New Indian mobile banking service launched

The State Bank of India has unveiled a new mobile banking service, "State Bank freedoM", which enables customers to move funds, check balances, make bill payments all by way of their mobile phones without having to visit for registration for the service. This is a free service offered by the bank. Customers will have to bear the charges imposed by the telecom operators however.

This service also allows users to conduct m-commerce transactions. The bank has linked up with Paymate for the payment for goods/services over the Internet.

The bank also has plans to set up a Mobile Wallet which will allow it to take the mobile banking to non customers.

TRAINING COURSE - Risk Management - Focus on Fraud

Join us in JOHANNESBURG, South Africa on 2 & 3 August 2010 for our 2-day training course “RISK MANAGEMENT - FOCUS ON FRAUD”

Fraud is on the increase. Recent studies have shown a surge in economic crimes. The statistics reveal that the three most common forms of crime are theft, accounting fraud and corruption.

Of these, fraud has shown a particularly sharp rise. The rise in fraud stems from a mixture of increased opportunities and growing incentives. Companies have been reducing the number of people employed to monitor workers at a time when employees are more tempted to break the rules because their living standards are eroding and their jobs are looking shakier. The proportion of frauds committed by middle managers has shown a particularly sharp rise, from 26% in 2007 to 42% today.

Just consider the following questions;

* Can your bank or organization cope with fraud?
* Can you identify a fraud in your working environment?
* Are you maximizing your staffs’ potential to reduce fraud and error in your systems?
* How aware are you or employees of fraud?
* Do they have a clear understanding of the role they play in detecting fraud?
* Do they understand you organization’s fraud policies and procedures?

The “Risk Management - Focus on Fraud” course in Johannesburg on 2 & 3 August 2010 is a 2-day intensive course on fraud and how it presents huge challenges for banks, requiring them to radically modify behavior and increase their vigilance in many of the traditional risks associated with banking activities.

Ensure that your staff are able to cope with the growing fraud threat. For more details including a fully descriptive course brochure e-mail us at courses@citadeladvantage.com today. Please indicate FRAUD-JHB in the subject line.

Securities and Exchange Commission is to put out for public comment Stock-By-Stock Circuit Breaker Rule Proposals

This is in a response to the market disruption of May 6. The national securities exchanges and the Financial Industry Regulatory Authority (FINRA) have filed proposed rules under which they would pause trading in certain individual stocks if the price moves 10 percent or more in a five-minute period. The SEC is seeking comment on the proposed rules.

The markets are proposing these rules in consultation with FINRA and staff of the SEC to provide for uniform market-wide standards for individual securities in the S&P 500 Index that experience a rapid price movement.

These rules reflect a consensus that was achieved among the exchanges and FINRA after SEC Chairman Mary Schapiro convened a meeting of exchange leaders and FINRA at the SEC early last week. That meeting took place within days after the market dropped significantly and after approximately 30 S&P 500 Index stocks fell at least 10 percent in a five-minute period.

“We continue to believe that the market disruption of May 6 was exacerbated by disparate trading rules and conventions across the exchanges,” said Chairman Schapiro. “As such, I believe it is important that all the exchanges quickly reached consensus on a set of uniform circuit breakers that would be triggered when needed. Today’s filings reflect that consensus. I am pleased by the constructive cooperation of the exchanges and FINRA as evidenced by their rapid response.”

Under the proposed rules, which are subject to Commission approval following the completion of the comment period, trading in a stock would pause across U.S. equity markets for a five-minute period in the event that the stock experiences a 10 percent change in price over the preceding five minutes. The pause would give the markets the opportunity to attract new trading interest in an affected stock, establish a reasonable market price, and resume trading in a fair and orderly fashion. Initially, these new rules would be in effect on a pilot basis through Dec. 10, 2010.

The markets will use the pilot period to make appropriate adjustments to the parameters or operation of the circuit breaker as warranted based on their experience, and to expand the scope to securities beyond the S&P 500 (including ETFs) as soon as practicable.

The proposed rules will be available on the SEC’s website as well as the websites of each of the exchanges and FINRA. The Commission intends to promptly publish the proposed rules for a 10-day public comment period, and determine whether to approve them shortly thereafter.

