By Stanley Epstein - Principal Associate at Citadel Advantage
The news item regarding impending staff a cut being ‘inevitable’ as SWIFT contends with declining volumes” (FINEXTRA News, 14 September 2009) triggered some wider thoughts that I would like to share.
SWIFT’s need to restructure and to contain operating costs is not in my view simply a result of the financial crisis and the downturn in message volumes. There is also a substantial element of the “dinosaur” syndrome in these events.
If SWIFT wants to succeed in the efficiencies that it seeks there are three basic issues that it needs to urgently address.
1. Speed up innovation – SWIFT is too slow to innovate. There are some great changes in the SWIFT pipeline but the problem is that they take forever to develop and implement. A competitive banking industry has rightfully not got the patience for this.
2. Get away from the technical focus - SWIFT messaging and its processing is a technical issue, but the market that it serves is driven by business requirements. From my own experience the business area is oft-times totally neglected. The business champions in the industry often do not really understand what SWIFT can do for them. Similarly the “translation” and melding of the technical and the business aspects is left to the banks to do. The banks are no good at this. If SWIFT wants banks to uses their solutions they need to actively show the banks how this can be done.
3. Temper the bureaucracy - SWIFT is run by (1) too many bureaucrats (who really don’t have an appreciation for the role that SWIFT ought to be playing) and (2) too many interbank bodies (who’s agenda’s are often shaped by the business interests of the financial institutions involved).
I am a great believer in and supporter of SWIFT – I have been since its birth way back in the 1970s – so please don’t take my thoughts amiss.
Wednesday, 16 September 2009
Sunday, 13 September 2009
US Mobile Banking Report Cards - Some Banks Are Failing
Mobile banking in the US is not a bed of roses and some banks are not really making the grade there as Matt Hamblen writing in Computerworld reports.
Saturday, 12 September 2009
Are We Heading Into Chaos – Again?
By Stanley Epstein - Principal Associate, Citadel Advantage Ltd.
This is the time of year when the financial services industry, or at least the “techie” element heads off to some exotic venue for the annual SWIFT jamboree. SWIFT as we all know is the global financial messaging operator. And as part and parcel of what they do, they have also created the messaging standards on which the financial world to a very large degree depends.
Of course there are huge exceptions, especially in the United States where most banks are not members of SWIFT. But in the rest of the world any bank that is worth its salt is a part of this very important element of the financial system’s operating backbone.
So with this as a background, I am somewhat taken aback to read that the international financial messaging standard which has become so ubiquitous over the past three decades is under “attack” for want of a better word.
Banks are, by all accounts, moving to back to proprietary systems for many of their new messaging requirements. There are many reasons for doing this; existing messaging systems can’t meet specific unique requirements, development cycles for new messaging standards are too long, existing services are too expensive (given the surge in message numbers), platform migrations are too complicated or not yet budgeted for and so-on. Now, I don’t want to get into the pros and the cons of all these issues. Everyone has surely got their own very valid points of view on this. And this question of the whys and the wherefores surely has material for many, many debates.
What does concern me however, is the fact that perhaps we are now plunging headlong into an ever increasing period of infrastructural chaos because of these actions. Are banks short term goals clouding the bigger picture?
If the financial industry as a whole looses this one – and we head into a new period of multiple, competing and incompatible messaging standards – we face years of soaring operating costs and other miseries as we try to bridge these developing operating gaps in the future.
My own view is “please let’s think this through properly before we condemn the next two decades of banking to immense problems”.
What are YOUR thoughts?
This is the time of year when the financial services industry, or at least the “techie” element heads off to some exotic venue for the annual SWIFT jamboree. SWIFT as we all know is the global financial messaging operator. And as part and parcel of what they do, they have also created the messaging standards on which the financial world to a very large degree depends.
Of course there are huge exceptions, especially in the United States where most banks are not members of SWIFT. But in the rest of the world any bank that is worth its salt is a part of this very important element of the financial system’s operating backbone.
So with this as a background, I am somewhat taken aback to read that the international financial messaging standard which has become so ubiquitous over the past three decades is under “attack” for want of a better word.
Banks are, by all accounts, moving to back to proprietary systems for many of their new messaging requirements. There are many reasons for doing this; existing messaging systems can’t meet specific unique requirements, development cycles for new messaging standards are too long, existing services are too expensive (given the surge in message numbers), platform migrations are too complicated or not yet budgeted for and so-on. Now, I don’t want to get into the pros and the cons of all these issues. Everyone has surely got their own very valid points of view on this. And this question of the whys and the wherefores surely has material for many, many debates.
What does concern me however, is the fact that perhaps we are now plunging headlong into an ever increasing period of infrastructural chaos because of these actions. Are banks short term goals clouding the bigger picture?
If the financial industry as a whole looses this one – and we head into a new period of multiple, competing and incompatible messaging standards – we face years of soaring operating costs and other miseries as we try to bridge these developing operating gaps in the future.
My own view is “please let’s think this through properly before we condemn the next two decades of banking to immense problems”.
What are YOUR thoughts?
Wednesday, 9 September 2009
Annual ATM losses in Europe are approaching EUR 500 million – What should consumers do?
