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Showing posts from July, 2017

Shayne Elliott's revolution at ANZ | afr.com

xxx Within a year or so, the rangy New Zealander hopes to introduce what could be the most profound change in modern Australian banking – a move away from conventional fixed pricing of deposits and loans (in which most people pay or receive the same interest rate) towards granular “risk-based pricing” in which everyone can in theory capture a unique interest rate depending on their propensities… Risk-based pricing requires massive amounts of historical data coupled with outstanding predictive modelling capabilities From Shayne Elliott's revolution at ANZ | afr.com xxx

In the online dating jungle, unverified by Twitter doesn’t mean undesirable | Sam Diss | Opinion | The Guardian

xxx That’s the world in which Blue, the new Twitter-verified-users-only offering from dating app Loveflutter, is claiming to operate in. “In an era of catfishing and fake identities, authenticity is key,” says the accompanying press release, “which is why we’re leveraging Twitter’s world-class verification system to make dating safer.” From In the online dating jungle, unverified by Twitter doesn’t mean undesirable | Sam Diss | Opinion | The Guardian xxx

Blueprint for KYC data sharing in the UK

xxx The UK's Payment Strategy Forum has delivered a blueprint for the future of the nation's payment system, setting out design and implementation approaches for the construction of a new 'National Payments Architecture'. From  PSF lays down blueprint for new UK payments architecture xxx Since publishing our Strategy, we have reviewed the approach and agreed on the following detriments as focus areas for the proposed data sharing framework: Inclusion of bad actors: Obtaining sufficient KYC information to identify bad actors requires the use of multiple external data sources and systems during on-boarding and ongoing due diligence. Incomplete, in-accurate or out-of-date SME customer data hinders the detection of bad actors. Poor customer experience for good actors: Limited data sharing among the PSPs and other sectors such as utilities and telecommunication providers lead to significant duplication of effort if a customer moves to another provider or extends

End user needs

xxx In our Strategy, we prioritised the collaborative development of requirements and rules for 3 EUN solutions. These are: ‘Request to Pay’ which addresses detriments arising from a lack of sufficient control, flexibility and transparency in the current payment mechanisms to meet the evolving needs of some end-users. Apart from anything else, this is why there's no need for "pull" payments in NPA. ‘Assurance Data’ which addresses the lack of adequate assurance to the payer that they have sufficient funds to make a payment; that they are making the payment to the intended payee’s account and status of the payment once they make the payment. Right now, the assurance services envisaged are confirmation of available funds, payment tracking and the slightly more complex confirmation of payee. ‘Enhanced Data’ which addresses the limited capacity, in current payment systems, to carry more structured data alongside the payment. The reason why I call the payee confirmation

MUles

xxx   xxx Cifas, which aims at reducing financial crime in the UK, said that the number of “misuse of facility” frauds involving those under 21 years of age, has risen sharply. From  Gangs force thousands of teens to become 'money mules' | The Independent xxx Payment Strategy Forum’s “Blueprint for the Future of UK Payments” (July 2017) says that “tactical solution work has been progressed to provide early benefit in the fight against financial crime in the detection of money mule accounts, and piloting methods for funds repatriation. The tactical solution was handed over in June, and implementation is expected by the end of 2017”. I’m not privy to the work of the Forum

POST Push! Push! Push!

Many years ago, I worked on a couple of projects looking at the future of payments. My conclusion, and that of my colleagues, was that the payment systems of the future would very likely be push rather than pull. The reasoning is quite straightforward: push payments are simpler and cheaper (pull payments, such as Direct Debit in the UK, are a hack to get around a lack of connectivity) and if there is a need for more complex instrument or services then they should be a layer on top of a cheap, fast and transparent push infrastructure. Earlier this year, the UK’s new payments infrastructure was set out The UK's Payment Strategy Forum has delivered a blueprint for the future of the nation's payment system, setting out design and implementation approaches for the construction of a new 'National Payments Architecture'. From  PSF lays down blueprint for new UK payments architecture I was naturally very excited to see what this new architecture would be, and one of the ke

Tax breaks for farmers causing 'subsidy addiction', government adviser warns

Some years hence at a party of some kind in the West Country, I found myself chatting to a farmer. He was telling me about sheep farming, and making the point that it would be wholly uneconomic without massive taxpayer subsidies. Naturally I asked why these subsidies were provided. After all, if management consulting were to become uneconomic, because of the  xxx "Farmers receive not just the £3 billion of subsidy, they receive a whole range of other benefits that nobody else in the economy gets." From  Tax breaks for farmers causing 'subsidy addiction', government adviser warns xxx xxx “If you’re producing 0.7% of output, receiving £3 billion of subsidies for that output of about £9 billion and being exempted on rates, and being exempted on diesel and being exempted on inheritance tax… it’s kind of a subsidy addiction in the end. From Tax breaks for farmers causing 'subsidy addiction', government adviser warns Land Value Tax Now! 

