‘Phishing’ website targets Bank of Maldives mobile banking customers

The Bank of Maldives (BML) has issued a statement warning that fraudsters have created a false BML website to deceive the company’s mobile banking service customers, obtaining their bank account number, credit card number and its security code through the fraudulent website.

The fraudsters were inviting BML customers to their fraudulent website under the “bankofmaldives.net” domain by sending text messages, claiming it was a registration website for the BML mobile banking service.

This fraud is of course ‘phishing’ and is relatively common in the Western world. Many banks advaice their customers to never access their website by clicking a link in an email. Technology analyst group Gartner estimate that 3.6 million adults fell victim to such scams in the 12 months ending August 2007, losing US$3.2 billion in the process.

Since then phishing attacks have become markedly more targeted and refined, with the emergence of ‘spear-phishing’, with individual and high-value targets such as corporate account executives being targeted.

BML has warned that if any of its customers filled this registration form displayed in the fraud website, the fraudsters will be able to take advantage of them and misuse the information.

The statement said that the mobile banking was a service provided by BML “with high security and confidentiality.”

However, it is the responsibility of the customers to keep confidential information such as their card number, expiration date, pin number and security code, account number, internet banking user ID and its security and password, said the statement.

The BML said the most common method fraudsters used was to obtain information to misuse credit cards and debit cards after obtaining the data by sending emails from sources trusted by the victim, linked to fraudulent sources.

The fraudulent website is designed to appear just like the legitimate website.

BML warned customers to never use a link to access the bank’s website, and recommended its address www.bankofmaldives.com.mv be typed directly into the browser.

European Payments Council calls on EU lawmakers to set regulatory migration dates for SEPA

The European Payments Council (EPC) has announced updated and enhanced versions of the SEPA Credit Transfer (SCT) Scheme Rulebook and the SEPA Direct Debit (SDD) Scheme Rulebooks.

November 1, 2010 marks an important target date for SEPA, as all banks in the euro area are now reachable for cross-border SEPA direct debits.

The single element now required to achieve an integrated euro payments market is a clear deadline for the transition to the SEPA payment schemes. The EPC has called on EU lawmakers to set an end date for migration to SCT and SDD through EU Regulation. The EPC believes that a possible forthcoming regulatory intervention relating to SEPA, as outlined by the European Commission earlier this year, could derail the entire SEPA project. As such it believes that it would eliminate the extensive benefits SEPA would offer bank customers.

The SEPA Credit Transfer and SEPA Direct Debit Schemes evolve based on a transparent change management process providing all stakeholders with the opportunity to introduce suggestions for changes to the SEPA Schemes. Proposed changes to the schemes are subject to a three-month public consultation. As a result of this annual change cycle, the SEPA Credit Transfer and SEPA Direct Debit Schemes incorporate numerous features introduced by end users. The limited number of requests for new elements to be introduced into the newly released Rulebooks demonstrates the maturity of the SEPA Credit Transfer and SEPA Direct Debit Schemes and highlights that they are fit for purpose. In accordance with best industry practice, banks and their service providers have sufficient time to address the Rulebook updates ahead of November 2011, when these revised Rulebooks will come into effect.

1 November 2010 is also an important target date for the roll-out of SEPA Direct Debit services by banks. EU Regulation (EC) No 924/2009 established mandatory reachability of all banks in the euro area for cross-border direct debits. In practice, this means that any consumer who holds an account in the euro area, which provides the option to make euro direct debit payments at a national level, can now make cross-border payments by SEPA Direct Debit as well. As a result, paying bills becomes significantly easier for mobile European citizens. At the same time, companies are now able to collect payments by SEPA Direct Debit across the euro area resulting in enhanced business opportunities.

Supervisory effectiveness – New report by Financial Stability Board

The Financial Stability Board (FSB) has just published a new report setting out recommendations for strengthening the Intensity and Effectiveness of Systemically Important Financial Institution (SIFI) Supervision. The report is based on an internationally coordinated assessment of lessons from the current financial crisis, and its key findings form part of the FSB’s overall recommendations on reducing moral hazard risk associated with SIFIs, which will be published following the Seoul Summit.

The report on “Intensity and Effectiveness of Systemically Important Financial Institution (SIFI) Supervision”, which has been prepared in consultation with the IMF, was endorsed by G20 Finance Ministers and Central Bank Governors at their meeting in Gyeongju, Korea, on 22-23 October.

The financial crisis revealed that certain national supervisory regimes failed to detect problems proactively and/or to intervene early enough to reduce the impact of stresses on large systemically important firms and ultimately on the financial system as a whole.

This happened for different reasons in different jurisdictions but generally included weaknesses in:

• the directives that drive the work of these organizations; 
• the powers and resources given to these organizations to deliver effective consolidated oversight and to address potential problems; 
• the strength of the supervisory methods used and the standards against which these authorities are judged in international assessments; and 
• the frequency with which self assessments are made of the methods deployed by supervisory authorities.

The goal of the new recommendations is to strengthen the intensity and effectiveness of supervision, particularly as it relates to systemically important firms.

