World Bank report cites risk to remittances

The Philippines remained the world’s fourth highest recipient of remittances from nationals in 2009, even as these flows face risks from high unemployment rates in host economies, the World Bank said in a report, “Migration and Development Brief”, posted on its Web site recently.

The report showed the Philippines trailed only India ($49 billion), China ($48 billion) and Mexico ($22 billion). Remittance flows to developing countries could grow 6% to $335 billion this year, a turnaround from 2009’s 6.2% dip to $316 billion, it added.

Central bank data show that money sent home by Filipinos abroad beat official projections of a 4% rise last year, actually growing 5.6% to $17.35 billion. These flows grew by an even faster 7.75%, year on year, to $2.786 billion in the first two months of this year, the same data show.

But the report said remittance growth could be tempered by uncertain employment prospects in high-income markets. "... high unemployment rates... in receiving countries... may give rise to pressure to impose additional restrictions on new immigration," it said, adding that such outlook could also dissuade high-skilled workers - a source of big remittance values - from migrating.

Process improvement anyone?

Take a lighthearted break, relax and prepare for your flight. We have a look inside the Boeing factory as a 737 is assembled and takes to the air. Makes our business processes look a bit silly.

Risk management weaknesses at finance firms persist - EIU survey

Many of the flaws in risk management at banks and insurers that precipitated the global financial crisis remain unaddressed even as new dangers have emerged, according to research from the Economist Intelligence Unit.

The report, sponsored by SAS and based on a survey of 346 financial sector risk managers, reveals that most have made significant progress since the crisis to strengthen their risk capabilities.

Discussions about risk have become a key part of the boardroom agenda, chief risk officers now have a prominent seat at the top table and there is renewed zeal for instilling a greater awareness of principles in the front office, the so-called first line of defence.

However, inadequacies in expertise, data quality and processes remain a worry. The enthusiasm for a large-scale overhaul of risk management has created personnel shortages as firms and regulators scramble to acquire suitable expertise.

Around 40% of respondents says they do not conduct regular updates or have a clear risk strategy in place. Meanwhile, less than one-half of respondents are confident that they understand the interaction of risks across business lines, and poor communication between departments is seen as a key barrier to effective risk management.

In addition, the focus on regulatory compliance could distract attention from emerging risks, says the report. Respondents to the survey highlight uncertainty over future regulation as the main barrier to effective risk management. There is a danger that the focus on compliance could be crowding out day-to-day risk management.

Risk managers recognize that data quality and availability need to improve but collecting, storing and aggregating data is an area of weakness for many firms, with only 39% of respondents believing that they are effective at these activities.

Abhik Sen, report editor, says: "When it comes to managing risk, banks and insurers are clearly keen to raise their game. But the research shows that improvements have not yet gone far enough to reassure everyone about their capacity to protect themselves and others from a catastrophe like the financial crisis."

The global recession appears to have sparked a spending splurge, with the top 100 financial institutions set to spend over $100 billion a year implementing risk governance frameworks by 2012 - more than double the 2006 figure - according to recent research from business advisory firm Deloitte.

Using IBAN and BIC in SEPA Credit Transfers - Public Consultation Online

The European Payments Council (EPC) Customer Stakeholder Forum (CSF) representing the EPC and customer organizations acting on a European level have prepared a set of questionnaires to investigate the actual experience of users inputting the IBAN and the BIC. This has been a response to suggestions that some bank customers may have problems using these two identifiers when initiating SEPA Credit Transfers.

To this end, two online questionnaires have been prepared, one for individual users and another for business users. Users are asked to respond online to the survey published in English. As it is important to get as many responses as possible, translations have been provided for a number of languages - see below under related files.

The questionnaires will be available for a two-month period beginning 3 May 2010 and ending 5 July 2010.

You can access the questionnaires please CLICK HERE

Remittances – Do you need information?

One of the biggest problems in the Remittance industry is the availability of accurate information.

The World Bank operates a website that provides data on the cost of sending and receiving Remittances from one country to another. Called remittances, these international transfers are often initiated by migrant workers. The site covers 178 "country corridors" worldwide. The corridors studied flow from 24 major remittance sending countries to 85 receiving countries, representing more than 60% of total remittances to developing countries.

Pay the website a visit. It’s certainly worth it. You can find it at http://remittanceprices.worldbank.org/

New US Mobile Payment System

A Silicon Valley company has created a mobile payment system called FaceCash that it hopes will one day displace credit cards.

Here’s how it works: You can download the FaceCash application on any leading smartphone — it will be available on iPhone, BlackBerry or Android phones beginning next week. Then you type in your bank account information, Social Security number, and driver’s licence number, and upload your picture. That’s it. You can now use your phone to make pretty much any in-person transaction, whether at a restaurant or at a grocery store — as long as the merchant has signed up for the service. To accept your payment, the merchant simply scans the FaceCash barcode on your phone with a scanner, and your picture will pop up on their computer screen — which helps them avoid fraud. They then approve your payment.

FaceCash has a tough road ahead of it in the short term, because it needs to sign up lots of customers and merchants before it can be useful to either side. On the flip side, if it devises some smart marketing tactics, and cuts deals with banks so that it can become a credit instrument as well as a debit card, this company has a very nice chance. And we should wish it well, because it offers a more open, useful, and inexpensive technology than the gouging credit card companies.

A working ATM - in Lego

An American man has built a working cash machine out of Lego, tapping the toy firm's NXT programmable robotics kit.The ATM - made entirely from Lego and a HiTechnic IRLink and Codatex RFID sensor - can be used for cash withdrawals and to make change, dispensing notes and coins.

It includes a fully functional numeric keypad, a banknote scanner that can be calibrated to accept any currency and a note separator.

The 22 pound machine took Ron McRae four months to build and program, incorporating around 8000 pieces and 1800 lines of NXC code.

Financial Innovation, Technology, Regulation and Public Policy

As the recent financial crisis begins to fade from memory we are starting to see behaviors in the world of financial innovation reverting to old methods and practices. Is it a good thing? Perhaps…

However, misunderstood financial innovations such as securitization, which led to the financial crisis through the sub-prime debacle in the United States, pose an ever present danger to the financial industry. Regulators and supervisors everywhere, as guardians of the various components of the world’s financial system, do still not clearly understand the implications of financial innovation. Often too this is clouded by public policies which as the basis for such oversight are suspect as to which “public” they are intended to benefit. This is especially the case in the uses of technology in the provision of financial services.
The word “innovate” means to bring in novelties or to make changes. Financial innovation extends this simple definition to the financial world. However, here the simplicity ends with a plethora of products, processes and methods that have been applied to the spectrum of the financial world – some good and some bad.

What drives financial innovation? Simply put – self interest, which finds expression through Adam Smith’s “invisible hand”. Financial institutions seek out, through the innovative process, the most efficient cost effective way to maximise their profits either on existing products or potential new ones.

There are two basic drivers of financial innovation which result from the barriers that a bank faces in reaching its financial goals – competition and regulation. To beat these barriers banks engage in completion of two sorts – competitive or circumventive. The first is pretty obvious as all banks seek to maximise their profits and they do this by competing with other players in the market.

The second, circumventive, is a little bit more obscure. In all jurisdictions financial firms are faced by a plethora of rules and regulations, imposed by the banking and regulatory authorities on how they conduct their business. These are the regulatory barriers that a bank faces. These barriers may often be overcome by innovation – hence the term “circumventive innovation”.

The classic illustration of this is the development of the humble Automated Telling Machine (ATM) which was introduced first in the United States as a circumventive innovation, to get past retractions on branch banking. The idea was quickly picked up, first in Europe, and then globally as a competitive innovation.  European banks had no restrictions on the number of branches they could have but labour policies created limitations on for example working hours among many other issues.  In the ATM the European banks found a new “staff member” who (1) was cheaper than a human teller, (2) could work all day and night, (3) was accurate, (4) did not need a physical branch to support it. There were many other plusses a well, not to mention the ability to widely expand the range of products and services that could be offered.

In essence, one type of innovation (circumventive) morphed into another (competitive). This interaction goes on constantly and is a key feature of the dynamics of a constantly evolving financial system. And technology has been a leading driver of this process. We see this in action all the time in many different ways.

