3 Puzzles for the Bank Sector

By John Maxfield Markets Fool.com

What does the future of banking look like? That question is at the top of bankers' mindstoday.The rise of the internet is presenting a lot of new puzzles for companies across the board to solve.

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In this week's episode of Industry Focus: Financials, Motley Fool analyst Gaby Lapera and contributor John Maxfield talk about three of the biggest problems facing the financials industry in the wake of the internet and big data. Listen in to find out more about crypto-currencies, especially Bitcoin, and what hurdles they'll have to clear before they're adopted by the masses; what API is and how it can both help banks and hurt their businesses in a big way; some of the biggest benefits and drawbacks to cloud banking and third-party app banking; and much more.

A full transcript follows the video.

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This podcast was recorded on May 1, 2017.

Gaby Lapera: Hello, everyone!Welcome to Industry Focus, the podcast that dives into a different sector of the stock market every day. You'relistening to the Financials edition, taped today onMonday, May 1, 2017. My name is Gaby Lapera, and joining me via the phone isJohn Maxfield, one of our financials analysts here at the Fool. How's it going, Maxfield?

John Maxfield: It'sgoing great,very happy to be with you, as always.

Lapera: Fantastic.I'm excited for today's show, because we're doing a theme week that'sseparate from the topic of today's show,but I decided to marry them andmarinate them a little, and it's just full of flavor for our listeners.I'm going to end that metaphor andmove on to what we're actually talking about today. Today's theme is mysteries! But, no,seriously, today we're going to be talking about puzzles, both anactual puzzle for listeners to solve and puzzles that banks aregoing to need to start solving in the near future. Make sure youlisten all the way to the end to hear about ourlistener puzzle challenge. We're going to put that aside for now and turn to banking puzzles. We have these threebig categories were going to talk about. The first is going to beBitcoinand blockchain technology. We're also going to be talking about big data and cloud, and we're also going to be talking about API stuff. So, Bitcoin.Maxfield and I are going to have a bit of a back and forth with this. This iskind of a new topic for both of us, so we're both learning. Bear with us. Ifanyone out there is a Bitcoin expert and we getsomething wrong, please write us a gentle email andwe'll make sure to fix it in the next episode.

What is Bitcoin? Bitcoin iswhat they call a crypto-currency, which is a digital currency, it's made, mined, actually, by thesecomputers that are basically solving math problems. In order to get one, in thebeginning, it was really easy to get a Bitcoin, theproblems were easier, but astime goes on,the problems become harder. Andwhat's really interesting is there's a cap onthe total number of Bitcoins that can ever exist, which is 21 million. Right now, we're around 16.3 million Bitcoin in circulation, at the moment.Bitcoin,you can buy one whole Bitcoin, andI think thecurrent price on Bitcoin, last I looked, was around $1,300, which is a lot of money for one Bitcoin. I just looked it up. Right now, onMay 1 at 12:42 p.m. Eastern time,Bitcoin is equal to $1,446.41. Which is a lot of money, butthankfully you don't have to spend an entire Bitcoin,because that would be pretty excessive to pay that for one pizza. They can be split up to100-millionth of a Bitcoin,which is called a satoshi, and that's the name of the person orpotentially group of people who created the crypto-currency. Much like someone who would create a crypto-currency, this is a very cryptic individual, ha-ha, andno one knows who he or she or they are. So, yeah,Bitcoin, very interesting. Do you have any questions so far, Maxfield?

Maxfield: You knowwhat I think about when I think about Bitcoinand blockchain technology more generally --I'm not an expert on blockchain technology, I'mmuch more of an expert on bankingas opposed to technology, butmy understanding is the way the blockchain works,and this is in the context of Bitcoin, is, to your point, Gaby, each time a transaction happens to create orexchange Bitcoins, there issome sort of large formula,complicated math problem, that is solved, and that ends, and the nexttransaction that happens, that happens again,and then it happens again. So that's that blockchain, that's what that's referring to. Am I understanding that correctly?

