The Banksy effect could reach FX – Op Ed

Bristolian vandal and graffiti art activist Banksy has developed a huge following. What does this tell us? That anarchists can be turned into customers, and that this is the future direction of FX industry innovation

Love or loathe him, Banksy has become a worldwide anomaly.

More than just a vandal or a graffiti ‘artist’, he has for several years made banal and off the wall statements through his pseudonymous scrawlings which adorn the walls of other people’s property from New Orleans to New Barnet.

Banksy began his public debut into the underworld of creating anonymous murals in 1990, almost 30 years ago, at the time simply emulating the method of many other rebellious late 1980s anarchists whose point was to adorn prominently positioned walls and buildings with illustrations of questionable taste in order to bamboozle the mind of the conservative middle classes across the United Kingdom who had improved their standards and embraced capitalism and freedom of choice during the self-empowering Thatcher years.

Innocuous but absurd, not that many people took note, apart from a few similarly minded and equally socially sub-culture orientated unemployables in Banksy’s home town of Bristol, England.

Almost three decades on, however, things are somewhat different.

As the melancholy proliferation of geopolitical unrest hung like a 1950s smog over the government buildings of Western free market nations, Banksy began to capitalize – if you’ll excuse the pun – on the side effect, this being a new generation of post-industrial decline era youth who had been herded through polytechnic colleges in provincial towns, picking up membership cards to counteractive groups which encourage them to rail against the middle class society that raised them and then blame it for what they saw as global failures.

Innovation in the retail sector would avoid this and turn anarchists into customers

Banksy portrayed capitalism throughout the last two decades as an evil and macabre force which is being operated by the faceless and the unknown, therefore dehumanizing it which assisted him to put it into what is now considered to be artistic interpretations of the free market economy which has led the Western world’s majority to comfort, freedom, calmness and self-determination.

During those years, nobody really paid attention apart from those who would be encouraged to join the “Occupy” movement, but today, financial technology has taken the best parts of the highly advanced structure that underpins Britain’s leading edge capital markets economy and packaged it into a system that could perhaps appeal to, and appease, the Banksy brigade.

In 2011, Banksy stenciled a woman falling to the ground while clutching her shopping cart full of goods. Below on the lower right portion of the stretch, verbiage reads, “COPS AGAINST CUTS * The G=Good Cops.” Toting the artist’s usual subliminal overtones, the piece arrived at a time of year when consumerism had continually been questioned due to heightened economic overspending, and at a time when the electronic investment market had experienced what at-the-time CEO of FXCM Drew Niv stated to be “the lowest period of volatility in the last 20 years”.

Banksy’s point had been analyzed by art critics (what are we coming to, art critics now commenting on graffiti!) as a deliberate note to those who console themselves in consumer spending that it will lead them down a road to ruin.

Perhaps the most intriguing part occurs when you walk past the final display and enter the gift shop at Flag Wall, which was part of a 2006 Los Angeles exhibition, which contained several expletive-laden works demonstrating absolute anger at capitalism.

There were huge amounts of overpriced merchandise from mugs to T-shirts, along with a large Aroma coffee stand. The large swath of progressive admirers were perusing and purchasing these items with great gusto, which is rather ironic considering Banksy’s art is usually interpreted as ultra left-wing, anti-establishment and pseudo-anarchistic. Moreover, it’s violently opposed to the capitalist impulse witnessed in this gift shop.

Therein lies the opportunity that modern British entrepreneurs have seized, which is extremely clever.

There are two nations at the moment which lead the retail financial revolution, one is Britain, the other is Singapore.

Shop Till You Drop? No need anymore with the new types of retail product available

New companies like Revolut and Robin Hood have begun to offer capitalist opportunites to a would-be Banksy audience. People who like their own independence, want their own home, want their nice new car and choice of everything from mung beans at the local fair trade health store to brand new pink All-Star trainers whilst on a 5-star hotel-based surfing tour in California, yet publicly do not align wth the suited-and-booted notion of Chartered Accountant-style economics and traditional conservative governments backed by central and shareholder-owned financial giants that date back to the merchant naval period 400 years ago.