Recently I came across a news item that indicated that Citibank had embarked on a project to make deep inroads to consumer banking in India – a vast market. Notwithstanding the size of the market in India, which is on a par with that of China, anyone trying to establish or expand their business in the world’s largest democracy has a massive hurdle to overcome. For a bank one of these hurdles is very tight regulation and the restrictions placed on banks in growing their branch networks.
The Reserve Bank of India, which is the country’s central bank, tightly controls the number of new branch licenses that are granted to foreign banks. This has a massive restrictive affect on the ability of such banks to grow their distribution networks.

To get past this limit on its physical presence Citibank has begun targeting India’s almost six hundred million mobile users. Now this is the “circumventive innovation” that I spoke of.

Citibank, who is one of the leading foreign banks in India with 42 branches and more than 450 ATMs – recently completed a six-month program in Bangalore to test the appetite of customers to make transactions through phones. The program was called the “Tap and Pay” pilot project.

During the project, the bank sold more than 3,000 phones especially enabled to make transactions over the mobile network. Customers made Rs26m (US$585,000) of purchases from 250 merchants. Citibank is now considering rolling out such services to its wider client base.

This case is a classic illustration of how financial innovations can be used an adapted to achieve other needs.

So, what is the message to bank regulators, supervisors and their policy makers? Well put simply “financial innovation or its implications are not always clearly understood”. These facts are critical to bank supervisors and regulators because innovative actions on behalf of the financial industry are not always benign or made for the general good. Equally so, public policy makers need to understand why some financial innovations take place and review their policies in the light of this. Very often restrictive practices are created for the wrong reasons – protection against genuine competition is often disguised as consumer protection.  

Teaching Banking to Kids

Commonwealth Bank of Australia recently launched Coinland, a fascinating virtual online game for junior school children to learn about money management and banking.
Mark Murray, general manager consumer marketing at CBA says Coinland creates a virtual world where children can have fun while starting to build their knowledge about money.

"The once simple lessons of personal finance have grown more complex, and the ways children learn has evolved," he says. "Coinland teaches children in a format they can easily relate to and have fun along the way."

Children create a personalized avatar which represents them in the game, alongside their guide Platy, who shows them how their actions impact their savings goals. The Bank's saving super heroes, the Dollarmites interact with players to bring money management to life. They also meet Mr. Save-a-lot who teaches children about money, while Gobbler - Platy's nemesis - entices them to spend.

Players develop their money management skills through a series of challenges and games, visiting eight different zones with the aim for each player to earn and save coins.

The site also offers social media tools, so that children can connect with friends by adding other players to their buddy list via safe chat using pre-defined messages.

Italy orders American Express to stop issuing credit cards

Central bank of Italy has ordered American Express to discontinue distributing new credit cards after the payment network failed to comply with the regulation on money laundering, usury, and transparency.

The move came after customers’ complaints about overbearing rates, and the use of confusing and complicated wordage by the credit card industry.

American Express acknowledged the actions and reported that at the moment the company is introducing some amendments to its information-technology systems and other procedures in order to "adhere more closely to the regulations applicable to payments service providers and financial intermediaries".

Mobile Banking - Inventor files huge claim for infringement

Two of South Africa's largest companies, Standard Bank and MTN, have been served with summonses that could result in a claim nearing R1 billion (US$ 137 million).
The claim is for alleged infringement of technology patents in establishing and running the joint Standard Bank-MTN cellphone banking venture, MTN Banking.

The claim is by 3MFuture Africa, a company controlled by a German information technology expert, Wolfram Reiners, who is a South African permanent resident.
Reiners claims that Standard Bank and MTN used technology developed by him and two others in 2000 to launch and maintain MTN Banking.

The technology allows for credit cards to be securely used where the credit card itself is not present. With the technology the card can be briefly activated electronically when a transaction takes place and then deactivated when out of use. This effectively prevents fraudsters from using the card, even if they have the card details.

In issuing the summons for a claim to be heard in the Patents Court in Pretoria, Reiners wants to put a halt to the alleged continued infringement of his internationally registered patents and requires full details of how much profit the two companies have made as a consequence of their alleged use of the patented technology.

Reiners has chosen to take his case to the Patents Court initially because his legal advisers say he can get a court date by early next year while a high court case will be a far more drawn out affair.

The extent of the profits will define the rand amount of the claim that will be made. At this stage the estimate ranges from a low of R300 million (US$ 41 million) up to a maximum of R950m US$ 130 million).

Reiners has retained the services of Heath Executive Consultants, which is headed by former anti-corruption judge, advocate Willem Heath, to do the forensic investigations into the infringements.

Reiners says that between April 2001 and November 2002 he held more than 20 meetings with Standard Bank at its request after an initial meeting to interest them in the technology.

During this period a meeting was also allegedly held with Santie Botha, who at the time was the ABSA Bank director in charge of marketing, who then moved to take over as marketing director of MTN. She was provided with extensive details on the technology.

Citadel Advantage & IASeminars partner to offer a week-long joint program in London in June

Citadel Advantage, a global banking solutions provider specializing in payment systems, operational risk management, business continuity planning, and liquidity management, has partnered with IASeminars Ltd, an international leader in International Financial Reporting Standards (IFRS) training and education solutions to offer a week-long joint program in London: Banking Transformation 2010 – IFRS and Process Improvement.


This program on Banking Transformation is comprised of two distinct modules which can be attended separately, though together they are designed to address the challenges facing banking and other financial institutions in the year ahead. Places for this unique event are limited, and advance booking is required.

• June 21-22 - Process Improvement and Managing Change in a Banking Environment
• June 23-25 - IFRS for Banks and Other Financial Institutions

“Process Improvement and Managing Change in a Banking Environment” will be led by Citadel Advantage industry experts who are experienced in addressing business continuity, compliance, payments, risk, and host of other issues which are faced by banking professionals on a daily basis.

The June 21-22 program is an intensive course on business processes, what they are and how they can be improved. The program also deals with managing the effects that changes to business processes bring about, and gives insights into how to use a specific business process improvement methodology to create successful results.

"Process Improvement is extremely critical for financial institutions, but can only succeed if understood and managed correctly" said Richard Barr, Citadel Advantage Principal Associate. "We are excited to be cooperating with IASeminars in our first offering of a combined training event which truly tackles the needs that financial institutions face and provides invaluable knowledge that all management need in today’s demanding market"


“IFRS for Banks and Other Financial Institutions” will be led by international experts from the IASeminars IFRS banking faculty who have benefited from banking regulatory and international IFRS implementation experience.

The June 23-35 program is interactive, hands-on, and makes use of case studies, exercises, and model financial statements to explore the effects that the current and likely future IFRS requirements will have on the financial statements of banks and other financial institutions.

"Adopting and complying with IFRS is a key organisational change affecting financial institutions around the world," said Marc Gardiner, IASeminars Managing Director. "We are delighted to be collaborating with Citadel Advantage to offer a combined training event which addresses the issue of banking transformation and also provides the necessary skills for finance executives to thrive and grow in this challenging environment."

This new collaboration with Citadel Advantage expands IASeminars offerings to over 100 international accounting courses available in some 50 cities around the world on topics including:

• IFRS Basics
• IFRS Transition and Implementation
• IFRS vs. U.S. GAAP Differences
• IFRS for SME's
• IFRS for Financial Instruments, Derivatives and Hedging

By cooperating with IASeminars, Citadel Advantage also increases the range of its services. Citadel Advantage offers a comprehensive array of professional training courses for commercial and central banks in the areas of; Operational Risk Management (for Basel II and for back-office risk mitigation), Specific Operational Risk Management areas (including Business Continuity Planning, Anti Money Laundering & Payment Systems), and Liquidity Management.

About Citadel Advantage

Citadel Advantage (http://www.citadeladvantage.com/) provides back office system specialist services, specifically covering operations risk mitigation, fraud prevention, payments, and liquidity & treasury systems. The company provides services relating to the design, functionality, risk mitigation, training and operation (including payment flow control and liquidity management) of Payment Systems and associated Back Office operations activities.