Gangs pay teenagers to launder crime cash | News | The Times & The Sunday Times

xxx According to Cifas, the fraud prevention service, there has been a huge rise in the number of young people involved in “misuse of facility fraud”, where an account, policy or product is misused by the genuine account holder. There were 4,222 cases involving a person under 21 in the first six months of this year, compared with 2,143 cases during the same period last year. From Gangs pay teenagers to launder crime cash | News | The Times & The Sunday Times xxx

What's wrong with finance

xxx What is the finance sector supposed to do? Essentially, it needs to perform a number of basic economic functions. First and foremost, it operates the payments system without which most transactions could not occur. Secondly, it channels funds from individual savers to the corporate sector so the latter can finance its expansion. In doing so, it does the highly useful service of maturity transformation; allowing households to have short-term assets (deposits) while making long-term loans. It also creates diversified products (such as mutual funds) that help to reduce the risk to savers of catastrophic loss. Thirdly, it provides liquidity to the market by buying and selling assets. The prices established in the course of this process are a useful signal of which companies offer the most attractive use for capital and which governments are the most profligate. Fourthly, the sector helps individuals and companies to manage risks, whether physical (fire and theft) or financial (sudden

From Liverpool to east London: Local currencies are making a comeback

xxx Millennials' distrust of British banks, and a growing interest in supporting local communities, has helped spawn a new crop of local digital currencies, with the Liverpool pound launching earlier in the year, and the east London pound debuting last month. From From Liverpool to east London: Local currencies are making a comeback xxx

Expectations on PSD2 interactions between banks and fintechs clarified by UK Treasury

xxx Though there are differences in scope between the two regimes, consideration is being given to how open application program interfaces (APIs) being developed under the open banking initiative could be used to support access to payment accounts and data by PISPs and AISPs under PSD2. From Expectations on PSD2 interactions between banks and fintechs clarified by UK Treasury xxx

Families left stranded after £10,000 villas did not exist | Daily Mail Online

xxx When you search on Google, it orders results by what it believes to be the most useful and relevant. A website’s rank has become a common barometer for how high-quality or trustworthy a company is. From Families left stranded after £10,000 villas did not exist | Daily Mail Online Oh dear. A website’s rank has absolutely nothing to do with either quality or trustworthiness. It’s no wonder people get taken in like this, but since we have no trust infrastructure and no way of connecting people to it via the user interface even if we did, it’s hard to see how things will improve. What would have to be in place to fix this sort of problem. Well, first of all, when you go to a website offering holiday villas you should be able to tell whether someone knows who it is that is behind the site. 

Families left stranded after £10,000 villas did not exist | Daily Mail Online

xxx ‘We’ve booked online before and the website looked genuine. It came up as the number one search on Google,’ From  Families left stranded after £10,000 villas did not exist | Daily Mail Online Oh dear.   xxx after an email exchange with the website’s staff, Ann, a 39-year-old PR director, felt content as she transferred £6,000 via BACS direct to the villa owners for her two-week holiday. From Families left stranded after £10,000 villas did not exist | Daily Mail Online It was a scam, of course. But you’d think that as the money could only have been sent via BACS to a UK bank account, and since that UK bank account was opened and maintained in accordance with our strict KYC and AML regulations, it should have been easy for the police to simply pop round and arrest the perps.

POST The government is completely and utterly wrong about surcharging

When I was in sunnier climes earlier this month, I was asked a couple of times about a particularly bonkers British government policy announcement concerning card payments. More than one person from overseas regulators asked me about it, in fact. They asked me if I could explain our government’s reasoning behind their policy announcement about card payment surcharges. Which was: From January next year, businesses will not be allowed to add any surcharges for card payments. The worst offenders currently are airlines and food delivery apps, and small businesses which typically add a fee for cards. In 2010 alone consumers spent £473m on such charges, according to estimates by the Treasury. From  Credit and debit card surcharges to be banned - BBC News Unfortunately, I cannot. This is just plain dumb. If you are going to interfere in a market and start price-fixing, then you should do it to increase the net welfare, not to provide a hidden subsidy to the well-off. I imagine what happe

Ed Sheeran takes on ticket touts and cancels 10,000 gig tickets sold by unofficial resale sites

xxx Fans who purchased tickets when they went on sale will have to arrive at their gig venue with the booking confirmation, a valid form of ID and the credit card used for the purchase (or a photocopy). From Ed Sheeran takes on ticket touts and cancels 10,000 gig tickets sold by unofficial resale sites How are the bouncers on the door at an Ed Sheeran concert supposed to tell a real Portuguese fishing licence from a fake one? And what happens if I use my credit card to buy a ticket as a present for someone? There is a solution, of course: put the tickets on a shared ledger and then sell them on eBay so that the market clears. If Ed wants fans to have tickets for £10 instead of £100, then he can buy the £100 tickets in the auction and re-sell them himself using whatever identification and authentication system he wants. Ticket “scalping” is a natural response to a broken market.