Lapera: That'sactually a really good question. Blockchain technology is the other side of the Bitcoin stuff. Theblockchain is actually just a public ledger, and on it, it contains a date that a transaction took place and the amount that the transaction was for, but it doesn't contain any personallyidentifying features for the transaction, soyou don't know who the two individuals werein the transaction. The way the blockchain works is,in order to exchange Bitcoins, a computer has to be hooked up to this Bitcoin network, andeach computer becomes a node, and each node has a copy of the ledger downloaded to it, and it's updated fairly regularly. That's the price ofbeing able to transact Bitcoin. That way, there's this huge, diffusepublic ledger that's really hard to hack,because even if you get to a few computers on this network,you probably can't get to all of them, andeventually the correct ledger will pop back up again, unless you somehow manage to get all of them at once. Bitcoin, asyou might be starting to understand, is a very secure way of dealing with money. It'sreally interesting because it's not exactly like the U.S. dollar. There's no physical stuff backing it. It'sone of those amazing things that humans do, where they're like, "We have this thing, you can't touch it, it has value."

Maxfield: If youthink about it, when they talk aboutcreatingBitcoins, they talk about mining them. In that respect,it really is very analogousto, say,the gold standard, where thequantity of currency that is in circulation at any one particular time is a function of how much gold they're pulling out of the mine. Butwhat's interesting, to your point about what'sdifferent between how a Bitcoin is createdand the gold standard is at, there can always be more mines discovered. But in the Bitcoin arena, there is a lifetime cap in terms of the number of Bitcoins that can be created. Is that right?

Lapera: Yeah. I thinkwhat you're getting at is that,unlike gold, wherewe don't know 100% exactlyhow much gold is in the world in mines that we can dig up, butwe do know exactly how many Bitcoins there are, or could possibly be in the world. So, it lends this really hard cap,it gets into this crazy economic theory. Listeners, if you're really interested in Bitcoin,I'm actually hopefully going to do an interview with an author whospecializes in Bitcoin in a couple weeks.I'm still working with the publicist to figure out the details, buthopefully it all works out. But, let's turn to why Bitcoin is a puzzle for banks. One of thethings about Bitcoinis that it's fast,cheap or free, andfrictionless to transfer money, totransfer this currency. And banks andmoney transmitters especially, people likeWestern Unions, make a lot of money off fees of shuttling people's money around the world. Do you know what the cap is forWestern Union, how much they can charge you fortransmitting money for you?

Maxfield:I'm guessing it's high,given Western Union's reputation.

Lapera: 9% of the amount that you sent. That's a lot of money.

Maxfield: Andeven in the context of banking,if you think about how cumbersome checks and dollar bills are --you go into an ATM and get dollar bills and then go and use that as a currency to transact with, as opposed to,you could just have this on your phone, and you go to a store andtake that whole middle step out of it. The other point about Bitcoin andcrypto-currencies of blockchains in the context of payments, becauseI think that's really where this is going to impact banking significantly, is for checks, somebody writes you a check, yougo to your bank todeposit it, andin this day and age with the technology that we have,particularly with a huge, sophisticated bank that poursbillions of dollars every year into technology, still, to this day, a check takes overnight to clear. That's so absurd. And the reason it takes so long is it has to go through theFederal Reserve's system. Blockchain and crypto-currencies provide,potentially, an end run around that,because as soon as you make that payment transaction,it's my understandingand it sounds like what you're saying, Gaby, there's an immediate update to that open-source ledger, and then it moves on to that next transaction. Itmight not happen instantaneously, like, in a nanosecond, but in a couple of minutes,which is significantly faster than, say, overnight.

Lapera: Yeah,definitely. I guess one of the things to know about Bitcoin isthe people who originally started it were a group that,I think they described themselves in theparticularlyendearing term cypherpunks. "Cypher" because they were really into cryptology and "punks" because they were kind of against the system. One of the big things about Bitcoin iseveryone is their own bank, and thisdecentralizes the banks andtakes away the power from the governments and the military-industrial complex or whatever. Not to sound dismissive. That's thephilosophybehind it, and that's a huge problem for banks, if everyone can be their own bank. If the only thing you need the bank for is lending money, that takes away a lot of their fee income, which for a lot of banks, that's a big chunk oftheir income.