About IASeminars

IASeminars (http://www.iaseminars.com/) has established itself over 10 years as one of the world's leading independent providers of international accounting seminars. With offices in London and Washington, D.C., it offers several hundred public courses each year on six continents. IASeminars events attract thousands of senior delegates from around the world, who are taught by an international faculty of expert instructors.

Operational Risk ban for not having right control system

The UK's Financial Services Authority (FSA) has banned Martyn Powsney, the former director of Powsney & Co Ltd, an IFA firm based near Manchester, from holding positions of significant influence in any FSA authorized firm. Pownsey, who failed to put in place systems and controls to ensure that customers received suitable advice and failed to take sufficient remedial action, was found to be not fit and proper to run an authorized firm.

Following an initial visit in 2007, the FSA required Powsney to take action to rectify serious failings at Powsney & Co Ltd but, despite employing a compliance consultant to assist with the remedial work, he failed to take prompt, adequate action. A subsequent assessment by the FSA in 2008, as part of its assessment program for small firms, identified similar concerns to the 2007 visit.

The FSA has concluded that Powsney failed to:

• establish appropriate systems and controls at the firm, 
• demonstrate that the firm was providing suitable financial advice, and 
• fully appreciate or adequately undertake remedial action required by the FSA.

Tom Spender, FSA head of department, enforcement and financial crime, said:

“Powsney lacked competence and capability. Even when FSA staff visited the firm in 2007 and 2008 and set remedial action, Powsney failed to implement the required changes.

"It is vital that those running firms have the necessary competence and capability to put systems and controls in place to ensure that suitable advice is given and customers are treated fairly. Individuals who do not have these qualities are a risk to consumers and face being banned.”

The 2008 visit to the firm was part of the assessment programme for small firms. Firms who fail to have in place appropriate systems and controls to demonstrate that they are treating their customers fairly will continue to be identified through the FSA’s Small Firms assessment program and action, including enforcement where appropriate, will be taken.

Powsney & Co Ltd, is currently in liquidation and is no longer authorized to conduct regulated business.

South African Mobile Banking

A “land grab” is under way in South Africa's mobile phone and banking industries as big companies — retailers, banks and telecommunications operators — begin vying for a stake of the fast-emerging market for mobile payments. So writes Duncan McLeod in TechCentral (http://www.techcentral.co.za/inside-sas-mobile-payments-land-grab/13674/ )

Significant announcements are being made virtually every week, as SA’s big four banks and the country’s mobile operators make a play for what could become a lucrative new business — providing electronic financial services to the unbanked using mobile phone.

The past week saw two important developments. First, Vodacom confirmed market talk that it is partnering with Nedbank to introduce Vodafone’s M-Pesa in SA. M-Pesa, developed for Vodafone’s Kenyan subsidiary, Safaricom, has proved wildly successful as a person-to-person money transfer system in the East African nation.

The second big announcement came from Standard Bank subsidiary Beyond Payments, which is rolling a similar system in conjunction with retail chain Spar. Standard Bank’s offering, called Instant Money, is only available in the Eastern Cape — and soon northern KwaZulu-Natal — but will be expanded nationally this year.

Absa already has a solution, which allows consumers to use its ATMs to receive money sent to their mobile phone. It uses an electronic voucher mechanism. First National Bank, which was in the news last week for bringing US company PayPal’s full suite of online payment services to South Africans for the first time, offers something similar.

John Campbell, business development executive at Beyond Payments, describes what’s happening as a “land grab”. All the big banks and mobile operators are experimenting with different models, trying to find the one that will prove a massive success.
There’s no question of the banks backing away, either, as they view mobile payments and commerce as core to their future strategies, Campbell says. That means the fight could soon turn into a full-scale war.

“For Standard Bank, this is a must win,” Campbell says. “It’s our future.”
Beyond Payments was set up outside of the normal Standard Bank structures precisely so that operational issues in the rest of the bank would not distract it. It’s mandate is to come up with innovative new products, even if this means competing directly with long-established and core parts of the bank, Campbell says.

Instant Money isn’t Beyond Payments’ first product. Last year it introduced MiMoney, though it hasn’t taken off in quite the way that the company expected. The product, aimed initially at people without credit cards, especially youngsters who want to shop online, has developed a loyal following in specialist areas. For example, it’s become popular as a way of buying cellular airtime, and as a way of purchasing movie tickets.

People who do use it for online shopping do so not because they don’t own a credit card — they often do — but because it’s seen as a more secure payment mechanism, Campbell says.
Unlike MiMoney, Instant Money is targeted at people without any access to the formal banking system.

The idea behind Instant Money and rival services like M-Pesa is that because mobile phones are in the hands of virtually everyone, they’re an ideal platform on which to transact and move money around quickly. People working in cities, for example, can send money to unbanked family members in the rural areas, with neither party having to open a bank account.

“What we’ve launched with Spar is really backing another horse, as another feed into this whole [mobile payments] thing,” Campbell says.

Spar, which has 850 outlets, is an ideal partner, he says — it has stores catering to the more affluent parts of the population as well as stores targeting the poor, including those in outlying areas.

A flat R9,95 fee is levied on each transaction, with Spar collecting “the bulk” of that money.

Campbell says Beyond Payments will launch similar products with other retailers in time, though the Instant Money brand is exclusive to its deal with Spar.

“It’s flipping hard work to sign up retailers,” Campbell says. Beyond Payments has to train staff in each store so they know how to use the system and how to detect, for example, attempts at money laundering.

Consumers are already using the service to do interesting things, he says. For example, some people send transactions to themselves — handing in cash at the point of sale and converting it into electronic currency — so that it doesn’t get stolen, say, while they’re traveling on the taxi. They then draw the cash they’ve sent to themselves, when they need it. This obviates their need to open a bank account and makes their money less likely to be stolen.

Because these payment systems work over telecoms networks, some analysts have suggested that mobile operators could soon find themselves competing head-on with banks on their own turf. But Campbell thinks this is unlikely, especially in the SA context. He says operators more likely to partner with the banks — like Vodacom has with Nedbank for M-Pesa, or like MTN has with Standard Bank for MTN Money — than they are to go it alone.

“The [financial services] industry is still incredibly tightly regulated,” he says.
Even more regulation could be on the way. The SA Reserve Bank has said that eventually it would like mobile phone payment systems to interoperate, much like ATMs do via the Saswitch network. The central bank hasn’t set any deadline for this, though, as the market is still considered to be in its infancy.

Public Relations - How Not to Treat a Customer

Even though this is an extreme case, the “other bank” depicted in this advertisement is unfortunately typical of many real live banks today. I am sure we can all relate to this. It's a very clear lesson in how to NOT treat a customer.

This is certainly worth a watch…

Doing the right thing – A question of Ethics

I recently blogged on Finextra about Ethics and regulation in the financial world under the title “It is more about ethics than policing” (http://www.finextra.com/community/fullblog.aspx?id=3918 )

In this blog I wrote;

"So the FSA is going to beef up on its staff in the oversight of the banks. As I see it, this approached is doomed before it even starts. The regulator, whether it is the FSA or any other, cannot match both the expertise and the innovativeness of the staff in the banks. The reason for this is simple. The regulator cannot compete with the banks in terms of direct payments, like salaries, or other incentives like bonuses.


This gets the whole issue back to what got the financial industry into this mess in the first place.


Putting more overseers in to monitor what is going on is also of doubtful value. It is an approach that will only lead to lulling everybody back into a false sense of security (again). This will last only until the next crisis emerges.


The real solution lies with bank managements accepting, in all sincerity, that they do have a real obligation to abide by certain ethical standards (and bankers in their position of trust within the community should know all about this) and that profits are not the only game in town.


If they can't get this right then no amount of new rules or new inspectors are going to make any difference.”

Bryan Foss responded to my comments with the following;

“Absolutely agree - this issue is about ethics and no amount of expensive (funded by the consumer it aims to protect) regulation will be enough to counter the effects of boards with objectives that are misaligned from their stakeholders (whether customers, investors, employees, suppliers, partners or regulators).


As an NED I have a responsibility to represent all these stakeholders at different times and the ethical challenge makes sense on the board and in leading and being a member of the key assurance committees (Audit, Risk, Nominations and Remuneration for example).


