Crook versus crook

In a new turn for the books a pair of cybercrooks has posted a phishing kit on hacker forums that lets them steal the data gleaned by those who download and use it, says security operation Imperva.

Imperva says the phishing kit helps crooks set up fake sites purporting to belong to organizations such as banks to dupe personal and financial data from victims.

However, unknown to these hackers, the creators of the kit use a built in back door to harvest all the credentials. While the proxy crooks may find some success before their phishing sites are closed down, the masterminds gets everything without needing to conduct an open campaign.

The cloud-based approach of the kit - developed in Algeria with Arabic tutorials but itself in English - makes it far harder to shut down than normal phishing scams, says Imperva.

In traditional schemes when you take down a server you affect not only the Web page but also the back end data collection capability. In the cloud version, data collection is hosted separately from the sites which means hackers only need to repost the front end in a new location to be back in business.

'Darth Vader' robs US bank

A man wearing a Darth Vader mask and cape robbed a Chase bank branch on Long Island on last week, police said.

The thief entered a branch in Setauket at 11:30 a.m. and demanded money from a teller. But instead of using a light saber, "Darth" threatened the teller with a semiautomatic gun.

The teller gave the robber some cash from the drawer. A customer started to battle Vader inside the bank.

Det. Sgt. William Lamb of the Suffolk County Police Department says, "They got into a bit of a physical altercation. No one was hurt."

The Darth Vader thief, described as between 6 feet and 6 feet 2 inches tall, then took off running. In addition to the mask and cape, he was also wearing camouflage pants. He headed east through the bank's parking lot and then jumped on a bicycle and took off. Witnesses say his cape was waving behind him as he ran.

A witness said, "I thought it was just a joke but I guess he was serious."

Police have not said if Luke Skywalker has offered to help track "Vader" down.

Det. Sgt. Lamb says, "After doing this for 28 years, nothing surprises me anymore but this was a unique one."

Australian Foreign Exchange Turnover

For those FX aficionados the Australian Foreign Exchange Committee has just released its April 2010 Semi-Annual Report on Foreign Exchange Turnover


You can access this information on the Reserve Bank of Australia website by clicking HERE.

Bank of Ireland to refund €3 million to ATM users after glitch

Bank of Ireland is refunding around 43,000 ATM users a total of €3 million after a problem with anti-fraud systems saw money incorrectly debited from their accounts.

The bank is making the payments after its internal monitoring processes flagged that ATM users who forgot to take their cash from the machine were still having the money taken from their accounts.

When distracted customers fail to take cash or their cards at ATMs, the machine waits a short while before pulling the money back in with the debited amount automatically credited again.

However, for four years, until October 2009, the installation of anti-fraud measures "resulted in the normal system response of automatically prompting a refund to issue not to occur for these particular transactions" says Bank of Ireland in a statement.

It is now in the process of refunding €1.3 million to 14,000 of its own customers this week and is working with other banks to help get a further €1.7 million to 29,000 non-customers.

The bank says has apologised for the error and has informed the country's Financial Regulator.

About six people per ATM per year leave their cash, card, or both in machines.

Madoff trustee starts gathering $3.6 billion - new facts are being revealed

It is reported that Irving Picard, the court-appointed trustee started to gather money from 43 new defendants to pay the victims of Bernard Madoff's Ponzi scheme. In total they demand $3.6 billion from entities tied to Fairfield Greenwich Group which is considered to enable Bernard Madoff to run the fraud for at least 20 years.

Among the most significant defendants are Walter Noel, Jeffrey Tucker and Andres Piedrahita, the Fairfield Greenwich Group co-founders.

The trustee Irving Picard has submitted papers to the US Bankruptcy Court in Manhattan last week insisting on the fact that the company, its founding partners and two dozen affiliates, among others, represented nearly half of Madoff's reported assets under management, and that they "cannot deny their knowledge of many 'red flags' indicating the likelihood of that fraud," reports the Washington Post.

Picard has provided a 228-page complaint describing in details the relationship of Noel with Bernard Madoff which started in 1989.

"The defendants misled regulators, investors and potential investors, and generally looked the other way, focusing only on self-interest and profit," said Irving Picard.

Fairfield Greenwich has stated that Picard's filing was filled with "false, misleading and rehashed accusations."

“Diaspora Bonds” – Remittances as a new source of development finance?

Nigerian banks can create Diaspora bonds as a financial tool to bridge financing gaps in the country, Vicky Johnston, Senior Regional Director, Middle East and Africa, Moneygram International, has said.

Johnston said this in an interview with newsmen on the sidelines of the Banking Outlook Africa conference 2010 in Johannesburg. She stated that Nigeria, with US$10 billion annual remittances, was well positioned to develop Diaspora bonds to stimulate its economy.

"Diaspora bonds are a mechanism whereby developing countries can borrow from their diaspora community abroad to raise financing," she said. She noted that official aid alone was not adequate to bridge the financing gaps in developing countries

Johnston said that Nigeria was one of the highest receivers of remittances in sub-Saharan Africa and should use this for economic development.

It is being done in Ethiopia and Rwanda at the moment and not many other countries are utilizing it around the world, but it could be an interesting thing for the Nigerian market," Johnston said. Shedding more light on the bonds, she said it was developed when the community of the Diaspora abroad provides money as a source of funds or capital that could be used to help in the financing gaps.

"In other words, we are using the Diaspora abroad who have their natural links to their home country of Nigeria, to bridge financing gaps. When you take debt to export ratio and this is a key measure in terms of sovereignty ratings, and factor into that, the foreign exchange that is derived from the remittance business, you can see a decrease of debt to export ratio," she said. Johnston said similar effect would occur when remittances were factored into current account deficit placing the nation in better stead.

She said Nigerian banks have the potential to become number one in the continent in the future. She explained that remittance business is very large in Africa, with funds coming mainly from the USA, and Canada which account for "at least 50-60 per cent of remittances into Anglophone Africa" .Johnston said other countries from where huge remittances come are the UK, Germany, Italy and Spain. Globally, she said the remittance business was worth about US$330 billion.

Unskilled foreign workers are highest remittance senders

The Philippines National Statistics Office (NSO) says laborers or unskilled overseas Filipino workers were the biggest source of remittances in the country last year.

In a statement, the NSO said laborers or unskilled workers posted the highest cash remittance of P18.03 billion from April to September last year among the different occupation groups. However, this was lower compared to the cash remittance sent home in the same period in 2008 of P19.5 billion.

Cash remittances of professional OFWs during the period amounted to P16.5 billion, higher than the P15.12 billion for the period April to September 2008.

The total remittance sent by OFWs during the period April to September 2009 was estimated at P138.5 billion, down by 2.4 percent compared to the same period in 2008 amounting to P141.9 billion.

Cash sent amounted to P102.5 billion, cash brought home P31.4 billion and remittance in kind, P4.5 billion.

Of the total cash remittance sent for the period April to September 2009, about P78 billion were sent through banks, P12.4 billion through other means, P8.6 billion through door-to-door and P3.5 billion pesos through agency or local office and friends or co-workers.

UK fraud losses reach record £1bn

BDO a major accountancy firem says fraud in the United Kingdom has hit a record of £1bn in the first six months of 2010. BDO has been monitoring fraud levels for the past seven years.

The main types of financial crimes, says BDO, include mortgage fraud, under-reporting of revenue and VAT avoidance. Mortgage fraud now accounts for 20% of all reported cases.

The average amount of each type of fraud had increased to almost £6m, up from £5m last year. About 16% of all reported fraud came from management falsifying the accounts of their own companies.