Maxfield: Yeah. If you talk to the leading bankers,one of those things they'lltell you is that the way that banking is changing right now is, it'stransitioning frominstitutions that store money to institutions that lord over the movement of money. This is the payments space. If you go into thatcrypto-currency arena, that blockchain arena where the payments structure can occur on the outside of banks, really, potentially could attack thefundamental business purpose of banksin the future. I think that's why,when you hear people talking about things like, "Are banks facing an Uber moment where new technologies will come in andcompletely disrupt the business model?" I think blockchain plays a very major role in that.

Lapera: Yeah. One of the things to think about, too, is that Bitcoinisn't this thing that's going to take over overnight, although it has spread very rapidly. Bitcoin is stillstruggling to figure out who and what it is. I told you a little bit about the history and how it's thisdecentralized movementand people who are libertarian in nature who are really excited about Bitcoin. But then,of course, there's also people who want to make money off Bitcoin. And then, there's a third party that's involved in any financial interaction ever in the United States, which is the federal government, and we don't really know what regulation is going to do to Bitcoin. Bitcoin might be driven underground, or it might become an actual tool that's easy for people to use in the United States. A lot of that depends on what the federal government decides. Andone of the major issues they've run into in the past is the federal government regulations surrounding "know your customer" and anti-money-laundering laws, because one of the things about Bitcoin is you don't need to know anything about the person you're sending money to. You don't need to know their name, you don't need to know their address. So, it becomes very easy for illegal activities, at leastin the eyes of the federal government, to occur, the most notable incident being Silk Road, I think that's the one most people are familiar with, which was an underground deep web marketplace where people could buy things like drugs with Bitcoin, because there was no way to trace who it was coming from and where to. That got shut down, and I'm sure a million iterations have sprung up since then. But, it's areally interesting world that isvery divorced from the reality that I think most Americans experience from day to day.

Maxfield: Yeah. This is how I see it --it's not even so much about Bitcoin, but about crypto-currency. Bitcoin could be the first one that gained attraction, but there will be different iterations of crypto-currencies that improve on the ability to, whether it's to know your customer, to track, to determine whether there's money laundering going on, in order for this type of thing to really catch on, those issues are going to have to be addressed. That's why, at the end of the day, something will emerge in this area, whether or not it's Bitcoin itself remains to be seen, although it doesn't look like it, because of those issues you pointed out. But, something will come up in this area, it's only a matter of time.

Lapera: Yeah. Who knows. A lot of the issues the government has with Bitcoin, technically, they have with cash, too. The only difference is that cash is really hard to, if you're in Indiana, send to Hong Kong, especially if it's $1 million.

Maxfield: And if you think about it like, I had this friend who, his parents were libertarian, and they didn't trust banks. So they saved his money for college in cash. They had something like $100,000 in cash. Well, one of their sons got a full-ride scholarship to college, so then they had $100,000 in cash. So then, they started depositing the cash into a bank in increments of $9,999, which is one dollar below that $10,000 threshold at which point the banks have to disclose to the federal government that it's a presumably suspicious transaction going on. In the Bitcoin area, it could be a similar thing, where the government could take care of it by setting a threshold, above that threshold, an amount of Bitcoins or crypto-currency that would trigger the regulatory disclosure requirements. But still, you would need to sort out exactly how that would work.

Lapera: Yeah. Wherea lot of these Bitcoin start-ups got caught up wasthey were considered money transmitters by the federal government, and they wereconsidered to be operating outside the law, soa lot of them got shut down in the United States. But there's one thathas been operating for a while where theyliterally just hold your Bitcoins for you,they just help you create a wallet, andif you forget your password you're pretty much out of luckbecause they don't know what your password is,they don't know anything about you,they don't even know how many Bitcoins there are in your wallet. Theyjust provide a service to help you do that. Thatcompletely falls outside of the existing regulations,noone knows what to do with them. So, we'llsee what happens. It's definitely a puzzle forbanksto think about and the federal government to think about, andtrust me, they are thinking. Theyactually recently denied theWinklevoss twins application to start a Bitcoin ETF,and it doesn't really sound like they want to let anyone start an ETFbecause they're worried about fraud. So, we'll see what happens. One bigpuzzle for people in finance to figure out.Another one is API. Do youwant to tell me a little bit about what an API is?

