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A 500 million lesson in the importance of UX


This week in fintech

February 22 · Issue #48 · View online

A weekly summary of the latest news in our world of finance, design, and technology.

Also:  🖼 NFT - $71 k for a video highlight? 👵 Pension in alternative assests? 📦 Flatpacked Fintech? 🤪 Tips for Microsoft Teams

💩 A 500 million lesson in the importance of UX
Last week Citibank got a $500 million lesson in the importance of User Experience. You can read the details here, but in short, Citibank accidentally wired $900 million incorrectly because the users of the software didn’t know that they should check off two extra checkboxes. When they discovered the error the next day, their first reaction was to email tech support to say the software was broken, not to email the lenders asking for the money back (which they did afterward). Eventually, they just got about $400 million, a total net loss of $500 million. Naturally, Citibank went to court to get their money back but eventually lost the case because it seemed like the payment was downpayment for some loans. When the lenders knew it was a mistake, they started sending each other chat messages making fun of Citibank:
DFREY5: I feel really bad for the person that fat fingered a $900mm erroneous payment. Not a great career move [..]
DFREY5: How was work today honey? It was ok, except I accidentally sent $900mm out to people who weren’t supposed to have it
This is the UI where the Citibank-error happened.
This is the UI where the Citibank-error happened.
Let’s not talk about user error in this case. The transfer had to be approved by three users, where everyone thought the transfer was correctly handled. What I’m thinking about is how much CitiBank is investing in creating a better UI now? My guess? Not much. 
🖼 NFT - $71 k for a video highlight?
We’ve previously written about NBA Top Shot where you can buy digital collectibles of in-game-highlights. Each NBA Top Shot moment is a non-fungible token (NFT), which means it can only have one owner and cannot be copied. NFTs are very popular at the moment and used “to create verifiable digital scarcity” and digital ownership. It might seem crazy paying $71 477 for a video highlight of LeBron James, but as the CEO of Dapper Labs - owners of NBA Top shot says:
There are guys buying trading cards and they’re never taking the custody of the cards before putting them into vaults. [..] There are people buying shares of cards on sites like Starstock, without ever seeing the card. This is the same concept. We have a lot of believers in what we offer, and we have people who don’t get it. That’s OK. We can’t please everybody.
The use of NFTs this week also got a bit more mainstream when Christie’s announced that it will become the first major auction house to sell a fully digital, NFT-based artwork. For the first time, Christie’s will also accept ether (the cryptocurrency that runs on the Ethereum blockchain) as payment for the artwork.
Christie’s will auction  “Everydays: The First 5000 Days” by Mike Winkelmann, also known as Beeple
Christie’s will auction “Everydays: The First 5000 Days” by Mike Winkelmann, also known as Beeple
Crypto technology has many uses and is absolutely not limited to speculating on meme coins. In fact, the emergence of real utility (vs speculation) is the single most important thing that needs to happen for crypto to live up to its potential (and current market values). I think NFTs and digital art is likely to be an early example of that utility emerging. Fred Wilson
Scott Belsky, CPO of Adobe and Behance, is also very positive to the NFT-movement:
This NFT world is likely the greatest unlock of artist opportunity in 100+ years. This isn’t a suboptimal or fringe version of the real-world art economy, it is a vastly improved one.
Last week we wrote about Bitcoins energy footprint, but what is the footprint of NTFs? Memo Akten has dug deeper into the issue:
“Joanie Lemercier tried to have this conversation [about energy footprint] with NiftyGateway for months, to understand the impact of his release, but couldn’t get any information about this. He only got the classic Silicon Valley response: ‘we will check with the team and get back to you’. Lemercier is trying hard to reduce his studio’s electricity consumption every year, and it turns out his NG release consumed in 10 seconds more than his entire studio over one and a half years”.
Akten has made a website to calculate ecological footprint of NTFs called The results are not good news for the technology. The footprint from all NFTs on the NFT marketplace SuperRare is 6 GWh, 3.8 Mt CO2, equivalent to an EU recidents electricity consumption for 2000 years(!?!).
The usage of all the NFTs on SuperRare
The usage of all the NFTs on SuperRare
👵 Pension in alternative assets?
Despite the carbon footprint of cryptocurrencies, they are getting a lot of traction at the moment. Many people want to diversify their investments, and cryptocurrencies are often a part of this equation. In Norway, we’ve just gotten our own pension account (EPK), which is supposed to simplify the pension investments and is a massive step in the right direction. Unfortunately, or perhaps understandably, there are restrictions to what you can invest in on EPK-accounts. More specifically, you can only invest in UCITS fund / listed funds. Although the US’s bank infrastructure is quite behind Norway in many areas, many innovative solutions are happening. One of these is AltoIRA which enables alternative investments in retirement accounts. We’re not just talking about cryptocurrencies, but also artworks and more. Packy McCormick has written about why this could be a good idea as part of your portfolio:
Allocating money across a diversified portfolio has historically generated better risk-adjusted returns than concentrating in just stocks, bonds, or even the traditional 60/40 split.
Statistics from AltoIRA
Statistics from AltoIRA
While we’re into the topic of investing, I just came over CheaperThanGuru, which shows how the best investors invest. It’s a fascinating view of buy and sales from a lot of professional investors with nice visualizations. Here is f.ex. Warren Buffets movements in Apple over the last years:
📦 Flatpacked Fintech?
Every company will be a Fintech company, has long been a saying from the VC-firm Andreessen Horowitz. This week we saw two signs of this trend:
  1. Furniture retailer IKEA is acquiring a 49% stake in Ikano Bank intending to offer a full suite of banking services instore and online. The move is described as a “decisive step into financial services” that will “help make IKEA more affordable, accessible and sustainable”.
  2. The web browser group Opera is getting involved with European fintech by launching a startup called Dify and announcing its going to invest more than $100m in fintech over the coming years. Dify is an in-browser cashback service that will let Opera’s users earn cashback from their online shopping without jumping through any hoops.
🤪 Tips for Microsoft Teams
🙏 Don’t keep it a secret!
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Marius Hauken, partner Stacc X
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