There is some excellent work being done in this area, but so far with insufficient impact on the big banks, or even on the government or FSA as regulator. Too many 'same olds' are moved around or called back in so that things don't really change at all - just look at the FSA and UKFI, if you can find the key names or how the appointment process is supposedly 'transparent'.


One person who is starting to influence these boards and to shake things up with the various regulators (wider than the FSA) is Prof. Roger Steare, Corporate Philosopher with CASS (City University Business School).


There is much more to be done, but we may now be at, or very close to, the tipping point where ethics really count - and there are more than a few people ready to give a final push .......”

Roger Steare is the Corporate Philosopher (http://www.rogersteare.com/). He works with people in businesses all over the world who want to do the right thing. He helps them build trust and sustainability. This short video is like a breath of fresh air.

Bankers’ Bonuses in context

The UK economy is in a mess but the bankers that many hold responsible for this are still taking home jaw dropping bonuses. This illuminating graphic from Money.co.uk.

Click on the image below to enlarge.

Lehman Brothers kept billions off its books

It is the Wall Street equivalent of a coroner’s report — a 2,200-page document that lays out, in new and startling detail, how Lehman Brothers used accounting sleight of hand to conceal the bad investments that led to its undoing.

You can read the full article from the New York Times at http://www.nytimes.com/2010/03/12/business/12lehman.html?hp=&pagewanted=all

Asia's growing economic power

Asia is regaining the economic dominance it enjoyed a thousand years ago. However it still has some way to go. View this short video by the Economist.

CA Digest No. 191 10 March 2010

You can dowload the new CA DIGEST here. Click the link below and the "DOWNLOAD" button.

Citadel Advantage Ca Digest New 191 100310

View more documents from Stanley Epstein.

Short Selling or Shorting – Is it really a conspiracy?

Bloomberg's Sara Eisen reports on a February 8, 2010 secret dinner of hedge fund managers, at which the investors discussed big bets against the euro.

New association formed to simplify international credit transfers

A group of 21 banks, clearing houses and associated payment service providers have launched the International Payments Framework Association (IPFA).

The body says its main purpose is to provide business rules, standards and operating procedures to improve non-urgent cross border credit transfers based on the ISO 20022 message standard by establishing a contractual framework.

At its inaugural meeting in London the IPFA has elected a board of directors - consisting of representatives from six banking institutions and three clearing houses - for a three year term.

Arthur Cousins of Standard Bank of South Africa was elected chairman with Equens' Michael Steinbach named vice-chairman.

April 2010 will see the commencement of live traffic between two IPFA members when the The Federal Reserve Bank in Atlanta and Equens will start with exchanging both USD and EUR payments between the USA and Europe.

Meanwhile, several IPFA members have begun planning for the inclusion, into the framework, of the Brazilian, Canadian, Mexican and South African currencies over the next two years.

The full list of members is ABN Amro, Canadian Payments Association, CamaraInterbancariade Pagamentos(CIP), Clear2Pay, Equens, Eurogiro, Federal Reserve Bank, Fifth Third Bank, JP Morgan, Nacha, PayPro, PNC, SECB Swiss Euro Clearing Bank, Standard Bank of South Africa, Standard Chartered Bank, Swift, The Clearing House, US Bank, VocaLink, Wells Fargo/Wachovia, World Savings Banks Institute and ZionsBancorp.

Mobile Union Launches Online Remittance Service

By: Emmanuel Okoegwale writing in “Mobile Money” - 4 March 2010. http://mobilemoneyafrica.com/

Mobile Union Ltd has announced the launch of its new online remittance service (http://www.mtxpress.com), mtxpress, which uses a secure SMS platform to provide a low-cost and convenient solution for people in the UK to send money to friends and family abroad.

According to the most recent DFID UK Remittance Market Report, the UK is one the top 10 remittance-originating countries worldwide, with approximately GBP2.4 billion recorded outward remittances annually from the UK to the developing world. Mobile Union is taking a new approach to remittance by focusing on a massive under-served market segment: people who want to send smaller amounts of money without being penalised with high fees. Mobile Union’s service enables people to send money safely and securely from their home or workplace without the need to visit a retail location; immediately stripping out the costs in time and money associated with a retail infrastructure and passing on these savings to customers. After registration online, with a user-friendly, simple and easy interface, customers can then send money securely using their debit card. Within seconds, the recipient is notified by SMS message that money is available for collection, leveraging the ubiquitous reach of mobile phones throughout the developing world.

Steven Faulkner founder and Commercial Director of Mobile Union commented:”mtxpress makes sending money home fast and convenient (http://www.mtxpress.com/). A combination of simple pricing and exchange rates directly linked to the Central Bank rate makes it easy to understand the true cost of sending money home.”

Security is of paramount importance to Mobile Union and there are multiple bank-grade security checkpoints for both the sender and recipient of the remittance, enabling customers to have certainty throughout the transaction lifecycle leading to complete peace of mind. In addition, Barclays Bank is providing the day-to-day banking and merchant services and Cybersource, the world’s first online payment management company, processing debit card transactions.

This week’s launch focuses on the UK to Bangladesh market, where Mobile Union has collaborated with BRAC Bank, one of the leading banks in Bangladesh. This partnership will enable recipients, without the requirement of a bank account, to utilise the bank’s extensive network of locations across the country to receive money. However, it is also possible to credit accounts maintained at BRAC Bank.

This template is one that Mobile Union will continue to use as it rolls out its service to other parts of South East Asia and West Africa later this year, providing an accessible service to the underserved.

Speaking about the launch of the service, Randall Harper, CEO for Mobile Union said: “The UK’s remittance market continues to grow, but little attention has been given to people who want to send smaller amounts of money without incurring the high fees. Through our mtxpress service and its secure SMS platform, we are able to provide this under-served segment of the market with a world-class service that is convenient, instant and great value-for-money.”

Remittances – France to Mali

TagPay operates a service which allows people to send money from France to any mobile phone in Mali.

TagPay is says that it is the first stored value solution available on all mobile phones. It is a prepaid account system that stores value on the mobile phone. The receiver is able to spend money in any Merchant accepting the service. Clients can make purchases at participating stores and restaurants using their mobile phone.

PayPal can return to India but without personal payments

Early last month, online payment service provider PayPal had stopped transactions in India and also reversed some fund transfers to personal accounts. The shutdown was because of the doubts that had arisen as to whether the personal payments at Pay Pal were remittances payment from expatriate Indian workers.

Now the Reserve Bank of India (RBI) has allowed PayPal to resume Indian bank withdrawals for Indian businesses that use PayPal to sell their goods or services abroad.

Personal payments into India will still remain suspended. Fahad Irani, the PayPal’s Asia Pacific boss said that the personal payments still remain switched off. RBI has said that it needs specific approvals to allow personal inward remittances to India.

The Indian Payment and Settlement Systems Act states that no person other than the RBI shall commence or operate a payment system, except with an authorization issued by the RBI under the provisions of the Act.

According to the rules set by the RBI, transactions for goods and services to Indian bank accounts will now be requiring a "purpose code" tag specifying the nature of the transaction.

PayPal has said that under new Indian laws these purpose codes are required for all cross-border transactions; depending on the amount of the withdrawal and purpose case, a bank may require additional documentary proof of the transaction, such as invoices and receipts.

The Indian Government has laid down these new laws because it fears that intermediaries like PayPal are used by freelancers who do not pay taxes for income generated abroad.

Who is this man?

eBanking - Twitpay to convert Twitter into e-commerce platform

US startup Twitpay is set to be expanded into a platform that enables users to pay online via Twitter.

The service has been procured for USD 100,000 by investors led by Acculynk CEO Ashish Bahl and Morgan Keegan investment banker Keith Meyers. The investors will initially focus on raising money for charities, but they are also planning to expand to other products and other social networks and allow users to make online purchases using the service.

To make a payment, the donor will have to re-tweet the message. By doing so, the money transfer will be authenticated from the donor’s account to that of the beneficiary. Twitpay retains 5 percent of each transaction. The beneficiary will receive its money within 72 hours.