Simon Bevan, head of the fraud services unit at BDO, said the increase could not be blamed on the economic downturn. He said fraud continued throughout good and bad times, but austerity brought greater scrutiny and a higher number of laid-off employees prepared to blow the whistle on illegal practices.

Another growing trend identified by BDO is where managers of companies commit fraud by either setting up "companies within companies" or diverting lucrative contracts away to accomplices.

"Linked to this unethical activity is an increase in insider dealing where management don't directly defraud their own employer but their actions leave them open to stringent, and often public, enforcement action by financial regulators," Mr Bevan said.

About 49% of all fraud occurs in finance or insurance, according to the figures.

The BDO data, published every six months, may understate the scale of the problem, because only cases that have been publicly reported to authorities are included.

PayPal boosts online shopping protection in Asia-Pacific region

PayPal has launched newly enhanced buyer protection policy, in a move to strengthen the growing consumer confidence in e-commerce and online shopping sweeping across Asia-Pacific. The new policy targets to protect the over 785 million internet users who buy goods from over 8 million merchants worldwide, accepting PayPal as a payment method on their site.

Moreover, PayPal's Buyer Protection policy can also support online sales growth of SMEs PayPal merchants in the region. Thus, 84 million active PayPal users from over 190 markets worldwide will be more comfortable purchasing on small, unfamiliar sites.

Any eligible PayPal merchant can thus add the Buyer Protection logo to their website to give consumers more confidence in shopping on their site.

PayPal aims to help making online shopping safer and more secure as its Buyer Protection policy enables buyers who have purchased eligible items via PayPal to get a full refund if they do not receive the items from the seller. That’s fine as when shopping with a new or unfamiliar online retailer, especially on overseas websites, consumers are usually worried about the risks involved, like fraud, security and the goods not being delivered.

PayPal’s Buyer Protection policy is now applicable to all its registered users in Asia Pacific, including Australia, China, Hong Kong, Indonesia, Japan, Malaysia, Philippines, Singapore, and Thailand.

Bank of America to launch online-only bank account

Bank of America is set to make available a new type of cheque account starting early August 2010, according to reports.

The new eBanking account is set to charge a monthly fee of USD 8.95 for account holders wishing to obtain paper statements or else opt for access to tellers for other routine bank statements. For users who chose to access the account via Bank of America’s ATM network, online banking platform or mobile banking service, the USD 8.95 charge does not apply.

Consumers can open the new Bank of America online-only cheque accounts directly online, as well as by visiting a bank branch or over the phone. According to the same source, starting fall 2010, the new type of account is set to replace the bank's CollegeEdge cheque offering.

New apps added to JPMorgan Chase mobile banking platform

JPMorgan Chase & Co. has added two new features to its application for the iPhone that allow users to deposit checks and conduct person-to-person payments.

The bank hopes that clients who use their phones to deposit cheques would also want to use the devices to transfer funds on a person-to-person basis. “The more people start using their phone and seeing their phone as a payment…or a banking device, you’re going to get adoption of a broader array of services,” said Jack Stephenson, director of mobile, e-commerce and payments for JPMorgan Chase.

Early results indicate both payment services have “very high adoption” rates, but Stephenson said it would take time to figure out if the uses would overlap. “Our strategy is around convenience,” he said. “You want to allow customers to do business in the channel of their choice.”

JPMorgan Chase developed the apps for the iPhone and iPad initially because of the higher user rates those devices have. The company has plans to enlarge its mobile services to other phones and devices, although Stephenson declined to name which ones or how soon those apps would be launched.

Money Laundering – New methods pose new threats

One tends to think of Money Laundering as just that – integrating illegal funs into the legal economy.

Seldom do we think beyond this. Question like “how is it done?” or “what should I be aware of?” just never seem to come to mind.

US Anti-money laundering expert Kevin Sullivan speaks about the latest - and pending - fraud schemes. Bulk cash smuggling and the use of mobile technologies are among the latest, money laundering risks to banking institutions not only in the US but across the globe.

You can read and listen to Kevin Sullivan in an exclusive interview by CLICKING HERE

New remittance transparency standards in US financial reforms

The US financial reform bill, which has cleared its final hurdle in the Senate and now awaits President Obama's signature, includes long-needed remittance transparency standards that will help ensure the safe and affordable transfer of money from immigrant workers to their families abroad.

Those provisions require remittance providers to disclose vital service information prior to a transaction. Among the details to be provided in a written pre-transaction notice are the amount of currency that will be received by the designated recipient, the amount of transfer, any fees charged by the remittance provider for the transfer, and the exchange rate to be used in the transfer.

The bill also requires remittance providers to distribute receipts showing the amount of money to be received, the promised date of delivery to the designated recipient, identifying information about the recipient, and a statement containing the senders' rights regarding error resolution.

Further, the bill requires disclosure of contact information for the remittance provider and the state and federal government regulators for complaints. The disclosures will be available in the foreign languages most commonly used by remittance customers.

Remittance flows from United States, which reached an estimated $47 billion in 2008, play integral roles in both poverty alleviation abroad and asset building in the US. Because about 80 percent of remitters earn less than $30,000 per year, even small savings are vital to both sides of a remittance transaction, and up-front disclosures will not only allow for comparison shopping, but likely drive down costs through increased competition.

Ugandan PostBank now offers an “new” form of reality mobile banking

The Ugandan PostBank has introduced a mobile-van based banking system to ease access to financial services in rural areas.

“This system will reduce the distance customers have been travelling to access our services,” Elidad Kansiime, the chairman board of directors, said at the inauguration of the bank’s Ntungamo branch.

He said system had been operating in the remote areas of Karamoja, but would be extended to other parts of Uganda to encourage saving and fight financial exclusion.

Kansiime said the bank focused on developing a saving culture to improve household incomes of rural people.

“This is the reason we have special products that meet the needs of the low-to-middle income people who wish to save and increase their assets base and productivity to enhance their savings.

“To us, you are not mere numbers, but rather individual clients with personal hopes, wishes and aspirations,” he said.

He disclosed that the bank was in talks with the Government to increase its capitalisation to enable them extend more loans to the rural masses.

While commissioning the branch, the First Lady and Ruhaama county MP, Janet Museveni, castigated commercial banks for being profit-oriented instead of helping the masses to come out of poverty.

She urged the people of Ntungamo to save and invest to prosper.

Mobile banking in Cambodia

Cambodia's ACLEDA Bank, who operates the largest bank branch network in Cambodia, has just announced that it has launched mobile banking services for retail clients. The service, called "Unity", provides mobile customers with the ability to view account balances, obtain a mini-statement, transfer between their accounts, make payments to other people, make bill payments and top-up their mobile phones.

The bank is marketing its new services as a virtual ‘bank in your pocket’ – providing convenient and secure way to manage all regular daily banking transactions. The system operates in both the English and Khmerlanguages and handles transactions in Khmer Riels, US Dollars and Thai Baht,with other currencies to follow.

“Our aim is to offer access to financial services to the whole community”, said Mr. In Channy, ACLEDA’s President and CEO. “Unity works with all mobile phone networks and a very wide range of mobile handsets. It ‘unites’a whole selection of financial services under one umbrella that simplifies day-to-daybanking through mobile phones anywhere in the country. For those customers whohave global roaming it will even work throughout the world”, he said.

IBM employee fingered as culprit in massive DBS outage

An IBM employee has been fingered as the culprit behind a seven-hour system-wide outage that knocked out all consumer and business banking services and ATM and POS transactions at Singapore's DBS Bank recently.

In a letter posted on the bank's Website, DBS Ceo Piyush Gupta, says the outage was triggered during a routine repair operation on a component within the disk storage subsystem connected to the bank's mainframe.