Maxfield: Yeah. Here'sthe best way that I have found to think about API. Theacronym stands for applicationprogramming interface. All that is, basically, is a tube that connects your bank to, say, a third-party app like the Mint app. And in that tube, Mint can pullpertinent data to its customers from their bank. That's what an API does, itconnects those,anoutside third-party developer to a bank andallowsinformation to flow over it. Here's the interesting thing about API. If youlook at what's going on in Europe right now, they are more advanced on thetechnological front in terms of financial services than we are, andone of the big movements they are pushing right now is to force banks andother companies in the payment space to use so-called open APIs. Closed APIs,information needs to be exchanged within a bank between, say, the investment banking division andmaybe the retail banking division or the corporate banking division, whatever that is, those are called closed APIs. Open APIs, theyprovided that highway tooutside third-party developers. And theregulators in Europe are now starting to force banks andfinancial services companies to use open APIs in the payments space, the thought process being that that's thebeachhead, and thenopen APIswill be used much more broadly in all areas of financial services. This is a huge benefit, becausetraditionally,the way that apps like Mint would work is that the customers would have to go in, log into the Mint account, and then give Mint their usernames and their passwords to their banks, and then that app would then log into your bank account andscrape the screen,basically just copy the information from that screen andincorporate itinto the Mint app. API allows a much more seamlesstransfer of data to take place. So,you're not going to have interpretation issues between scraping the data from the screen and translating it into text in the Mint area.

But,here's the interesting thing about APIs. Companies and banks for a while were opposed to that screen-scraping technology. But now,because of the importance and the growth andproliferationof these third-party apps, banks realize that, "Look, we have to get in on this game."JPMorgan Chasemade news last year, starting to use open APIs with Mint and other apps like that in particular. But here's the interesting point about API. If these open APIs really take hold, and everybody starts banking through a third-party app,think about how convenient that would be, if you could have an app that had all of your banking accounts, you mortgage, your car loan on there, all of your retirement funds, your credit card accounts,all these different accounts all aggregated in one single place. Basically, anycustomer at any one time had a constantly updating balance sheet that they could justpull upon their phone by tapping on an app. It would be revolutionary. But then, if those apps are created -- and, there are some of those, and there will be more and more -- what will happen is, the question will become, willcustomers then be able to actually do banking, not just see their accounts, actually doconductive banking in these third-party apps, where they candeposit a check into theirChaseaccount through their Mint app, and do all these different things, to where not only are you puttingAppleandSamsung'sapp store thereby between a customer and their bank, but you're also putting that third-party app between the customer and the bank. Which, thereby, means that the bank itself and the bank's brand will erode further and further and further into the distance as these types of things are going. So, the question is, how will that change therelationship between banks and their customers if there's always somebody standing in between the two?

Lapera: Yeah. That's one of the things that banks are thinking aboutright now, even just in terms ofhow many physical locations do theyhave? Likeyou said, customers are increasingly moving to online platforms. When youlose that personal touch, you'repotentially also losingactual customers. On the other hand, customers really want thatconvenience. I was telling someone the other day aboutmy experience trying to switch banks. It's hard. It takes a lot of effort,and it takes you going physically into the bank branch in order to get all of your money out all at once,after you systematically, slowly drained your account over months, at least in my case. It'snot a pleasant experience. But if someone created an app that let you switch banks super easily,people could do that and banks wouldn't really have a lot of recourse. They would actually maybe have to change the way they operate with customersin order to retain them.

