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Europe’s financial services sector must reinvent itself in order to survive disruption and remain competitive, according to a new joint report from PwC Luxembourg and development agency Luxembourg for Finance.

The report published Monday urges Europe’s banks and wealth managers, along with payment service providers and insurers, to proactively embrace “Amazonization” and the shift in power to consumers driven by online platforms.

The European financial sector has lost significant ground to U.S. and Chinese counterparts over the last decade. Since 2007, China’s banking sector has grown its share of global tier one capital from almost nothing to around 53%, while Europe’s market share has tumbled from 73% to 18%, the report outlines.

Tier one capital is a core measure of a bank’s financial strength, from a regulator’s perspective. It refers to the bank’s “core capital” which is comprised of equity capital, held in common stocks, and disclosed reserves.

European banks are currently experiencing will documented profitability struggles and PwC researchers suggested that upcoming regulations would increase their already stringent lending requirements.

‘Amazonization’

The report highlights that new online platforms will become the dominant customer interface with the continent’s financial services industry, offering similar bespoke search, purchase and management capabilities to Amazon. This will offer a new level of transparency, comparability and convenience which will directly impact the four main sectors of financial services.

Bank of America Merrill Lynch is one example of a Wall Street competitor seeking to achieve this monopoly. In October 2018, the megabank introduced a seamless transition mechanism via its app between retail banking and investment management brokerage capabilities.

Banks will need to become whole solution one-stop shops for clients’ specific financial needs, aggregating their own products alongside innovation available through third parties.

The research mirrors a report released last week from management consultancy Bain & Company. Following its release, partner Mike Kuehnel emphasized the need for tech investment and partnerships if European banks are to catch Wall Street peers.

“I see many banks that are more tactical and opportunistic about their changes they are embarking upon across products and clients, and also their technology investment,” Kuehnel told CNBC’s “Squawk Box Europe”.

“Let’s take J.P. Morgan as an example — they are spending nearly $11 billion on a yearly basis into technology, and they have a very dedicated change agenda behind that. They understood that this is less about maintaining their legacy system, but more about investing into new technologies, so driving innovation.”

The mainstreaming of sustainable finance, underpinned by millennial preferences, and the multi-polarization of Europe’s financial hubs post-Brexit, will also force the sector to adapt.

John Parkhouse, senior partner at PwC Luxembourg, said: “With Europe’s financial industry facing up to Amazonization and the critical themes like ESG (environmental, social and governance) innovation and technology that accompany it, more traditional players must focus and invest, if they want to remain competitive on a global scale.”

“We recommend firms disrupt themselves to become cost effective, nimble and competent, prioritizing the efficient use of data and new technology.”

Parkhouse also called for a “deepening of cross border services” and fresh emphasis placed on innovation and digitalization, which he said can be achieved by completing the EU’s banking and capital markets union (CMU), as well as alignment at the national level.

EU action

Luxembourg Finance Minister Pierre Gramegna said that the completion of the CMU should be a priority, as it will help speed up the further completion of the single market and increase access to a wider source of cross-border financing and investment opportunities.

Pierre Gramegna, Luxembourg’s finance minister.

Marlene Awaad | Bloomberg | Getty Images

“Paradoxically, Brexit has not only increased pro-EU sentiment in the remaining EU member states but has also underscored the benefits for companies, be it in finance or in other industries, of having unfettered access to the world’s largest economy and trading block,” Gramegna said.

In particular, the report argues that the loss of the City of London from the EU will dent competitiveness with global hubs like New York and Singapore in the short term, but will eventually strengthen other European financial centers such as Frankfurt, Paris, Amsterdam, Dublin and Luxembourg.

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House passes Hong Kong rights bill amid Trump China trade talks

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Pro-democracy supporters hold their phone’s flashlight in a rally to show support for students at The Hong Kong Poytechnic University on November 19, 2019 in Hong Kong, China.

Anthony Kwan | Getty Images

The House passed a pro-Hong Kong rights bill on Wednesday, putting President Donald Trump in a bind as he tries not to roil high-stakes trade talks with China.

The chamber approved a measure that aims to protect human rights in Hong Kong by a 417-1 margin amid efforts to crack down on months of pro-democracy protests. The House passed a second bill to bar the export of certain munitions to Hong Kong police by the same margin.

