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<ul class="summary-list"><li>Investors face diminishing returns from cash alternatives as interest rates decline.</li><li>Money market funds offered low-risk yields, but missed gains in the S&amp;P 500.</li></ul>Just a year ago, if the stock market got bumpy or felt risky, investors could shave a bit off their positions and park in cash-like <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/banking/what-is-a-money-market-account">money market funds</a> yielding slightly over 5%.Today, cash alternatives are yielding slightly less. Still, they remain near or above 4.5%, which is a tempting return in exchange for no risk. But as we head deeper into an <a target="_blank" class="" href="https://www.businessinsider.com/fed-cut-rates-inflation-powell-blackrock-ceo-larry-fink-2024-10#:~:text=The%20Federal%20Reserve%20will%20disappoint,a%20rise%20in%20global%20inflation.">interest-rate-cutting cycle</a>, the benefits of sitting on the sidelines will diminish, and investors will need to rethink their strategy.While the perk of a low-risk asset with a decent yield seems like a sweet deal, it actually did some investors a disservice, says Mark Malek, the CIO at Siebert. Specifically, those who didn't have liquidity needs but chose to sit in cash anyway missed out on a strong year for the S&amp;P 500."I'm going to say something controversial, which is that we weren't having as many of these conversations when money markets were almost zero," Malek said. "Clients had no other alternatives, so they were putting their money to work in the equity markets or in the best bonds they could find. Many people should have probably invested in equities and would've probably gotten great returns."The main advantage money markets give investors is quick access to their cash, followed by lower risk and then a decent yield. The former is harder to match. But the latter two can be found in <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/investing/treasury-bonds">Treasuries, notes, and bonds</a>, Malek said. By sticking to shorter-term Treasuries, investors can still meet their liquidity needs."That's where the whole conversation changes because now you're saying, 'OK, we can get you into a three-month bill, but then you would want to hold that,'" Malek said, adding that he would never advise a client who needs liquidity to go further out and buy a two-year note. And anyway, the yield curve is inverted, meaning there's no term premium, with the best yields coming from the one-month out to the six-month Treasury.It's about gauging liquidity needs and then sticking to bills or looking for older notes that are months away from maturity, Malek said. The main challenge with going shorter term is the rollover risk, which happens when you're faced with less favorable yields once the current Treasury matures. For investors who don't have immediate cash needs, Malek advises a six-month bill at a 4.5% yield since he expects rates to be 75 basis points lower by then. If liquidity needs arise, investors may be able to sell for a profit if the Fed's cutting cycle is steeper than expected, he added.Investors with a bit more of a risk appetite who want to maintain a yield just over 5% should consider investment-grade corporate bonds, which are AAA to BB-rated, Malek said.<h2 id="ac89e755-a442-47d7-b00d-34e1f8eb6a94">Dollar alternatives</h2>While interest-rate cuts are part of the move away from cash, there are other factors that make the dollar, in general, a crummy place to be right now, says David Miller, the CIO at Catalyst Funds.Inflation remains present even if it's not as high as it was. The Federal deficit continues to balloon. And, the weaponization of the dollar against countries like Russia has made it less attractive globally, Miller noted.Based on these additional concerns, Miller says the closest alternative would then be <a target="_blank" class="" href="https://markets.businessinsider.com/news/commodities/gold-price-record-high-became-etf-interest-rates-trump-costco-2024-10">gold</a>, and big money is vying for it. Central bank demand for gold reached its highest in a decade in 2022 and 2023. Although it slowed in 2024, it was still up by 6% from a year ago in the second quarter, according to the World Gold Council.Investors may feel queasy about the asset as it hits peak prices near $2,800 per ounce. But you have to consider the value of the dollar against that backdrop, Miller noted. Simply put, the M2 money supply, which includes cash and cash alternatives, has skyrocketed since 2020 by over 36%, debasing the dollar.For investors looking for that gold alternative, Millers says they can <a target="_blank" class="" href="https://www.businessinsider.com/how-to-invest-in-gold-price-record-highs-safe-haven-2024-10">buy coins, bars, and even gold ETFs</a>.<a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/investing/buy-bitcoin">Bitcoin</a> is another alternative that more risk-prone investors look to. As of Tuesday, it surpassed $71,000, hitting near its all-time highs as hedging demand grows. While it has similar liquidity to cash, it's much more speculative, Miller noted.

Cash is no longer king. Here are 3 alternatives investors are trading it for, according to chief money managers.

Our experts answer readers' banking questions and write unbiased product reviews (<a href="https://www.businessinsider.com/personal-finance/personal-finance-editorial-standards#rating-banking-products" class="not-content-link" target="_blank">here's how we assess banking products</a>). In some cases, we receive a commission from <a href="https://www.businessinsider.com/personal-finance/our-partners" class="not-content-link" target="_blank">our partners</a>; however, our opinions are our own. Terms apply to offers listed on this page.Bottom line: The Cash App Mobile Banking - Product Name Only has no fees and unique perks, and it's easy to get one thanks to no minimum deposit. However, it's not a traditional checking account, so it's probably not the right choice if you want access to a full-service bank.<h2>Cash App Banking Review</h2>Cash App is best known for letting users <a href="https://www.businessinsider.com/personal-finance/how-to-wire-money-send-receive-cash-immediately">transfer money</a> to each other, but the company also offers the Cash Card through its banking platform. It's similar to a debit card since you can deposit cash at retail locations, direct deposit your paycheck, and withdraw money at ATMs. But there are some notable differences from your standard debit card — it's easier to set up, there are fewer fees, and you can round up transactions to invest in bitcoin or stock.The Cash App Cash Card is a strong account with no minimum deposit or monthly fees, making it more accessible than some more traditional <a href="https://www.businessinsider.com/personal-finance/best-checking-accounts">checking accounts</a>. Creating an account takes a few seconds, and once you apply, you can get instant access via Google Pay or Apple Pay. But if you use an ATM outside the network, you typically have to pay $2.50 per transaction. You also have to pay $1 per transaction to deposit paper money at retail locations, which can add up.The Cash Card also offers in-app integrations like Round Ups and instant discounts. With a few clicks, you can enable Round Ups, which automatically rounds up your purchases to the nearest dollar. You can put the extra money in your Cash App savings account, select a stock, or invest in bitcoin.Cardholders can also utilize offers for instant discounts at checkout. Cash App provides offers for various retailers, including coffee shops, retailers, and restaurants. Once you activate the offer within the app, you can use it when you pay. <h3>Cash App Pros and Cons</h3><table style="border-collapse: collapse; width: 100%; height: 44px;" border="1"><tbody><tr style="height: 22px;"><td style="width: 50%; height: 22px;">Pros</td><td style="width: 50%; height: 22px;">Cons</td></tr><tr style="height: 22px;"><td style="width: 50%; height: 22px;"><ul><li>No monthly fees or overdraft fees</li><li>Receive your paycheck up to two days early with direct deposit</li><li>In-app discount offers for purchases with certain retailers</li><li>Round up purchases to invest in stock or bitcoin</li><li>FDIC-insured account</li></ul></td><td style="width: 50%; height: 22px;"><ul><li>$2.50 charge for out-of-network ATM transactions unless you direct deposit $300 or more each month</li><li>No joint accounts</li><li>$1 fee per transaction to deposit paper money at retail locations</li></ul></td></tr></tbody></table><h2>How Cash App Banking Compares</h2><h3>Cash App Banking vs. Chime Checking Account</h3>Like Cash App, Chime aims to remove barriers that prevent customers from opening accounts. You don't need to undergo a credit check or banking history review. You also won't pay fees or have minimum account balance requirements, which is similar to the Cash Card. The main difference between the two options is that Chime Checking is a bank account, and Cash App is a financial platform that offers a debit card. Both companies provide solid products that prioritize accessibility. The type of card you want will determine which is a better fit.<a href="https://www.businessinsider.com/personal-finance/chime-bank-review">Chime Banking Review</a><h3>Cash App Banking vs. Capital One 360 Checking Account</h3>Capital One is an <a href="https://www.bankrate.com/banking/best-online-banks/" target="_blank" rel="noopener">online bank</a> with various account options, including the 360 Checking Account. The account offers the typical features associated with top banks — no fees, no minimum deposit, overdraft protection, and a user-friendly app. You have to pay a $2 fee for using an out-of-network ATM, which is nearly the same as Cash App's fee. Capital One offers a discount program with the Capital One Shopping browser. However, the in-app Cash Card discounts provide a more seamless customer experience. It's easy to set up an account with Capital One, and if you prefer access to in-person branches, it might be a better pick. Plus, once you have a Capital One account, applying for additional ones only takes a few seconds. <a href="https://www.businessinsider.com/personal-finance/capital-one-bank-review">Capital One 360 Bank Review</a><h2>Cash App Banking FAQs</h2><h3 class="faq-question">What banking does Cash App use?</h3>Cash App is not a bank. Since it's a banking platform, Cash App partners with Sutton Bank to offer the card. However, it's not a checking account. If you have questions or need assistance with the card, <a href="https://cash.app/help" target="_blank" rel="noopener">contact Cash App</a> instead of Sutton Bank.<h3 class="faq-question">How long does a Cash App card take to arrive?</h3>The application for a Cash App card is quick, and once you apply, you usually get instant access to the card through Apple Pay or Google Pay. The physical card arrives in the mail within 14 days.<h3 class="faq-question">Do you need a bank account for a Cash App Cash Card?</h3>You do not need a bank account for a Cash App Cash Card. You can deposit paychecks, send money, pay for purchases, withdraw at ATMs, and add paper money to your Cash Card without a bank account. Some of those transactions have fees, though.<h3>Why You Should Trust Us: How We Reviewed Cash App Banking</h3>We used Personal Finance Insider's <a href="https://www.businessinsider.com/personal-finance/how-we-rate-checking-savings-money-market-accounts">bank account rating methodology</a> to review the Cash Card. Even though Cash App is not a bank, it offers a debit card, which is typically a banking product. To create a rating for the account, we looked at customer service, the mobile app, ethics and fees. Each category received a rating between 0 and 5, and our ratings factor in how the Cash Card compares to similar accounts. We then averaged those numbers to create a final score.