The prerequisites for such transactions require both the donor and the charity to register on Twitter, with the donor additionally authenticated by Twitpay. Currently, the Twitpay service directs users to PayPal to settle their debts.

AIG (Arrogance, Ignorance and Greed)

I came across this the other day - the group Show of Hands singing their song Arrogance, Ignorance and Greed (AIG - what a coincidence!). It’s worth a watch and very true too.

The lyrics are:

All I wanted was a home
And a roof over our heads
Somewhere we could call our own
Feel safer in our beds

There was a storm of money raining down
It only touched the ground
With a loan I took I can’t repay
And the crock of gold you found

At every trough you stopped to feed
With your Arrogance, your Ignorance and Greed.

I never was a cautious man
I spend more than I’m paid
But those with something put aside
Are the ones that you betrayed

With your bonuses and expenses
You shovelled down your throat
Now you bit the hand that fed you
Dear God I hope you choke

At every trough you stopped to feed
With your Arrogance, your Ignorance and Greed.

You're on your yacht, we’re on our knees
Through your Arrogance, your Ignorance and Greed.

Toxics bring you tact and soul
Poisoned every watering hole
Your probity, you exchanged for gold

Working man stands in line
The market sets his price
No feather bed, no golden egg
No one pays him twice

To enter thrift and caution
Your only sound advice
You know you doubt yourself and meaning
And alone at every dice

At every trough you stopped to feed
With your Arrogance, your Ignorance and Greed.

I pray one day we’ll soon be free
From your absolute indifference
Your avarice, incompetence
Your Arrogance, your Ignorance and your Greed.

TRAINING COURSE - Process Improvement and Managing Change in a Banking Environment

Join us in JOHANNESBURG, South Africa on 4 & 5 August 2010 for our 2-day training course “PROCESS IMPROVEMENT & MANAGING CHANGE”

Process improvement and innovation is a series of actions taken to identify, analyze and improve existing business and other operational processes within an organisation to meet its goals and objectives.

Business process improvement follows a specific methodology to create successful results. All business operations whether back, middle or front-office are based on business processes. Often however, business processes have been inherited from earlier times, have been endlessly modified over time and tend to lose their earlier efficiencies.

With Process Improvement comes change. Often too, these changes introduce a layer of uneasiness to the individuals that make up the financial institution. Just as critical as the innovation and improvement is getting your staff to accept change as beneficial even within their own comfort zones.

The “Process Improvement & Managing Change” course in Johannesburg on 4 & 5 August 2010 is a 2-day intensive course on Business Processes – what they are and how they can be improved. The course also deals with managing change that changes to business processes bring about.

Ensure that your staff are able to understand business processes and how they may be improved. For more details including a fully descriptive course brochure e-mail us at courses@citadeladvantage.com today. Please indicate BUSPROCES-JHB in the subject line.

Banking - Any Time, Any Where

By: Adarsh Preet Mehta

Banking - Any Time, Any Where

The banking sector in India has experienced a rapid transformation especially with the LPG model in 1990’s. Just about a decade back this sector was limited to nationalized banks and cooperative banks. Then came the multinational banks. The opening up of the Indian banking to private players backed by information technology sector proved a big push for financial resources mobilization. Many financial institution ( like HDFC and ICICI) and non financial institutions like GIC, LIC, UTI, organizations of pension and provident fund and other financial institutions like IDBI, IFCI and NABARD entered the banking arena. Now day’s banks have to do much more beyond just providing a multi-channel service platform to its customers. There are a lot of issues which bank management have to keep in mind before future planning. Banks have a lot of challenges to meet which are as below.

Cost Reduction: - It is essential to cut down the cost of operation with the aim to enhance profit margin. Because in the era of competition it is prime necessity to cut down the cost of operation to survive in market.

Product Differentiation: - Private banks like ICICI, HDFC and AXIS bank etc introduced product differentiation through specialization, new products and increasing the added value. Specialization basically means that bank gets involved only in selected areas such as housing finance or limit service to corporate sector or handling just specific set of portfolios. Above all it was the pleasantries in terms of respect shown to customers, discipline, long working hours, absence of strike by employees.

Customer-Centric: - Indian banks have realized to focus on customer-centric services. While banks have to ensure product superiority and operational excellence, but the biggest challenge is to establish customer intimacy. No doubt the real strength comes from operational excellence and understanding with customers. Customer relationships have to be managed in best possible manner. In increase of good customer base and their retention will provide better income generation capability. Because major part of income comes from existing customer rather than new customers.

Information Technology is Pivotal: - Information technology’s application in banking sector is the main cause why new private banks and multi national banks have been able to survive and compete. Majority of banks are leveraging on low cost channels such as ATM and Internet banking to optimum level contributing to reduction in operating cost. These channels help to reduce the traffic from branches. In reality cost of transactions over these channels is lower than doing at branches itself.

Evolving Information Technology: - Banks are trying to make customer’s banking experience more convenient, efficient and effective. Banks are now moving from branch banking to bank banking. Banks are now working on the basis of IP based network. IP based networking improves efficiency and productivity. IP based networks lets a bank offer multiple services over the same network resulting in cost saving.

Redefining Objectives: - To meet with increasing cost and high competition as well as to retain new customers, banks have started venturing into newer territories. This is one of the main reasons why banks are focused on retail banking in big way. There are lower NPA (Non performing assets) in retail banking. CRM if implemented and integrated correctly can help significantly in improving customer satisfaction levels.

Information Technology has totally revolutionalised the banking sector. Information technology has opened up new markets, new products, new services and efficient delivery channels for the banking industry. Online electronics banking, mobile banking and internet banking are just a few examples. Information technology has also provided banking industry with the wherewithal to deal with the challenges the new economy poses. It has been the cornerstone of recent financial sector reforms aimed at increasing the speed and reliability of financial operations and of initiatives to strengthen the banking sector. The IT revolution has set the stage for unprecedented increase in financial activity across the globe. The progress of technology and development of world wide networks have significantly reduced the cost of global funds transfer. It is information technology which enables banks in meeting such high expectations of customers who are more demanding and are also more techno-savvy compared to their counterparts of the yester years.

They demand instant, anytime and anywhere banking facilities. IT has also been successful in providing in providing solutions to banks to take care of their accounting and back office requirements. Information technology facilitates the introduction of new delivery channels in the form of ATMs, Net banking, Mobile banking and the like. Banks are increasingly interconnecting their computer systems not only across the branches in a city but also to other geographical locations with high speed network infrastructures and setting up local area and wide area networks and connecting them to Internet. As a result of it information system and networks are now exposed to a growing number. Now IT sector has developed a lot of technology products for banking companies which are used to facilitate the banking operations.

Internet Banking: - Internet banking is simply banking with the help of internet. It is also called net banking. The common feature falls broadly into several categories like account to account transfer, paying a bill, funds transfer between two accounts, purchase or sale of investment, repayment of loan, issuance of bank statement and financial institution administration. Some online banking platforms support account aggregation to allow the customers to monitor all of their accounts in one place whether they are with their main bank or with other institution.

Credit Card: - A credit card is a part of system of payments named after the small plastic card issued to users of the system. It is a card entitling its holder to buy goods and services based on the holder’s promise to pay for these goods and services. The issuer of the card gains a line of credit to the consumer from which the user can borrow money for payment to merchant or as a cash advance to the user. When purchase is done the credit card holder agrees to pay the card issuer. He gives his consent to pay by signing a receipt with a record of the card details and indicating the amount to be paid by entering a personal identification number.

Mobile Banking: - Mobile banking which is also known as M-Banking, SMS banking etc is a term used for performing balance checks, account transactions, payments etc via a mobile device such as a mobile phone. Mobile banking today is most often performed via SMS or the mobile internet but can also use special programs called clients download to the mobile device. It refers to provision and availability of banking and financial services with the help of mobile telecommunication devices. The scope of offered services may include facilities to conduct bank and stock market transactions, to administer accounts and to access customized information.

Telephone Banking: - Telephone banking is a service provided by a financial institution which allows its customers to perform transactions over the telephone. Most telephone banking uses an automated phone answering system with phone keypad response or voice recognition capability. To guarantee security, the customer must first authenticate through a numeric or verbal password or through security questions asked by a live representative.