Maxfield: Yeah,I'm so glad you brought that up,I had forgotten about it, that switching element. That'sone of the most important elements inthe context of API. Bankstraditionally have benefited from the fact that there are high switching costs. Let's sayyou have a bank account and you set up your direct deposit,you know how when you set up accounts, the bank is all over you aboutsetting up direct deposit and reminding you aboutautomatic bill pay and all those kinds of things, andtrying to get you to rollover your IRA at another bank into an IRA at your current bank, and get your car loan there. The reason they do that is, the more and moretentacles or stringsthey put between the customer and the bank, the harder it is for them to switch, because you have todetached all of those things and it would be a nightmare.I don't know if this statistic is accurate or not,but I heard this statistic from a board member of a major bank. He told me that, at their bank,approximately 40% of customers lived paycheck to paycheck. If you'reliving paychecktopaycheck and you have direct deposit andautomatic bill payconnected to your account, it becomes a very delicate dance to detach all of those things, go to a different bank, and not accrue an overdraft charge. The switching costs are really high. But if they come up with an app whereyou can just go in there and say, "Justswitch all my accounts over to this other bank,because I'm tired of this bank charging me overdraft fees or doing this or that, all these things that banks have been doing for all these years against customers," it willcompletely erodethat switching cost,which would dramatically change thecompetitive dynamic in the banking industry. Banks pretend and talk abouttreating their customers well today, butthey would actually have to back that up with reallysubstantial actions in the future in order to combat the impact that open APIs could have on lowering the switching costs.

Lapera: Yeah,definitely. Likeyou mentioned, the other thing is,when you have someone in person, it is way easier to just sell them something. It'sway harder to sell someone a mortgage online,because they have time to sit back and thinkabout all theirdifferent options withmortgages. But if you have them in the bank, it's way easier to be like, "You knowwhat you really mean? Another credit card."

Maxfield: Right. That'ssuch a good point. Cross-selling has gotten a bad name because of theWells Fargobank account scandal last year, which isunderstandable, that it got a bad name from that. But, there's only a couple ways to grow a bank, andone of them is to cross-sell customers. You have tobe able to do that, but youhave to be able to do it appropriately. Butif you don't have those interactions, you'renot going to have the opportunity to cross-sell. So,it's a major conundrum.

Lapera: Yeah. This is another puzzle for the banks. People are moving increasingly online. They also need to moveincreasingly online. They'vestarted to embrace this API technology,because that's the way the tide is turning. Buthow do theybalance that with making sure that they're able to grow their businesses and retain customers? Something for them to think about.

Let's talk about big data and banks, something that youwouldn'tinitially think would be a puzzle for banks, but could be. Big data,just in case you're not familiar with this, is this thing that's emergednow that we livebasically our entire lives online and with easily accessible data, it'scompanies basically using it, mining through it, tofigure out trends and patterns, both for consumer groups like on a general level and also for consumers on an individual level. One of the things you might see are, "We saw you look at thisoutdoor brands company, you might also be interested in this other outdoor brands company," and those ads follow youaround the internet, or, you're suddenly getting emails whenyou don't remember signing up for something, stuff like that.

Maxfield: Yeah. If you think about big data, there are fewinstitutions that have more data at their disposal than banks. In fact, a lot of bankers willtalk about the fact that the future of banking is not in money, it's in information. Googleobviously has a lot of information,Amazonhas a lot of information about your purchase history,Google about your search history. But banks know what you spend money on. They know what everybody spends money on. They know what people are spending money on on Amazon. And whilepeople might be doing searches on Google, they'reactually making the purchases via their banks. That information is incredibly valuable. But the problem that banks have had is justbecause of the way the bank industry has developed in the United States. First, banks weren'tallowed to operate multiple branches in those states, then they also were not allowed to bank across state lines, what happened was, you had thousands and thousands of banks, small little banks all over the United States.

And then,when those regulations around banks getting together and banking andoffering services over interstate lines and through branches, etc., once that opened up, thenyou had this huge consolidation movement. So,banks buyingother banks,and pretty soon you have your big four banks --Bank of America, Wells Fargo,JPMorgan Chase, andCitigroup-- that are, excluding Citigroup, hundreds of banks that have been rolled up into one. Theproblem with that is that each of those individual banks that were acquired or mergedinto thesehuge organizations had data, and they used different systems, different software to record and analyze data, they stored it in different places,they stored iton antiquated mainframes and things like that. So, you think, aperson at a bank should just be able to go on the computer and type in, "What accounts doesJohn Maxfield have?" and it showsall the different accounts that I have across that banking company. But, the fact of the matter is,because of that situation with all that data dispersed all over the place, it's taking a long time for banks to wrangle all the data that they have at their disposal. So, that'swhere they're at right now.

