Grateful Act of Congress

The making of a legal holiday

The making of a legal holiday

THE FOURTH THURSDAY of November is a legal holiday in the United States. Designated as a national day of thanks, it is named, appropriately enough, Thanksgiving.

Observing Thanksgiving in autumn has been around since the early 17th century. An act of Congress signed on October 6, 1941 established it as a legal holiday and designated the last Thursday of November as the day.

Which, believe it or not, caused a controversy. Larger merchants argued for establishing the fourth Thursday, fearful that in years in which November had five Thursdays, the last Thursday would leave too little time for Christmas shopping. (This was long before Christmas sales began popping up in September.) Meanwhile, smaller merchants liked the idea of reduced shopping time, hoping to attract shoppers unwilling to put up with too-crowded department stores. Adding to the tumult were not a few citizens who objected to letting commercial concerns move their holiday.

The matter was finally settled two months later, when on December 26, 1941 President Franklin D. Roosevelt signed H. J. Res 41. Henceforth the legal holiday would be on the fourth Thursday.

Thanksgiving is a popular time for authors who like debunking tales of “the first Thanksgiving.” True enough, most of the stories we learned in grade school are exaggerated, whitewashed, or outright fabricated. Dig around and you’ll find that the original meal bore no resemblance to today’s feast, and that, overall, the interaction between European immigrants and Native Americans is more to be regretted than celebrated.

History aside, I like the idea of setting aside one day—at least one—to ponder what has gone right for us. Whether we stumble into opportunities or make them, we must at some level concede that something out of our control put us in the right place at the right time, not to mention gave us the wherewithal and skills needed to seize it. Remembering as much can ground.

I do not embrace the cliché that everyone has something to be thankful for. There are many who mourn, and it is not for me to insult them with a pep talk. Nor do I embrace relative gratitude, the idea of feeling blessed because there exist people not as well off. It is not another’s ill fortune that makes mine good. Recognizing that there are less fortunate people serves best when it motivates empathy and compassion.

Now, please pass the gravy.

Posted in Uncategorized by Matt. No Comments

The “War on Cash”
(A Report from the Front)

War on Cash MEDIUM

DON’T THROW AWAY your cash just yet. If the International Currency Association (ICA) has its way, cash will never be found on the abandoned products pile next to the likes of eight-track tapes, dot matrix printers, and 16 ounces of coffee for under six bucks.

The ICA, which came into existence last year and sometimes refers to itself in the third person as “the cash lobby,” says its mission is to “support and promote currencies worldwide,” “provide a framework to foster innovation,” and “encourage the highest ethical standards.”

The ICA is not the sole pocket of resistance in “the War on Cash.” Last year Steve Forbes wrote,

The real reason for this war on cash … is an ugly power grab by Big Government. People will have less privacy: Electronic commerce makes it easier for Big Brother to see what we’re doing, thereby making it simpler to bar activities it doesn’t like, such as purchasing salt, sugar, big bottles of soda and Big Macs.

If you detect more than a hint of paranoia in Forbes’s remarks, I am with you. Still, his take is rather muted compared with that of people who see in digital banking no less than a prophecy-fulfilling harbinger of doom. One such warns:

Over the last several years, the banks, financial institutions, and governments have all colluded to remove the last traces of cash transactions … this war on cash is nearly complete. These developments show just how close we really are to the complete elimination of the paper money in your wallet and the rise of the Antichrist’s system!

Ideology and religion aside, there are a number of companies whose survival depends on keeping hard currency in circulation. These include marketers of paper, ink, holograms, sorting and counting devices, counterfeit detection training and products, intaglio printing presses, and, ironically, cash-shredding machines. Such account for a good deal of the ICA’s membership.

Yet the alleged war on cash hasn’t taken as many casualties as alarmists might have us believe. In its 2017 “State of Cash” report, the Federal Reserve Bank of San Francisco provides surprising information about the endurance of cold, hard, tangible currency:

Despite innovations in smartphone technology and mobile payment apps … The amount of currency in circulation has increased steadily over time, and demand for higher denominations has accelerated in the years since the 2008 financial crisis.

It also reports that:

In 2015, cash remained the most frequently used retail payment instrument, used in nearly one-third (32 percent) of all transactions, including bill payments … Consumers used debit cards for 27 percent of their transactions, followed by credit cards for 21 percent of transactions.

And that:

Despite its decline in share of reported transactions, cash was used for a variety of merchant categories, even when other payment options were available … Gifts and transfers to people, where cash was used for 75 percent of transactions, was the category with the highest share of cash transactions. Other cash-intensive categories included government and nonprofit purchases (40 percent), food and personal care supplies (39 percent), and auto- and vehicle-related purchases (39 percent).

So despite the histrionics of Steve Forbes and the ICA, it doesn’t look like cash will diminish to the point of being used only by contemporary Luddite holdouts anytime soon. It still has its uses. Legal ones, even.