Smart Money Card (Debit Card): - A smart money card is a form of chip card which is built with integrated circuit card, is any pocket sized card with embedded integrated circuits which can receive input which is processed and deliver the output. Smart money card contains only non-volatile memory storage components and also some security logic. This card bears a hologram to avoid counterfeiting.

Bank @ Home: - Now day’s banks provide home delivery services like other companies. Today bank offers special facility to pick up heavy cash directly from customer’s home or deliver heavy cash directly at customer’s home. This is called bank at home. Customer need not go physically to bank. This facility is provided to special customer who deal with bank on daily basis and whom transaction amount is heavy.

Railway or Airline Ticketing: - Bank provides its customers facility to buy rail or air tickets through their deposit in bank via using internet. Customers can purchase railway or air tickets electronically by using their debit or credit card.

Bills and Tax Payment: - Today bank offers facility to its customers to pay bills directly through bank account by using internet facility. These bills may be of electricity, water rates or mobile etc. Similarly we can pay income tax or sales tax or VAT to government through bank account by using their bank identification number or password.

Shopping: - Customers of bank can shop any where any time by using smart card issued to them. They need not carry hard cash with them. They can buy any product or service and can pay the bill of same by these cards. Bank provides special type of machine to seller or owner of showrooms who can swipe these cards on that machine and it automatically deducts amount from customer’s account.

Online Recharging: - Now bank is providing all type of services to its customers which include online recharging also. Customers using prepaid mobile connection can recharge their mobile directly by visiting the website of concerned service provider company and giving the detail of their bank account.

Cash on Tap: - Cash on tap is a facility to take liquid cash directly from ATM by using debit card. This facility is 24 hrs and 7 days available. Customer can withdraw amount from Automatic Teller Machine by inserting their debit card and following special instructions. ATM gives us hard cash just like a tap gives water by turning it.

Forex Cards: - Foreign exchange cards are called forex cards. These cards are meant for those persons who often keep on going to foreign countries. Customer can deposit amount to bank where he has account and bank gives him in exchange forex cards. These cards can be used in foreign countries where customer can obtain foreign currency of concerned nation.

In conclusion we can say that information technology is the backbone of banking sector in present time. Armed with a technology backbone, banking will remain the best business model for managing liquidity, creating trust and managing risks.

About the Author

Author is Lecturer in Ferozepur Institute of Management at Ferozshah (Ferozepur) in Punjab.

Author can be reached at adarshpreetmehta@gmail.com or 98885-54328

(ArticlesBase SC #1875921)

Article Source: http://www.articlesbase.com/ - Banking - Any Time, Any Where

Nokia and India's Yes Bank partner on mobile finance pilot

Nokia the world's biggest handset manufacturer is teaming up with India's Yes Bank on a commercial mobile financial services pilot. The pilot scheme will let people transfer money to another person simply by using their mobile phone number. They'll also be able to pay utility bills and top up SIM cards while the ability to pay for goods and services is expected to be added in the future.

The system is based on technology from Obopay, the California m-payments start-up Nokia took a minority stake in last year. Soon after, the pair unveiled a mobile financial management and payments service targeted at unbanked people in developing countries.

At the time they predicted the service would be rolled out in "selected markets" this year and have now confirmed India as an early test site. Obopay and Yes Bank already had a partnership, enabling person-to-person and person-to-bank mobile payments.

India has the fastest growing cellular market in the world, says Obopay. There are 500 million mobile phones in the country now but this is expected to be reach than 900 million by the end of 2013. Meanwhile, 41% of the population does not even have a bank account.

Mobile Payments - M-PESA to be launched in South Africa

M-PESA was launched by Vodafone affiliate Safaricom in Kenya in 2007 and now claims over eight million users in that country. A recent study suggests that more than 10% of Kenya's GDP now pass through the mobile banking service.

M-PESA has since been introduced in Tanzania and Afghanistan and now Vodacom South Africa has teamed with an unnamed local financial institution to target the 26 million people in that country without bank accounts. Vodafone says only 60% of South African adults have bank accounts but mobile penetration is over 94%.

Cenk Serdar, director, mobile payments, Vodafone, says: "Mobile technology in Africa has already improved the lives of millions simply by allowing them to communicate far beyond their immediate surroundings. It is now set to transform the way we send and receive cash. The successful take-up of M-PESA in Kenya has clearly demonstrated the demand for easily accessible, secure payment services particularly in emerging markets."

Paying for parking with your mobile phone

Mobile payment systems are beginning to proliferate pretty rapidly now. There are some very impressive commercial systems out there already. This short video illustrates on such system to pay for parking. This particular system has been developed by Margento, a Dutch based technology company.

Remittances, Africa and the effects of the Financial Crisis

In a recently published Working Paper “The Global Financial Crisis and Workers’ Remittances to Africa: What’s the Damage?” Adolfo Barajas, Ralph Chami, Connel Fullenkamp, and Anjali Garg estimate the impact of the global economic crisis on African GDP via the remittance channel during 2009-2010. The data and it’s interpretation forecasts remittance declines into African countries of between 3 and 14 percentage points, with migrants to Europe hardest hit while migrants within Africa relatively unaffected by the crisis. The estimated impact on GDP for relatively remittance-dependent countries is 2 percent for 2009, but will likely be short-lived, as host country income is projected to rise in 2010.

The paper is available for download at http://www.imf.org/external/pubs/ft/wp/2010/wp1024.pdf

Mobile Payments - How "Square" works

A facinating look at how "Square" operates. Is this the future of mobile payments?

Credit Card payments on a Mobile Phone - Is this the future?

"Square" is a new add-on for a mobile phone that enables anyone (whether they own a business or not) to accept credit card payments with their iPhone or iPod touch.

Take a peek. Is this the future of payments?

European Union Parliament kills SWIFT deal

The European Parliament has voted to scrap a controversial agreement to allow US authorities access to EU banking data transmitted over the international SWIFT network.

In November 2009 European Union ministers agreed an temporary nine-month deal to continue letting US anti-terror investigators access details of bank transfers conducted over SWIFT.
The decision to overturn the agreement follows intense US lobbying ahead of Thursday's vote.

Last weekend in an interview with the German magazine Spiegel, Adam Szubin, the US treasury department official in charge of the Terrorist Finance Tracking Program, said that US tapping of SWIFT banking data had helped to identify and break-up a number of potentially deadly terrorist cells operating in Europe. He warned of serious diplomatic consequences, as well as security gaps, if Parliament were to veto the program.

But EU Parliamentarians were unconvinced by the appeals, expressing concerns that the deal failed to protect the privacy of EU citizens.

In the final vote, political leaders in Strasbourg voted 378-196 against the deal, with 31 abstentions.

The European Commission said it will need to explore with the US treasury department the extent to which there is scope to negotiate a long term EU-US TFTP agreement.

Commissioner for Home Affairs, Cecilia Malmström states: "I remain convinced that the program enhances the security of our citizens: it would be the role of the Commission to make sure that all the relevant safeguards for EU citizens' privacy and data protection are duly included in any possible future agreement. In spite of this set back, I hope we will be able to agree a text in the near future that will give us greater security, more data protection and a useful cooperation tool with US authorities.

"Following today's vote in the European Parliament, we will have now to reflect together with our US partners on the possible negotiation of a new agreement".

Remittances – Regulator query leads to PayPal suspending payments to and from India

PayPal said a ban on personal transactions to and from India will continue for "at least a few months" while the online payment service tries to resolve a problem with local regulators.

"We temporarily suspended these services to respond to enquiries from the Indian regulators, specifically questions on whether personal payments constitute remittances into India," PayPal said.

The company is working with regulators and bank processing companies to resolve the problem as soon as possible, it said. But "personal payments to and from India will be suspended for at least a few months until we fully resolve the questions from the Indian regulators."

"We realize that this is causing considerable inconvenience to our customers and I want to reassure you that this is a top priority for the leadership at PayPal," the company said.

PayPal notified users on Saturday that personal payments to and from India had been suspended, as well as transfers to local banks. Customers can still make commercial payments to India, but merchants can't withdraw funds in rupees to local banks, the company said.

