Weekly Briefing No. 163 | How Awards Shape Behavior, Big Changes for a Venerable Financial Brand, and more


Welcome to The FR.  We’re always on brand.

In this edition:

  • How Awards Shape Behavior

  • Georgia’s Role in Charlotte’s Rise as a Banking Hub

  • The (Almost) End of a Venerable Financial Brand

  • What Makes for a Good Fintech Workplace?

  • A Shoddy Business Accelerator

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How Awards Shape Behavior

From the Oscars on down, people have differing opinions when it comes to the validity of awards. But after listening to a recent Hidden Brain podcast (See below), it’s clear that beauty is in the eye of the beholder — and it’s worth considering their merit.

That’s because economist Bruno Frey makes a compelling case for why well designed awards can have a significant, positive impact on behavior. Some of that impact comes from the idea that the award recipient feels an obligation to live up to the honor. Frey cautions, though, that too much of a good thing is a bad thing. That is to say that if everyone gets a gold star, the value of that star is diluted to the point where the award becomes a joke — which is then mocked by folks like us.


Georgia’s Role in Charlotte’s Rise as a Banking Epicenter

Have you ever wondered why Charlotte, N.C. has come to almost rival New York as a banking capital of the country? The reasons are of course myriad and filled with many nuances, but a very interesting piece this week in the Atlanta-Journal Constitution posits that highly restrictive laws against bank expansion in Georgia are a main culprit.

According to the piece, for many decades Georgia made it highly onerous — if not impossible — for banks to expand into counties where they didn’t already have a presence. That means banks’ only recourse for expanding to a particular area in the state meant acquiring, usually at a high price, a bank that already existed there. The article notes that such laws were initially designed to protect local community banks from the “Wall Street octopus,” but lawmakers who were interviewed in the article who even championed such regulations at the time now say they regret it, and that the laws led to many big banks decamping from Georgia and relocating a couple hundred miles north.

Did the state’s archaic regulations around bank expansion play a pivotal role in Charlotte’s rise as a banking hub? It’s hard to say with certainty, but it is an interesting point to ponder regardless.

The End of a Venerable Financial Brand

In a noteworthy move, Bank of America said Tuesday it would phase out the 105-year-old Merrill Lynch name for its investment banking and trading divisions. These businesses will now be known as BofA Securities. The main financial advisory unit will still operate as Merrill Lynch Wealth Management, and the logo for wealth management products will still include the famed Merrill bull.

Bank of America acquired Merrill Lynch during the height of the Financial Crisis in 2009, allowing its brand name to live on at a time when peers such as Lehman Brothers and Bear Stearns went belly-up. But now, ten years later, the Merrill Lynch name will be (mostly) gone.

What Makes for a Good Fintech Job?

A start-up fintech needs, first and foremost, an innovative idea in order to be successful. But nearly as important are attracting and retaining quality workers. Why are some more successful in that regard than others?

American Banker polled employees at a range of fintechs to answer that question and shared the results in its “Best Fintechs to Work For” series this week. Not surprisingly, pay and benefits topped the list. However, the companies that scored at the very top offered additional perks to employees that went above and beyond. Some examples include contributing to an employee’s newborn’s 529 savings plan, access to an on-site gym and yoga classes, and, yes, beer on tap.

It’s interesting to see what employees consider most when evaluating job satisfaction: money matters most, but as this list shows, the little things can go a long way.

A Shoddy Business Accelerator

This week, so-called serial entrepreneur Kyle Geoffrey Sandler pleaded guilty for creating a sham accelerator in Opelika, Alabama (the Round House) that swindled the entire community. According to one of the locals that backed Sandler’s ambitious initiative, Sandler was a good promoter and pitchman.

But while Sandler will now be spending time in orange, hucksters in general have cause to celebrate. The reason? The CFPB — which today should perhaps stand for the Consumer Fraud Promotion Bureau — has rolled back looming rules that would have required lenders to verify the income of prospective borrowers and ensure that they have the wherewithal to pay back loans. Had such rules gone into effect, payday lenders would have had a much more difficult time trapping low-income individuals into debt spirals. That would have been great for the nation, but horrible for the Sandlers on the loose. Fortunately for them, payday lenders have friends in high places who decided to take action.

To make matters worse, evidence is now emerging that a front group for the payday loan industry, the so-called Short-Term Loan Bar Association, actually had a hand in commissioning the fraud studies that were cited by the CFPB as the basis for nixing the rules. For online lending start-ups out there, now is the time to act aggressively to step up your education efforts and offerings that propose fair and transparent terms to lower-income borrowers.

Quote of the Week

“Awards can give you a tremendous amount of encouragement to keep getting better, no matter how young or old you are.”

~ Alan Alda