Cash App Banking Review 2023

<ul class="summary-list"><li>My bank has lowered the APY on my high-yield savings account by almost half a percent recently.</li><li>I'm not happy that my cash is generating less returns now, and I don't know what to do.</li></ul>It's never pleasant to receive an email from your bank informing you that the interest rate on your <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/banking/best-high-yield-savings-accounts-rates-right-now">high-yield savings account</a> is decreasing.Unfortunately, like many Americans happy to collect a robust yield on their savings, I've gotten three of these notifications in the last three months as the Federal Reserve has begun to lower interest rates. From August until the end of October, the annual percentage yield (APY) on my high-yield savings account has fallen from 4.6% to 4.2%.I opened this bank account almost two years ago, right after graduating from college. Back in 2023, with inflation still elevated, interest rates were at their highest levels since the Great Financial Crisis, and it seemed like most banks were offering near-5% yields on savings. After paying off my bills every month, I would put the remainder of my paycheck into my high-yield savings account and watch the number creep up.Now, it looks like the days of a 5% APY are in the past. In September, the Federal Reserve dished out a 50 basis-point rate cut, signifying the beginning of the end for high rates. Continuing this trend, the central bank's chair, Jerome Powell, announced a <a target="_blank" href="https://www.businessinsider.com/federal-reserve-cuts-interest-rates-quarter-point-powell-inflation-election-2024-11">25 basis-point cut</a> last week, and is expected to slash rates further in the months ahead.Is there anything I can do about the state of my savings account, or do I have to watch my yield erode away slowly? Curious, I asked three financial experts for their advice on this topic.As a famous politician once said, we didn't just fall out of a coconut tree. Context is important. Patti Black, a financial advisor at Savant Wealth Management, reminded me that the recent high interest rate environment is a marked departure from the last decade, where interest rates were near zero and there was no yield on cash to be found. So, while yields dropping from nearly 5% might seem like a tough pill to swallow for someone like me who just opened an account in the last couple of years, it's still a pretty good deal when you consider where rates have been in the past.I didn't have a bank account during the post-2008 zero-interest rate policy era, so this was helpful context to have. Perhaps my generation is indeed coddled — first by our parents and now by Jerome Powell's post-pandemic rate hikes.Black also suggested that I switch up my perspective. While a rate-cutting cycle means less return on my cash, it also means lower borrowing costs for a car loan or a mortgage, which is good news for the housing market.But there are other options for where I can have my money sit, Black said. Of course, one alternative is a <a target="_blank" href="https://www.businessinsider.com/cd-rates-certificate-deposit-high-interest-where-to-invest-now-2024-10">certificate of deposit</a> (CD), which is essentially a savings account that holds money at a fixed interest rate for a fixed period of time. CDs generally pay higher interest rates than savings and money market accounts in exchange for locking up your money for anywhere between three months to many years. However, my hands are a little tied. A well-known rule of thumb is to keep three to six months of living expenses available in your bank account as an emergency fund (read: liquid and highly accessible), so it's not a good idea to lock up money in my high-yield savings account for a prolonged period time. I could withdraw my money from the CD if needed, but I'd have to pay back some or all of the interest I'd generated up until that point as a penalty.With this in mind, Black said that sometimes it doesn't matter what the rate on the high-yield savings account is — it's the best place to park cash for easy access.Armed with this context, I still wanted to see if there were more ways to put my cash to work for me.Daniel Milan, financial advisor at Cornerstone Financial Services, had some more thoughts on CDs. A three-month CD could be a good option if I were comfortable locking up my money for that period of time, according to Milan.My bank didn't offer CDs, so I would need to open up a new bank account, which isn't necessarily a bad thing. Some financial experts recommend having <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/banking/how-many-savings-accounts-can-you-have">multiple bank accounts</a> for different savings goals. Searching online, I saw <a target="_blank" href="https://www.businessinsider.com/personal-finance/banking/best-3-month-cd-rates">multiple options</a> yielding over 4.6%.However, Milan didn't recommend locking up my money for longer. Usually, the longer the term of the CD, the higher the rate. But that's not always the case in today's market."In this current environment, it makes no sense to go further out than three months on a CD because the three-month CD is paying you more than a one-year or two-year right now," Milan said.Looking at CD offerings from a variety of banks, I discovered that this was indeed true — generally, the longer the CD duration, the lower the rate, especially after a 1-year duration. Rates on 6-month and 9-month CDs were also attractive depending on the bank, but again, my liquidity needs take those off the table.Many of the banks I looked at didn't offer short-term CDs, either. For example, one option offered a 4.5% APY on an 11-month CD, 3.7% on a 2-year, and 3.5% on a 5-year.It wouldn't make sense to move my money out of my savings account without high enough compensation for the lower liquidity."You're not getting paid for that illiquidity," Milan told me.Short-term <a target="_blank" href="https://markets.businessinsider.com/bonds">Treasury bills</a> are another investment option for higher yield, and they offer more liquidity than CDs, according to Richard McHorter, a private wealth advisor at SRM Private Wealth. A three-month Treasury bill currently yields 4.43%.There's also the added benefit of tax savings, which is especially appealing for McHorter, who lives in California: "If you're a resident of a high-income tax state, I would be looking at Treasury bills."As a resident of New York City, the idea of lower taxes certainly appeals to me. If I were to buy Treasury bills, I would only need to pay federal taxes, bypassing state and local income taxes.McHorter also said that there's a lot of uncertainty about interest rates right now, and they could actually start going back up again. Trump's proposed <a target="_blank" class="" href="https://www.businessinsider.com/trump-tariffs-hit-company-stock-profits-hardest-china-investing-manufacturing-2024-11">tariff policies</a> could increase inflation, in which case the Fed would probably increase rates to combat an overheating economy, he said.If I buy a three-month Treasury bill, I can reassess the inflation situation when I get my money back in three months and reinvest it accordingly, McHorter said.When it comes to interest rates and inflation, pay attention to the data and don't try to predict the market with your money, Milan advised. <a target="_blank" href="https://www.businessinsider.com/federal-reserve-cuts-interest-rates-quarter-point-powell-inflation-election-2024-11">Jerome Powell</a> himself has said that it's too soon to say how the election results could reshape markets and interest rates."My advice to anybody would be: just be diligent in reading and interpreting the data as it comes out," Milan said. Watch inflation data and Fed commentary, and base your investing decisions on the information you have at hand.It feels like the market is a bit in limbo as everyone waits for the effects of the election to ripple through, but as Black mentioned, not taking any action right now isn't the worst decision.What's next? For starters, I'm going to sit down and crunch some numbers for what three to six months of living expenses look like for me and keep that in my high-yield savings account. With the money I have left over, I have some good options.Are you a Gen-Zer who has recently been faced with an investing predicament? Feel free to reach out to Christine at <a target="_blank" href="mailto:cji@businessinsider.com">cji@businessinsider.com</a> to share your story.