On Tuesday it said customers should be able to withdraw funds to a local bank within a few days. But for now it can do nothing to facilitate personal transactions.

The problems may have been triggered by a marketing push that promotes PayPal as a way to send money abroad. The campaign - which reads "As low as $1.50 to send $300 to countries like India" - may have caught the attention of Indian regulators, the source said.

Some Indians use PayPal to receive payments for services in the country such as software development. The suspension of payments appeared to catch many by surprise and has generated more than 150 pages of comments in an online discussion thread.

Some expressed frustration that PayPal had apparently suspended payments without warning, and said they learned only from buyers that payments from overseas had been returned.

PayPal processed more than US$4 billion of payments in the Asia Pacific region in 2008, a PayPal spokesman said. Its largest market in that region was Australia. The company processed $60 billion in payments worldwide in 2008.

Mobile Money Launched in Rwanda

The Governor of the National Bank of Rwanda Mr. Francois Kanimba has presided over the launch of MTN Mobile Money to the media at MTN Centre in Nyarutarama in Rwanda. This new mobile banking product which is compliant with local banking regulations, is a convenient, secure and affordable way of sending and receiving money anywhere from anywhere in Rwanda.

Customers on the MTN network can now sign up for MTN Mobile Money and begin transacting at will through the 120 agents that have been appointed and that located across the country. Those who are not on the MTN network are also able to receive money.

Mr. Khaled Mikkawi, the CEO of MTN Rwanda, described the launch as one of the most innovative initiatives that has been made available to Rwandans in recent times: ‘We have a network reaching over 90% or the population and it is only right that we leverage this coverage for a common good product that will go a long way in the financial deepening of the Rwandan economy.’

MTN pioneered mobile banking in South Africa in 2005 in a partnership with Standard Bank and commercially launched in Uganda in March 2009. MTN Rwanda has partnered with BCR as the key driver financial institution.
Mr. Mikkawi expressed his gratitude to the Governor of the National Bank of Rwanda and the team at the bank for their resolute support with which we would not have been able to launch: ‘I cannot thank the Governor enough for accepting our invitation to preside over this launch to the media. Sir we are humbled by you enthusiastic support and grateful for the opportunity MTN has to play a lead role in the economic and social transformation of Rwanda.’ The National Bank of Rwanda has played a central role in ensuring the product and the project complied with banking regulations.

MTN Rwanda partnered with the largest specialist mobile financial services provider, Fundamo. Fundamo’s leadership team has a strong background in the financial services industry and has applied the stringent design principles required for secure banking systems, whilst also taking full advantage of the unique characteristics of the mobile phone and the mobile user experience. This new style of mobile financial system represents a powerful convergence of the rigor of banking systems and the convenience, simplicity and ubiquity of mobile.

MTN Rwanda also work with Oscillyte Ltd, a consultancy firm that provides specialist strategy, marketing and product development skills and knowledge to organizations’ active in the telecommunications market and mobile in particular. The firm’s lead consultant Mark Guthrie has been Project Manager for MTN Mobile Money.

MTN Rwanda has planned an extensive communication campaign to sensitize the public on the benefits of MTN Mobile Money which include:
* Depositing cash into client’s account at Mobile Money agent outlets
* Sending and receiving money from the convenience of a mobile phone
* Managing ones Mobile Money account
* Withdrawing cash at any MTN Mobile Money agent location.

Remittances - Western Union sees 4% revenue drop in 2009

Money transfer services provider Western Union has seen its Q4 2009 revenue rise 2 percent to USD 1.3 billion compared to the same interval of 2008, with constant currency earnings per share (EPS) of USD 0.32, compared to USD 0.34 in the fourth quarter of 2008.

For the full 2009 year, Western Union has seen its revenue drop by 4 percent compared to 2008 to USD 5.1 billion, with EPS worth USD 1.21, compared to 2008 EPS of USD 1.24. The company also saw its volume of cash provided by operating activities reach USD 1.2 billion for the whole of 2009.

In 2009, Western Union’s cross-border consumer-to-consumer (C2C) money transfer market share rose from 17 percent in 2008 to an estimated 18 percent in 2009, while its number of agent locations has grown to over 410,000.

For 2009, the C2C segment represented 85 percent of Western Union’s revenue at USD 4.3 billion, a decrease of 4 percent from 2008. Operating income was down 4 percent and operating income margin was 27 percent, which compared to an operating income margin of 27 percent in 2008.
The EMEASA (Europe, Middle East Africa and South Asia) region, which represented 45 percent of Western Union revenue, reported a revenue decline of 1 percent and transaction growth of 10 percent compared to 2008. India revenue grew 11 percent and transactions increased 22 percent for the year.

The Americas region, which represented 32 percent of Western Union revenue, reported a revenue decline of 9 percent and a transaction decrease of 3 percent for the entire 2009. In the domestic money transfer business, revenue declined 14 percent and transactions declined 5 percent. Mexico, which was 6 percent of Western Union revenue for the year, had a revenue decline of 15 percent and a transaction decline of 12 percent.
The APAC (Asia-Pacific) region, which represented 8 percent of Western Union revenue, increased revenue by 5 percent on transaction growth of 18 percent during the year. China revenue increased 1 percent and transactions increased 4 percent compared to 2008.

Operations Risk - Federal Reserve launches a new website for bank directors

The Federal Reserve has launched a website to help new bank directors learn how they can work to ensure the safety and soundness of their institutions. The website, www.BankDirectorsDesktop.org , also provides a refresher course for experienced board members.

BankDirectorsDesktop.org is tailored to directors of community banks and features online training and other resources to help directors better understand the issues and challenges associated with serving on a bank's board. The website includes links to the "Training for Bank Directors" interactive course and the latest edition of Basics for Bank Directors, a comprehensive guide to directors' roles and responsibilities.

"Many people who are asked to serve on bank boards have little training or experience to prepare them for their new roles," said Patrick M. Parkinson, director of the Federal Reserve Board's Division of Banking Supervision and Regulation. "This website has been developed with new directors in mind, but there is plenty of useful information for those who have already spent time on bank boards."

CPSS-IOSCO Review of Standards for Payment, Clearing and Settlement Systems

The Committee on Payment and Settlement Systems (CPSS) and the Technical Committee of the International Organization of Securities Commissions (IOSCO) have launched a comprehensive review of their existing standards for financial market infrastructures such as payment systems, securities settlement systems and central counterparties.

There are currently three sets of standards involved, namely:
• the 2001 Core principles for systemically important payment systems
• the 2001/2 Recommendations for securities settlement systems
• the 2004 Recommendations for central counterparties.

Financial market infrastructures generally performed well during the recent financial crisis, and did much to help prevent the crisis becoming even more serious than it actually was. Nevertheless, the committees believe that there are lessons to be learned from the crisis and, indeed, from the experience of more normal operation in the years that have passed since the standards were originally issued. It thus seems timely to review the standards with a view to strengthening them where appropriate.

Robust financial market infrastructures make an essential contribution to financial stability by reducing what could otherwise be a major source of systemic risk. Moreover, insofar as they enable settlement to take place without significant counterparty risk, they also help markets to remain liquid even during times of financial stress.

The review will be led by representatives of the central banks that are members of the CPSS and those of the securities regulators that are members of the IOSCO Technical Committee. The International Monetary Fund and the World Bank are also participating in the review. The review is part of the Financial Stability Board's work to reduce the risks that arise from interconnectedness in the financial system.

The committees will coordinate with other relevant authorities and communicate with the industry, as appropriate, as the work progresses. They aim to issue a draft of all the revised standards for public consultation by early 2011.

Separately, as announced in the press release on 20 July 2009, the CPSS and the Technical Committee of IOSCO are already in the process of providing guidance on how the 2004 Recommendations for central counterparties should be applied to CCPs handling OTC derivatives. The guidance will also cover other relevant infrastructures handling OTC derivatives such as trade repositories. This aspect of the work has been put on a fast track because of the new CCPs for OTC derivatives and trade repositories that have recently started, or are about to start, operating.
A consultative document on the guidance will be issued within the next few months. This new guidance will not entail amendments to the existing recommendations for CCPsbut will of course be incorporated into the general review of the standards that has now begun.

