Google+ was launched 7 months ago in June 2011. On January 19 it was reported that G+ has surpassed a user base of 90 million and may reach 400 million by the end of 2012. However, these are not necessarily active users (as the 900 million reported users of FB). MPB analysts are working right now on a new analysis of social media & banking (to be published end of March 2012). The preliminary results on Google+ show that most banks have a presence there - but usually without any or with very little content. It can be described as “wait-and-see-strategy” or simply to put a placeholder on the network.

Over the last 2 months G+ has gained a lot of traction and there seems also some clear support from Google’s search services for the network. I guess that G+ as a networking platform is still technically a bit confusing (may be a consequence of the different terminology like “circles”, “hangout” etc.) but is essentially offering a similar platform as Facebook. Some innovations like “hangouts” and the search function seem even better than on FB. Yet - despite some heated discussion among tech geeks - this is not really important. What seems crucial is the point that Google potentially has the market power and leverage to push G+ to become a FB rival. The key here is the search services of Google and some existing services which - in combination with a new viable network platform - can potentially become very successful. Yes, Google Buzz was a disappointment - but probably a necessary stepping stone to the technically much more mature G+.

What does this mean for banks and other financial service providers? They should probably have a presence on G+ and also spend some resources on filling this presence with content & life. Not necessarily too much yet - as it remains to be seen what will happen to G+ over the next 12 months but don’t underestimate the marketing power of a 800 pound gorilla. If G+ can keep its speed one will have to take it seriously very soon. It will be fascinating to watch how and where G+ and FB will try to get a competitive advantage and how the will try to differentiate themselves from each other. Make sure to follow our research when our new report will come out in March with more analysis about Google+, other social media trends and how banks can profit.

Chinas’s Internet users cross 500 million reports TechWorld. Almost 70% of those users access the Internet via their mobile devices. Today, China (and in a broader sense the whole of East-Asia) is at the forefront of the mobile and social media revolution. Therefore, it is no wonder that Asian financial institutions are time and again leaders in our rankings for social media and mobile apps. For instance, the Bank of China has - according to our latest app report - the best single mobile banking app. DBS Bank from Singapore made the 4th place in our overall mobile app ranking.

For the future, we are expecting that Chinese financial institutions as well as players from Singapore, Indonesia and India will will play a much bigger role in the application and web development for the socially networked and mobile consumer. It’s a matter of survival in a market place that is dominated by ever more tech-savvy customers who expect their bank to be easily reachable via social media channels as well as on various mobile devices.

Brainyard has a great piece on Wells Fargo’s efforts to implement an internal social media strategy. The intermediate conclusion goes like this:

“…there have been some early signs that internal social networking tools will add significant value to the company. “We’re still in the first iterations–whether or not internal social networking tools will reduce service times or the email volume remains to be seen,” Carlson-Jagersma said. “But what I do hear from everyone is, ‘Oh, my gosh–it’s so nice to put a face to a name.’ We’ve made this huge company feel a little bit smaller. That has been the immediate benefit.”

I guess this is a pretty good outcome for a start. MyPrivateBanking will in 2012 analyze not online the external social media strategies of financial services companies (as we have done extensively in 2010/2011) but also focus more on the internal side.

New York Times has reported about our research on apps as well as the German edition of the Financial Times. Some more coverage you will find here (TechNewsDaily, US), here (Fondsnieuws, Netherlands) and here (CIO, Germany).

Frankly, this is probably the most comprehensive report worldwide on banking and apps you can find. It is full of insights on how banks are doing with their mobile apps for private customers. One of the most surprising findings for me was that only 40% of the surveyed banks offered some kind of brokerage via mobile app. Another interesting result is that US banks (with the exception of Citbank) are very weak with regard to their mobile app strategy. Not sure whether this is due because US banks are more conservative than their competitors in Asia or Europe or whether they are facing some specific hurdles (like privacy laws…)

A few days ago the Bank of New York Mellon was named in a foreign exchange fraud case by the New York State Attorney General. BNY Mellon allegedly has promised insitutional clients to give them the best exchange rate available. But in reality the bank gave clients the worst or nearly the worst rate defrauding clients of USD 2 bn.

In this case institutional clients were the victims. But as we know from many complaints of private clients, it happens to private wealth clients as well. In these cases most often the bank does not even promise a good or the best foreign exchange rate. The bank executes transactions just at bad or very bad rates for their clients. Most clients don’t even notice as they have no clue what the market rate for a specific currency pair is at the point in time when the transaction is executed. It is common for private banks to deviate 100 to 200 basis points from the market rate (1% to 2%). This generates a very nice income stream for the bank - the client does not even register the scam. We can only recommend to check very closely any foreign exchange transaction, compare with competiors and re-negotiate the rate.

There are a few things every private investor should know about foreign exchange:

1. Before you make a foreign currency transaction, check the real time market rate on the Internet. Yahoo Finance or other portals give you an easy set of tools to get the most up-to-date market rate on almost any important currency pair.

2. Beware of automatic currency exchange when you do an online or telephone trade with your bank or broker. They might just convert money from your dealing account to buy foreign assets at the so called “system rate”, which is usually the worst on offer from your bank.

3. Negotiate your exchange rate: make sure that you get preferential treatment, an improvement on the system rate, when you want to change small amounts quickly online. Be even more insistent on preferential rates for any amount higher than USD 10,000. You should be able to negotiate a rate between 10 and 40 basis points better than the market rate.

4. If you can’t get what you want from your main wealth manager, don’t hesitate to switch to special platforms to get a better exchange rate. In most countries you will find online brokers who offer extremely competitive deals on foreign currency - especially if you make frequent trades for substantial amounts.

Jamie Dimon, the CEO of  JP Morgan Chase considers the Basel III accords as “anti-American”. He suggests that the US should pull out of these international agreements. Basel III requires bank to hold more equity. The biggest banks - like JP Morgan - would be required to hold 9.5% of their risk weighted assets as so-called core-tier-1-capital.

Felix Salmon gives a clear answer to Dimon. Nothing to be added…

FT Alphaville reports today that French banks have a funding problem. Reason is that French banks have historcally relied heavily on short-term funding (borrowing) to fund their business. How can private banking clients insulate themselves technically from a meltdown of their bank and keep assets safe?  Of course, rising gold prices suggest that many move their assets into (physical) gold. However, it is important to understand that if you keep securities in a separate account they cannot be touched if a bank becomes illiquid.  Experts recommend to private banking clients to  move deposits and cash to money market funds or other (relatively) safe securities if they wish to insulate themselves from possible liquidity problems of their bank. Another measure is to chose a bank carefully and have a hard look at the balance sheet befeore opening an account…

The Swiss newspaper NZZ reports today (print only) that the Handelsgericht of the Kanton Zurich (business court) decided that a client has the right to be informed about all kick-backs, retrocessions or distribution fees the bank received from a third party for products sold to the client. The client had sued Swiss private bank Credit Suisse. The bank had sold to him equity notes of J.P. Morgan and did not disclose kick-backs received.

Nouriel Roubini aka Dr. Doom threw an epic bash at his new east village penthouse. You can find the plans of the modestUSD 5 m apartment on James Altucher’s blog (scroll all the way down). It seems that bleak forecasts pay well these days…