The Senate unanimously approved both pieces of legislation, so they head to Trump’s desk after House passage. The White House has not yet signaled where the president stands on the bills, but he could face a dilemma.

Chinese Foreign Ministry spokesman Geng Shuang said Beijing “condemns and firmly opposes” the first bill, known as the Hong Kong Human Rights and Democracy Act, according to Reuters. Trump aims not to anger the Chinese regime as he pushes for the elusive first piece of a U.S.-China trade agreement.

Congress’ move to pass the bills comes at a tricky time for Trump, who hopes to have a China trade victory to promote on the 2020 campaign trail. Major U.S. stock indexes fell on Wednesday following a Reuters report that the world’s two largest economies may not finish a “phase one” trade deal this year.

Trump did not answer shouted questions from reporters Wednesday about whether he would sign the bills. The legislation passed with near-unanimous support in both chambers, meaning Congress could override a Trump veto.

The government response to months of pro-democracy protests in Hong Kong, a semi-autonomous region, has grown increasingly violent. The demonstrations first started in response to a since scrapped bill that would have allowed extradition to mainland China. 

Some members of the Trump administration such as Secretary of State Mike Pompeo have harshly criticized China’s response to the protests. Trump has said China should handle the situation itself, though he has warned harsh treatment of people in Hong Kong could derail the trade talks. 

One bill passed this week would require Pompeo to say once a year that Hong Kong has enough autonomy to keep special U.S. trading consideration that helps its economy. It would also set up the potential for sanctions on people responsible for human rights abuse in Hong Kong. 

The second measure would bar the sale of items such as tear gas and rubber bullets to Hong Kong police.

Asked about the trade talks earlier Wednesday, Trump said Beijing wants to strike a trade agreement more than he does. He added that he has not made a deal because “I don’t think they’re stepping up to the level that I want.” 

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Autonomous driving ‘hard’ when other factors are in play, Pony.ai CEO

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Aerial view, view from above, drone view, or birds eye view of a highway at night.

Malorny | Moment | Getty Images

Autonomous driving in a “simple environment” is fairly easy but becomes hard to keep safe when other factors are in play, according to the CEO of self-driving start-up Pony.ai.

Echoing some of the comments he made earlier in the week, James Peng highlighted the challenges faced.

“The reason autonomous driving is so hard is because all of us, right, we are sharing the same road with AI (artificial intelligence) and we are irrational at a lot of times,” Peng, who was speaking on a panel discussion on Tuesday at the East Tech West conference in China, explained.

“So, this is the task: where autonomous driving in a simple environment is fairly easy, it can be easily done, but if you’re adding the irrationality of all the other vehicles, pedestrians, then it becomes very hard to keep it safe,” he added.

Around the world, the last few years have seen a range of tests and developments take place in the autonomous vehicle sector.

At the end of October, for example, the Volkswagen Group announced the creation of a subsidiary called Volkswagen Autonomy (VWAT), with the German car giant saying it planned to “make autonomous driving market-ready.”

With offices in Munich and Wolfsburg, Volkswagen said that VWAT would aim to “bring a self-driving system… to market maturity.” As well as its sites in Germany, Volkswagen said it also planned to establish companies in Silicon Valley and China in 2020 and 2021 respectively.

For its part, Pony.ai, which has offices in the U.S. and China, and Hyundai recently launched BotRide. Pony.ai has described BotRide as “a shared, on-demand, autonomous vehicle service operating on public roads in California.”

On the mass adoption of autonomous vehicles, Pony.ai’s Peng sought to add some perspective to the discussion, emphasizing that tests were already underway.

“I think people tend to be super optimistic at the beginning and suddenly become very pessimistic, but I think that shouldn’t be the case either,” he argued, explaining that his firm had almost 30 vehicles that were being tested in the Nansha area of Guangzhou, even during rush hour.

“You will see the vehicles actually being able to handle complex driving situations, very, very complex driving scenarios.”

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Baby Yoda is the star but it’s not perfect

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The Child, popularly known as “Baby Yoda,” is a character in the new Disney+ series, “The Mandalorian”

Episodic Photos, Disney

Disney+, the $6.99-a-month streaming video service from entertainment giant Disney, launched on Nov. 12.

I’ve been using it since then, and there’s a lot to like. But there are also a few areas where Disney+ can improve the experience for users, including through security and by adding new features that would improve controls and how users find content.

