And the winners are...

Sore heads and tired eyes at FStech today, in the aftermath of our 2012 Awards.

The event, now into its twelfth year, was held last night at the Lancaster London Hotel. Lloyds Banking Group, RBS, Hastings Direct and Barclaycard/Orange were among the winners. You can find the complete list of winners here.

Congratulations to all those who picked up a gong. Thanks to our sponsors, judges and everyone who came along. It was a really enjoyable night. Now, must go home and sleep...

2012 FStech Awards draw near

It's almost that time again...The winners of this year's FStech Awards will be announced tomorrow night.

The event, now into its twelfth year, will be held at the Lancaster London Hotel. This is my first Awards, having joined FStech from sister title, Retail Systems, in June 2011. I feel confident in saying that the judging panel have come up with the strongest list of winners since the Awards were founded 12 years ago. There will be a full house (the events team have just told me that this year's table sales are the highest yet). And the rather spiffing Alun Cochrane will be hosting. So it's all set up to be a great night.

Look forward to seeing many of you there!

All we are saying is give cash a chance

An email arrives from Bank Machine's PR peeps..."You may well have seen that the UK Payments Council announced the results of their latest quarterly statistical report," says the PR lady. "Although trying desperately to make it a contactless story, the real story which they carefully buried were the stats showing that last year showed a record high in ATM withdrawals, beating the mark set in 2008."

It's true that the Payments Council press release went big on the fact that Britons sent two-thirds more money through Faster Payments in the last three months of 2011 compared to the previous year, with the ATM stats thrown in almost as an afterthought. So in the interest of fairness...The busiest single second in the LINK network’s 25 year history was recorded at 13:03:57 on Friday 28 October, with 482 transactions made. Overall, we used cash machines 2.87 billion times during the year, taking out £191 billion, and the overwhelming majority of these transactions were free. Fewer than one in 30 ATM withdrawals were at a pay-to-use machine in the last three months of 2011, the lowest percentage for seven years.   

And comment from Ron Delnevo, MD at Bank Machine: "The level of ATM usage vividly demonstrates once again that the British public continue to place their trust in cash. Neither flashy hyping of unproven gimmicks like "contactless" cards, nor attempts to limit access to ATMs, have prevented UK citizens from continuing to exercise their right to choose cash as their number one payment method."

According to the Payments Council, the underlying reasons for the record year are "the low levels of withdrawals a year earlier during the period of heavy snowfall, the increase in the number of free-to-use machines, coupled with an increase in the number of machines dispensing £5 notes, and a possible slight increase in demand for cash by people who prefer to use cash as a budgeting tool to control their spending."

There you go, everyone's happy.

Would you pick the iBank?

I'm an Apple admirer but not sure I would. As a user of iTunes I guess you could say I am banking with the tech giant. Sort of. But at the same time I'm a bit of a stick in the mud when it comes to my bank and not sure if I would be willing to transfer everything over to them. I've been a NatWest customer for 25 years or so and during that time have only once seriously considered switching to a rival. I was a victim of card fraud and was not impressed by NatWest's shall we say casual attitude to the situation. But that's for another blog post...

There are two reasons for posing the above question. Firstly, Apple's staggering cash reserves, sparking talk of their next moves. And secondly, new research on the potential of Apple to break into the banking sector. The survey was carried out by marketing and research consultancy KAE, in conjunction with Toluna, a specialist in online polls, surveys and opinions. Toluna’s research panel community of four million consumers, collected data from over 5,000 respondents, across the US and UK. 

The press release landed in my inbox with the subject heading 'Banking with Apple could pose serious challenge to high street.' Wowser, I thought, this sounds interesting! But turns out the research revealed that currently just one in ten people would consider banking with Apple. Of those who are already customers, a mere 43 per cent would switch to the company for their day-to-day banking needs. Not exactly the sort of thing which justifies excitable prose. 

Certainly, Apple has a good base from which to launch an assault on the banking sector: an impressive track record in terms of  cross-selling products, a strong retail presence and an affluent, hugely loyal customer base, to name but three strengths. But, as things stand, they haven't thrown their hat in the ring and, even if they had, consumers are wary of making the leap from traditional banks. And rightly so. We're dealing with the great unknown here. Your money and your music are two completely different things.   

The aforementioned press release contained the comment: "it wouldn't take long for Apple to become one of the most profitable consumer banks in recent times." Really? Or how about: "the boldness of the next Apple move will inspire and terrify in equal measure." Please.