Notwithstanding, consumers are discovering that digital transactions are more convenient than handling hard currency. P2P is obviating resorting to cash for gifts and personal reimbursements. And as digital wallets become more popular and easier to use, they are proving preferable even for smaller purchases, to date the cash transaction’s main stronghold.

It will be a long time before cash becomes obsolete, but I don’t think it’s irresponsible to suggest that it is in the early stages of obsolescence. The day may yet come when retail clerks need no longer be trained in the art of counting out change.

Posted in Uncategorized by Matt. No Comments

DNA and the woman
behind the mag stripe

credit-card-2308380_1280MOST PEOPLE COULDN’T tell you what DNA stands for (hint: deoxyribonucleic acid), much less pronounce it (dē-ˈäk … on second thought, never mind). But since its discovery in 1953, DNA has become a household initialism.

It’s no wonder, then, that the 1962 Nobel Prize in Physiology or Medicine went to Francis Harry Compton Crick, James Dewey Watson, and Maurice Hugh Frederick Wilkins “for their discoveries concerning the molecular structure of nucleic acids and its significance for information transfer in living material.”

Just one problem. Why the hell was Rosalind Franklin omitted? After all, on its page dedicated to Franklin, UC San Diego’s San Diego Supercomputer Center recounts:

Franklin persisted on the DNA project. J.D. Bernal called her X-ray photographs of DNA, “the most beautiful X-ray photographs of any substance ever taken.” Between 1951 and 1953 Rosalind Franklin came very close to solving the DNA structure.

In fact,

… Wilkins showed Watson one of Franklin’s crystallographic portraits of DNA. When he saw the picture, the solution became apparent to him, and the results went into an article in Nature almost immediately.

In the end, Rosalind Franklin …

… was beaten to publication by Crick and Watson in part because of the friction between Wilkins and herself.

Franklin’s tale has (at least) one corollary in banking.

It’s fairly well known among bank history buffs that IBM introduced the magnetic stripe for credit card use. It became the U.S. standard in 1969 and the international standard in 1971. As for the mag stripe’s origin, Wikipedia tells us:

Forrest Corry Parry (July 4, 1921-December 31, 2005) was the IBM engineer who invented the Magnetic stripe card used for Credit cards and identification badges.

And IBM tells us:

The first person to affix magnetic media to a plastic card for data storage was IBM engineer Forrest Parry. This was back in the early 1960s.

Trouble is, you have to read further to learn that Parry had some behind-the-scenes help. A few lines down, Wikipedia adds that Parry …

… had the idea of gluing short pieces of magnetic tape to each plastic card, but the glue warped the tape, making it unusable. When he returned home, Parry’s wife Dorothea … suggested that he use [an] iron to melt the stripe onto the card. He tried it and it worked.

Also a few lines down, IBM adds:

The story goes that he wanted to combine a strip of magnetized tape with a plastic identity card for officials of the CIA, and he couldn’t figure out how to do it. When he mentioned his problem to his wife, who happened to be ironing clothing at the time, she suggested that he use the iron to essentially melt the strip on. And that’s what he did.

Is it just me, or is “The story goes” diminutive? Either way, a fairer recounting might be, Credit for finding a way to place the magnetic stripe on plastic cards goes to husband and wife Forrest and Dorthea Parry.

On the positive side, at least Rosalind Franklin’s and Dorthea Parry’s stories can be found. A search for other banking innovations in which women might have had a hand turned up nothing, leaving me to wonder if Dorthea Parry’s tale was unique, or if history, per its habit, has simply overlooked banking’s female innovators. From a statistical standpoint, and from a look at other fields where female contributors have gone largely unsung, the latter seems more than likely.

The financial services industry today is awakening to the fact that women represent a huge chunk of the banking market, that banks overlook women at their peril (see Well’s Fargo’s “Women as customers”), and that women, once viewed chiefly as teller material, make powerful loan officers, managers, officers (see American Banker’s “Want to innovate? Hire more women”), and, finally, CEOs (see Bloomberg’s “A Female CEO of a Big Bank? The Odds Are Now Greater Than Zero”).

For a time banks’ laudatory treatment of women may have been or seemed, and to an extent may still be or seem, patronizing and self-promoting. If that is so, it is fast changing. The reality of women as a force speaks for itself.

I hope when my daughters are old enough to google “women in banking” and “banking innovations by women,” their search will be rewarded with a wealth of substantive, inspiring information.

Posted in Uncategorized by Matt. No Comments

Of zeroes, ones,
bricks, and mortar

Matt Wilcox Pro

To view entire chart, click image (opens new window with Bank Innovation article)

A few weeks ago, The Financial Brand published my article, “Digital is hot, but don’t close branches yet.” It seems I’m not the only one who thinks brick and mortar still provide value. “Branches still matter a lot,” says Chase CFO Marianne Lake Dimon, quoted in a recent Bank Innovation article by Philip Ryan, senior editor. Ryan adds—not, I’d say, without irony:

“The mobile growth at Chase comes despite CEO Jamie Dimon’s professed fondness for bank branches and their centrality to banking.”

