A.

Go back

Leave a Reply