The Financial Services Club's Blog

Virtual currencies will explode thanks to mobile games

The European Central Bank (ECB) has just issued a report on Virtual Currency Schemes, with case studies on Second Life and Bitcoin (both previously covered in depth here).

In the report, the ECB calls Bitcoin “the most successful — and probably most controversial — virtual currency scheme to date.”

The ECB goes on to say that the concept of Bitcoin stems from the Austrian school of economics, where business cycle theory developed by Mises, Hayek and Bohm-Bawerk floated the idea that virtual currencies could be the starting point for ending central bank money monopolies.

What is an acceptable level of fraud?

Derek Wylde, Group Head of Fraud at HSBC, presented at the Financial Services Club last week. 

He talked about many aspects of fraud and risk, and presented quite  a few numbers related to the issue.

One of the charts raised questions in my mind.  It related to the total cost of payment card fraud.  According to Derek, payment card fraud costs an average of six to eight basis points on sales. For those who don’t use the terminology of basis points, a basis point is 1/100^th of a point, or 0.01 if you prefer.  So fraud costs between 0.06% to 0.08% of the total sales in payment cards.

A hundred years of cash

A hundred years ago, things were different but the same.

We needed to eat, but what we ate was very much a national rather than international cuisine.

We had to travel, but we would walk, bicycle of take the train.

We enjoyed entertainment, with a visit to the cinema once a month as a treat.

We had to talk, and most of this communication would be face-to-face.

A century later, we eat an international cuisine, catch a plane as easily as a train, watch the movies on our telephones and communicate 24 by 7 by remote media.

But one thing hasn’t changed much.

Cash.

Welcome to SIBOS 2012

So here we are, a few of us anyway, at SIBOS 2012 in Osaka, Japan.

More reaction to the RBS glitch

After last week's post about the meeting we had at the Club regarding the RBS glitch, I received an email from one attendee, Peter Miller.  Well worth a read so I thought I would post it here as additional input to this challenging and important area in our group.

Last week’s Financial Services Club meeting, covering the RBS systems failure of last summer, stopped at the point that it might have got really interesting.  It ran out of time.

World Payments Report, Part Four: Innovation

The eighth World Payments Report (WPR) was released last week, and so far we have summarised Part One, the Non-Cash Trends, Part Two, the Regulatory Trends and Part Three: SEPA.  This final part summarises the final section of the report on innovation.

Banks Need To
 Seize Opportunity Of Customer-Centric Innovation

World Payments Report, Part Three: the latest on SEPA

The eighth World Payments Report (WPR) was released last week, and so far we have summarised in Part One, the Non-Cash Trends, and in Part Two, the Regulatory Trends.  Today, we have extracted a summary of the section that updates on SEPA.

Mandated deadline of February 2014 is set for SEPA Credit Transfers and Direct Debits

The future of payments and technology

Andrew Vorster, Vice President of R&D and Adam Banks, Chief Technology Officer for Visa Europe delivered a fascinating double act at the Financial Services Club the other night.

The theme of the presentation was: the future of payments and technology, and covered seven key trends that Andrew and Adam have identified that will disrupt payments:

The World Payments Report, Part Two

The eighth World Payments Report (WPR) has just come out and, last week, we provided a summary of the first section on non-cash trends.  Here’s a summary of section two: regulatory trends.

Ability to Innovate is Challenged Amid Sea of Key Regulatory and Industry Initiatives

The World Payments Report 2012, Part One

The World Payments Report (WPR) has just come out.  It is the 8^th report produced by EFMA, in partnership with Cap Gemini and the Royal Bank of Scotland (ABN AMRO previously), and provides a good analysis of global payments movements in the same way as we do with our European Payments Report, produced in partnership with Logica and the EBA (if you want a copy of the European report, email me).

What really happened when the RBS payment system failed

At the start of this week, we had a discussion at the Financial Services Club about the issues at the Royal Bank of Scotland (RBS) over the summer when their payments systems failed.

It was a major failure that garnered headlines worldwide, with many banks saying: “there, but for the grace of God, go I”.