There's a serious discussion to be had re. tech giants like Apple, Amazon and Facebook posing a threat to the monopoly enjoyed by the banks. Spurious press releases might make for cheap headlines but ultimately they undermine the debate.

They would say that, wouldn't they?

I've got that Groundhog Day feeling. The banks make another round of  job cuts and the unions label them uncaring swines.

This time around, Unite has condemned 'brutal' job cuts at Lloyds Banking Group and RBS. The gruesome twosome are axing 1,300 and 464 jobs respectively. At Lloyds, 300 jobs are being sent abroad from IT whilst another 100 are being cut.

Have to say that the union has a point here. It doesn't look good when taxpayer supported institutions lay off staff at the lower end of their pay scales, particularly when it comes so soon after the massive bonuses handed out to their top dogs.

Depressing stuff.

Cards on the table

A few thoughts on the UK credit card, debit card and online banking fraud figures released this week by The UK Cards Association. 

Fraud losses on UK debit and credit cards fell seven per cent in 2011 to £341 million, an 11-year low. This has understandably made a lot of headlines in the last couple of days. But little attention has been paid to the sizeable increase in cheque and telephone banking losses last year.

The reduction in card fraud can be attributed to such initiatives as MasterCard SecureCode, Verified by Visa and American Express SafeKey; continued upgrading of the chips on UK cards; and increased roll-out of chip and PIN abroad. All of which have made the fraudster's life that little bit more difficult and sent him/her off to other areas. Hence the increase in cheque and telephone banking losses.

Online banking fraud losses dropped 24 per cent from £46.6 million in 2010, to £35.4 million in 2011. Factors contributing to this fall include: customers better protecting their own computers with up-to-date anti-virus software; banks’ use of sophisticated fraud detection systems; and banks providing customers with additional software and hand-held devices to log on to internet banking. The press release I received notes that this decrease has occurred despite a continuing rise in phishing attacks and attacks involving malware. Phishing attacks were up 80 per cent from 2010.

The rise of phishing shouldn't come as a surprise. Whilst we should welcome the fall in online banking fraud, we should also remember the increasing sophistication of cybercriminals. For many of them, it's not about what was taken in 2011 or indeed what they can get their hands on this year. They're playing the long game, stockpiling with an eye on two or three years from now.

Preparing for MiFID II

Guest blog post by Tony Virdi, VP and Head of Banking and Financial Services Practice for the UK and Ireland, Cognizant

Since the Markets in Financial Instruments Directive (MiFID) was enforced back in November 2007, the economic landscape has changed dramatically. Regulators and the G20 are now demanding better execution, greater transparency, risk management and regulation of more opaque markets. To meet these demands, the European Commission (EC) released MiFID II in October 2011.

MiFID II will involve the addition of previously unregulated organised trading facilities to the MiFID framework, new safeguards for algorithmic and high-frequency trading activity, additional supervision of derivatives markets, and more stringent portfolio management requirements. Moreover it will introduce measures to protect investors. 

While not yet passed as legislation, MIFID II will require significant change for financial services firms in terms of both internal infrastructure and day-today business processes. The EC’s own estimates for one-off compliance costs for MiFID range between €512 million – €732 million with on-going costs of between €312 million – €586 million.

In addition to the financial burden, companies need to ensure they are meeting quickly changing regulations. IT plays an essential role in allowing this to happen smoothly. Businesses must think carefully about how they work with their technology teams when implementing these adjustments across the enterprise. 

Regardless of any anticipated changes, the focus needs to be on enhancing the processes and systems for electronic trading, risk management, transparency and transaction reporting (across more asset classes), compliance and investor protection. Another consideration is around data consolidation and dissemination. The reporting, publication and consolidation of trade data needs to be addressed due to problems with its formatting, cost, quality and reliability, with many issues highlighted by the European Commission.

The sell-side firms in their capacity as liquidity providers arguably have one of the biggest challenges to overcome. They will need to reassess their service strategies in attracting buy-side clients and adapt their systems quickly in order to adhere to the transparency and reporting regulations. Also, since MiFID II’s focus is on breaking the vertical integration to increase competition, sell-side firms can no longer hope to sell exclusive, fully integrated investment services to clients, which could significantly change their business model.

The full impact of MiFID II can only be ascertained once the legislation is fully in place. Forward-thinking firms will use this opportunity to upgrade their IT infrastructure and ensure a flexible approach to take advantage of the market benefits MiFID II could bring.