Hold on. Despiteor partly due to?

Chase is obviously doing a number of things right. Marketing successes tend to emerge from a convergence of factors, so while it may be a mistake to give exclusive credit to physical branches populated by real humans, their value is not to be overlooked. As I wrote in the above-referenced article, Fiserv’s most recent Expectations and Experiences survey found digital banking devotees continue to value branches, even as their use of them diminishes:

Though the number of people who actually walk into a bank lobby may be shrinking – 54% of consumers said they visited a branch in the month of the survey, down from 61% at this time last year – the 39% who prefer live bodies can’t be ignored. Moreover, consistent with other surveys, the majority of consumers (60%) named “branch location” as a determining factor in their choice of primary financial institution.

That branches matter comes as no surprise to many. Earlier this year, The Financial Brand’s president, CEO, and publisher Jeffry Pilcher quoted a roster of industry leaders speaking to the issue. You can read all of the comments in their entirety by clicking here (which I recommend), so I’ll content myself by excerpting just one. It’s from Finsia’s Marion Williams:

“When consumers want advice or discussion, branches remain as relevant as ever. As long as personal service and relationships remain important, bankers and their customers will likely continue to do business face-to-face.”

Adoption of digital services enjoys geometric growth industry-wide, but adoption at Chase outstrips its nearest competitors Bank of America and Wells Fargo by a wide margin. Which is saying something: Bank of America and Wells Fargo are doing quite well themselves, thank you very much.

Posted in Uncategorized by Matt. No Comments

Besides Cookie Month,
it’s Cyber Security Awareness Month

2017 NCSAM Poster Revised 9.25.17- 508 compliant copyI AM REMISS. I allowed September to come and go without wishing anyone a happy Chicken Month. As long as I’m catching up, and despite my failure to send out greeting cards, I also hope you had a great Oatmeal Month in January and a happy Pig Day in March. And then there was International Beer Day in August. How on earth I missed that one is beyond me. I mean, it even has its own online countdown clock.

In my defense, every month and nearly every day commemorates something, so it can be easy to lose track.

The current month of October commemorates a couple of serious matters. It is Breast Cancer Awareness Month, which, each year, organizations such as the Susan G. Komen Breast Cancer Awareness Foundation and the American Cancer Society do a good job of reminding us.

On a less serious note, it’s also Applejack Month, Cookie Month, Pizza Month, and, fittingly, Sarcasm Month. But here’s one I for sure don’t want to let slip by unnoticed:

October is National Cyber Security Awareness Month (NCSAM).

The United States officially launched NCSAM in October of 2004, with a proclamation signed by President Barack Obama:

Cyber threats pose one of the gravest national security dangers the United States faces … Our commitment to maintaining an open, secure, and reliable cyberspace ensures the Internet will remain an engine for economic growth and a platform for the free exchange of ideas  … This month, we resolve to work together to meet this global challenge … I call upon the people of the United States to recognize the importance of cybersecurity and to observe this month with activities, events, and training that will enhance our national security and resilience.

The Department of Homeland Security website dedicates a page to NCSAM that provides a wealth of materials on self-protection, arranged by audience and by topic. There’s also a Phishing Awareness poster (above, right), weekly themes, and an invitation to join the campaign. Per its own description, the page is …

… designed to engage and educate public and private sector partners through events and initiatives to raise awareness about the importance of cybersecurity, provide them with tools and resources needed to stay safe online, and increase the resiliency of the Nation in the event of a cyber incident.

Though I encourage readers to check out the DHS NCSAM page, I tend to agree with author Dave Moore, who wrote in The Norman Transcript:

While things have improved over years past, if you are looking for information you can actually use to keep yourself, your family and your business safer, it’s hard for me to recommend the pooorly-organized Cyber Security Awareness Month section of the DHS website. While there is some good information there, it’s organized in such an oddball way as to drive away their potential audience.

Moore goes on to recommend a visit to the StaySafeOnline.org/ncsam website:

… Logical in its layout and comprehensive in its approach, there’s something here for everyone. I suggest taking a look at the Cyber Security Awareness Resources Library page and checking out the Future of Internet Security and Privacy video. It is very timely, especially in light of the recently-revealed hacks at Equifax and Yahoo. The Stay Safe Online section is good, too, full of good advice; check out the very timely Responding to Identity Theft and Managing Your Privacy articles. If I could choose only one Cyber Security Awareness Month-themed website, it would be this one.

Not surprisingly, IBM and other companies dealing in cyber safety products are helping promote NCSAM as well. Good. Their profit motive in no way lessens NCSAM’s importance.

I have posted before about the importance, in the financial services industry, of educating clients on the basics of cyber security. (For starters, see here, here, here, and here.) With the U.S. government, other nations, and other organizations taking on the topic throughout October, this might be a good time to hop on board. Financial institutions that haven’t already launched a full-blown campaign might consider an e-letter directing readers to some of the links above. Short of that, it’s not too soon to begin planning for next year.

Posted in Uncategorized by Matt. No Comments