"So far, we understand from IBM that an outdated procedure was used to carry out the repair," says Gupta. "In short, a procedural error in what was to have been a routine maintenance operation subsequently caused a complete system outage."

IBM and BDS entered into a S$1.2bn agreement in 2002 in which the bank outsourced IT services and infrastructure in Singapore and Hong Kong to IBM.

Gupta says that all payments and transactions that were scheduled to be made on 5 July were completed. "Nothing was held over and full data integrity was maintained at all times," he says.

He continues: "I am treating this matter with utmost priority and the full scale investigation that we initiated last week is still underway. This investigation is being done with the support of IBM's labs in the US and their engineering teams in Asia.

In a statement, IBM says it has taken steps "to enhance training of our personnel related to current procedures and brought in experts from our global team to provide further assistance."

In addition, IBM and DBS are taking "additional actions to increase the resiliency and redundancy of this part of DBS' infrastructure."

South African mobile banking set for rapid adoption

Consulting services and outsourcing group Accenture South Africa has said that the stage has ben set for the rapid adoption of mobile banking in South Africa, with more than 60 percent of the local adult population owning a mobile phone, the highest penetration on the African continent.

Simon Russell, managing executive financial services, Accenture South Africa noted extensive positioning in the local mobile banking market with some innovative products including FNB's “Send Money” and Standard Bank's “Mimoney”.

Accenture said that in addition to the existing economic challenges, SA banks faced significant pressure from the competition commission, government access targets and more demanding consumer requirements.

"The winners, in the fight for market share, will be those banks with high customer loyalty delivered through greater customer centricity, convenience and low cost processing. Mobile banking enables all three," the group said.

Accenture said that the scramble for banks to partner with retailers, government institutions, gyms and other 'go to' locations, to provide cash out points had already begun.

Russell added that smaller innovative banks could also take on the mass market and grab a piece of the pie from Tier 1 banks through mobile banking.

"It's a challenge for the Tier 1 banks to defend with huge investments in ATM and Branch networks. Approximately 60 percent of a Bank's cost is typically in its distribution network," he said.

"Small innovative banks, using existing mobile technology, leveraging agents and through partnerships in other industries, can bring low cost, convenient transactional banking to consumers country wide thereby challenging the previous exclusive domain of the Tier 1 Banks."

"The 'attack strategy' will be to acquire customer transactional business through a combination of convenience and a low cost play - ownership of the transactional account is a prerequisite for understanding a customer's behaviour and for executing a successful customer centric strategy."

"A successfully executed customer centric strategy increases loyalty, decreases customer churn, increases the number of products sold to clients and increases profitability and Return on Equity," Russell said.

Accenture believes that mobile will evolve quickly from P2P payments, wallet, bill payments and general banking to more complex banking processes including Account Origination (identification and authentication) and finally true M-commerce - point of sale transactions.

Russell cautioned that Account Origination identification and authentication processes were dependent on mobile devices with camera and biometric capabilities, with implementation by roving sales and service agents.

"It will take time before these devices become affordable for the majority of the population. However, when they do become available, they will transform the mobile handset into a sophisticated banking sales and service channel that will challenge the prevalence of 'bricks and mortar' banking," he said.

Glitch in HBSC online banking system

It was reported that on Monday the online banking system of HSBC broke down causing problems and losses to its customers. This was the second time Hongkong and Shanghai Banking Corporation clients suffered from an incident like this in the last 3 months. The previous one was on April 15.

There is still no official statement about the reasons of the breakdown. Neither have any offers of compensation been made. However one of the banks clients has reported that he was offered HK$8,000 reimbursement to cover an HK$11,000 loss.

HSBC has officially acknowledged the problem and confirmed that it lasted or 15 minutes between 10am and 10:15am. During that period customers were not able to access their accounts as the system did not respond to instructions. As a result many clients were unable to sell shares right at a specific time resulting in the losses.

Currently the bank has 1.6 million internet banking users.

eBay being sued for $3.8bn - infringement of 6 patents and theft of a business idea alleged

XPRT Ventures LLC based in Connecticut has filed a complaint in a federal court in Delaware against a popular online auction eBay. According to the company eBay has infringed six patents to develop its online payment system PayPal.

According to the plaintiff in April of 2003 eBay (currently Bill Me Later, Shopping.com, StubHub and PayPal), has held out its familiarity with XPRT’s patent application when it submitted an application for its proposed technology (Method and System to Automate Payment for a Commerce Transaction)to the US Patent and Trademark Office.

"EBay's familiarity with the confidential information provided by the Inventors allowed eBay to recognize the advantages it would realize by acquiring, modifying and integrating PayPal's payment platform with eBay's own e-commerce payment platform. EBay also knew or should have known that such modification and combination would violate Inventors' patent application claims should they issue as patents," says XPRT.

"The inventors listed on XPRT's patents shared their patent applications and ideas on how to implement such concepts taught therein, with eBay in confidence. eBay incorporated such inventive concepts and ideas into its auction payment process during current California gubernatorial candidate Meg Whitman's tenure as eBay's CEO. eBay's unauthorized incorporation was a misuse of inventors' confidential and proprietary material,” said Kelley Drye and Warren, the law firm representing XPRT.

XPRT Ventures LLC is claiming a minimum award of $3.8 billion in damages. The representatives of eBay told that they are reviewing the complaint however they believe that “it is without merit, and intend to defend ourselves vigorously.”

Kuwait ‘launches’ e-payment of fines

The Kuwait Ministry of Justice has launched an electronic payment system for misdemeanor fines related to violations of regulations specified by the Ministry of Social Affairs and State Ministry for Municipality Affairs. In a recent press statement Assistant Undersecretary Dr Mohammad Abdullah Al-Ansari disclosed the public can pay these fines by logging on to the ministry’s website www.moi.gov.kw. He said the service was launched on July 1 to ease procedures for citizens and expatriates, adding that the service is free. He advised the public to obtain a receipt to ensure completion of the payment process.

Al-Ansari attributed the successful implementation of the system to the concerted efforts of the technical and financial teams, which worked under the direct supervision of Financial Affairs Department head Khaled Al-Dakheel. He added the teams developed the system, in coordination with the Information Technology Department and K-Net Company.

Microsoft's fake bank shows just how gullible the public is

Microsoft has set up a fake bank branch in New York and tricked members of the public into handing over huge amounts of personal information.

The tech giant built its “Greater Offshore Bank & Trust” branch in a bid to demonstrate how vulnerable people are to scams and promote their Internet Explorer 8, which it says blocks three million online threats a day.

In two videos posted on YouTube, actors playing bank staff members convince members of the public to reveal highly sensitive information in order to open accounts and receive $500.


Duped "customers" were willing to hand over their mothers' maiden names, social security numbers, credit card numbers, strands of hair for DNA tests and details on whether they wear boxers or briefs.

Chase adds cheque deposit and P2P payments to iPhone app

US bank Chase has updated its iPhone app, adding remote cheque deposit and person-to-person payment features.

To make a deposit using the app, customers enter the account details and payment amount before adding photos of the front and back of the cheque taken with their iPhone or iPod camera. USAA bank introduced a similar feature last year.

Chase has also added P2P QuickPay to the latest version of its free app, enabling payments to be made to anyone as long as the customer has their e-mail address.

European Payments Council publishes White Paper on Mobile Payments

The European Payments Council (EPC), the coordination and decision-making body of the European payments industry, has published their White Paper on Mobile Payments. The White Paper highlights the EPC's initiatives for mobile payments in the Single Euro Payments Area (SEPA) designed to facilitate implementation and interoperability of user-friendly mobile payment solutions across the 32 SEPA countries. The white paper explores how mobile payment services can be delivered through cooperation between service providers active in the banking industry and the new players emerging in the mobile ecosystem.