The interest rate on my high-yield savings account keeps dropping. I asked 3 experts how to earn more on my cash.

In March 2023, Citigroup CEO Jane Fraser anointed Anand Selva, as the bank's chief operating officer. His mandate: oversee a deeply unsexy yet crucial initiative to regain compliance with regulators. At the time, she praised his "long track record of delivering results."So far, Selva's tenure has been rocky.In July, two regulators <a target="_blank" href="https://www.businessinsider.com/citi-jane-fraser-regulatory-citigroup-transformation-2024-7">fined Citi $135.6 million</a> for failing to make enough progress in fixing its data-management issues. The bank had agreed in 2020 to work on this problem and others, including poor risk controls, after <a target="_blank" href="https://markets.businessinsider.com/news/stocks/citigroup-slammed-400-mln-fine-longstanding-deficiencies-regulation-occ-fed-2020-10-1029660295">paying $400 million</a> in fines to the Federal Reserve and the Office of the Comptroller of the Currency. The OCC said in July that the bank had made "meaningful progress overall" but that the agency wanted to ensure Citi allocated enough resources to address the "persistent weaknesses" regarding data.These new fines are despite Citi dedicating massive resources to a firmwide initiative to overhaul the bank's technology. This program, called the <a target="_blank" href="https://www.businessinsider.com/citi-transformation-citigroup-regulatory-fine-anand-selvakesari-2024-7">"Transformation"</a> and overseen by Selva, has about 13,000 employees. Citi spent $7.4 billion on the endeavor from 2021 through 2023. This year's budget has been increased by $250 million, to more than $3 billion.The pressure is on, with Sen. Elizabeth Warren urging the OCC to "impose growth restrictions" on Citi, arguing that it has grown "too big to manage." The regulator and Citi declined to comment."We've always said that progress wouldn't be linear," Fraser said after the latest fines, "and we have no doubt that we will be successful in getting our firm where it needs to be in terms of our Transformation."For Selva, leading the Transformation is unlike any test he has faced in his three-decade career at Citi. Selva, who goes by the shortened version of his last name, Selvakesari, joined Citi as an assistant operations manager in Chennai, India, in 1991. He rose through the ranks in Asia before taking over the US consumer bank in 2019. When Fraser was made CEO in 2021, she chose Selva, who's now 57, to replace her as the global head of consumer banking.In his current role, his mandate is to make the bank safer, not to turn a profit. To do so, he has to solve for Citi's <a target="_blank" href="https://www.businessinsider.com/inside-real-reasons-behind-citi-mike-corbat-early-retirement-2020-9">decades of underinvestment</a> in its infrastructure, which affects every business line of the bank.Business Insider talked to 14 current and former Citi employees who have worked under Selva to get a picture of the challenge facing him and why he was put in charge of the bank's No. 1 priority. All but two spoke on the condition of anonymity, citing fear of reprisal or the sensitivity of regulatory matters. Three senior executives pointed to his experience navigating regulation and working with technology from running Citi's consumer bank. Gonzalo Luchetti, Selva's successor as the head of the US consumer business, told BI that serving 70 million customers required handling tremendous operational risk."If we mess it up, usually you don't mess it up for one; you mess it up for hundreds of thousands, if not millions," he said. "You have to be super good at process orientation and making sure that there's high discipline and rigor."Luchetti also emphasized Selva's longevity at Citi and experience across regions."He knows the fabric of the firm very well," Luchetti said. "The Transformation is about really repiping the machine. He's touched a lot of the machine himself."But touching the machine isn't the same as fixing it. Eight employees told BI that they were surprised that Selva was made the head of the Transformation given that he had never held a leadership role in technology or compliance. They described Citi's culture as a cliquey environment that rewards managing up over results, noting that the COO promotion followed dismal performance for the wealth unit he oversaw."The biggest job was given to a guy who with 1 ½ years in wealth wasn't able to do anything," a former managing director said.Selva has also come under scrutiny for a lawsuit filed against him and the bank by an ex-Transformation executive in May. Kathleen Martin, a former interim data chair, alleged that Selva pressured her to hide information from the OCC that would make Citi "look bad" and that she was fired in September 2023 after multiple refusals. Citi denied the accusations and filed a counterclaim in late August, alleging that Martin was fired for underperformance. Citi has recently made leadership changes to Selva's unit. The bank tapped its new tech head, <a target="_blank" href="https://www.businessinsider.com/citi-data-tim-ryan-anand-selva-memo-transformation-regulators-2024-9">Tim Ryan</a>, to lead the data effort alongside Selva and take over management of the 800-employee data team. The work on data, along with risks and controls, is paramount to the Transformation.Splitting the burden may expedite the massive task, which requires coordinating work from employees across the entire bank. Citi declined to specify a timeline, citing the confidential nature of regulatory matters. A managing director in the Transformation estimated that the work required would take about two decades.Mike Mayo, a Wells Fargo analyst, said that until Citi meets the requirements of the OCC and the Federal Reserve, the bank is in "regulatory purgatory.""Citi has thrown over 10,000 people and $3 billion and more at this problem," Mayo told BI in July. "They just have to get it done."Selva does have a long track record at Citi. Born in Madurai, a large city in southern India, he studied engineering and played basketball at the Coimbatore Institute of Technology. He earned his master's in business administration at Madurai Kamaraj University before joining Citi in 1991.Selva made his name at Citi by shaping its consumer-bank businesses across Asia. He led retail banking in China and India before taking over the Asia Pacific market in 2015. His approach was digital-first, eschewing branches for banking apps. Despite closing 60% of bank branches in Asia from 2016 through 2018, Selva grew deposits by 10%.<div type="image" title="Citi's Anand Selva speaking at a panel, seated and wearing a pinstripe suit and a red tie." height="3307" width="4960" msid="114093573" hostid="261" sizebytes="2310830"></div>"He's very tech and digital-oriented," Luchetti said. "We've been to China together to look at startups and firms that were disrupting the world. He was always very connected with learning more about technology, had that curiosity, and then the execution chops to get it done here."In 2019, Selva moved from Singapore to New York, where he now lives with his family, to run the US consumer bank. He assumed the global consumer-banking business from Fraser in 2021. Selva leaned on credit-card and lending offerings, launching products like Citi Custom Cash which allowed customers to pick their reward categories, and Flex Pay, a buy-now, pay-later service. Under Selva, Citi was the No. 2 issuer of credit cards in the US, and deposits grew by more than a third, to about $220 billion.In 2021, Citi started divesting itself of more than a dozen consumer-bank markets across Asia, Europe, and the Middle East. Selva was an important player on both sides of the table, according to Adora Tidalgo, the head of operational risk management at Citi. She said he helped find Asian acquirers that maximized value for Citi while keeping the businesses running smoothly with low attrition."That skill of balancing how much you want to bring in terms of revenue and the credit loss you want to take is really a skill that very much needs to be honed in the consumer space," she said. "That balancing, to me, I have seen Anand over the year been very successful in doing that."There have been some bumps in the road. As part of Fraser's reorganization of the bank in 2021, Selva gained oversight of a newly formed wealth unit and its new leader, Jim O'Donnell. Six current and former managing directors told BI that Selva's approach focused more on scale and digital offerings than high-touch client service. For instance, he didn't approve loans that failed to meet a certain threshold of return, even if it meant losing an important client, two former managing directors said."The way that every private banker on earth thinks about relationships is you need to invest in relationships, and then as you start to do more business with clients, you start getting more and more valuable opportunities with them," one of the former managing directors said. "You have to look at the relationship. You can't just look at every single transaction."Employees argued that Selva's playbook may have worked to build scale in Asia but not to satisfy well-heeled — and much more sought-after — US clients."I think Anand's decisions were comparing everything to what he knew from his time in Asia, and they are completely different markets," another former managing director said. "In Asia, Citi has a very recognizable brand, and people actually want to bank with Citi. You don't have to sell it that hard."<div type="image" title="Citi CEO Jane Fraser testifying at Congress" height="3828" width="5846" msid="114093582" hostid="261" sizebytes="314760"></div>The wealth business' revenue dropped by 6% year over year at the end of 2022. Fraser called the division's performance "disappointing." O'Donnell's reign over wealth was cut short in January 2023, and it was later placed under <a target="_blank" href="https://www.businessinsider.com/andy-sieg-citi-wealth-management-ceo-2024-6">Andy Sieg</a>, the former head of Merrill Wealth Management. With Citi on a campaign to divest itself of 14 international consumer-bank markets, Selva's remit shrank.His appointment as COO thrust him into the spotlight. Tidalgo told BI that he was no stranger to the task of dealing with regulators."When you are the head of a country, you are the face of Citi to the regulators. Good, bad, or indifferent, you have to face them," she said. "That's part of the job."Citi's Transformation and its challenges predate Selva's appointment as COO. It existed as a firmwide initiative before the October 2020 fines but was kicked into overdrive after Citi entered consent orders with the OCC and the Federal Reserve.It can be viewed as two parts. The most visible is the strategy to simplify and modernize the bank, such as divesting Asian consumer businesses, removing five layers of management, and <a target="_blank" href="https://www.businessinsider.com/citigroup-reorganization-layoffs-management-overhaul-reorganization-jane-fraser-stock-price-2023-9">reorganizing</a> so that the five business lines report directly to Fraser.The second part is meant to address the 2020 consent orders. The initiative is separated into seven programs, including finance, compliance, and risk and controls. While some 13,000 employees are dedicated to the Transformation, much of this work is carried out by employees across the bank. Selva sits at the center, coordinating these efforts. He's in a tough position, as much of the Transformation's work is executed by employees in other divisions."The challenge with the Transformation role is you are accountable yet not responsible," the managing director in the Transformation said. "The role is really coordinating and getting others to do what they need to do, which is very different from running a business where the entire team follows your lead, you own it, you have the ability to actually get them to do this stuff."When everyone is accountable, effectively no one is, a former senior vice president in the Transformation said. Matters got stuck in bureaucracy, bouncing from one department to another and being debated in committee for months.A senior executive in the Transformation acknowledged that the programs often rely on each other's work. For example, a delay in data work can lead to one for a finance project."When we are asked sometimes why it is challenging to execute on the Transformation, one of the challenges is the interconnectivity of those seven works," she said.The senior executive said the Transformation's successes had been overlooked, partly because the bank is limited in what it can say on regulatory matters. For instance, Citi has retired or replaced a quarter of its applications, halfway to its overall goal. The bank declined to specify the number of existing or terminated applications, but as of July, it had retired nearly 300 applications this year. The senior executive also touted the bank's streamlining its risk-management workflow.But the Transformation has earned a middling grade from Citi itself. The bank evaluates the initiative's success for the purposes of a bonus program applicable to about 200 senior employees, including Selva. In 2022, an internal committee gave it a score of 94%, citing targets it met, such as submitting remediation plans to regulators.For 2023, the score sank to 80%, calculated by measuring the timeliness of executing scheduled work, the percentage of work deemed complete by the bank's internal auditors, and a "qualitative consideration of Citi's cultural change" derived from the bank's employee surveys.<div type="image" title="Headshot of Citi's new tech head Tim Ryan, smiling and wearing a black suit jacket with a light blue shirt" height="739" width="985" msid="114093578" hostid="261" sizebytes="32120"></div>Bringing in Ryan, the bank's head of technology and business enablement, to help the bank catch up makes sense. The recruiter Phil Waxelbaum argued that a more traditional candidate to help lead the Transformation would be a seasoned, high-ranking person from a regulatory agency. But someone with a nonbanking background such as consulting or technology can work, too, according to recruiter Jeffrey Warren. Ryan joined Citi in June after seven years leading the US business of PricewaterhouseCoopers."In situations like this when you are looking to drive transformation, you need someone who can work at the intersection of people, processes, and technology," said Warren, managing director at Russell Reynolds Associates. "That includes working from within and likely driving some change with new people who have experience in new technologies or new ways of doing things."Ryan is now sharing data, a significant component of the Transformation, with Selva. Another PwC alum, Citi's head of enterprise risk management, Ashutosh Nawani, will take over the chief data office from one of Selva's lieutenants, Japan Mehta, and report to Ryan. Mehta will move to another role that the bank declined to specify.Employees told BI that they thought bringing in Ryan and Nawani would help."Sure, there might be some reservation that more consultants are coming in to run Citi, but there is a positive vibe of changing senior leadership," the former senior vice president in the Transformation said. "Legacy Citi culture is what got us into this spot in the first place."While the July fines did not meaningfully move Citi's stock, they have placed the bank and the Transformation under greater scrutiny. The OCC has ordered Citi to provide a resource-review plan each quarter to ensure the bank is providing enough resources for the effort. The Securities and Exchange Commission has also required the bank to address the Transformation's progress in future filings.The outstanding issues have also impeded Citi from expanding in China. According to <a target="_blank" href="https://www.bloomberg.com/news/articles/2024-09-23/citigroup-s-china-expansion-plan-put-on-hold-by-us-regulators">Bloomberg</a>, the bank is still waiting on a clearance letter from the Federal Reserve to set up a securities office. The bank declined to comment on the process but said it was "fully committed to supporting clients" in China.<div type="image" title="Democratic Sen. Elizabeth Warren of Massachusetts at a hearing on Capitol Hill on January 11, 2024." height="1333" width="2000" msid="114093583" hostid="261" sizebytes="96482"></div>Regulators placing an asset cap on Citi, as Senator Warren has requested, isn't out of the realm of possibility, said Timothy Coffey, an analyst with Janney Montgomery Scott."At what point do the regulators just get fed up with Citi's inability to adequately resolve these issues or stick to the timeline that they've laid out?" he said. "That's an open-ended question."But the consent orders and the lack of progress are distractions in themselves. When Fraser took over Citi nearly four years ago, she said the Transformation was her No. 1 priority and asked for patience. Now her requests for time are wearing thin. Regardless of who leads the Transformation, Fraser is still accountable."This stays out here in terms of headline risk, and I think it puts a cap on the valuation that Citi can achieve," said Stephen Biggar, an Argus Research analyst. "It's an overhang on the stock. It's an overhang on the reputation of Fraser."Do you work for Citi? Have a tip or story to share? Reach out to Hayley Cuccinello at <a target="_blank" href="mailto:hcuccinello@businessinsider.com">hcuccinello@businessinsider.com</a> or 917 740 5340, which works for calls, text, and the encrypted messaging app Signal.

