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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