The EPC White Paper on Mobile Payments offers an informative read to anyone interested in mobile payments, and aims to foster a common understanding between payment service providers and bank customers by using non-technical language. The document predominantly focuses on mobile contactless card payments, where the mobile device needs to be in close proximity to a point-of-sale terminal, while also addressing some aspects of mobile remote payments, where two parties are able to send and receive funds irrespective of where they are located.

Given the proliferation of mobile phones and related service levels throughout the European Union (EU), the EPC recognizes that the mobile channel is an ideal launch pad for SEPA payment instruments. Many consumers are already using mobile phones for services beyond the traditional voice calls and short messaging services due to the introduction of packaged offers, including internet access provided by the mobile network operators. As a result, consumer expectations with regard to mobile phone functionality have increased dramatically, with many users eager to embrace new service solutions based on this delivery platform, such as payments. The availability of practical SEPA mobile payments, either account or card-based, would provide a realistic alternative to cash and cheques.

At the same time, merchants demand that new technology translates into cost savings, increased business volume and reduced exposure to security threats such as cash thefts or illicit payments, as well as enhanced marketing opportunities and brand recognition. Mobile phone initiated payments, in particular those using the contactless approach, are very well positioned to generate these benefits for merchants and other stakeholders who are directly providing services to consumers.

Gerard Hartsink, Chairman of the EPC, comments: “The EPC, working together with other stakeholders such as, for example, GSMA, the organization representing the interests of the worldwide mobile communications industry, is in the process of establishing the necessary standards and business rules with regard to the initiation and receipt of SEPA payments by mobile. The aim is to develop proposals that support collaboration and standardization and which form the basis for interoperability. Our intention is to establish a service framework sufficient to reach potentially all payers and payees in the European Economic Area and to create a trusted and secure environment for the multiple stakeholders active in the field.”

Dag-Inge Flatraaker, Chairman of the EPC M-Channel Working Group, adds: “The EPC White Paper on Mobile Payments responds to changing customer requirements in the payments market and demonstrates how mobile payments can increase efficiency, effectiveness and convenience. This paper creates awareness on how to best combine the benefits of state-of-the art SEPA payment instruments for credit transfers, direct debits and card payments handled through one of the most popular and versatile devices introduced in the past two decades – the mobile phone.”

The EPC plans to publish a second edition of the white paper in 2011 that will focus further on mobile remote payments.

To download the EPC White Paper on Mobile Payments CLICK HERE

Mobile payments – Cellcom Israel and Citi to offer cash transfer services

Cellcom Israel is entering the financial services market with Citigroup and the Bank Hapoalim’s credit card subsidiary Isracard.

Cellcom and Citibank are to launch a service which will allow remittance transfers from Israel by clients of all local domestic mobile carriers, through Citi's platform and worldwide distribution channels.

Cellcom CEO Amos Shapira said that global remittances, including to and from Israel, are expected to grow by billions of dollars over the coming years. He said that Cellcom saw a potential growth market and decided to enter it. Cellcom only plans to launch the service by the end of 2010. Under the deal Isracard will issue mobile wallets to Cellcom subscribers.

Jérôme Kerviel verdict on 5th October

French "rogue" trader Jérôme Kerviel will have to wait until the autumn to discover if he will be sent to jail for four years and ordered to pay back Société Générale the nearly €5bn it claims he lost the bank.

In his final defence, Kerviel's lawyers, described the accused as humble "young Breton", passionate about banking and economics who was corrupted by Société Générale, a pawn in a global frenzy for profit and called for him to be cleared of all charges.

"Jérôme Kerviel is not a fraudster. He was trained, formed by Société Générale, deformed if you will," said the defence lawyer Olivier Metzner, adding: "Jérôme Kerviel is the creation of Société Générale."

Metzner, a heavyweight at the French bar, asked: "Who are you Société Générale?", echoing the question "Who is Jérôme Kerviel? asked by the judge Dominique Pauthe at the start of the trial.

Metzner concluded that Kerviel was being made a scapegoat for the global financial meltdown.

"When everyone is winning, nobody minds. When everyone loses, there has to be someone – just one – found guilty," he said before sitting down.

Metzner called for him to be acquitted on charges of abuse of confidence, computer hacking and falsification of records.

Kerviel had admitted making unauthorized bets on the stock market; at one point he was trading €50bn, more than the bank was worth. But he insisted his bosses knew what he was doing and encouraged him to take risks in pursuit of profits. The bank denied this and accused him of being a "manipulator, a trickster and a liar" who caused a "planetary trauma" that almost brought down one of France's oldest banks. Asked by the judge at the end of the trial if he had anything further to add, Kerviel said he did not.

Kerviel joined Société Générale in 2000 in its back office, but was promoted to the trading floor in 2005. In his first trading year, he made the bank €5m, rising to €12m the following year. In 2007 he made €1.5bn, but declared only €55m of this hoping to carry the rest over to the following year.

Most of his extraordinary gains were made through speculative deals which he claims traders knew were not officially allowed but were tolerated as long as they turned a profit. But in January 2008 Kerviel's complex web of hidden deals began to unravel when Société Générale discovered he was involved in trades worth about €50bn more than the bank's market value. In selling off Kerviel's trades over a three day period when the global markets were dropping, the French bank lost €4.9bn.

The court will announce its judgment on 5 October, said Pauthe. If found guilty Kerviel faces a five-year sentence – one year suspended – and a €375,000 fine. The bank has claimed €4.9bn it lost in damages.

Securities and Exchange Commission to pay $755,000 damages to ex-lawyer

A former lawyer for the Securities and Exchange Commission (SEC) who claimed he was unjustly fired after trying to investigate an insider trading ring is to receive $755,000 in damages.

Gary Aguirre, who was fired by the SEC in September 2005, alleged that he was let go by the organization after attempting to probe trades made by hedge fund Pequot Capital Management.

The ex-lawyer claimed that senior officials at the regulator prevented him from interviewing John Mack, an executive who at the time was a candidate for the role of chief executive officer at Morgan Stanley.

It was alleged by the legal expert that his determination to pursue the investigation led to his eventual dismissal by the SEC. The SEC’s payout will include the cost of his legal fees and salary equivalent to that of four years and ten months.

John Nester, SEC spokesman, said: “The settlement resolves all outstanding litigation between the parties and reflects the agency’s determination to focus on its core mission of protecting investors.”

In May Pequot Capital and Arthur Samberg, the hedge fund’s founder and chairman, agreed to pay $28 million in fines to the SEC to settle charges of insider trading in relation to shares in Microsoft Corp.

Ex-Société Générale banker fined for insider trading

Jean-Pierre Mustier, former head of investment banking at Société Générale, has been fined €100,000 for insider trading by France’s financial regulator.

According to AMF, the trader was found to have used insider data to inform the sale of shares from Société Générale in August 2007. The sale was made before the start of the subprime mortgage crisis, which pre-empted the global financial crash. Mr Mustier, who resigned from his position with the bank in August 2009, is expected to file an appeal against the ruling by the AMF.

The AMF said in a statement that “the level of Mr Jean-Pierre Mustier’s responsibilities imposed on him” a duty to not to sell the shares when he did.

Mr Mustier was in charge of Société Générale’s investment banking unit during the period when Jerome Kerviel worked with the firm.

Doha Bank launches mobile money service

Vodafone and Doha Bank have partnered for the launch of a mobile money transfer service for Qatar customers. According to the official statement the service is scheduled to go live early next year. Using it customers will be able to send money to friends and family overseas, or locally, via a mobile phone.

Customers will be able to apply for a Vodafone Money Transfer (VMT) account from Vodafone Qatar in order to avail themselves of the service. After the registration customers can load money onto their mobile phone from Doha Bank e-branches or directly via a bank transfer.