POST The non-banks are in

You might remember that last year I wrote about giving non-banks access to the UK payment infrastructure. There are plenty of non-bank players out there who want to have access to the infrastructure and the UK’s Emerging Payments Association recently presented a report to arguing that, under the appropriate licence conditions, non-banks should be allowed access to instant payments infrastructure through the use of a new kind of limited pre-funded settlement account at the Bank of England. From  Access | Consult Hyperion Well, this is exactly what is going to happen.` The widely-trailed move is expected to open up a competitive space which has long been the preserve of the UK's biggest incumbents, providing non-bank PSPs with direct access to the UK’s sterling payment systems that settle in central bank money, including Faster Payments, Bacs, Chaps, Link, Visa, and, once live, the new digital cheque imaging system. From Bank of England comes good on promise to provide non-ba

Child Safety Online: Age Verification for Pornography - GOV.UK

The government’s consultation process on blocking children from accessing porn has completed and they have published the results and the way forward. Child Safety Online: Age Verification for Pornography From Child Safety Online: Age Verification for Pornography - GOV.UK I was listening to reports of this on the BBC and I heard at least two mad schemes being suggested. One was to use credit card details as a mechanism for proving that someone is over 18 and the other was to have people send their passport details to porn sites. What I didn’t hear being suggested was the development of a sane digital identity infrastructure capable of actually solving the problem. Since I’ve written about this topic several times in recent years, I thought I’d bring together a couple of old posts and update them with some new thinking to try to explain why the ideas I heard on the radio are not only wrong but dangerous and to make a sensible suggestion as to how the problem should be fixed. So let

Films for planes review of "Life"

L ife ☀️☀️ In the mood for some sci-fi I punched this up on a transatlantic flight. At first I thought I’d made a reasonable choice. Nice start, interesting idea even if you sort of knew what the plot would be, good special effects to get the story moving. Lots of it was too dark to see properly so I couldn't entirely tell what was going on. Rating System In case you’d forgotten, I use a five sun rating system. It works like this: Movie gets one sun for interesting story with good acting Movie gets one sun for not having an English villain Movie gets one sun for not being too dark or having lots of special effects, so you can enjoy it properly on an airplane screen Movie gets one sun if I watched all the way to the end without falling asleep or turning over because I was bored Movie gets one sun if it doesn’t have Kate Winslet in it So any movie I watch on a place gets at least one sun, and if they pull out all the stops they can get five.

Mobile payments taking off for contactless commuting

xxx one-in-ten contactless journeys on London's buses and tubes now paid for by the likes of Apple Pay and Samsung Pay. The latest figures from Transport for London detail over one billion journeys on the transit network using contactless cards, with almost £2 billion spent by commuters since the cards were first accepted in 2012. In total, 40% of all pay as you go journeys are now made using contactless. This is up from 25% in early 2016. From Mobile payments taking off for contactless commuting xxx

Blockchain Technology Could Reduce Investment Banks’ Infrastructure Costs by 30 Percent, According to Accenture Report | Accenture Newsroom

xxx Blockchain technology could reduce infrastructure costs for eight of the world’s 10 largest investment banks by an average of 30 percent, translating to $8 billion to $12 billion in annual cost savings for those banks, according to a new report by Accenture From Blockchain Technology Could Reduce Investment Banks’ Infrastructure Costs by 30 Percent, According to Accenture Report | Accenture Newsroom xxx

Guru

Alan Woodward, one of the security-wallahs that I take very seriously, pointed me to a new paper from the University of Luxembourg: " Guru: Universal Reputation Module for Distributed Consensus Protocols ". We introduce reputation module Guru, which can be laid on top of various consensus protocols such as PBFT or HoneyBadger. It ranks nodes based on the outcomes of consensus rounds run by a small committee, and adaptively selects the committee based on the current reputation. The protocol can also take external reputation ranking as input. Persistent reputation of pseudonyms is one of the key mechanisms that I think

PSD2 impact on payments - Icon Solutions

xxx PSD2 and Instant Payments to drive a 37% decline in online card volumes by 2027 Boosted by increased consumer convenience, Instant Payments will overtake cards by 2025 Retail Instant Payments in Europe will hit €725bn in transactions by the end of 2027 Single card payments set to decline from 40% to 11% market share by 2027 Instant Payments will become one of the main online payment tools in Europe, accounting for roughly €338bn of direct online expenditure From PSD2 impact on payments - Icon Solutions xxx