Every jurisdiction must have a supervisory system that is up to the task of ensuring strict compliance with new regulations, delivering high quality risk assessments through the use of leading-edge risk detection methods, and intervening early to address problems in firms before those problems become too large to address in an orderly way.

The report contains 32 recommendations which focus on achieving four key outcomes:

1. Unambiguous mandates, independence and appropriate resources: All supervisory authorities must take steps to ensure that their supervisory authorities have unambiguous mandates, are free to act independently, and have access to the resources (quality and quantity) required to be effective.
2. Full suite of powers: Where supervisory authorities lack a full suite of powers to carry out early intervention, actions must be taken to correct those shortcomings.
3. Improved set of standards and methods: The expectations placed on supervisors must be higher. The standards against which supervisors are judged will be enhanced to reflect the higher complexity of the financial system and the firms that comprise it. The higher standards will also underscore the need to apply more intense supervisory techniques to SIFIs.
4. Stricter assessment regime: Assessors should have stricter and more relevant criteria against which they can assess to drive supervisors to high quality work, alert authorities to potential weaknesses in their oversight processes, and ultimately raise the effectiveness of supervision internationally.

While the recommendations are primarily aimed at making SIFIs less susceptible to failure, there are also lessons for the supervision of financial institutions more generally.

The FSB has asked standard setters and national authorities to follow up on these recommendations as they incorporate them into supervisory core principles and national supervisory frameworks respectively. For several key recommendations, standard setters and national authorities have been asked to report their progress to the FSB. FSB thematic peer reviews and IMF/World Bank FSAP assessments will assess national implementation and ongoing conformity with these higher standards.

Hardware failure causes PayPal outage

PayPal suffered a worldwide outage last Friday after a network hardware failure in one of its data centres. An initial service outage began at around 8.00am PT and lasted for approximately an hour and a half. A second outage lasting about 50 minutes hit at 11.30am PT.

In a blog, the company's CTO, Scott Guilfoyle, confirmed the cause of the problem was a data centre network hardware failure which was compounded by an inability to switch over to back up systems "as quickly as planned".

"We are investigating ways to ensure that this doesn't happen again. Thanks for your patience today, and for using PayPal. My apologies once again," says Guilfoyle.

“What migration, remittances are doing to our societies”

Former Jamaican Prime Minister P J Patterson suggests that remittances fuel wasteful consumption and discourage able-bodied family members from seeking employment. But these negatives pale in comparison to the actual needs and the positive spin-offs which they trigger, he says.

Patterson, who is also chairman of the Ramphal Commission on Migration and Development, was delivering the Walter Rodney Memorial Lecture last week on "Migration and Development in the Commonwealth: A Caribbean Perspective" at the University of Warwick Ramphal Building in Coventry, United Kingdom. Following is an excerpt from the lecture:

“A striking feature of international migration is the increasing mobility of women. This is partly due to the rise in demand for household and care workers and, thereby, the increasing participation of women in all migration streams.

Forty-nine per cent within the Commonwealth are women, some of whom are obliged to leave their children behind in the desperate search for an income to sufficiently maintain them. For us in the Caribbean, we have already begun to observe some of the consequences — particularly on the nurturing of children and the social fabric. We cannot condone any attempt to exploit those who are engaged in the provision of household services and domestic care.

From the days of imperial conquest, those who settled abroad were sending remittances and profits back home to the Motherland. So the remittance phenomenon is by no means novel. Cross-border financial flows had topped US$414 billion by the start of the new millennium.

Remittances received by developing Commonwealth countries amounted to US$73 billion in 2007, accounting for 3.2 per cent of GDP (Gross Domestic Product). For the least developed, 6.2 per cent of GDP was attributable to remittances.

The figures for the Caribbean are even higher — averaging seven per cent and in some cases as high as 19 per cent of GDP in Jamaica and 20 per cent for Guyana. In several Caribbean countries, these figures exceed the value of Foreign Direct Investment and vastly more than comes from Official Development Assistance.

We are well aware of possible negatives which remittances may have — fuelling wasteful consumption, discouraging able-bodied family members from seeking employment. But these pale in comparison to the actual needs and the positive spin-offs which they trigger.

There is mounting evidence that more and more of these resources are being channeled into housing, small business development and pension schemes.

Our Commission will consider how the transaction costs of remittance flows may be reduced and how these significant financial flows may best be protected in a volatile and somewhat turbulent foreign currency exchange market.

We need to create an investment climate which will attract more of these resources into economic activity.

In all four developed Commonwealth countries, the percentage of those with tertiary education is markedly higher among immigrants than among the native-born. The difference is largest in the UK, where the proportion of tertiary-educated among the foreign-born was 35 per cent, nearly double that of the native-born (20 per cent).

The emigration rates of the highly skilled in Commonwealth countries differ widely. Countries with small populations, especially island states, experience high emigration rates of their highly skilled population. In the case of Barbados, Gambia, Guyana, Jamaica, Mauritius and Trinidad and Tobago, the percentage of the highly educated population living abroad varies from 40 per cent to over 70 per cent. The small island states are the ones that are most directly affected by the emigration of highly skilled workers, the so-called 'brain drain'.