Meet the executive tasked with Citi's hardest challenge: getting the bank's house in order

<ul class="summary-list"><li>Jamie Dimon shared a bunch of his worries during JPMorgan's investor day.</li><li>The bank's CEO flagged the risks of sticky inflation, higher interest rates, and dwindling savings.</li></ul>Jamie Dimon aired a laundry list of concerns during JPMorgan's investor day on Monday, ranging from sticky inflation and government largesse to overseas clashes and a burgeoning cash crunch."I'm cautiously pessimistic," Dimon said, according to a transcript provided by AlphaSense. Between the <a target="_blank" href="https://www.businessinsider.com/israel-gaza-hamas-war-benefit-putin-russia-ukraine-invasion-2023-11">conflicts raging</a> in Ukraine and Gaza, and <a target="_blank" href="https://www.businessinsider.com/us-deal-with-russia-china-if-at-war-with-one-2024-5">rising tensions</a> between countries like the US, Russia, and China, he bemoaned the "most complicated geopolitical situation" since World War II."I look at the world situation and I'm quite cautious," the JPMorgan CEO said before <a target="_blank" href="https://www.businessinsider.com/warren-buffett-berkshire-apple-stock-sales-dietrich-market-crash-recession-2024-5">echoing Warren Buffett</a>: "I like having a lot of extra capital right now to tell you the truth."Dimon warned against dismissing inflation and elevated interest rates as temporary headwinds. Annualized price growth has slowed from a 40-year high of over 9% to below 4% within the past two years, but still remains above the Federal Reserve's 2% target. The central bank raised rates from nearly zero to north of 5% to tackle the problem, and hasn't yet made its first cut."It's possible that inflation is embedded in the system at 4% for the next year, and there's not a damn thing anyone can do about it," he said.The billionaire banker also underlined that if rates climb higher, it could <a target="_blank" href="https://www.businessinsider.com/economy-bad-good-news-stock-market-inflation-recession-fed-2024-3">change the calculus for investing</a> in many types of assets. Higher rates tend to erode the appeal of risk assets like stocks and housing by boosting the guaranteed returns from savings accounts and Treasurys."That's a different world for real estate. It's a different world for assets. It's a different world for private credit. It's a world that a lot of the people in the world have not seen," Dimon said.The Wall Street heavyweight also emphasized that people are <a target="_blank" href="https://markets.businessinsider.com/news/stocks/big-short-michael-burry-jpmorgan-consumer-inflation-rates-banking-crisis-2023-4">feeling the pinch</a> from historic inflation — which has made basics like food, energy, and housing more costly — and steeper rates that have raised the monthly payments due on their car loans, credit cards, and mortgages."We do know the consumers are <a target="_blank" href="https://www.businessinsider.com/economy-pomboy-consumer-spending-savings-debt-inflation-interest-rates-recession-2024-5">running out of excess money</a>. Small businesses are running out of excess money. We don't know when it's going to end, but it looks like sometime early next year."Dimon rang the alarm on the budget deficit and national debt too, warning that both are set to worsen over the next decade and beyond."Somewhere along that journey, and I don't know if it's six months, six years, or 16 years, it will be a problem," he said.The bank chief has voiced similar concerns in recent weeks. In October, he <a target="_blank" href="https://markets.businessinsider.com/news/stocks/jamie-dimon-dangerous-world-geopolitics-wars-debt-federal-reserve-2023-10">warned</a> of the "most dangerous time" for the world in decades. In his <a target="_blank" href="https://www.businessinsider.com/jamie-dimon-jpmorgan-letter-war-inflation-recession-rates-economy-ai-2024-4">shareholder letter</a> this year, he called out market complacency toward the threats of inflation, interest rates, and recession.