Why such a furor occurred is pretty obvious: when a core payments system goes down, people cannot pay for the things they need, companies cannot function, commerce grinds to a halt and economies fail.

Pretty obvious really, and it’s the reason why banks with critical transaction processing operations in any country are ‘too big to fail’.

Joining the debate were:

• Ralph Silva, Director and Broadcast Analyst with SRN;
• Chris Dunne, Strategy Director with Vocalink;
• Roy Vella, former Director for Mobile Payments with the Royal Bank of Scotland; and
• Anand Vyas, Vice President, Sales for UK and Europe with Thinksoft.

(see end of this blog entry for their profiles)

A truly social bank advisor is the key

This week has been fascinating with lots of discussions about branch versus no branch and financial advisor versus product seller.

I was going to leave it at that, but feel one final blog post worthy of discussion and this is about the role of social media.

We all talk about Facebook and Twitter in the abstract whilst, for most banking people, it's an alien world that is firewalled away from them.

The future of the cash machine

I’ve blogged about the cash machine of the future before, with BBVA coming up with the idea of side-facing screens.

Very nice too.

NFC: No Flippin' Chance (or why contactless is a dead tech)

The world is a wonderful place, as times shift fast and things turn faster than an egg on a timer.

Just as you get used to one technology, another comes along and turns things on its head.

What technology do we mean?

NFC.

Near Field Communication.

No Flippin' Chance.

The more I think about NFC, the more I realise it is a dead technology.

NFC is a technology past its sell-by date.

You should take Bitcoin seriously

I realised that it was over ten years ago when I started banging on about mobile payments and tablet computing.  It struck me particularly when I revived this video that I made back in 2000.

From Chris Skinner's videos on Vimeo

Some would say that video was / is visionary.  I would say that it was just ahead of its time, but nothing that could not be foreseen.

Ten years ago, it was obvious that mobile, wireless technologies would fundamentally change the way in which we pay and transact and, today, it is obvious that the way in which social, consumer technologies will fundamentally change the way in which we pay and transact over the next ten years.

The future of the payments terminal

I’m speaking at a conference on the future of payments today for one of the world’s largest suppliers of payments terminals.

They asked me my views on the future of the point-of-sale, and I said that it would disappear.

Not a good position to take when you’re the keynote speaker at a conference for a payments terminal supplier.

So we debated the point and here’s the reason why payments terminals might have a long-term future.

Mobile payments explode in India

I was jut updating a presentation about mobile payments.

The presentation was from May 2011 and talked extensively about Google Wallet, Square and M-PESA.

One year on and the presentation still talks about the same things but I am shocked and amazed about how much things have changed in just eighteen months.

So how should a bank protect itself from hacktivists and cybercrime?

The real challenge for the banking system is how to protect their firewalls from attack by hacktivists, goverworms and cybercriminals and, conversely, how to deliver easy access to online banking for their clients and customers.

It’s a real dilemma.

On the one hand, everyone wants mobile access to his or her account balances and to make payments; on the other, no-one wants to consider the issue of haemorrhaging losses if they don’t protect their account properly.

Do you believe in NFC?

I ‘ve been talking about contactless for years now  - I remember talking about the Octopus card system about ten years ago after it launched in Hong Kong in 1997 – and still find it surprising how invisible it is.

Sure it got some coverage at the Olympics but some, like Forrester, reckon that NFC mobile payments will not reach critical mass until 2020.  Others, like me, say that this technology is already past its sell-by date, although I am open to persuasion.

In order to persuade me, Barclaycard sent me their latest research promoting the fact that everyone in Britain knows what contactless is all about.

The impact of mobile: bigger than you think?

This week’s TIME Magazine has a spread all about how mobile technologies are changing our world.

There are stories of how it’s changing elections, charity, privacy and more, as well as getting rid of our wallets of course.

The wallet piece is pretty weak to be honest, with the story of one of their journo’s spending a week cashless in America with just Google Wallet and Square.  The conclusion is that Square is pretty cool, Wallet breaks down too often, whilst being cashless is fine in principle but in practice meant that he had to borrow money from his wife for beers at the ballgame.