Category Archives for Technology

For Simple, The Struggle for Active Users; For BBVA, A Big Bet

Quartz was able to obtain an internal document outlining the recently acquired (for $117 million) subsidiary of BBVA current “key” metrics.

The outlook described Simple’s struggle to gain active users

Qz: 

The draft Simple document refers to 33,387 active customers in April, up 4.5% from March. But it notes that “customer acquisition is slower than expected” and “deposits per customer are growing slower than expected.”

In a response, Simple CEO’s Joshua Reich didn’t necessarily address the issue. But he did clarify the issue:

Like most businesses, we’re looking for active customers. Banks have traditionally defined ‘active’ as any customer who’s made at least one financial transaction within a month. This definition doesn’t work for us. We’ve found that our customers benefit from Simple most when they use it as their primary bank account, marrying their spending and saving with our real-time transaction data and Goals. Because of this, we set a higher bar to measure activity.

Simple’s active definition takes into account both swipe frequency and deposits. Our goal is to build a banking experience that our customers love. Our active customers are already swiping their Simple Visa® Cards multiple times a day, while the average bank customer swipes a few times per week.

When  BBVA bought Simple, it said it was doing so for its customers — obviously a point of contention. Still, for the Spanish banking company, Simple isn’t only a source of (relatively small) revenue.

It’s also, most likely, a petri dish of sorts; A sandbox of new features for a tech savvy audience.

Something the Spanish-banking company is already trying to do with its NBA banking account, and its corporate venture capital arm.

@AmerBanker on BBVA Ventures (January, 2013):

Financial services companies with a keen eye for innovation are making venture capital investments.

They’re funding and incubating early-stage, high-risk technology companies. They’re seeding their investments in Silicon Valley, Silicon Alley in New York City,Silicon Prairie in the Midwest and wherever else such companies are creating financial technology.

Banco Bilbao Vizcaya Argentaria recently said it would invest $100 million through its newly created BBVA Ventures arm.

Illinois Utility Company Hacked; Operations Weren’t Affected, DHS says

Reuters:

A sophisticated hacking group recently attacked a U.S. public utility and compromised its control system network, but there was no evidence that the utility’s operations were affected, according to the Department of Homeland Security.

DHS did not identify the utility in a report that was issued this week by the agency’s Industrial Control Systems Cyber Emergency Response Team, or ICS-CERT.

…

The agency said the hackers may have launched the latest attack through an Internet portal that enabled workers to access the utility’s control systems. It said the system used a simple password mechanism that could be compromised using a technique known as “brute forcing,” where hackers digitally force their way in by trying various password combinations.

The evidence of such an attack proves that this type of intrusion is possible anywhere in the country, even, here, in Georgia. Interestingly, however, this isn’t the first time that an Illinois utility company has been under such scrutiny.

Christian Science Monitor (November, 2011):

A foreign cyberattack on the computer control systems of an Illinois water utility system earlier this month burned out a water pump, according to a recent state report. The attack may be the first known attempt to successfully destroy a piece of critical US infrastructure, say industrial control-system experts.
The Federal Bureau of Investigation and other agencies are investigating the Nov. 8 cyberattack, said Peter Boogaard, a spokesman for the Department of Homeland Security (DHS), in a written statement. The name of the utility was not released.

Federal Investigators would later go on to deny that the breach occured.

Children and Computer Science

I have a four-year-old brother.

His name is Jacob. He’s smart — honestly remembers details about the world that I couldn’t begin to recall (“Sean-y, you like wearing black-socks,” upon seeing my choice of foot garment, and hearing me say that six months before).

And, obviousbly, he’s adorable.

It is for all of those reasons that I’m forced to find myself consistently thinking about how computer science will play into his future.

Fortunately, or unfortunately, depending on your perspective, there’s a movement of entrepreneurs that are trying to take advantage of nervous parents (and big, big brothers like myself) hellbent on preparing kids for tech careers.

Play-i, of Mountain View, Calif., for instance.

From (my favorite) IEEE Spectrum:

Yana and Bo play hide-and-seek.

These colorful robots are not only fun to play with—they can teach kids computer programming skills. That’s what Play-i, a Silicon Valley startup founded by engineers from Google, Apple, and Symantec, says about its robots, unveiled this week as part of a crowdsourcing campaign.

The idea of using robots to teach kids programming, math concepts, and problem solving is not new. In fact, it’s been more than 40 years since MIT educator Seymour Papert demonstrated the possibilities of hands-on learning with his Logo programming language and mobile machines known as “turtle robots.”

 

Square’s Balance Sheet: Fortune

The downfall of payments processing company Square shouldn’t be news to anyone who is deeply entrenched in the industry.

The company’s balance sheet was always mysterious to those that understand the business behind transactions; But Fortune, this week, got its hands on some interesting information:

Some earlier reports suggest Square loses money on every transaction in its core payments business. But internal e-mails show that gross margins on transactions — the amount of profit left after paying card processors, payment networks and other intermediaries — are a relatively healthy 34%. On a $100 transaction, the company takes a cut of about $3, which it records as revenue and from which it earns about $1 in gross profit. According to the internal e-mails, company is processing about $30 billion in transactions annually, which would put its gross profit at an annual rate of about $300 million. (These figures exclude the transactions Square handles on behalf of Starbucks; more on that below.)

…

Internal projections show that the company expects to start turning a profit about a year from now, according to the documents reviewed by Fortune. (An alternate plan that contemplates more aggressive investments in new products shows profitability would be delayed by a couple of months but would increase at a faster rate afterwards.) Though the company expects its cash reserves to decline between now and then, its projections show that a turnaround will happen before Square would run out of cash. Further, the company recently secured a $225 million line of credit — a total higher than what has been previously reported — that will give it additional breathing room. People familiar with the company’s finances say that its projections are relatively conservative, and do not include revenue from Square’s new (and as yet unproven) products, which could conceivably help the company reach profitability sooner.

Though the company recorded am overall loss of roughly $100 million in 2013, its EBITDA loss, a commonly used accounting measure, was $67 million, according to the internal e-mails. The loss, which excludes Starbucks transactions, was $12 million lower than the company had projected and slightly smaller than the year before, the e-mails show.

How Banks Share Your Data

Bankers share your personal information — it’s a fact of life; Federal law allows them to do so.

A while back I received a message saying just that from Valley National Bank of Wayne, N.J.

The notice (which the bank is required to disclose) describes what the financial services company does and does not do with my social security number; account balances; transaction history; income information; asset transactions; and account transactions. Continue reading →