The Caribbean has some of the highest rates of migration of its tertiary-educated labour force. These rates run as high as 70 per cent. Between 1990 and 2000, some 60 per cent of Caricom (Caribbean Community) nationals, who benefited from higher education provided by Member States, moved to OECD (Organisation for Economic Development) countries. This figure could increase with the shortage of particular skills in the EU (European Union) for medical personnel, scientists, teachers and information technologists.

WHO data reflect that the highest emigration rates for doctors now working in the OECD are to be found in small island developing states and Africa. Of the 10 countries with migration rates of over 50 per cent, eight were small states and six of these were from the Caribbean. The rate reached 89 per cent for Antigua and Barbuda and was over 70 per cent in Grenada and Guyana.

Overall, the expatriation rates for nurses were even higher than those for doctors. Among the 10 Commonwealth countries with the highest expatriation rates, the percentages residing in the OECD countries ranged from 66 per cent to 88 per cent. Of the 20 countries with rates over 50 per cent, 19 were small island developing states.

Eight of the 10 with the highest expatriation rates were from the Caribbean with Jamaica, Grenada, Belize, St Vincent and the Grenadines and Guyana exceeding 80 per cent.”

World Bank calls for the creation more formal remittance flow channels to cut losses

Financial experts and economists at the World Bank (WB) have called for the creation of additional formal remittance flow channels to reduce the Ethiopian government’s loss of income due to foreign exchange being transferred into the country through informal channels.

Although a lot of the remittances sent to Ethiopia flows through innformal channels, the amount received by 14% of adults accounted for eight per cent of the gross domestic product (GDP), at current market prices, in 2008/09.

The amount received by this 14%, comprising people who are aged between 18 years and 65 years, amounted to 3.2 billion dollars a year, according to a survey which was conducted for the first time in Ethiopia by the WB. On average, each person received 600 dollars annually, which was sent to them five times a year.

There are around 37 million adults in Ethiopia, according to the 2007 census.

Remittance flows represent a significant share of the national income and foreign currency earnings for Ethiopia, said Benjamin Musuku, WB Africa Region Payment System specialist, speaking recently at the “Future of African Remittance Program” initiative that was held in Addis Ababa.

Globally, international remittances totaled 414 billion dollars in 2009, of which 316 billion dollars went to developing countries, involving around 192 million migrants or three per cent of the world population, according to a recent WB estimate.

Despite significant amounts of remittance flowing through formal channels, a great deal of money makes its way into Ethiopia through informal channels, according to the survey.

In order to touch this money, policy makers and remittance service providers should play an active and supportive role to increase the development impact of remittance by facilitating formal remittance flows, thereby reducing the cost of remittance transfers, according to Donald F. Terry, financial expert at the WB.

The cost of sending and receiving remittance in Ethiopia is higher than the rest of the world, which is around 10% of the transfer amount, a study conducted by Western Union has revealed.

To lower the high transaction costs, the WB has launched the “Future African Remittance (FAR)” program, which intends to enhance competition and financial innovation in the Ethiopian remittance market.

Under the FAR programme, the WB is expanding its efforts in Ethiopia to assist the government and remittance service providers to realize the development impact of remittances. The program will act as a collaborative platform for enhancing and focusing complementary efforts on the issue of remittances.

The FAR program will also facilitate the exchange of best practices among participating countries by creating a forum for technical discussion and examination of innovative technologies, regulatory developments, and improved data collection on remittance.

The program sets a goal to reduce the cost of sending and receiving by five per cent and increase remittance through formal channels by 20% in 2015.

Commercial Bank of Ethiopia (CBE), state owned and the biggest bank, plans to increase the remittance that is sent through it by 40% this year. To this end, it had stopped charging commission on Western Union transfers that are sent through its branches.

The result of the national survey and FAR programme was made public in the joint conference held by the WB and National Bank of Ethiopia (NBE) on October 27.

The conference, held in Addis Ababa, following a similar initiative in Kenya, intended to disseminate the survey results and launch country specific initiatives to improve competition and foster technological innovation, according to Benjamin.

“The program started in May 2010 with engagement in Ethiopia, Kenya, and Uganda and plans to expand to an additional five Sub-Saharan African countries in 2011,” he said.

The conference brought together nearly 50 participants comprising policy and decision makers from Ministry of Finance and Economic Development (MoFED), NBE, commercial banks, and non-bank financial institutions.

Ethiopian ATM & POS network on the cards

Fourteen separate firms are bidding to supply ATMs and POS systems to three separate Ethiopian banks, United, Nib and Awash. The project includes the supply of a turnkey solution for a shared card-based payment system and electronic fund transfer solution which consists of a switch, 60 ATMs, 300 POS units, a personalization system, a data center and disaster recovery site and the network infrastructure. In addition to the supply and installation of the ATMs and POSs, the winning company would be responsible for the supervision of the whole system for a period of two years.

Awash International Bank, Nib International Bank, and United Bank signed an agreement in February 2009 to launch the Fettan ATM Network. Originally, it was planned that Fettan ATM™ will install over 140 ATMs and over 340 POSs across Ethiopia with one ATM at every branch of the participating banks.