With digital money on their VMT accounts customers can initiate local or abroad transfer or use these funds to pay for goods and services at local shops. Until e-money is transferred or spent it is stored for customers with Doha Bank, meaning they can also have the option to get it back as cash.

The service will be tested over the next few months to gain Qatar Central Bank approval prior to a commercial launch.

Huge IT failure at Singapore bank

One of Singapore's largest banks suffered a major IT outage this Monday that took down its computer systems for seven hours. The outage knocked DBS Bank's back-end computer systems offline, leaving its customers unable to withdraw cash from ATM machines on Monday morning.

"We first knew of the problem at 3:00 a.m. (Singapore time) and by 10:00 a.m., all our branches and ATMs were fully operational. We are conducting a full investigation into the cause of yesterday's problem, thus will not be in a position to comment much about the cause at this point in time," wrote Jenny Lee, a spokeswoman for the bank, in an e-mail response to questions on Tuesday.

The outage affected all of DBS' consumer and commercial banking systems, but no data was lost during the system failure, she said.

When DBS branches opened at 8:30 a.m. Monday, the bank was able to accept cash cheques- personal cheques made out to 'cash' - worth up to S$500 (US$359) until systems were restored, DBS said in a statement. Customers could also make cash withdrawals over the counter, and branches stayed open for an extra two hours, until 6:30 p.m.

While the root cause of the outage remains uncertain, DBS is investigating the system failure with help from IBM, which runs some of the bank's IT operations under an outsourcing contract.

"The bank has multiple levels of redundancy to protect against such occurrences and this is the first time a problem of this nature has occurred. We are now conducting a full scale investigation with our main vendor IBM," said David Gledhill, managing director and head of group technology and operations at DBS, in the statement.

It wasn't immediately clear why the bank's backup systems didn't prevent the outage.

The collapse of DBS' IT systems caught the attention of the Monetary Authority of Singapore (MAS), the country's central bank, which oversees the financial services industry in the Southeast Asian city-state.

"As part of IT and operational risk management, banks are required to investigate promptly the causes of system breakdowns and take immediate measures to rectify system failures and restore customer services. Subsequent action is also required to strengthen the system and prevent future recurrence," an MAS spokeswoman said via e-mail.

Banks in Singapore are required to follow technology risk management and computer security guidelines issued by MAS that are designed to ensure the "robustness and resiliency" of banking and finance-related computer systems. "As part of its supervision of banks, MAS assesses banks' compliance with these requirements, and will take appropriate supervisory action where necessary," the spokeswoman said.

Changes to US Payment System Risk Policy

The US Federal Reserve will implement changes to its Payment System Risk (PSR) policy in early 2011. The revised PSR policy explicitly recognizes the role of the central bank in providing intraday credit to healthy depository institutions predominantly through collateralized daylight overdrafts. The policy encourages institutions to pledge collateral to cover daylight overdrafts by providing collateralized daylight overdrafts at a zero fee and by raising the fee for uncollateralized daylight overdrafts to 50 basis points.

A specific implementation date will be announced at least 90 days in advance.

In anticipation of depository institutions' changing needs for collateral management under the revised policy, the Federal Reserve, in collaboration with the financial industry, has assessed and identified opportunities to improve System operational systems. The Reserve Banks have been implementing enhancements to their own operational systems and processes that will improve the efficiency and effectiveness of pledging, withdrawing, and monitoring collateral. Many of these operational improvements will be available to institutions on or before the implementation date of the PSR policy changes.

British 'Ponzi scheme' defendants fined £115m

Three men accused of running the UK's largest-ever Ponzi scheme have been ordered to pay £115 million to the Financial Services Authority (FSA).

It is claimed that John Anderson, Kautilya Nandan Pruthi and Kenneth Peacock – who ran Business Consulting International – took up to £84 million from clients including celebrities and sports stars, using new investors' cash to pay returns out to older ones. hey were offering investors returns of up to 20 per cent a month, reports BBC News.

While the police investigation into their activities continues, a High Court hearing has ruled that they were unlawfully accepting deposits without FSA authorization.

As a result, Pruthi has been ordered to pay £89.7 million, Anderson £13.1 million and Peacock £11.6 million. The FSA said that despite the ruling, it would be unlikely investors will be repaid for their losses "in part or at all".

Margaret Cole, director of enforcement and financial crime at the FSA, said: "This case emphasizes the importance of taking care to ensure that any firm or individual consumers deal with are authorized or approved by the FSA."

Google Checkout introduces Android m-payments option

Google has launched a tool designed to enable one-man-band merchants moving from site-to-site to accept payments using its Checkout system and Android mobile phones.

In a blog, the search giant says it’s Android Payment Chrome Extension "helps merchants quickly set up a store and accept payments via Google Checkout and Android".

Before they can take payments, users need to set up a Checkout Merchant account and then create their own webstore template using the Store Gadget Wizard - a tool that taps Google Docs spreadsheets to help people quickly set up an online 'store

The store can then be embedded into a Google Sites page, which also needs to be built using pre-built templates.

Once set up, merchants can add the Android Payment Chrome Extension. They are then able to create a cart on a laptop containing the products a customer wants to buy. They then click the green Checkout with Android button and have the customer scan the QR code displayed with their phone. The QR code directs the customer to the buy page where they can complete their purchase.

Google admits the option has limited appeal, saying "this payment method may not be perfect for all cases".

PayPal readies itself for Mobile-Commerce

Already claiming to be the leader in mobile payments, PayPal has announced it had optimized its Express Checkout service for mobile devices. The new mobile service caps a busy week for PayPal that included the disclosure that alternative-payment provider Bling Nation Ltd. is developing a PayPal application. PayPal also added a feature to its new Adaptive Payments service that lets consumers pay merchants with a credit card while within an application, regardless whether the consumer has a PayPal account.

Like the existing Express Checkout, PayPal’s new Mobile Express Checkout is aimed at online merchants that already have a payment card merchant account but want to add PayPal as an acceptance option. Mobile Express Checkout has the same pricing as Express Checkout, 2.2% to 2.9% of the sale plus 30 cents for merchants with $100,000 or less in monthly sales; micropayments, sales of less than $10, are charged 5% plus 5 cents.

With the optimized Express Checkout service, mobile merchants get a better user experience on their smart phones or other mobile devices, according to Anuj Nayar, San Jose, Calif.-based PayPal’s director of global communications. The first iteration of Mobile Express Checkout is adapted for Apple Inc.’s iPhone and Google Inc.’s Android 2.0, an increasingly popular mobile-device operating system with merchants. Nayar says PayPal will adapt the new service to the other major mobile platforms, including Microsoft Corp.’s Windows Mobile and that used by Research in Motion Ltd.’s BlackBerry.

PayPal identified test merchants as Buy.com Inc., which is already using the system, and Nike Inc., which will implement it soon. Mobile Express Checkout will be available to PayPal’s other merchants later this summer.

The optimized service puts PayPal in a position to capture even more mobile transactions than it already is as payments through smart phones and new devices such as Apple’s iPad explode. The eBay Inc. subsidiary says it has been offering mobile payments since 2005 and processed $25 million in such payments in 2008, $141 million in 2009, and expects to exceed $500 million this year. More than 5 million PayPal users will be using mobile devices for PayPal transactions, Nayar adds. “This is the next great step for us to open it up for users to shop on the mobile Web,” he says. “The time has come for mobile purchases.” Nayar would not break down the existing mobile volume into person-to-person payments and on- and off-eBay merchant sales.