To tie this into that API conversation, wherebig data is so valuable outside ofthe risk and compliance area, which isextremely valuable, to track customers,making sure they'renot doing inappropriate things with money,the other area where it comes in really handy is that cross-selling area. The reason is because, once a bank gets its arms around its data,it can then determine not only which products each customer has, but they can look at the transaction history of that customer and determine, say, if this customer would really benefit from a brokerage account, or a specificretirement account or another credit card. And then, they can see which customers have those needs, and pitch those specific products to those customers, which reallydramatically increases your cross-sell ratio and the revenue you derive from your customer.

Lapera: Andit's not just that. If they get organized enough, and if this is legal, which,it might not be in the future,there aren't really laws around it right now, banks could sellpackages of data ormake some sort of agreement with outside retailers, and say, "I know that Gaby Lapera really likes swimming,why don't you sell her a pool or swimsuits," or whatever it is, and they can do integrated ads in the bank app, which is on the API. Those are all things they couldpotentially do, and that could be a major source of money for them. That's howFacebookmakes a lot of its money, ittracksyou around and lets businesses serve ads of websites that you recently visited. That could be huge.

Maxfield: Yeah. Credit card companies, they'vealready made a significant amount of progress. If you look at Bank of America'srewards for their credit card, theBankAmericard, they haveindividualized rewards programs for customers that can be tailored based on a customer'stransaction history. The benefit there would be, if a bank,like we were talking about before the show, Gaby,let's say they know you loveChipotle. They have 10 millioncustomers who go to Chipotle once a week --because one of the things Chipotle is trying to do right now is getpeople to come more frequently to their stores after that whole issuethey had last year with food-borne illnesses -- Bank of America could go to Chipotle and say, "We have 10 millioncustomer who go to yourrestaurants once a week. Why don't we send a coupon to them and see if we can get them to go more frequently?" The benefit to banks would be, that moretransactions are processed. If I get a coupon forChipotle, rest assured I'm going to use it. You know what I mean? That would probably encourage me to go to Chipotle morefrequently, which means I would conduct another transaction, and banksmake money on those transactions from interchange fees.

Lapera: Some do. It depends.

Maxfield: So, there'sa number of different ways they could use it to generate revenue.

Lapera: Yeah, that'sdefinitely really interesting. Side note, you're saying Chipotle wrong.

Maxfield: [groans]I know! God,I've only been going there for, like,20 years.[laughs]

Lapera: Yeah, they got you on that one last time, too. Listeners, it's not his fault. If you say it one way for years and years, it'sreally hard to break out of that habit. So,don't get mad. Don't write us emails about it. But, yeah,I 100%agree with you. It has boundless potential. But then,if they do figure out how to do thisand the federal government OKs it, they have a puzzle before them,which is figuring out a way to do thiswithout alienating people. And also,even if they do figure out a way to do it,if the federal government hasn't caught up with them,figuring out a way to do it without breaking the law,because there are a lot of laws surrounding what banks can do with your personal information.I don't think they could sell your name to a different company. Butif they could figure out a way to protect your information and sell you the ads,there's a lot of potentialchallenges for them here. AndI don't know about you, Maxfield, butsometimes I get really annoyed when ads follow me around the internet, and I'm like,I'm just not going to get on Facebook for three daysbecause I don't want to see thesefuzzyGucciloafers anymore.I'll send you a picture,I swear to God, if you email me industryfocus@fool.com, they're hideous. I warn you, you will befollowed around the internet for days by them. Not to make it personal or anything.[laughs]

Maxfield: Buy Gaby's shoes,you'll be trailed by Gaby's shoes.

Lapera: Ohmy gosh, I just don't understand,someone sent them to me, and be like, "Haha, look at these shoes!" AndI clicked on them and now they won't leave me alone. But, anyway, there's a lot of things to chew on there. And thenthe last thing I want to hit on super quick because we're running way over is cloud banking, which is basically the banks lettingother services like Amazon or Google to host their data centers, which is cheaper for the banks, then the banks have all their own data easilyat theirdisposal. But there are potentialproblems with it. For example, Amazon Web Services went down,was it this year or last year?I can't remember, but it was down for a whole day. That's no good.