Jamie Dimon warns inflation and higher interest rates may linger — and people are running out of spare cash

<div type="image" title="Are Indians depositing less money in banks, or more in mutual funds? Turns out, it&amp;#39;s neither of those." msid="113663806" hostid="261" sizebytes="1121785"></div> Over the past few months, there’s been a lot of brouhaha about the lagging pace of <keyword id="20202062" type="General" weightage="20" keywordseo="bank-deposits" source="keywords">bank deposits</keyword> in India. Simply put, the rate at which Indians are depositing their hard-earned money in banks has been falling constantly, and some blame the increasing financialisation of <keyword id="20751315" type="General" weightage="20" keywordseo="household-savings" source="keywords">household savings</keyword> in the country or the rising preference of Indians towards <keyword id="19929240" type="General" weightage="20" keywordseo="mutual-funds" source="keywords">mutual funds</keyword> and shares. So, the hypothesis is that people are choosing to invest more in mutual funds and the Indian <keyword id="19949641" type="General" weightage="20" keywordseo="equity-markets" source="keywords">equity markets</keyword> through direct investments, IPOs, or NFOs, the money flowing into Indian banks in the form of deposits is slowing down. But is that really the case? <h2>A crisis or a phase?</h2><keyword id="19899808" type="General" weightage="20" keywordseo="RBI" source="keywords" meta.keywordsubtype="org" meta.entityname="RBI" meta.hostid="261" meta.entityid="RBI">RBI</keyword> data suggested that for the quarter ended June 2024, bank deposits grew at 11.7%. On the other hand, credit growth has outpaced this at 15%. This means that the outflow from banks as loans is far greater than the inflow into them in the form of deposits in Q1 of FY 2024-25. The situation largely saw cut-copy-paste in the first week of September as well, with loans registering a 13.3% YoY growth during the period, while deposits rose only 11.1%. This gap has only been widening for the last 3 years. Since deposits are how banks gather assets to further lend and earn interest income as a consequence, even a slight dip could set the alarm bells ringing for banks, and rightfully so. And truth be told, mutual funds are indeed taking on bank deposits in a big way. Per a report by Franklin Templeton, in August 2024, the AUM (assets under management) of Indian mutual funds, or the total funds managed by them, stood at 31.3% of total bank deposits in the country, up from 24.20% during the year-ago period. As of August 2024, the AUM of mutual funds stood at Rs 66.17 lakh crore, an all-time high. But all said and done, is this really the reason why the rate of bank deposits is falling behind? SBI has dismissed this to be a “statistical myth”, and experts point out that since equity and fund houses also keep the cash in their respective bank accounts, there’s no cause for concern. So, is financialization really to be blamed for the trailing tempo of deposits? Or is something else happening behind the scenes? We take a closer look: <h2>First, are household deposits really slowing down? And is that a cause of concern?</h2>Data from Motilal Oswal suggests the contrary. Deposits grew by around 10.4% between March 2020 and August 2024. Data from RBI also highlights that as of August 9, 2024, bank deposits witnessed a YoY growth of 10.8%. The loan-to-deposit ratio for the retail segment, which indicates what percentage of its total deposits the banks lend out as loans, has stayed at 77.5%, above the 77% mark for the tenth straight month. <div type="image" title="Yes, household deposits (as % of total deposits) have dipped, but the drop is far from significant" msid="113663882" hostid="261" sizebytes="306706"></div> Also, we can’t forego the fact that the share of Indian households in bank deposits has indeed slowed down. However, data from Axis AMC shows that the dip is marginal—from 63% in 2022 to 62% in 2023 and 61% in 2024. What has slowed down even more considerably is the share of government deposits in the aggregate bank deposits, which has dipped from 14% in 2018 to 9% in 2024. So, it's not just household deposits, you see. Moreover, as of March 2024, the collective CASA ratio (current and <keyword id="114757" type="General" weightage="20" keywordseo="savings-account" source="Orion">savings account</keyword> deposits) of all commercial banks in India stood at 41.00%, down from 43.1% in March 2023 and 45.2% in March 2022, marking a nearly 5% point decline over the past year, while still staying over the 10-year average of 39.2%. This implies that Indian banks are relying more on higher-cost funds (savings accounts), which can limit their profitability. <h2>What is this financialisation of savings we are talking about?</h2>Then again, there is no doubt about the growing affinity of Indians towards mutual funds and stock markets. Recent data from CBDT (Central Board of Direct Taxes) highlights that India’s net direct tax collection surged by around 22%, driven exclusively by the significant uptick in the collection of Securities Transaction Tax (STT), which doubled to Rs 26,154 crore, from Rs 13,352 crore in the year-ago period. Why does this matter? STT is levied when you buy or sell equity shares on stock exchanges, sell <keyword id="6361918" type="General" weightage="20" keywordseo="equity-mutual-funds" source="Orion">equity mutual funds</keyword>, and trade in futures and options in the equity segment. Such taxes, including the multiple other taxes in equity market investments, are considered as leakages as the money moves out of the economy into government coffers. Data from a ValueQuest report explains that over the last 20 years, the markets have handsomely rewarded the investors, generating over $900 billion in incremental value for them. This is the major driver behind the dramatic rise in investment flowing towards the equity markets. There’s further proof of this budding romance, if you check the demat pudding. The number of demat accounts, which are a primary requisite for participating in the stock markets, also burgeoned by 42.3 lakh in August 2024, taking India’s total tally of demat accounts beyond 17 crore. To put this in perspective, this is almost equivalent to the population of just 8 nations in the world, including China, the US, Brazil and more. Vivek Iyer, Partner, Grant Thornton Bharat thinks it's rather important, as well. “Financialisation of household savings in India is an indication of deepening capital markets in the market, especially from a retail investor standpoint. Bank deposits with a modest rate of return are no longer the only option for savings for investors. Investors today have more avenues for wealth creation in the form of public capital markets, which have democratized wealth creation and provided equality of opportunity to retail investors”, he says. Yes, Indians are investing more and more in the markets, and in mutual funds. But is it a sin to look out for inflation-beating returns, which the stock markets offer, and vanilla bank deposits don't? After all, the allure of 12-13% annual returns offered by <keyword id="45369" type="General" weightage="20" keywordseo="equities" source="Orion">equities</keyword> can certainly pale the stability offered by good old deposits, which generally do not go beyond 9% when it comes to annual returns. But all of this is not what is behind the slowdown. India is still a toddler in the school of savings financialization, with less than 10% of the population holding a demat account, and less than 5% of us saving in equities. That's a drop in the ocean of deposits, far inadequate to trigger a tsunami. <h2>Tell me why lagging deposits have nothing to do with Indians investing more in mutual funds!</h2>Says Shweta Rajani, Head - Mutual Funds, Anand Rathi Wealth Limited, “Households' equity holdings composition grew from 11.1% in FY 23 to 14.7% in FY 24. This trend reflects a growing awareness of investment options, empowering individuals to take control of their financial futures. Despite this transition towards equities, banks still hold a significant share of household financial savings—33.5% in FY24 compared to 34.9% in FY23”. Also, household savings and their subsequent financialization do not have much to do with deposit creation, which is entirely made by banks. What actually drives increased deposits is credit growth or increased lending. When interest rates are eased, people tend to borrow more and spend more, which circulates more money in the economy. For the past 4 years, RBI has been tightening the screws on interest rates, which raises the cost of borrowings, and makes it more expensive to take loans, putting a dampener on credit growth, but effectively curbing inflationary pressures. The last time RBI cut the repo rate by 40 basis points was back in May 2020, 4 years ago. The lag in <keyword id="19998084" type="General" weightage="100" keywordseo="deposit-growth" source="keywords">deposit growth</keyword> we’re witnessing is almost 3 years old. Coincidence much, or just good old economics at work? But with the Fed recently setting a rate cut precedent by slashing 50 bps off its interest rate, RBI is expected to follow suit in the next MPC (Monetary Policy Committee) meeting, scheduled for November 2024. A rate cut would ease the aforementioned high cost of borrowing, and increase loan-taking for corporates and institutional investors, thereby stoking consumption in the economy. And then, deposit creation in banks is likely to return to its former glory. If not, then that would be a curious case to unravel! But that worry is for another day. Do you have insights or personal experience to share on your personal finances or money? Contact us at <a target="_blank" class="c-link" href="mailto:businessinsider@timesinternet.in">businessinsider@timesinternet.in</a>.

