A federal #judge has ruled on a New York #lawsuit set against the Office of the Comptroller of the Currency’s decision to begin offering #fintech charters, stating that the suit was ‘premature’ as the OCC has yet to receive #applications for these fintech charters. Judge Naomi Reice Buchwald noted that the complaints listed in the […]
Bank Innovation
Smart #card #Edge has bought the remaining assets of #Plastc, which folded in April. Yes, smart cards are still around — sort of. The idea behind many of them was that multiple cards could be loaded by mobile app, and deployed as the situation demanded, based on rewards or merchant offers. The most famous smart card, […]
Bank Innovation
I have recently moved to Dublin for a six-month secondment, and have the pleasure of leading our small but growing Accenture Research team based at The Dock, Accenture’s state-of-the-art R&D hub.
This is an amazing space to work in, where that terrible phrase “the art of the possible” isn’t so cringingly hackneyed, and actually means something. In a room close to where I am sitting writing this, there is a team creating software for a space “cube” that will be launched into orbit to gather data for a project (I could tell you what that involved, but then it would automatically self-destruct etc., etc). In this environment, automation could almost feel old hat.
Not so intelligent automation though. This is definitely in the realm of “anything is possible”. Intelligent automation learns as it works. It isn’t just doing what it is told; it is constantly adapting to new situations. Imagine a #robo-advisor that remembers when a customer started to sound agitated during a call, and adapts the number or style of questions they ask on their next interaction, to try to improve the experience? Hyper-personalisation of services is an expectation by which customers will increasingly rank their banking experience, as they become used to having the choices available to them through Open Banking. And intelligent automation is one of the core tools available in a bank’s armoury to get them to this level of service, without (ahem) breaking the bank.
#Banks are in the perfect position to ride this wave of personalised services—if they can adapt to a platform that funnels a customer towards these slicker services. And thanks to intelligent automation, this need not come at a hyper-cost to the business, with fully automated approvals that adapt to a users’ preferences and usage of third parties. Even the potential for fraud could be reduced as a result of IA learning a customer’s patterns of use and being able to spot anomalies and potentially fraudulent transactions.
Aside #from the pure efficiency benefits available from IA, this #technology could also provide recommendations to customers for products and services available to them based on their current circumstances and financial needs, such as an overdraft facility if they are low on funds. Thanks to IA, the bank knows that based on previous spending patterns, the consumer will likely need £x amount to spend until their next bank credit payment is due.
This intelligent automation of services is heavily reliant on data, the last but by no means least part of the AI trinity: People x #Process x Data. And there are numerous ways in which banks are custodians of vast amounts of customer information, which is ripe for a reinvented approach. And they don’t even need to send a cube out into space to achieve this.
The post Artificial intelligence: Unlocking value from process appeared first on Accenture Banking Blog.
EXCLUSIVE—While the U.S. is #unlikely to ban #token #sales outright, those looking to raise funds with an ICO (or Initial Coin Offering) #should make sure they’re paying close attention to risk. This is according to Joshua Ashley Klayman, co-head of the #blockchain and smart contract group, Morrison & Foerster. “It doesn’t look like [regulators] are […]
Bank Innovation
HPE, the enterprise spinout from HP, will #offer RS #Corda #blockchain #tech on its Non-Stop #computing #platform.
Financial Technology
If it feels like #innovation has been one of the hot themes of 2017 in the financial world, it’s because its true. A new report shows that despite many companies struggling to maintain a culture of innovation, financial services companies are among the top three industries getting it right. One of the factors helping them […]
Bank Innovation
EXCLUSIVE—Should #banks #acquire or #partner with smaller, more agile fintechs? Well, that depends if the end goal of the bank is to further financial #innovation, Derrick Walton, EVP of global financial networks for #Hyperwallet, told Bank Innovation. “There’s a difference in culture, in what the goals tend to be,” Walton said, who is responsible for […]
Bank Innovation
Issuer fraud rates have remained fairly constant across payment card products following the Europay, Mastercard and Visa (EMV) liability shift. Yet, issuers’ net fraud losses for credit and signature debit have decreased and the long-predicted migration from counterfeit fraud to Card-Not-Present (CNP) fraud is becoming visible, according to Accenture’s annual survey of US major card issuers.
