💸 Banking on Innovation

^{"There's always a way - if you're committed."}

— Tony Robbins

👋 Friends, Rallie here. The newsletter making sure you don’t get locked out on the latest in crypto, finance, and tech.

On the menu:

• 💸 Banking on Innovation

• 🗞️ Headlines That Hit

• 📈 Refresh: Candlestick

• ✌️ Trivia Thursday

• 💯 Top Tweets

The Rallie Recap

🤔 Traditional banking, an area that many do not commonly associate with innovation, but will current pressures change that?

• 📢 With changes in the financial ecosystem occurring through innovation, the bar for banks and the need for adaptation is rising. 🌊

• This week, S&P Global followed Moody’s in cutting its credit ratings and outlook on multiple U.S. regional banks. S&P Global cited higher funding costs and troubles in the commercial real estate sector with higher deposit costs. 🏠

• Furthermore, the Federal Reserve is holding depositors from going to other high-yielding alternatives through higher interest payouts. 🤕

• 🇨🇦 On the Canadian side… banks are also experiencing higher provisions for potential credit losses and escalating costs for employees as technology eats into earnings. 😬

• In comparison, 🏛️ Canadian banks have higher surprise expenses than U.S. banks with upward pressure on loans due to higher debt service ratios and 2025’s mortgage refinancing risk. 💳

• The systemic issues in banking… 🏦 to add onto environmental pressures, experts also cite the banking industry’s key flaws and threats as part of the banking crisis.

• High interest rates pushed banks to pay more to keep deposits with many going to higher-yielding money market funds. 📈

• ❌ Low rate securities and loans are losing money due to rising interest rates and banks being unable to lend these funds out or invest them at higher rates.

• Banks are anticipating losses on commercial real estate loans in their portfolios as a housing crisis lingers. 🏘️

• In the first half of 2023, nearly half of the checking accounts opened in the US were opened by digital banks and fintechs. ✌️ An indication that banks need to reinvent what they offer to consumers to continue long-term consumer relationships.

• ⚙️ Meanwhile, most banking technology needs a revamp of its core systems which requires tech experts that many banks do not have.

• The need for genuine innovation at an organizational level has never been so strong.

• With 90%+ of banking touch points being digital and less than 10% of banks committed to reinventing their business and operating models, will change come? 😳

• In the U.S., some change might be forced to, 🇺🇸 as a House Democrat is pressuring big banks on the status of $32B USD in racial equity pledges. 🤝

• Meanwhile, 🦾 Citibank in the US has launched simplified banking, with relationship tiers, a streamlined product range and enhancements for the consumer experience.

• Although major Canadian banks such as RBC have implemented new technologies (eg. Robo-advisors), is it enough change for the Canadian banking environment? 🤨

• Innovation takes time, but are banks motivated to make it happen?

Headlines That Hit

• 🇮🇳 India beats Russia? India becomes the fourth nation to successfully land on the moon in a vital mission for lunar exploration, just days after a similar Russian mission failed.

• 🚒 Wildfire recovery. Some B.C. officials say recovery work from wildfires can start with federal, provincial and local support soon.

• 🤖 AI coming in hot! Nvidia, the top chip designer, expected to cause not only an industry rally but also an overall U.S. stock rally with its growth.

• ₿ Bitcoin’s divide. While most long-term BTC holders (held for more than 155 days) are in the green for their investments, ~88.3% of short-term holders are in the red, and some are selling.

Rallie Refresh: Candlestick

Have you ever seen a Candlestick graph? It’s a chart that looks like this ⬇️

🕯️ What is it?

• 👉 A candlestick chart is a financial chart that typically shows price movements of currency, securities, or derivatives. It looks like a candlestick with a vertical rectangle and a wick at the top and bottom. The top and bottom of the candlestick show open and closed prices.

• The real body is the wide part of the candlestick and indicates if the closing price was higher or lower than the opening price. ⚖️

• Black/red = Lower closing price

• White/green = Higher closing price

🔍 Common implications:

• Long white/green candlesticks can suggest a bullish price with strong buying and support pressure. 🛒 However, always remember to look at what is happening in the security’s industry rather than trusting one graph. 🛍️

• 🏷️ Long black/red candlesticks can indicate notable selling pressure with bearish prices.

Enjoying The Weekly Rallie? Help us grow by sending a referral our way! 🤩

✌️Trivia Thursday✌️

📊 The answer for Tuesday’s newsletter (What does ETF stand for?) is Exchanged-Traded Fund! Find out today’s answer on next week!

Trending Tweets

Our fav funnies to get you through the day.

Congrats, you made it to the end!

That's all for today. Stay hungry & we'll catch you next time. ✌️

DISCLAIMER: This is not financial or legal advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.