Simply Put: A Deposit Dilemma — What's the fuss about a crisis in Indian bank deposits? Are mutual fund investments to blame?

<ul class="summary-list"><li>A public offering can lead to sudden wealth creation and leave founders wondering how to manage it.</li><li>A top Goldman Sachs wealth advisor shared key considerations for startup founders.</li></ul>In 1987, Bill Gates became the world's youngest billionaire at 31. His fortune had already ballooned the year prior when his brainchild, Microsoft, went public on the Nasdaq.Like many founders who have taken their companies public, Gates saw a sudden windfall of wealth transform his life and vault him into a new tax bracket. The bank that led Microsoft's initial public offering was Goldman Sachs, the <a target="_blank" href="https://www.businessinsider.com/goldman-sachs-investment-bank-leaders-lay-out-winning-strategy-2024-6">Wall Street behemoth</a> famed for its leading position in terms of both advising on public issuances and <a target="_blank" href="https://www.businessinsider.com/goldman-sachs-2q-earnings-david-solomon-investment-banking-forecast-2024-7">handling private merger transactions</a>.Goldman executives <a target="_blank" href="https://www.goldmansachs.com/insights/articles/dealmaking-and-ipos-are-poised-for-a-revival-in-2024">have forecast in recent months</a> an increase in public offerings this year after a <a target="_blank" class="" href="https://www.businessinsider.com/wall-street-bake-offs-back-morgan-stanley-2q-ted-pick-2024-7">slow past two years for IPOs</a>. The <a target="_blank" href="https://www.ey.com/en_us/insights/ipo/ipo-market-trends">accounting and tax giant EY found that IPOs were rebounding</a> this year and has tracked 82 public offerings in the US market throughout the first half of 2024, which have collectively generated $18.6 billion in proceeds. It puts this year ahead of last year's tally, at 63 deals producing slightly more than $10 billion in proceeds.So far in 2024, Goldman Sachs' IPO team has worked on 16 public offerings in the US, which generated more than $1.5 billion in value, according to deal-tracking firm Dealogic; that's up from last year's eight IPOs, which resulted in $930 million in value.Founders who go through successful IPOs may find they have a host of new money-management needs, according to Kerry Blum, the global head of the equity-structuring group within private-wealth management at Goldman Sachs."When someone has invested a significant amount of their life in creating a company and establishing a leadership team, we appreciate that there is a lot of emotion tied to that asset," Blum told Business Insider in an interview. "We understand that the decisions they're making are both economically and emotionally important."The team reporting to Blum — a more than 20-year Goldman veteran who was elevated to the <a target="_blank" href="https://www.businessinsider.com/goldman-sachs-partners-share-investment-banking-oral-histories-2024-7">bank's elite partnership in 2022</a> — supports family offices and high-net-worth clients like the founders of big-ticket companies. Blum's team is separate from the equity-capital-markets group, which advises companies in IPOs and is situated within the investment-banking division.Through the bank's One Goldman Sachs program, which unites various business lines to cross-sell services to clients, Blum and her team share referrals with their colleagues in the firm's investment-banking division. That could mean investment bankers referring clients doing IPOs or mergers to their private-wealth counterparts who work with Blum, or vice versa, for instance.The team is equipped with a tool kit of strategies to help clients with their money-management goals — from trust and estate planning to strategizing when and how founders should sell equity.Blum shared her advice for founders who may be on the cusp of successful IPOs and how they could work with wealth advisors to set themselves and their families up for prosperous financial futures.<h2 id="bbd45c66-0556-42e4-ba5c-85e785043026">Start the conversation early</h2>If you're considering a public offering, it's never too early to broach the topic with an advisor, Blum said.Many pre-IPO founders will have a relationship with a wealth advisor, she said, and it's not unusual for them to have initial discussions several years before an IPO.About three to six months before the IPO listing date, conversations between a founder and their advisor tend to ramp up substantially, according to Blum."We'll be more engaged with clients on a more regular basis to help them understand: What does the landscape look like? What should they be expecting? And what does that final to-do checklist look like as they approach the IPO?" Blum told BI.<h2 id="80043aae-d0fe-44e4-a2f8-8a7b7504176a">Think about messaging and signaling</h2>For many founders who go through an IPO, the milestone may represent the first time they contemplate selling off big stakes of equity in a business they've built from scratch. It's important to be mindful of what such decisions can indicate to other investors and to handle the process accordingly.Indeed, founders' equity sales often come with additional rites like issuing securities filings, "so we want to make sure that we're being mindful of the messaging and signaling considerations," Blum said."You get to take a company public once. You get to make your first sale as a founder once as well," she added, pointing to the importance of being thoughtful and deliberate when making such moves.Her team tracks other companies' regulatory disclosures and information about Goldman's own client portfolio to learn what other founders are doing.With that information, Blum's team can answer clients' questions such as:<ul><li>How do their peers in the founder community think about themselves?</li><li>When are they selling?</li><li>How are they selling?</li><li>How much are they selling?</li><li>Where are they selling?</li></ul><h2 id="a1890d80-961a-40aa-8869-1ddb64c4a409">Know what your priorities are</h2>Managing your money post-IPO is in some ways like managing your portfolio as it's always been, but with more considerations to contend with and more resources at play, Blum said.That means diversification across asset classes becomes even more important, as do other choices, like which philanthropic initiatives a founder may wish to support."We also spend some time helping clients make sure that they've thought through what could their impact and legacy look like," Blum said. "And although it's 10 or 15 years out, it's never too early to think through how to optimize for those events."

A Goldman Sachs financial advisor shares 3 strategies for founders preparing to cash in on IPO wealth