“I believe that circuit breakers for individual securities across the exchanges would help to limit significant volatility. They would also increase market transparency, bolster investor protection, and bring uniformity to decisions regarding trading halts in individual securities,” said Chairman Schapiro.

During the pilot period, Chairman Schapiro has asked the SEC staff to consider ways to address the risks of market orders and their potential to contribute to sudden price moves, as well as to consider steps to deter or prohibit the use by market makers of “stub” quotes, which are not intended to indicate actual trading interest. The staff will study the impact of other trading protocols at the exchanges, including the use of trading pauses and self-help rules. The SEC staff also will continue to work with the exchanges and FINRA to improve the process for breaking erroneous trades, by assuring speed and consistency across markets.

The SEC staff is working with the markets to consider recalibrating market-wide circuit breakers currently on the books – none of which were triggered on May 6. These circuit breakers apply across all equity trading venues and the futures markets.

Fraud - Ernst & Young's 11th Global Fraud Survey

Ernst & Young's 11th Global Fraud Survey sheds light on how businesses have coped with increasing fraud and corruption risk during the financial crisis, and examines the growing pressures on the CFO, internal audit, legal and compliance functions. It reviews the risks and challenges that businesses will face as they navigate clear of the financial crisis and begin to focus on growth.

This reflects the views of over 1,400 senior decision-makers in major companies in 36 countries across the world.

Fraud continues to rise as compliance struggles for recognition. The survey indicates continued need for anti-fraud measures, even against a tough financial background. However, this could be a result of the way fraud has come under the spotlight in recent years.

David Stulb, global leader of Ernst & Young's fraud investigation and dispute services practices says: "Regulators in western Europe have become much more aggressive and have been using US-style investigative techniques and settlement practices. In some jurisdictions, such as the UK, significant outreach efforts to encourage whistleblowers have been undertaken. These efforts are believed to have already yielded results."

Stulb explains that legislative developments have also been a factor. "While there was lively debate over the UK Bribery Act in the weeks before its passage, the final version of the Act is very robust, including penalties against corporations for failing to prevent bribery."

At the same time, there has been a drop in resources available to those that must prevent and react to instances of fraud. Ernst & Young states that one in five of the survey respondents from legal departments have seen their budgets fall in the last year.

Stulb says: "The UK lawyers and compliance officers I regularly meet are eager to hear about new and emerging risks for their organizations and what steps they can take to mitigate them. However, I suspect many of them face significant internal challenges to secure the investment required to take these steps."

The survey also shows the growing, and uncertain, nature of compliance as a specialty. More than half of those in the field have been in a compliance role for less than five years. This reflects the substantial growth in recruitment in this area, but also suggests some challenges ahead. Outside of specialist fields, there can be a lack of appreciation for the role that compliance can play in an organization. Some 70% of chief compliance officers interviewed said demonstrating the value of compliance to the wider organization was a significant challenge.

According to Stulb, though, this can be related to the industry that officers work in, particularly those under the scrutiny of external regulators.

"Many companies operating in heavily regulated industries, such as financial services and life sciences, have developed sophisticated compliance and internal audit systems. They are keenly aware of the value brought by investing time and effort to protect their brand, and, as a result, compliance is already high on their corporate agenda."

The report also looks at growth in the next year, in particular mergers and acquisitions. Fifty-three percent of global respondents said they are targeting growth for their companies in the next year, with 42% in Japan targeting aggressive growth.

This is likely to throw up particular issues as groups expand into new markets with different cultural practices, emphasizing the importance of thorough due diligence pre-acquisition.