Here are some thoughts on Disney+, including what’s good and what can be improved.

What’s good: Great material at a fair price

A scene from “The Mandalorian,” an original Star Wars TV series that will stream on Disney+.

Disney

Disney+ has a ton of content, including a lot of movies and TV shows that millennials and GenX grew up with and haven’t watched in years. It offers a chance for us to rewatch that content and share it with a new generation of youngsters.

I love that I can easily pull up original Mickey Mouse films, popular animated films such as “Beauty and The Beast,” “Snow White and the Seven Dwarfs,” the original “Lady and the Tramp” and “Peter Pan.” Then there’s the whole “Star Wars” series and a bunch of earlier “Star Wars” TV shows, which I have yet to dive into. In all, there are about 7,000 TV episodes and 500 films from Disney, Pixar, Marvel Studios, Lucasfilm, 20th Century Fox and National Geographic.

My favorite, though, is “The Mandalorian,” Disney’s new “Star Wars” show. I’ve watched the first two episodes, and I’m hooked. If you haven’t watched it yet, you should. It’s fun and exciting and brings some of the magic of “Star Wars” films to the small screen. Plus, it’s got this little fella:

I love that you can download content in various quality settings (to save space) to your phone or tablet for watching on the go. And you can download either over Wi-Fi or cellular, so you can save a movie quickly on the plane before your flight takes off if you don’t have Wi-Fi.

Best of all, it works: I haven’t had any issues with dropped streams or loss of quality. I don’t have those problems with Netflix, Amazon Prime Video, Apple TV+ or Hulu, either, but I have sometimes run into problems with other streaming services.

Disney+ costs $6.99 a month or $69.99 a year. It’s more affordable than Netflix, which costs $8.99 per month for the basic plan but more if you want to watch on up to four screens at the same time, which is included in the Disney+ entry-level price. Also, Disney+ sells a bundle with Hulu and ESPN+ for $12.99 per month. You can save money if you buy all three, since ESPN+ normally costs $4.99/month and Hulu with ads costs $5.99/month.

My guess is Disney+ will raise the price in a year or two after people flock to it, but for now it’s still the best deal out there.

The Disney+ (Plus) logo is seen displayed on a smartphone.

Rafael Henrique | LightRocket | Getty Images

Finally: Disney+ is one of the easiest apps to set up on third-party devices such as Amazon Fire TV. Instead of having to jump through hoops to enter your username and password in a web browser or attempt to type it out with an on-screen keyboard on the Fire TV, you just open the Disney+ app and you’re logged in. It’s a breeze, and other apps should follow suit.

What could be better: Controls, security

In this photo illustration, the Disney + logo is displayed on the screen of an Apple MacBook Pro computer on November 08, 2019 in Paris, France.

Chesnot | Getty Images

Disney+ isn’t perfect. There are some areas where it can improve the user experience.

For one, there’s no option to dive in to shows or movies and continue watching where you left off. Instead, you need to search and find the show again. Disney+ should add an area called “Continue Watching” like other competitors, including Netflix. It’s just more user friendly.

Also, some of my colleagues have pointed out that, unlike other streaming services, you can’t simply pause the stream by tapping the space bar on a computer. Disney should add this, since it’s a pretty widespread use-case for people who stream on computers.

A bunch of Disney+ passwords were being sold on the dark web recently, but Disney says it wasn’t hacked. Instead, this is probably the result of people reusing passwords that were already compromised. Disney could reduce the chances of this by adding two-factor authentication, which would send you a code to a phone to verify that it’s actually you who is logging in.

There’s a reason this may not exist yet: Disney basically tolerates password-sharing today, as the service is new and it believes people who sample Disney+ will eventually pay for it, according to an interview with The Verge. Adding two-factor authentication would make password-sharing harder.

Should you sign up for Disney+?

SOPA Images | LightRocket | Getty Images

There’s a seven-day free trial, so it’s a no-brainer. It’s worth just checking out to see what’s available, especially if you — like me — enjoy all the old content that you might have once owned on VHS but lost long ago. I think it’s worth paying for once you get past the trial. Disney did a great job here with lots of content you can download, original shows such as “The Mandalorian” and simple setup. Plus, it’s one of the cheapest streaming services out there.

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