<ul class="summary-list"><li>Banks worldwide are fixing issues from a global IT outage caused by a CrowdStrike update.</li><li>British banks like Santander and Metro Bank faced ATM service disruptions on Friday.</li></ul>Major banks worldwide are scrambling to fix issues resulting from a <a target="_blank" href="https://www.businessinsider.com/major-disruptions-airline-bank-london-stock-exchange-microsoft-outage-2024-7">global IT outage</a> caused by a CrowdStrike software update.British banks Santander and Metro Bank said they were impacted by Friday's outage, which affected their ATM services.Santander <a target="_blank" href="https://x.com/santanderukhelp/status/1814263776926962032?s=46&amp;t=0K7zLyMZdVYljqlGABmGpg">said</a> its support teams are "working hard to fix things as soon as possible," Metro Bank <a target="_blank" class="" href="https://x.com/Metrobank/status/1814213167209480505">said</a> customers "may experience a slowdown or temporary unavailability" with some of its products and services."Along with many other organizations, we have been affected by the reported global IT outage," Metro Bank told Business Insider."Currently we are having problems with our phone lines, which means customers may have trouble getting through. Customers can still transact via their app or online banking or visit us instore if they are close by."Metro Bank added that its ATMs had been functional since around 9:30 a.m. BST (4:30 a.m. ET).Commercial Bank of Qatar <a target="_blank" href="https://x.com/CBQat/status/1814284542343090587">said</a> that some of its services, such as mobile banking and its call center, experienced an outage, but all services are now fully restored.According to the <a target="_blank" class="" href="https://www.nzherald.co.nz/nz/bank-problems-reports-bnz-asb-kiwibank-anz-visa-paywave-services-down/R2EY42QKQBALXNF33G5PA6U3TQ/">New Zealand Herald</a>, some banking services in New Zealand were also disrupted, as was South Africa's Capitec, per Bloomberg.Meanwhile, Norway's central bank will carry out a<a target="_blank" href="https://www.bloomberg.com/news/articles/2024-07-19/norges-bank-reports-technical-problem-with-liquidity-operations?utm_source=twitter&amp;cmpid%3D=socialflow-twitter-tech&amp;utm_content=tech&amp;utm_medium=social&amp;utm_campaign=socialflow-organic&amp;sref=lAVQtUwz"> banking system liquidity auction</a> via phone and email, Bloomberg reported. Hundreds of outages related to Visa's services were reported on Down Detector.Some social media users posted about being unable to access banking services, which they said highlighted the importance of cash. Gina Glaros, a reporter at NBC affiliate WTHR-TV, <a target="_blank" class="" href="https://x.com/ginaglaros/status/1814284877920895158">said</a> in an X post that pumps at a Circle K gas station were not working, adding that it was only accepting cash as its card system was down.CrowdStrike said in a statement shared with BI that the outage did not result from a cyberattack or security incident and that it had deployed a fix.The cybersecurity firm added that it is "actively working with customers impacted by a defect found in a single content update for Windows hosts" and that Mac and Linux hosts are unaffected.However, <a target="_blank" class="" href="https://www.businessinsider.com/crowdstrike-outage-why-taking-time-companies-recover-2024-7">some large organizations may face delays</a> in resolving the issues and becoming fully operational again as the fix requires a manual reboot of computers, cybersecurity expert <a target="_blank" class="" href="https://www.businessinsider.com/fix-windows-computer-blue-screen-death-what-to-try-2024-7">James Bore previously told BI</a>. This could take significant time if an organization has many PCs. Santander didn't immediately respond to a request for comment from Business Insider.

Banks scramble to repair the damage caused by Crowdstrike IT outage

<ul class="summary-list"><li>UK Taylor Swift fans have lost over $1.2 million to Eras Tour ticket scams, Lloyds Bank says.</li><li>The bank issued an urgent warning after it said 600 of its customers fell victim to the scam.</li></ul>It looks like it's heating up to be a <a target="_blank" href="https://www.businessinsider.com/taylor-swift-songs-most-popular-hits-streaming-spotify-2023-11#2-cruel-summer-12">Cruel Summer</a> — at least for Swifties in the United Kingdom seeking Eras Tour tickets.Fans of Taylor Swift have already been scammed out of over $1.2 million trying to purchase concert tickets, mostly through Facebook, <a target="_blank" href="https://www.lloydsbankinggroup.com/media/press-releases/2024/lloyds-bank-2024/lloyds-bank-issues-urgent-warning-over-taylor-swift-ticket-scams.html">according to Lloyds Bank</a>.This prompted the bank, which is among the United Kingdom's largest, to issue an "urgent warning." The warning said that at least 600 of its customers had been victimized by a ticket scam, losing anywhere from £332 to over £1,000.Outside of its own banking system, Lloyds estimated some 3,000 more Brits may have fallen prey to the scams, losing as much as £1 million, or over $1.2 million, in total nationwide.Most of the scams appeared to target 25- to 34-year-olds using fake ads on Facebook, the bank said."For her legion of dedicated Swifties, the excitement is building ahead of Taylor's Eras Tour finally touching down in the UK this summer. However cruel fraudsters have wasted no time in targeting her most loyal fans as they rush to pick up tickets for her must-see concerts," fraud prevention director Liz Ziegler said.The popularity of Swift's Eras Tour has caused all manner of problems for its ticket-seeking fans.Many Swift fans in the United States were forced to purchase resale tickets after <a target="_blank" href="https://www.businessinsider.com/ticketmaster-explain-disastrous-taylor-swift-tour-sale-2022-11">Ticketmaster botched</a> the 2022 release of tickets, prompting a <a target="_blank" href="https://www.businessinsider.com/senators-doj-breaking-up-ticketmaster-live-nation-taylor-swift-chaos-2022-11">congressional inquiry</a> the following year. Swifties stateside told Business Insider they had to do serious <a target="_blank" href="https://www.businessinsider.com/i-bought-taylor-swift-eras-tickets-facebook-without-getting-scammed-2023-5">sleuthing to confirm they weren't being scammed</a> when they paid for resale tickets.In July 2023, the San Francisco Better Business Bureau warned Swift fans that scammers were running ticket scams as her "Eras Tour" date approached in the city, <a target="_blank" href="https://abc7news.com/taylor-swift-scams-concert-tickets-better-business-bureau/13474055/">according to ABC</a>.Alma Galvan, BBB regional communications manager, told the outlet that scammers will sometimes pretend to be friends on social media and sell fans fake tickets for a large price.The BBB recommends only purchasing tickets from reputable vendors and using a credit card before a debit card, cash transfer app, or cash, the report said.One Swift fan who <a target="_blank" href="https://www.businessinsider.com/i-bought-taylor-swift-eras-tickets-facebook-without-getting-scammed-2023-5">spent more than $1,500 on tickets on Facebook Marketplace</a> told BI that she insisted on using Paypal Goods and Services for the transaction because it helps users get a refund if their concert tickets never arrive.

Taylor Swift fans in the UK have been scammed out of $1.2 million, bank says

Big banks promised to protect the planet. Now they're doing an about-face.

<ul class="summary-list"><li>Tech mogul <a href="https://www.businessinsider.com/elon-musk">Elon Musk</a> has an estimated net worth of $264 billion.</li><li>His estimated fortune peaked at around $340 billion in November 2021 as Tesla shares soared.</li></ul>Elon Musk has a net worth of around $264 billion, according to estimates by <a href="https://www.bloomberg.com/billionaires/" target="_blank" rel="noopener">Bloomberg</a>.His net worth, which is closely tied to Tesla's share price, received a huge boost in the wake of the news that Donald Trump had won reelection as Tesla shares soared to their highest level since the beginning of the year.But the tech mogul's wealth comes from a number of sources and it isn't stable. Musk is currently the world's richest person and other billionaires are close on his heels, too: <a href="https://www.businessinsider.com/jeff-bezos-life-career-education">Jeff Bezos</a> is $43 billion behind Musk, while Meta CEO <a href="https://www.businessinsider.com/mark-zuckerberg">Mark Zuckerberg</a> is currently $18 billion below Bezos.<h2>How has Musk's net worth changed over time?</h2>Musk, who was born in South Africa, moved to Canada and dropped out of a Ph.D. at Stanford, became a millionaire before he hit 30. Musk started Zip2, a website that provided city travel guides to newspapers, with his brother Kimbal Musk, and sold it to Compaq for more than $300 million in 1999. Musk, then aged 27, is believed to have got $22 million from the deal.He went on to cofound online bank X.com in 1999. It soon merged with Peter Thiel's Confinity to become PayPal, and the company was bought for $1.5 billion by eBay in 2002. Despite having been ousted as CEO, Musk walked away with around $165 million. Musk cofounded space-exploration company <a href="https://www.businessinsider.com/spacex-elon-musk">SpaceX</a> in 2002. In 2004, he became an investor in and chairman of EV company Tesla.During the financial crisis in 2008, he saved Tesla from bankruptcy with a $40 million investment and a $40 million loan. That same year, he was named <a href="https://www.businessinsider.com/tesla-ceo-elon-musk">Tesla's CEO</a>.Musk said 2008 was "the worst year of my life." Alongside problems in his personal life, Tesla kept losing money and SpaceX was having trouble launching the first version of its <a href="https://www.businessinsider.com/spacex-falcon-9-launches-updates-schedule">Falcon rocket</a>. By 2009, Musk was living off personal loans.But <a href="https://www.businessinsider.com/tesla">Tesla</a> went public in 2010, and Musk's estimated net worth steadily climbed. In 2012 he debuted on Forbes' Billionaires List with an estimated wealth of $2 billion. In 2016, Musk set up the tunnel-digging business <a href="https://www.businessinsider.com/elon-musk-the-boring-company">the Boring Company</a>.The next year, he founded neurotechnology startup <a href="https://www.businessinsider.com/neuralink">Neuralink</a>.Musk's net worth began a rapid ascent at the start of the pandemic as <a href="https://markets.businessinsider.com/stocks/tsla-stock" target="_blank" rel="noopener">Tesla stock</a> prices soared. Musk started 2020 with an estimated net worth of just under $30 billion and was worth around $170 billion just a year later – a more than five-fold increase in just a year. His estimated fortune peaked at around $340 billion in November 2021.<a href="https://www.businessinsider.com/did-elon-musk-buy-twitter-acquisition-details">Musk also bought Twitter</a> for $44 billion in October 2022, serving as its CEO until he stood down in early June 2023.But it's tumbled since then: Tesla stock was down 56% by the end of January 2024, slashing the company's value from over $1.2 trillion to below $600 billion.<a href="https://www.businessinsider.com/elon-musk-net-worth-tesla-robotaxi-event-2024-10">Musk's net worth declined by $15 billion</a> after Tesla's "We, Robot" day on October 10 when it unveiled its highly anticipated robotaxi lineup. While the event turned heads with dancing robots and sleek autonomous vehicles offering rides to guests, it left investors with question marks surrounding the economics of the ride-hailing service. Following a big earnings beat later that month, Tesla's stock surged by 22%, leading <a href="https://markets.businessinsider.com/news/stocks/elon-musk-net-worth-gains-tesla-stock-price-earnings-tsla-2024-10">Musk's net worth to increase by about $30 billion</a>. The morning of Trump's reelection on November 6, which Musk heavily campaigned for, Tesla's stock was up about 15% to $289.37 per share after the market opened, the highest it's hit all year. <h2>Where does Musk's fortune come from?</h2>Musk's wealth is largely dependent on Tesla shares. Though he takes no <a href="https://www.businessinsider.com/elon-musk-tesla-salary-dropped-zero-2020-pay-electric-vehicles-2021-8">salary from Tesla</a>, he's awarded stock options when the company hits challenging performance metrics."Elon will receive no guaranteed compensation of any kind — no salary, no cash bonuses, and no equity that vests simply by the passage of time," Tesla said in 2018 when the company announced a 10-year performance award for Musk. "Instead, Elon's only compensation will be a 100% at-risk performance award, which ensures that he will be compensated only if Tesla and all of its shareholders do extraordinarily well."Investors had initially approved the $55 billion compensation plan in 2018, but a Delaware judge <a href="https://www.businessinsider.com/judge-strikes-down-elon-musk-tesla-compensation-pay-package-2024-1" target="_blank" rel="noopener">voided it in January</a> on grounds that Musk had undue influence over the package and its approval due to close ties with several board members.At its annual shareholder meeting in June, <a href="https://www.businessinsider.com/elon-musk-pay-package-approved-tesla-shareholders-vote-results-2024-6">investors voted to approve Musk's pay package</a>.According to Bloomberg, close to half of Musk's net worth comes from Tesla shares, while just over 20% comes from <a href="https://www.businessinsider.com/spacex-stock">SpaceX stock</a>.The rest of his wealth comes from shares in <a href="https://www.businessinsider.com/elon-musk-twitter">Twitter</a> and The Boring Company, as well as other miscellaneous liabilities.

