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.”