With the annual cost of ATM crime in Europe approaching half a billion Euros, the European Network and Information Security Agency (ENISA), is advising consumers to be more aware of the risks and take precautions to avoid personal loss. The rapid growth in the number of ATMs, together with more sophisticated attacks and fraud has resulted in an alarming 149% rise in ATM attacks in 2008.
These worrying findings, along with information and case studies highlighting the different ATM crimes and recommendations to help detect and prevent them, have been published in a paper by ENISA entitled ‘ATM Crime: Overview of the European situation and golden rules on how to avoid it’.
The number of ATMs in Europe increased 6% last year to almost 400,000, with many now found in remote site locations such as convenience stores, airports and petrol stations. Seventy-two percent of European ATMs are located in just five countries: UK, Spain, Germany, France and Italy.
Cash taken illegally from ATMs is still the preferred method for criminals who obtain pin numbers using a wide range of techniques from ‘shoulder surfing’ to complex skimming techniques. This can involve the usage of a small spy camera, a false PIN overlay and even fake machines; while increasingly Blue Tooth wireless technology is used to transmit card and PIN details to a nearby laptop computer. During 2008 alone, a total of 10,302 skimming incidents were reported in Europe.
Other methods used to extract money include trapping and then retrieving users’ cards, stopping withdrawals in the middle of a transaction only to complete them when the victim has left and even trapping cash in the machine. Organised criminal gangs are also using sophisticated phishing techniques and hacking into bank computer systems and web sites to obtain PIN and account information.
ATM burglaries and physical attacks have also seen an increase by 32% over the last 12 months from ram raids and explosions to the use of rotary saws, thermal lances and diamond drills.
As part of this process ENISA has drawn up its list of Golden Rules to offer maximum protection with minimum effort. You can download the ENISA report at http://www.enisa.europa.eu/doc/pdf/publications/ATM_crime.pdf
These worrying findings, along with information and case studies highlighting the different ATM crimes and recommendations to help detect and prevent them, have been published in a paper by ENISA entitled ‘ATM Crime: Overview of the European situation and golden rules on how to avoid it’.
The number of ATMs in Europe increased 6% last year to almost 400,000, with many now found in remote site locations such as convenience stores, airports and petrol stations. Seventy-two percent of European ATMs are located in just five countries: UK, Spain, Germany, France and Italy.
Cash taken illegally from ATMs is still the preferred method for criminals who obtain pin numbers using a wide range of techniques from ‘shoulder surfing’ to complex skimming techniques. This can involve the usage of a small spy camera, a false PIN overlay and even fake machines; while increasingly Blue Tooth wireless technology is used to transmit card and PIN details to a nearby laptop computer. During 2008 alone, a total of 10,302 skimming incidents were reported in Europe.
Other methods used to extract money include trapping and then retrieving users’ cards, stopping withdrawals in the middle of a transaction only to complete them when the victim has left and even trapping cash in the machine. Organised criminal gangs are also using sophisticated phishing techniques and hacking into bank computer systems and web sites to obtain PIN and account information.
ATM burglaries and physical attacks have also seen an increase by 32% over the last 12 months from ram raids and explosions to the use of rotary saws, thermal lances and diamond drills.
As part of this process ENISA has drawn up its list of Golden Rules to offer maximum protection with minimum effort. You can download the ENISA report at http://www.enisa.europa.eu/doc/pdf/publications/ATM_crime.pdf
The Informal Remittances Sector in Nigeria
An interesting piece of news from Nigeria. It looks like deceptive practices among some bank officials have created opportunities for the informal operators to thrive in the money remittances market.
Click on the Post heading to access the full article.
Click on the Post heading to access the full article.
Monday, 31 August 2009
India also upbeat on Remittances
Along the same lines as the previous post, Remittances to India have not slowed down significantly according to the Reserve Bank of India (RBI).
Writing in its annual report the RBI said "Available information indicates that inward remittances to India have not been impacted significantly by the economic crisis," also contradicting popular perception of a severe impact on remittances.
According to the World Bank estimates (in July 2009), remittance flows to developing countries, which increased to $ 328 billion in 2008 from $ 285 billion in 2007, are projected to decline by 7.3 per cent in 2009, the RBI said.
Click on the post headline to read the full article.
Writing in its annual report the RBI said "Available information indicates that inward remittances to India have not been impacted significantly by the economic crisis," also contradicting popular perception of a severe impact on remittances.
According to the World Bank estimates (in July 2009), remittance flows to developing countries, which increased to $ 328 billion in 2008 from $ 285 billion in 2007, are projected to decline by 7.3 per cent in 2009, the RBI said.
Click on the post headline to read the full article.
Remittances continue to grow
The global economic crisis has led to dire predictions of a dramatic fall off in Migrant Workers Remittances. Just how true is this? Looking at the news reports coming in from across the globe it does seem that while there was indeed a fall-off especially at the end of 2008 and early 2009, all signs now seem to point to continuing healthy flows of these funds.
According to the state-run “Land Bank of the Philippines” remittances may grow by as much as 3.1% this year as overseas Filipino workers (OFWs) are expected to send more money to their families this semester as the holiday season nears. Read all the details at http://www.bworldonline.com/BW083109/content.php?id=053
According to the state-run “Land Bank of the Philippines” remittances may grow by as much as 3.1% this year as overseas Filipino workers (OFWs) are expected to send more money to their families this semester as the holiday season nears. Read all the details at http://www.bworldonline.com/BW083109/content.php?id=053
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