A study released this week by the National Retail Federation’s Shop.org e-commerce division and done by Forrester Research Inc. says surveyed retailers are generating only 2% of their online revenues through mobile devices or applications. Earlier this year, Cambridge, Mass.-based Forrester forecast that U.S. online retailing would generate $173 billion in revenues in 2010. Thus, mobile commerce may be in line to produce $3.46 billion in payment volume.

Many retailers have done little to promote m-commerce, but that seems likely to change soon. Only 2% of 59 Forrester’s responding retailers said they had “easy payment options” when asked about what kinds of information and alerts they offer customers on their mobile applications or mobile Web sites. When asked about what kinds of new information and alerts they planned for 2010, however, 24% mentioned “easy payment options.”

Meanwhile, the Bling Nation payment system, which recruits local banks and merchants to create closed-loop merchant networks with customers paying via mobile phones, disclosed that it is developing a PayPal application through the new PayPal X platform for third-party software developers. Bling is testing the application in Palo Alto, Calif., where it is headquartered. The application is notable because it’s a departure from Bling’s locally focused model so far, and it also represents a major extension of PayPal, the king of e-commerce, to the physical point of sale.

On that latter point, Nayar says Bling, not PayPal, is leading the way. PayPal has consistently denied it has intentions on traditional POS payment processing. “They came in through that [PayPal X] door,” Nayar says. “We’re very interested to see what they do with that, but it’s very early stages.”

Nayar notes that LiveOps Inc., a call-center outsourcing firm, got PayPal into the payroll business by using a PayPal app to pay several thousand temps working for a fundraiser sponsored by the American Idol television show. “PayPal X takes us into all sorts of areas that we weren’t in before,” he says.

Auditors under FSA fire

Auditors were just too willing to follow management's line before the crisis the UK Financial Services Authority has charged. Now the FSA has outlined plans to bring auditors under closer supervision, arguing that they had failed to challenge dubious accounting practices in the run-up to the financial crisis, in a discussion paper published this week with the Financial Reporting Council, the UK accounting regulator.

As examples of recent accounting failures, the FSA said, "A credit institution incorrectly netted down derivatives in the balance sheet leading to a misstatement of circa £900 billion... A thematic review recently undertaken on arrears reporting revealed errors by 29 out of 30 of the credit institutions investigated."

Most auditors had done decent jobs, the regulator wrote, but it reiterated that "it is the auditor's responsibility to challenge management when it believes the disclosures are inappropriate". The FSA listed several areas where, it said, auditors had been too ready to accept management's accounts at face value.

Its own research, the FSA said, "has led it to question whether auditors are sufficiently skeptical when challenging management's basis for determining the models and assumptions used to derive ranges of fair-value estimates - in particular, the selection of particular estimates from within such ranges of probable estimates - where key inputs may be unobservable." In particular, fair-value accounting and the calculation of credit valuation adjustments showed more variation between and even within firms than was justifiable. "This diversity should trigger auditors to be more skeptical and to challenge management's judgments about modeling approaches and inputs," the FSA added.

In loan-loss provisioning, too, the FSA said it had seen more variation than seemed justified, adding: "Bank auditors should have placed greater importance on the disclosure requirements in 2007 and 2008. This could have mitigated some of the uncertainties that unsettled the markets."

In future, the FSA suggested, it could impose stricter reporting requirements on auditors, including more frequent meetings, higher transparency requirements, and trilateral meetings between auditors, bank audit committees and the FSA. It might also require all regulatory returns to be audited - it noted that the rate of errors is significantly lower in the returns of insurers, for whom this is already a requirement.

EU and US sign SWIFT bank data deal to curb terrorism

An agreement has been made between the European Union (EU) and authorities in the US to allow the sharing of bank data via the SWIFT network as part of a wider anti-terrorism strategy.

The deal, which is still awaiting approval from the European Parliament (EP), will allow financial data to be passed to the Treasury Department in the US to facilitate the tracking and potential prosecution of supposed terrorists.

Subject to EP approval, the agreement will initially last for five years before being renewed on an annual basis.

Michael Dodman, US Embassy's economic officer to the EU, said negotiations behind the agreement had been “very long and intense”.

“It is a very solid agreement and we want it to be applied fully as it is important for the security of the EU and the US,” he explained.

Alfredo Perez Rubalcaba, Spanish minister for home affairs, signed the agreement on behalf of the EU while Mr Dodman represented the US in the agreement. The arrangement has been provisionally drawn up following the rejection of a similar working relationship by the EP in February of this year.

Many of the contentious issues, which concerned privacy and data protection, have been removed from the new deal, the body explained.

MBNA unveils mobile banking to 5 million card-holders

Credit card provider MBNA has launched a new account facility enabling customers to check their balance using a mobile phone.

A new system from the Bank of America subsidiary has been rolled out to all UK customers that allows the checking of balance, transaction and bill details through the use of short-code text number 83838.

The Mobile Banking Text service is the first of its kind in the UK and comes as demand for mobile banking continues to gather pace. Speaking about the new account feature, Ian Craig, Sales, Service and Operations executive for Bank of America Europe Card Services, said: “Our customers’ needs and expectations are changing — they want greater control and choice in managing their finances, and they want to do so in a way that fits their lifestyles.

“Newer technology, including mobile phone functionality, SMS, the Internet and voice recognition systems are transforming the way our customers expect us to interact with them. The Mobile Banking Text service is one of a number of exciting new improvements we will be making to our services.

“With this service, we are able to provide our customers with another way to bank that is simple, straightforward and puts their credit card information at their fingertips whenever they need it.”

Previously, only MBNA customers who own an iPhone or Blackberry were able to use their mobile phone to view account information, but with the introduction of the Mobile Banking Text service, all card-holders now have access. In total, over 5 million UK based account customers will be able to use the service that will be available on all cards provided by MBNA.

Societe Generale to set up Obopay m-banking solution in Senegal

Societe Generale is using a mobile banking solution from Obopay to offer banking services in Senegal. The technology-agnostic solution being used by Societe Generale marks the fourth country where Obopay’s m-banking solution are being used. Obopay also offers m-banking solutions in the United States, partnering with MasterCard and Citibank, as well as Verizon Wireless and AT&T Mobility, with Nokia in India and with a mobile operator in Kenya.

“In Senegal, traditional banking services are typically very limited; people can spend an entire day each month standing in line to pay for things like their utility services in cash,” said Richard Hababou, managing director of Societe Generale Innovations Group. “Yoban’tel by Obopay allows us to establish innovative and convenient mobile money transfer and payments for those Senegalese who have previously not had access to such services.”

Societe Generale also broadened its distribution channels with the Obopay solution, adding Credit Mutuel du Senegal, a micro-finance agency; Tigo, a mobile operator; and a satellite TV provider Canalsat Horizons. Users can enroll for a mobile payment service and load or pick up cash at these retail outlets as well as banks. “Eighty percent of the population has not had access to a bank account before,” said David Schwartz, head of product and corporate marketing at Redwood, Calif.-based Obopay. The solution uses SMS to enable mobile-phone users to transfer money or make payments.

Each one of Obopay’s deployments is a little different, as each one has a different regulatory environment, and each partnership is slightly different, which shows the flexibility of the solution. In Senegal and the United States, the major partnerships are with financial institutions, in Kenya, a mobile operator is the primary provider; in India, handset maker Nokia is the primary partner and as such, the solution comes preloaded on Nokia handsets, Schwartz said.

Other French-speaking countries could benefit from the service because Societe Generale has such a large reach, Schwartz said. The banking institution employs 157,000 people worldwide. Mobile banking solutions are expected to transform the way people work and live in developing countries because they will have access to cheap financial services. The Bill and Melinda Gates Foundation earmarked $12.5 million to power Mobile Money for the Unbanked, a program that works with industry players to overcome barriers in deploying m-banking services to the reported 1 billion users worldwide who have phones but no bank accounts.