Maxfield: Yeah. And the big benefit -- cloud banking,it's good that we left this for last and won'tspend a lot of time on it because it's kind of boring. But,basically, what itallows banks to do is allows banks to shut down their data centers and outsource that to a largercompany like Amazon,Microsoft,IBM. It's a huge way to save money. Andwhen you consider how much data banks have, it's something that, a bank like JPMorgan Chase, ifthey eventually shut down the majority of their data centers to go over to anAmazon Web Services,it's hard to say how much they could save, buthundreds of millions of dollars, maybe even billions of dollars, over a stretch of time.

Lapera: Yeah. Butthe puzzle for them to think on is security there, because they're letting other people run their security. So, it'ssomething they really need to think about, and something they need to make sure they keep, because that's why customers stay with them, because they feel banks are doing a good job of protecting their data and their money. If they don't, it's no good. Anyway, we don't have all the time in the world,and we definitely don't have all the answers in the world, but these are all things we think you guys should watch in this space. That's really it for the analysis part of the show.

But,as I mentioned in the beginning, we have a special thing for our listeners this week. We love games at Fool HQ,puzzles and challenges area really big part of how we team-build and sparkcollaboration at the Fool. Welove them so much that we have achiefcollaboration officer,which is reallyhippy dippy but super cool,we have our own resident puzzle master named Todd Etter. This week,we wanted to let listeners in onsome of the fun that we have in the office andgive them a taste of one of Todd's challenges, so we asked him to put together apuzzle for you guys. Every day this weekeach host will wrap up the showwith a clue, andthe answer to that clue is a company name,and the company names from Monday to Friday will all fit into a final puzzle that will berevealed on the Friday Tech show. So,if you want to solvethe whole thing, you need to listen to every episode this week. What do you get for jumping through all of our clue hoops? The first 10 listeners to shoot us an email after Friday's show with the five company names and the final answer will get Fool swag. So,just the company names, we don't needany other answers to the clue. Fivecompany names andthe final answer.

If you're ready, here is today's Financials clue: Take the common name of a financial company. Add a letter to the front to get something you might get at KFC. Add another letter in front to get a word to describe someone in debt. Add one more letter to the beginning to get anactivity a homeowner might do on the weekend. What is the financial company?

Starting Friday, if you solve every clue, write in to industryfocus@fool.com with the email subject line "Puzzle" and the answers. Also, make sure to tell us your T-shirt size. If you're stumped and want the reveal, on May 12, we'll post them to The Motley Fool podcasts Facebook group and the Industry FocusTwitteraccount. To enter this contest, there'sno purchase necessary, and the contest is open to all legal residents of the United States and Canada,excepting residents of the province of Quebec over the age of 18. Employees,affiliates, and contractors and their families atThe Motley Fool LLCor any of their affiliates are not eligible. Void whereprohibited by law. For a complete list of contest rules, visit puzzle.fool.com.

As usual, people on the program may have interests in the stocks they talk about, and The Motley Fool may have recommendations for or against, so don't buy or sell stocksbased solely on what you hear. Super glad we're done with the legal language, because now I can slow down.Contact us at industryfocus@fool.com, or by tweeting us @MFIndustryFocus.Thank you to Austin Morgan. Have you solved the puzzle yet, Austin?

Austin Morgan: I have not.

Lapera: [laughs] Why not? You've had 30 whole seconds. And,thank you to everyone else all for joining us. Everyone have a great week!

Teresa Kersten is an employee of LinkedIn and is a member of The Motley Fool's board of directors. LinkedIn is owned by Microsoft. Gaby Lapera owns shares of JPMorgan Chase. John Maxfield owns shares of Bank of America, Chipotle Mexican Grill, Facebook, and Wells Fargo. The Motley Fool owns shares of and recommends Amazon, Apple, Chipotle Mexican Grill, Facebook, and Twitter. The Motley Fool has a disclosure policy.