PayPal puts a move to the public cloud on its wishlist; the must-know banking hires and exits of 2019

Hello, readers.

Happy (belated) Thanksgiving! Most probably think of Black Friday and Cyber Monday as make-or-break shopping days for retailers. But as you might expect, here on the finance team we're more focused on the payments and card companies that help underpin all that spending.

Turns out, PayPal is already planning for the 2020 shopping rush. As we reported this week, the payments giant is working to move a portion of its services - including parts of transactions - into the public cloud for the first time. PayPal's CTO told us that the company is aiming to get 25% of traffic onto the Google Cloud Platform by the next holiday shopping season.

We've already written a ton about how financial firms (recently, even some holdouts) are slowly but surely embracing the public cloud. PayPal's tech chief Sri Shivananda explained why, for ecommerce payments in particular, it makes sense given seasonal extremes in volume. "When you run something on-prem, you build capacity for the peak of the peak, and you are holding on to that capacity. You paid for it, and you continue to depreciate it every day," he told us. Read all the details on PayPal's plans here.

American Express - both a card network and issuer - may be associated more with corporate cards and airport lounge perks, but for 10 years it's also put a lot of effort into pumping up its own post-Thanksgiving shopping promotion for small businesses. Banks have beefed up rewards on their own cards, which has in turn has been upping the pressure on AmEx to get in front of more people in more places. (Oh, and last week, the Wall Street Journal reported that AmEx has been paying some small businesses hefty sign-on bonuses.)

A recent AmEx event in New York trotted out "Hamilton" writer and composer Lin-Manuel Miranda as a spokesperson. There, we saw how the card company is hoping it's found a sweet spot blending digital and brick-and-mortar using tech like biometric flavor recommendations for doughnuts and augmented-reality wine bottles. And a FedEx same-day delivery robot was twirling around there, too, making for a mesmerizing GIF ... words can't really do it justice, so check out the full story here.

We've taken to using the phrase "blockchain shrimp" as shorthand for some of the splashy, tech-heavy card showcases we've been attending over the past few months (this story should explain the reference.) But the efforts do all tie in with broader trends -VC investors have told us why payments companies old and new are under pressure create a shopping experience as opposed to just moving money from Point A to Point B.

Shopping aside, we had some must-reads this week on Wall Street people moves. Goldman Sachs has assembled a team of senior bankers devoted exclusively to building relationships with middle-market private equity firms, a first for the investment banking giant - read here for details on the key hires. Private equity giants like Blackstone have been expanding their rosters by hiring operating partners to squeeze returns out of portfolio companies that have been bid up by mountains of dry powder. Read more here to learn where firms are looking to do even more hiring.

We also rounded up the biggest investment banking people moves of 2019: see the full list of 40 here. We discussed some of the key factors that shaped hires and exits across Wall Street, and how the turmoil at Deutsche Bank meant that competitors swooped up at least 15 MDs in the US alone so far this year. So to do that justice, we decided to also assemble a breakout of the must-know Deustche Bank departures.

Keep reading below to see how we unpacked the proposed Charles Schwab-TD Ameritrade deal; heard one real estate exec's take on how to fix affordable housing; and explain what exactly a family office is and isn't. Plus - a roundup of the latest fintech and proptech news.

Enjoy the weekend!

Meredith


Fintech and propetch news

real estateREUTERS/Peter Nicholls/File Photo


Charles Schwab's $26 billion deal for TD Ameritrade is an aggressive play for size that was set in motion before brokers started slashing commissions

TD Ameritrade branchIn this April 16, 2009 photo, a worker polishes the metal window frame of a TD Ameritrade office in New York. Online brokerage TD Ameritrade Holding Corp. said Tuesday, April 21, its second-quarter profit dropped 29 percent because of lower asset-based revenue, but the results were in line with Wall Street expectations. It is also affirming its guidance for full-year earnings.AP Photo/Mark Lennihan

Charles Schwab ended days of speculation on Monday by announcing plans to buy its smaller rival TD Ameritrade in an all-stock deal valued at about $26 billion.

That sets the stage for a megamerger that would remake the US discount brokerage landscape, and it comes after rapid-fire moves to slash commissions rocked the industry and fueled chatter that consolidation and cost-cutting would follow.

The San Francisco-based Charles Schwab and the Omaha, Nebraska-based TD Ameritrade, the two largest publicly traded US discount brokerages and registered investment adviser custodians, would together oversee some $5 trillion in assets.

Deal talks were underway before the two discount brokerages announced they would eliminate online trading commissions for US stocks and exchange-traded funds in October, a source familiar with the matter said, and scaling up amid the industry's fee pressure was a main driver.

READ THE FULL STORY HERE


Family offices are gaining visibility, but remain tricky to define. Here's how an HSBC private bank exec explains the term to ultra-rich clients.

family office 4x3Ruobing Su/Business Insider

When it comes to overseeing the wealthiest families' complicated financial lives, executives toss around the phrase "if you've met one family office, you've met one family office." In other words, no two family offices are the same, because no two families are the same.

Pinpointing the precise size of the single- and multi-family office universe is difficult given the secrecy with which many of them operate. Business Insider has previously reported that family offices, historically an opaque corner of the wealth universe, are seeing slightly more light than in the past. That's thanks in part to the desire to partake in more direct deals (the practice of investing directly in a company rather than through a vehicle like a fund.)

Carly Doshi, the head of philanthropy and family office governance at HSBC's private bank for the Americas, recently spoke with Business Insider about how she explains the term to ultra-rich families, and what deploying a family office actually looks like in practice.

READ THE FULL STORY HERE


Developers have zero incentive to fix the affordable-housing crisis. Here's what one real estate exec thinks could change that.

NYC affordable housingAP

Americans are spending 37% of their income on housing expenses, seven percent higher than the standard measure of housing affordability.Housing affordability is plummeting, inventory is declining, and the high cost of labor and construction makes building new middle-income housing financially untenable for developers.

These factors have led to a squeeze in middle-class housing, one that's led venture capitalists to invest in construction tech that drives the cost of development down, and activists to push for rent control measures across the country.

At Nuveen's Real Estate Roundtable 2020 event last week, James Martha, managing director and head of housing sector in the Americas, highlighted middle-income rentals as a sector of concern. Simply put, there isn't enough affordable housing, and developers aren't incentivized to build more affordably-priced stock.

READ THE FULL STORY HERE


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