What is Elon Musk's net worth? Find out the wealth of the Tesla, SpaceX CEO

<ul class="summary-list"><li>Warren Buffett has sold 23% of his Bank of America stake for about $10 billion since mid-July.</li><li>Berkshire Hathaway's American Express stake is now more valuable than its Bank of America bet.</li></ul>Warren Buffett has followed up the surprise paring of his Apple stake by taking a knife to another of his largest holdings: <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/banking/bank-of-america-review">Bank of America</a>.The famed investor's <a target="_blank" class="" href="https://www.businessinsider.com/warren-buffett-berkshire-hathaway-trillion-dollar-valuation-2024-8">Berkshire Hathaway</a> sold about 239 million shares or around 23% of its stake in the banking giant between July 17 and October 2, Securities and Exchange Commission filings show.<a target="_blank" class="" href="https://www.businessinsider.com/how-warren-buffett-spends-money-net-worth">Buffett</a>, 94, offloaded the shares at prices ranging from about $39 to $44, generating roughly $10 billion in proceeds — and he may not be done selling.Berkshire has slashed its stake from 1.03 billion shares to 794 million shares, reducing its ownership from 13.2% to 10.2%. At Thursday's close, its remaining shares were worth just over $31 billion.If the conglomerate keeps selling and ceases to be a 10% shareholder, it will no longer have to update the market within two days of most transactions involving Bank of America stock.The Wall Street titan was Berkshire's second-largest holding after Apple at the end of June — the positions were worth about $41 billion and $84 billion each. Buffett's <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/warren-buffett-annual-shareholder-letter-coke-amex-buybacks-taxes-earnings-2023-2">piece of American Express</a>, worth around $41 billion, is now more valuable than his Bank of America bet.Buffett's <a target="_blank" href="https://markets.businessinsider.com/news/stocks/warren-buffett-diet-mcdonalds-coke-junk-food-soda-ice-cream-2023-4">iconic stake in Coca-Cola</a>, worth $28 billion, could soon be worth more, too, if the disposals continue or the stocks move the right way. Berkshire is set to reveal the contents of its portfolio as of the end of September in a mid-November filing.<h2 id="8f6cdd02-7480-4793-9ea2-2958c6b77ff6">No explanation yet</h2>The "Oracle of Omaha" hasn't publicly said why he's dumping Bank of America, but there are a few plausible reasons. He might be taking profits after a good run: the stock has gained about 50% in the past year and touched its highest level in over two years on July 17, the day that Buffett began selling.Buffett cited the prospect of <a target="_blank" class="" href="https://www.businessinsider.com/warren-buffett-berkshire-hathaway-stock-sales-earnings-cash-pile-buybacks2024-5">higher capital-gains taxes</a> as one reason for cashing out some of his Apple profits, and that could be true for Bank of America, too. Berkshire's Apple position was worth around $174 billion at the end of 2023, but Buffett and his colleagues <a target="_blank" class="" href="https://www.businessinsider.com/berkshire-hathaway-apple-stake-second-quarter-earnings-report-2024-8">cut it by 56%</a> in the first half.Based on the cost bases of those positions, Berkshire has more than <a target="_blank" href="https://markets.businessinsider.com/news/stocks/warren-buffett-berkshire-hathaway-apple-stock-price-record-share-sales-2021-12">quintupled its money</a> on Apple and tripled it on Bank of America, and it has now realized a sizable chunk of those paper gains.Buffett might also be rebalancing Berkshire's $300 billion stock portfolio in line with his smaller Apple bet. Or he might have soured on Bank of America's outlook; he's <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/warren-buffett-bank-stocks-accounting-banking-crisis-failures-svb-fdic-2023-4">exited several of its peers</a> including JPMorgan and Goldman Sachs in recent years.There's also a chance he's gathering cash to make an <a target="_blank" class="" href="https://www.businessinsider.com/warren-buffett-letter-2019-berkshire-hunting-for-elephant-sized-acquisition-2019-2">elephant-sized acquisition</a>. But Berkshire has plenty of dry powder for deals: it held a record $277 billion in liquid investments at the end of June, after dumping over $90 billion worth of stocks in the second quarter.<h2 id="cd3ef38f-5bec-45dc-90c9-ec39aaced733">Bathtub billions</h2>Buffett's Bank of America bet dates back to 2011, when he had the idea to invest in the bank <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/warren-buffett-invested-5-billion-bank-of-america-made-fortune-2020-10">while taking a bath</a>. He initially got tied up in the bank's call center but eventually reached CEO Brian Moynihan.The pair agreed Buffett would invest $5 billion in exchange for $5 billion of preferred stock paying a 6% annual dividend, plus warrants to buy 700 million common shares for a set price at any point over the next decade.Buffett exercised the warrants in 2017, receiving over $20 billion worth of common stock at a cost of about $5 billion, which he covered by redeeming virtually all of his preferred shares.True to his bargain-hunter reputation, Buffett <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/warren-buffett-bank-of-america-buying-years-pay-off-experts-2020-8">topped up</a> his Bank of America stake in 2020, when the pandemic-hit stock was trading around $25. He purchased about $2.1 billion worth over 12 consecutive trading days.He looks to have <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/warren-buffett-berkshire-hathaway-bank-of-america-stock-portfolio-gain-2021-10">made a killing</a> on the investment, given he's now sold nearly a quarter of it for around $40 a share. That's close to 60% more than his purchase price in the <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/warren-buffett-buys-another-337-million-bank-of-america-stock-2020-8">summer of 2020</a>, and more than five times the $7 or so he paid for the bulk of the position using warrants.

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