Capitalist anarchism is rather different to the anti-capitalist type in that there is no riotous behavior, but perhaps the riotous behavior in those who favor the new entrants such as Revolut would display their railing against the traditionalists by divesting from retail banks – themselves not exactly holders of clean copybooks – and therefore becoming holders of their own future without viewing themselves as captives of the banks.

The absolute wrong turn for self-directed investors to take would be to consider any form of digital asset to be a worthy alternative, as it simply is not. It is a way to lose your shirt. However, last week I made a quick test and comparison between traditional international bank accounts which can be used for settlement in various currencies and worked out that if a small business has to pay $5000 per month to suppliers all over the world, the average cost of this by using bank transfers from a regular bank would be around $400. That is a fortune! It is 8% of the entire payment!

With a traditional bank’s business debit card, costs are lower but by the time the bank has made its own market for FX transfer fees, and added the credit card charges, it would be $120 to process $5000 over a series of 10 transactions to Asia, Europe, America and Australia.

Nowadays, Transferwise and Travelex, both of which are not banks, but currency transfer and deliverable FX firms, will allow customers to deposit money with them and hold it in a type of account (although NOT a bank account) and then use a debit card anywhere in the world and all that is paid is the actual spot FX rate with zero charges or conversion rates or commissions.

Therefore by using this type of service instead of a bank, the cost goes down to zero.

You don’t see this on £10 notes….

This is a trick that is being missed within many retail FX businesses. Some companies, notably Saxo Bank and Swissquote, offer private investment services and alternative methods to traditional means of holding money, and Interactive Brokers will actually give loans on balances to retail customers, so there are some firms looking to compete with mainstream retail investment methodology, but it is largely restricted to those with their own trading infrastructure.

Conversation within the retail FX sector for many years now has often centered around the lack of diversity and therefore complete similarity which blights over 1000 MetaTrader 4-based brokerages worldwide, and this is now a bugbear which is paving the way for companies such as Revolut and Robin Hood to increase their market share among young, technology-savvy investors with a will to be totally independent and control their entire financial circumstances without being reliant on structured frameworks of banks.

The British authorities also back all customers of all financial product providers with the Financial Services Compensation Scheme, thus, if something goes awry, they are protected by an £85,000 cushion. With all the noise made by those touting digital assets as the key to freedom, where is the safety net or government recognition? Non-existent. Where is the litany of demises, exchange owners running away with money with no recourse and fake token scams? Loud and clear.

Terrible politics, but our future customers.

In essence, the only way to be an ‘anarchist’ in the financial and online brokerage world is to do so by providing sensible freedom to customers, backed up by proper and recognized recourse and arbitration.

Yes, the insurance industry went down the route of empowering customers in the 1990s with many comparison sites having become extremely popular, allowing customers to search for insurance policies specific to their needs and then get the lowest price and apply for the policy directly through the website, yet this is no good in our industry because it relies on affiliate schemes, which are very much a conflict of interest between broker and customer.

Yesterday in Cyprus, a brokerage executive quite rightly said to me “Its not logical to go down the affiliate route. There is no way anyone can grow like that. Customers need to have the same interest as brokers. We are a technology-centric industry and should behave like one. Customers should be able to pay per package. If a comparison site would exist in which 15 products are shown as a fit for one customer, then you of course pay a higher fixed fee or higher than you’d pay as affiliate deal but you gain far more accessibility long term.”

Michael Taube, a former speechwriter for former Canadian prime minister Stephen Harper, got it spot on.

Commenting on Banksy’s anarchistic mentality which has now gone commercial, he said “I contacted Tony Chapman, a communications/branding expert who I sometimes appear with on media panels, to see if he also felt this particular scenario was hypocritical. To see Steve Lazarides, Banksy’s former manager, tag his creative genius by staging an unsanctioned exhibit, complete with a souvenir shop, is the greed Banksy graffitied against,” Chapman responded by email. “I can only await his response – and I envision a large mural featuring a rat with a human face.”

It is quite clear that should any traditional financial services executive from any jurisdiction take a tour of middle management 30-somethings with a comfortable lifestyle in any company in any industry – basically the exact target market of an FX firm – and asked them what they think of the banks, they’d also probably say the same thing.

This is why the FX industry has a massive opportunity to displace the traditionalists and provide the holistic, comprehensive banking, financial markets and self empowerment facility of the future.

 

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