Key findings specific to the UK include:

• Increased enforcement against fraud, bribery and corruption is a priority in many major markets. The passage of the UK’s Bribery Act is the latest example of a more robust approach to punishing the unethical conduct of individuals and corporates. Individual executives and directors will not be immune from prosecution. 76% of our UK respondents say their directors are concerned about personal liability for actions carried out by their company.
• Despite this concern, organizations are not behaving in a way that would increase their own protection. Alarmingly, 18% of UK companies have not performed a fraud risk assessment over the last 12 months, and 1 in 10 (8%) have never completed one. Performing such an assessment will help prioritise actions to deal with the most significant fraud risks and is therefore fundamental when budgets and resources are scarce.
• Having coped through the downturn, many companies are now looking for new growth opportunities, which may come through entering new markets or making acquisitions. These efforts can expose companies to numerous new risks, potentially including corruption issues. To minimize such risks, businesses should undertake thorough, focused pre-acquisition due diligence. However, 34% of UK respondents rarely or never perform fraud or corruption related pre-acquisition due diligence, while 47% rarely or never perform a similarly focused post-acquisition review. These steps are vital to reducing the risk of successor liability and subsequent regulatory enforcement actions.

When growth returns, we expect more challenges, more potential for fraud, more exposure to corruption and more interest from regulators. In the coming months, if they haven't done so already, companies will need to review or improve their procedures to achieve long-term sustainable and ethical growth.

Download Ernst & Young’s 11th Global Fraud Survey at:

http://www.ey.com/Publication/vwLUAssets/Driving_ethical_growth_-_new_markets,_new_challenges:_11th_Global_Fraud_Survey/$FILE/EY_11th_Global_Fraud_Survey.pdf

Phishing - Anti-Phishing Working Group publishes a global survey

Phishing has always been attractive to criminals because it has low start-up costs and few barriers to entry. But by mid-2009, phishing was dominated by one player as never before, the Avalanche phishing operation. This criminal entity is one of the most sophisticated and damaging on the Internet, and perfected a mass-production system for deploying phishing sites and crimeware - malware designed specifically to automate identity theft and facilitate unauthorized transactions from consumer bank accounts. Avalanche was responsible for 66% of all phishing attacks launched in the second half of 2009, and was responsible for the overall increase in phishing attacks recorded across the Internet.

The statistics also show that phishing remained highly localized in certain Internet namespaces, and that some anti-phishing measures had noticeable impacts. While phishing remains a damaging phenomenon involving many millions of dollars in losses, the increasingly concentrated nature of much phishing offers some opportunities for improved response and mitigation.

This new report seeks to understand such trends by quantifying the scope of the global phishing problem, especially by examining domain name usage and phishing site uptimes. The report examines all the phishing attacks detected in the second half of 2009. The data was collected by the Anti-Phishing Working Group (APWG), supplemented with data from several phishing feeds and private sources. The APWG phishing repository is the Internet’s most comprehensive archive of phishing and e-mail fraud activity.

You can download the full report at; http://www.apwg.org/reports/APWG_GlobalPhishingSurvey_2H2009.pdf

Mobile Banking - A new product is launched in Kenya

Kenya's largest mobile operator, Safaricom, and Equity Bank, have unveiled M-Kesho, a mobile banking product targeting rural areas. M-Kesho will allow M-Pesa (Safaricom's mobile money transfer service) account holders to deposit money, withdraw cash and access loans.

"If all M-Pesa customers are banked as is envisaged with the M-Kesho product, Kenya will be the most banked country in Africa and in the developing world," said Mr. James Mwangi, Equity Bank chief executive.

The product will transform M-Pesa accounts into bank accounts, enabling M-Pesa customers to open savings accounts where they will be able to transfer as little as a Ksh.100 (US$1.3) at no cost.

Speaking during the launch in Nairobi, Kenya’s President Mwai Kibaki said M-Kesho is a landmark product that will integrate the telecommunications and banking sectors and would improve access to cost effective financial services.

Other than deposits and withdrawals, M-Kesho customers will also be able to access micro-credit and micro-insurance products, and earn interest on their money.

Mobile Banking – New text service for UK customers

MBNA Europe, a wholly owned subsidiary of Bank of America, has introduced new mobile banking text service, to enable UK customers to text for their credit card information.

By using the mobile banking text service, customers can use their mobile phone to get credit card account information, including balance, payments and transactions, by texting to a dedicated mobile short-code number.

To use the service, customers with mobile phone numbers registered to their accounts can send “Bal”, “Trans” or “Bill” to the dedicated short-code number for the latest information on their accounts.

Ian Craig, sales, service and operations executive for Bank of America Europe Card Services, which operates the MBNA brand, said: "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.”