The Committee on Payment and Settlement Systems (CPSS) serves as a forum for central banks to monitor and analyse developments in payment and settlement infrastructures and set standards for them. Its members are central banks from 24 countries and regions. The chairman of the CPSS is William C Dudley, President of the Federal Reserve Bank of New York. The CPSS secretariat is hosted by the BIS. More information about the CPSS, and all its publications, can be found on the BIS website at www.bis.org/cpss .

The International Organization of Securities Commissions (IOSCO) is a policy forum for securities regulators. The organisation’s membership regulates more than 95% of the world’s securities markets in over 100 jurisdictions. The Technical Committee is a specialised working group established by IOSCO’s Executive Committee and is made up of 18 agencies that regulate some of the world’s larger, more developed and internationalized markets. Its objective is to review major regulatory issues related to international securities and futures transactions and to coordinate practical responses to these issues. Kathleen Casey, a Commissioner of the US Securities and Exchange Commission, is the chair of the committee. More information about the Technical Committee can be found at www.iosco.org/ .

The review will be co-chaired by the chairs of the CPSS and the IOSCO Technical Committee, ie William C Dudley and Kathleen Casey.

Is this the future of Banking?

Australia’s Commonwealth Bank has a vision to be number one in customer satisfaction. This short video shows their idea of what the future of banking looks like with the customer clearly in the centre of their focus.

Is this really what the future of banking will be like?

Bank Trader’s Secret Caught Live on Camera

Just recently Australia's "Seven News" was interviewing Macquarie Bank’s private wealth adviser Martin Lakos on the financial market's reaction to the Australian Reserve Bank keeping interest rates on hold. Bust as as Lakos spoke, viewers saw a man in the background open an e-mail and peruse a series of near-nude pictures of Victoria's Secret model Miranda Kerr.

Subsequently in a statement the bank said; "Macquarie takes matters such as the unacceptable use of technology extremely seriously. Macquarie has strict policies in place surrounding the use of technology and the issue arising from today's live cross on 7 News is being dealt with internally."

Mobile Banking, the Future of Banking

Author: Pankaj Snv

Mobile Banking refers to provision and availability of banking and financial services with the help of mobile telecommunication devices. The scope of offered services may include facilities to conduct bank and stock market transactions, to administer accounts and to access customized information. Mobile banking is known by various other names. Through mobile banking, one can balance checks, complete his account transactions, make payments on time etc. via a mobile device such as a mobile phone. Most customers use mobile banking through SMS or the mobile internet. Some financial institutions take up another method to provide mobile banking to their customers. They make customers download special software on their mobile phones which acts as client for the mobile banking services.

Mobile banking is growing at a very fast pace and will soon become the primary channel for banks to connect with their customers. While the top banks have the financial and technical resources to make moves in the mobile channel, most mid-tier and small banks lack the innovation and funds needed to explore this front. Many of the largest banks have already launched mobile banking services, which are catching on with customers and generating positive business results. The past few months have brought a flurry of mobile banking announcements from mobile banking vendors who are responding to growing demand from their customers and the recognition of their own powerful position in the mobile banking vendor ecosystem.

Mobile banking technology vendors have a big role to play in helping mid-tier and small institutions take advantage of this emerging channel. Due to the increasing interest in mobile banking software, banks should deploy mobile banking software with confidence that their mobile banking vendors will provide the key to start the engine of mobile banking. Recent mobile banking announcements from technology giants represent the beginning of an evolutionary strategy with regard to integrating mobile banking more deeply into the banking infrastructure. As mobile banking software and payments evolve throughout the year, the associated mobile banking vendor ecosystem will change drastically. Mobile banking has reached a level of maturity that warrants action in the eyes of the mobile banking vendors.

Mobile banking is important to mobile banking vendors from the perspectives of both existing customers and new deals. The customers are eager to try out and use mobile banking capabilities, in large part because the top banks have made competitive inroads into the smaller banks' geographic markets. Pure-play mobile banking vendors have a hard time penetrating these smaller institutions because core banking vendors play the role of technology gatekeeper. It is quite possible that the core banking vendors will emerge as key players in the vendor ecosystem for mobile banking. In technology innovation, core banking vendors may not be trendsetters, but they are pacesetters. Because of their familiarity with banks' core operations, these vendors excel at seeing through the hype regarding new mobile banking software for banks and waiting to act until the market has matured to the point when innovation and profitability converge.

About the Author:

"Pankaj Modi Says:" mobile banking software is one of the best solutions for time saving. Also the banking becomes easier, quicker and foolproof. For more Interest Visit:
http://www.bank-companion.com

Article Source: ArticlesBase.com - Mobile banking, the future of banking

Is the Financial Crisis Really Over?

By Stanley Epstein - Principal Associate, Citadel Advantage

What is the risk of another financial crisis? The dust has begun to settle. The turbulent events of the past two and a half years seem to be over and the world is looking forward to a period of renewed stability and growth. Across most of the world there are plans afoot for the reform of the banking system to “fix” it so that the dreadful events that we were witness to so recently will not happen again.


2010 – The start of the second decade of the twenty first century is seen as a symbol of hope and a brighter future.

How realistic are these hopes? Is it possible to really repair the banking and financial system? Can we avoid any future pain such as we have seen (and alas are continuing to see)?

This is all good stuff, but realistically speaking the prospects for a quick “fix” are not at all good. In fact one need look no further than to the responses of governments and financial regulators to these recent events to see that the seeds of the next financial crisis have already been sown. And this crisis may not be so far in the future either.

Consider the facts. The overall response of governments and regulators alike to the recent financial crisis has sent a totally wrong message out to the banks. This misguided response has vastly increased the possibility that the same events will repeat themselves in the not too distant future.

To make matters worse, when the next crisis occurs countries may just not be able to take the strain. The events of recent days in Iceland regarding the reimbursement of the British and Dutch governments in the “Icesave Bank” saga and the ongoing financial problems in Greece are portents that the next crisis could be much, much worse.

The single distinguishing feature of the 2007-9 crisis was the huge amounts of financial assistance that was literarily thrown at the banks. Governments across the globe went almost berserk to avoid a systemic collapse of their individual country’s banking systems.

By taking this course of action governments simply reinforced the existent cavalier attitude of the banks. The banks who benefitted the most from the support of the state were in all probability the ones who presented the most serious risks to the financial system; the banks who should most probably been allow to go to the wall.

Because governments and regulatory authorities provided such massive assistance to banks and securities firms these governments have in effect created a sort of automatic disaster insurance fund. Bank executives now know that their banks will not be allowed to go under. This is going to lead the banking industry generally to their bad pre-crisis habits; habits of taking dangerous and unjustified risks once again, in the certain knowledge that that they will not be allowed to fail. “Too-big-to-fail” was (and is) the cry and governments have been all too eager to dance to this tune.

A factor which is so conveniently ignored is that for many banks across the globe the pain is not yet over. These banks are going to continue to experience losses for some time to come. These losses could still be extensive, as foreclosures continue to mount amidst a stagnating property market and continuing high levels of unemployment.

If governments could say with any absolute conviction that they would never, ever bail out another bank again, there would be some hope of averting a future crisis. However governments are fickle, driven by the winds of political opportunism.

When the crisis returns, as it surely must, we will see a replay of what we saw before. Indeed certain recent developments at some of the banking culprits from the last round are a clear indication that some banks are back to their bad old ways with massive profits and obscene bonus payments becoming the norm once again.

Clearly any attempts by various governments to “fix” the system have been a non-starter. To be brutally blunt – it has failed! And the same unfortunately applies too, to “fixes” that are planned. If they haven’t been started on yet the chances of them ever happening are less and less likely with each day that passes.

Unless governments and regulators seriously look at the failed systems and repair them properly in a manner that avoids the current implied guarantees of support “no matter what“, we are doomed to relive the events of 2007-9 again and again and again.

New Year - Welcome 2010

Welcome 2010! On this first day of the new year and the first day of the second decade of the 21st century we take a quick look at what folk on the street in London see and hope for (courtesy of The Economist).