Morgan Stanley decides to pay $102 million to stop investigation

Morgan Stanley has agreed to pay $102 million to end an investigation launched by Massachusetts prosecutors into the company’s unfair and deceptive lending practices.

According to the statement by Martha Coakley, the Massachusetts attorney general, Morgan Stanley which funded subprime loans throughout the US, improperly loaned billions of dollars to New Century which then sold loans to unqualified borrowers in the state. Morgan Stanley also packaged these risky loans and sold them to big investors like pension funds.

Coakley said that the settlement is ‘unprecedented’ and added that the amount would be divided between homeowners, taxpayers and state pension funds. Apart from this Morgan Stanley is also forced to overhaul parts of its lending practices by requiring more disclosure and demanding that the company stop funding "unfair subprime loans in Massachusetts," Coakley said.

Under the terms of the settlement Morgan Stanley will pay $58 million to affected Massachusetts borrowers and $23 million will go into an independent fund which will then cover the losses suffered by the Massachusetts Pension Reserves investment Trust and the Massachusetts Municipal Depository Trust funds. The state's taxpayers will receive $19.5 million, and $2 million will go to nonprofit groups that work with victims of subprime foreclosure in the state.

Massachusetts did not sue Morgan Stanley when it launched its probe. Under terms of the settlement, Morgan Stanley admitted to no wrongdoing.

"This has become an all-too-familiar pattern in which the deceptive practices of Wall Street devastated homeowners and investors, and ultimately contributed to the collapse of our economy," Coakley said in a news conference on Thursday.

She said that her investigation into unfair lending practices is continuing and that Morgan Stanley will provide information and materials needed by the office's investigators.

Bank of England publishes Financial Stability Report

The Bank of England published its bi-annual Financial Stability Report on 25 June. The Report is part of the delivery of the Bank’s strategy for its financial stability work, as set out in the Bank’s Annual Report 2010. The Report concentrates on the Bank’s assessment of conjunctural risks to financial stability. It was largely prepared ahead of the recent announcement by the Chancellor of the Exchequer of the Government’s plans to change the UK’s system of financial regulation.

The Financial Stability Report aims to identify key risks to UK financial stability and to stimulate debate on policies needed to manage and prepare for these risks. The Report is produced half-yearly by Bank staff under the guidance of the Bank's Financial Stability Executive Board, whose best collective judgment it represents, and following review by the Financial Stability Committee of the Court of Directors of the Bank of England.

Under the Banking Act, 2009 the Bank's financial stability objective is 'to contribute to protecting and enhancing the stability of the financial systems of the United Kingdom'. The Report is one vehicle to help it meet that objective.

In relation to current conditions, the Report notes that since December markets have focused increasingly on strains placed on sovereign balance sheets. In April, concerns over Greek sovereign risk spilled over to other European countries and developed rapidly into a generalized retreat from risk-taking. Inadequate transparency about sovereign exposures led to counterparty concerns and renewed strains in bank funding markets. In response, the IMF and European authorities put in place a substantial package of support. While these measures helped to stabilize conditions, market pressures have not yet abated. EU leaders also recently announced plans to publish the results of stress tests conducted on the largest European banks; this will be another important step.

In terms of resilience, the Report says that UK banks have raised their capital and liquidity buffers substantially, which has helped them weather recent tensions. But, in common with their peers, they face a number of challenges in the period ahead. UK banks need to maintain resilience in a difficult environment, while refinancing substantial sums of funding; they have a collective interest in providing sufficient lending to support economic recovery; and they will need over time to build larger buffers of capital and liquidity to meet more demanding future regulatory requirements. The new Basel regulatory regime will be agreed in the autumn. An extended transition to this new regime would enable banks to build resilience through greater retention of earnings, while sustaining lending. The new regime should include a buffer of capital which banks can use to absorb stresses, as well as a hard minimum. That buffer might need to vary over the cycle.

You can download the report at; http://www.bankofengland.co.uk/publications/fsr/2010/fsrfull1006.pdf

Barclays adds enhancements to its mobile banking service

To celebrate the first anniversary of Barclays.mobi service, Barclays provides a series of further enhancements to its UKs mobile phone banking service. The service is said to attract more than four million hits a month.

The updated service now includes:

• Currency conversion calculator as the summer holiday season kicks off
• 'At a glance' balance screen has been updated for easier customer views
• Introduced 'tappable' bars to support finger friendly principles for mobile phones
• Bookmarks feature - customers can save the mobi link to support access and navigation; IPhone users can also save the link as a Barclays icon 'lozenge'
• Introduced a mobile business site specifically for business customers.

Sean Gilchrist, Barclays Digital Banking Director, said: "In just over a year we have grown the service from nothing to over 4 million hits a month which is just phenomenal. The feedback from our customers is very much around 'snack banking' on the move, it's clear they want to see their balance, recent transactions and make payments whilst out and about. We believe the interest in banking through mobile hand-sets is market-driven and the iPhone has been a catalyst for it, as people use their phone to do more things. In addition we're also seeing an increase in terms of bandwidth that the phone can operate at and availability of Wi-Fi hotspots, so all in all people are getting a much better experience and prepared to use their phones to do more."

These latest enhancements build on a year of several key developments to the Barclays.mobi service which give customers a web application service operating on all of the main mobile platforms. Customers including those with Apple, HTC, Nokia, Motorolla, Blackberry etc mobiles have a user friendly mobile experience with access to the full range of services without having to scroll around.

The full range of services on offer includes:

• Balances
• Mini-statements
• Transfers between Barclays accounts
• Third party payments 
• Branch and ATM locator' using maps that specifically fit mobile handsets
• Mobile frequently asked questions and answers
• Currency conversion tool
• Free mobile security software from Kaspesky
• 'Layar' collarboration with Barclaycard which allows customers using iPhone or Android (but also comes pre-installed on the Samsung Galaxy S) to use a touch-screen device to find the nearest Barclays ATM, shop that accepts contactless - it integrates with google maps to help you find out just how to get there.

Barclays also offer a text banking service where customers can register to receive weekly balance, mini-statement, limit and transaction alerts for a small monthly fee of £2.

Prosecutor calls for prison sentence for Jerome Kerviel

The prosecutor in the trial of Jerome Kerviel has called for the former Societe Generale trader to spend four years in prison, if convicted. Mr Kerviel is standing trial over allegations that he bet €50bn euros of SocGen's money without the bank's knowledge. The bank says his actions cost it around €5bn.

Mr Kerviel, whose lawyer said he would fight the prosecution's call, maintains the bank knew about his risk taking. He is facing charges of forgery, breach of trust and unauthorized computer use. The maximum sentence for the allegations is five years.

In his summing up of the case, prosecutor Jean-Michel Aldebet has requested the maximum sentence, but with one year suspended. The trial has seen Mr Kerviel's former bosses and colleagues line up to testify against him.

SocGen's lawyer, Jean Veil, accused Mr Kerviel of "duplicity" for reassuring his bosses that nothing was wrong while racking up the huge losses.

On Tuesday, the bank's president and chief executive at the time of the losses, Daniel Bouton, called the trading scandal a "catastrophe".

"It's not an issue of losses or amounts," he told the courtroom.

"The trust that should exist between us is shattered. I cannot believe for one second any of Jerome Kerviel's supervisors were aware [of his actions]."

Mr Bouton maintained that Mr Kerviel's actions were unauthorised, and "outside any remit".

But he acknowledged that there had been flaws in SocGen's risk management systems.

At the start of the trial earlier this month, Mr Kerviel said his superiors at the bank had "encouraged" him to take risks.

