The bulk of the news in the financial world this past week was not pretty. The top stories forced us to consider whether the people who run our global financial system are inept or evil. Was Facebook’s IPO just unethical and sloppy? or was it an illegal conspiracy to fleece public investors while banks and other early investors got rich? Was JP Morgan’s disastrous London trade a simple mistake? or the result of arrogance and nepotism in the Risk Management department? And so our focus turned to smaller matters: what to do with yourself after graduation, what deals sites are up to (and if it matters) and the like. What wealthy bankers do can be infuriating, but it’s well out of your control. Focus on the small stuff this week.
There’s plenty of other interesting things happening in the world of money that might have a positive effect on you. Take Mint’s updated iPad app, for instance. Our own Zachary Ehrlich walked through the app with its product manager Ken Sun, who showed him the changes that Intuit had made to its app. Simon checked out ReadyForZero, another app that helps manage users finances. This one, however, focuses on helping its users pay down their debt.
Not all financial innovation is good news, however. Credit default swaps, for instance, are a financial innovation that I’m not sure we need. On the consumer end of things, we saw two financial innovations we think young people could do without. On Monday we looked at a study put out by Think Finance that suggested young people are turning toward alternative financial products these days because they prefer them. Funny thing about that survey is: it was conducted and published by a provider of somewhat predatory alternative financial products.
And then we saw Zynga and American Express teamed up to create a new sort of prepaid card: one that rewards real world spending with virtual world rewards. Now when you spend money loaded onto your Serve Zynga Card, you’ll earn the ability to buy pixelated cows in FarmVille. To anyone excited by that prospect: I’m sorry.
On the deals front, there was some odd news that broke Thursday: Groupon is rolling out a card swipe dongle. Why, why why? And Simon checked in to explain why he doesn’t fall victim to Groupon, Living Social or their ilk: these websites encourage spending, and that’s not going to attract savers. That said, his American Express, with its local deals, never leaves his wallet — there’s a lesson there, marketers!
And in regulatory news, we learned that, yes, the CFPB will indeed be creating some sort of regulations for prepaid cards. This is a good development, considering how many consumers might be pushed into this market in the future. And, we checked in on Senator Sherrod Brown’s bill that seeks to break up the six biggest banks in the U.S. — does it stand a chance? Here’s a hint: not really.
But that’s completely out of your control, so don’t worry. Enjoy your Memorial Day weekend.