Survey results¹ show slight changes in reported payment card fraud (“Gross Fraud”) from year-end 2016 to first quarter 2017:
This is the first year in which the issuer study did not show a material rise in Gross Fraud rates across all transaction types.
Despite modest changes in total reported Gross Fraud, issuers experienced a decrease in Net Fraud Losses on credit and signature debit cards due to higher recovery rates. The largest change was in recovery rates for counterfeit fraud, which increased to nearly 55 percent post-EMV, up from single-digit recovery rates in prior years. While average Net Fraud Losses for credit cards declined by 1.5 bps and average Net Fraud Losses for signature debit declined by 1.3 bps, Net Fraud Losses remained steady for PIN/ATM debit (Figure 2). We expect the recovery rates for PIN/ATM to increase significantly following the Visa ATM EMV liability shift in October 2017; some Mastercard debit issuers have already seen a significant increase in recoveries following that network’s ATM liability shift in October 2016.
Net Fraud Losses for credit and signature debit are significantly lower in this sample than in 2015, when average credit Net Fraud Losses were above 13 bps and signature debit Net Fraud Losses averaged nearly 7 bps (recognizing that the survey participant list varies from study to study). Average PIN debit Net Fraud Losses are more than a basis point higher than reported Net Fraud Losses in 2015. This increase is likely due to more frequent ATM and Automated Fuel Dispenser (AFD) skimming incidents and the delayed Visa EMV liability shift for ATM transactions.
Across the sample, most issuers reported that EMV migration efforts were almost complete for credit (for example, +95 percent of active cards were EMV-enabled); half of the issuers reported the same level of adoption for debit. Only one credit issuer indicated it was below 90 percent EMV enablement for credit, while three issuers reported lower than 75 percent completion of debit migration.
As issuers have migrated to EMV, #fraudsters have moved away from the card-present environment, and CNP fraud has become the most common type of fraud. CNP fraud (with an average case size of ~US$ 175) accounted for 55 percent of Gross Credit Card Fraud reported in Q1 2017, up from 49 percent in 2016 and 39 percent in 2015. Counterfeit fraud (with an average case size of US$ 200) constituted only 23 percent, down from 29 percent in 2016 and 50 percent in 2015. Meanwhile, Lost/Stolen and Application fraud—with average case sizes of US$ 2,000 and US$ 5,700—have increased to 10 percent and 9 percent, respectively, a significant increase over prior periods.
In a post-EMV world, US issuers will continue to see fraud shift to areas that are more difficult to detect. Application channels and remote/digital servicing channels are prime targets for sophisticated fraudsters using ID theft and synthetic IDs to hit issuers for high-dollar losses on Account Take Over and Fraud Application cases. While issuer investment continues to focus on the core “blocking and tackling” of fraud management (such as alert engines, back-office efficiency and reporting and so forth), all issuers must be aware of these evolving threats to the card business.
Beyond EMV, card issuers must stay vigilant around their defense measures. They can continue to tap new technologies—from geolocation data and acoustic analyses to biometrics—to more tightly secure payments data and other assets, and outpace sophisticated fraud.
The post Fraudsters favor card-not-present appeared first on Accenture Banking Blog.
EXCLUSIVE – #Financial #crime detecting platform QuantaVerse has added a new AI-based #service to allow its financial institutions and banking clients better detect fraud and other crimes through audit investigations, as these crimes continue to be a major concern for #banks and non-banks alike. The new CAE (Chief Audit Executive) Checkup service unveiled today uses […]
Bank Innovation
EXCLUSIVE – Nearly a third of Americans have low #FICO scores, and this can mean difficulties in securing loans to pay for higher education. It’s easy to see how this issue contributes to an ever-widening gap between rich and poor. #Student #lending company #Climb #Credit is taking on this challenge by offering loans that do […]
Bank Innovation
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