The bank was fined 4m euros by French regulators for failures in those systems following the scandal.

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Canadian government launches payment system review

Canadian Finance Minister, Jim Flaherty, has launched a task force to review the way the payments system in Canada. The minister said it was important to ensure the payments system facilitates the introduction of new technologies to the benefit of users without compromising safety and efficiency or consumer protection.

“Today, Canadians can pay for things in a bewildering number of ways, even by tapping a cell phone against a scanner,” Flaherty said in a statement Friday.

The task force will be chaired by Pat Meredith, a professional associate and senior adviser at the strategy consulting firm Monitor Group. Meredith is a former executive vice-president of corporate strategy at CIBC. The task force is expected to provide recommendations to the minister by the end of 2011.

Earlier this year, the federal Competition Bureau turned down a request by the Interac Association to allow the debit payment processor to become a for-profit business. Interac is governed by a consent order issued by the Competition Tribunal to prevent the company from engaging in anti-competitive practices. Interac’s desire to restructure from a not-for-profit association structure to a for_profit model requires a change to that order.

The federal regulator suggested that Interac could make other changes, including to its governance structure while maintaining its non-profit status, that would allow it to remain competitive to new challenges in the market.

However the bureau said it would be open to revisiting its rulings if things change in the future.

Visa and MasterCard have been eyeing the Canadian debit card market, which is dominated by Interac. MasterCard has also been actively expanding its Maestro debit program in Canada and has been working since late 2008 to increase acceptance.

Wells Fargo becomes first bank to introduce ATM e-receipts

US bank Wells Fargo has introduced its new ATM e-receipt service to its all online banking consumers. The new option allows customers to decide on whether they want to have an ATM receipt sent an Online Banking inbox or to the specified email address. Wells Fargo is the first and only bank, so far, to launch the kind of service.

All Wells Fargo customers can use the service while Wachovia consumers will be able to access it soon after they convert to Wells Fargo. The conversion is scheduled to take place through 2011.

In order to start using the service customers need to continue using the ATM the same way they do it at present time. They can select the new option on the receipt selection screen. When they visit the inbox they have prespecified before they will see an email sent to them from Wells Fargo Online titled “Your Wells Fargo ATM Receipt.”

FBI issues warning over denial-of-service phone scam

The FBI has issued a warning to Americans after a spate of telecommunications denial-of-service (TDoS) attacks left fraudsters able to access online bank and brokerage accounts. The TDoS attacks use automated dialing programs and multiple accounts to overwhelm victims' mobile phones and land lines with thousands of calls.

When victims answer the calls they hear dead air, an innocuous recorded message, advertisement, or a telephone sex menu. The attacks are a diversionary tactic, enabling the fraudsters to use personal information about the victim they've acquired through social engineering techniques or malware to pilfer online accounts.

Because the victim's phone lines are tied up, their banks are unable to contact them to verify transfers, enabling the fraudsters to empty accounts.

The FBI says it discovered the new-style attacks through a private industry partner, which found a Florida dentist who lost $400,000 from his retirement account after a denial-of-service attack on his phones.

Since April "there has definitely been a noticeable surge in telephone denial-of-service attacks, with numerous incidents having been reported in several Eastern states" says the agency.

It has now teamed up with the Communication Fraud Control Association - comprised of security professionals from communication providers - to analyze the patterns and trends of telephone denial-of-service attacks, educate the public, and catch the fraudsters.

Mobile payments set to soar in 2010 - Gartner

The number of people using their mobile phones to make payments is set to grow from 70.2 million in 2009 to 108.6 million this year, a 54.5% rise, according to research firm Gartner.

This represents 2.1% of all mobile users, with the fastest take-up of the technology witnessed in developing markets such as Asia, Eastern Europe, the Middle East and Africa, driven by the unbanked and underbanked.

In Asia Pacific, m-payment users will surpass 62.8 million in 2010 and represent 2.6% of all mobile owners. In Europe, the Middle East and Africa there will be 27.1 million while in North America the figure is expected to be just 3.5 million, or 1.1% of all mobile users in the region.

SMS remains the dominant mobile payment technology, says Gartner, because of its ubiquity and ease of use although Web and app-based systems gaining some ground in developing markets. However NFC technology has failed to take off, with many banks seeing no business case.

Sandy Shen, research director, Gartner, says: "Developing markets have found the right formula for mobile money services - functions that users want and an ecosystem that can sustain the service. The answer for developed markets, however, remains elusive. The offerings for developed markets will take a different format. Instead of a point offering for mobile payment, the service needs to be built on top of the existing payment behaviour and infrastructure so that users can choose any channel - retail, phone, online or mobile - that suits their context at the moment of payment."

Meanwhile, a separate report from Juniper Research suggests that the number of mobile subscribers who use their phones for mobile banking will exceed 400 million globally by 2013.

China regulates third party payments

The People's Bank of China (PBOC) has announced that non-bank payment service providers would need a license to conduct third party payment transactions in China. Under the new rules, the companies will have to report to the central bank the commission rates it charges for third party transactions. The companies would also be subject to periodic checks by the PBOC.

According to the central bank, the service providers will have to apply for a license within one year after the policy comes into effect on 1st September.

Analysts said the new rules will help regulate the online payment market, which reached 555 billion yuan ($81.4 billion) last year, up 135.6 percent from 2008.

Non-bank payment service providers will need to have a registered capital of at least 100 million yuan for a nationwide business license, and should have been making profits for two successive years, the central bank said.

"The policy will help in the healthy development of the online payment industry," said Cao Fei, an analyst with domestic research firm Analysys International.

China’s online payment market has been growing at more than 100 percent annually in the past five years. It has also been attracting more and more players. According to industry experts, there are more than 100 online payment companies in China at present.

But at the same time, there are also problems due to lack of regulation.

Some online payment companies have been accused recently of making money through illegal activities. Online payment company 99Bill Corp allegedly helped a gambling company to collect funds of over 3 billion yuan, and one of its senior officials was detained.

"The license rule is fair for all online payment companies," said Wang Ziling, who looks after public relations at Alipay.com Co Ltd, the largest online payment company in China.

Alipay had a 52 percent share of the online payment market in 2009, followed by Tenpay, an online payment unit of Tencent, with 24.7 percent.

Since companies have to be profitable for at least two successive years, analysts said the policy will restrict entry of newcomers in the market.

As for foreign funded companies, the central bank will issue separate rules.

Cao from Analysys International said the new rules are likely to mean stricter requirements for foreign funded online payment companies.

More Indian women go abroad to work

Deepa Gupta, 22, a mathematics graduate from Ludhiana, thought it a great opportunity to go to a postgraduate course in Michigan University. Two years down the line, she is settled in the US and has been joined by her widowed mother.

Gupta represents a trend — that of Indian women increasingly leaving home turf for professional, rather than personal reasons. The World Bank’s report on ‘Gender, Poverty Reduction and Migration’ says more women from developing countries such as India are migrating to the West independently rather than as dependents. It also says that female migration indirectly helps alleviate poverty.

Neelam Soni, executive with an overseas placement agency in Delhi says women in nursing, teaching, social and voluntary work, the hospitality industry, data-entry operations, sales and even housework are able to migrate to foreign shores.

Social scientist Mala Kapur Shankardass says that even though a large proportion of female migration can still be explained away by marriage (estimates say 80%) it is significant that 20% of all women migrants leave for professional reasons. A decade ago, less than 5% of women migrants worked She says that earlier, male migrants used to belong to the ‘Employed’ category and female to the ‘Not in the Labour Force’. This is changing. Shankardass.

But Shankardass cautions that Indian female contribution to forex remittances is still not properly documented. Official data largely focuses on male remittances.