Analysis

Merchant Lawsuit over Fraud Liability Shift Moves Forward

A federal judge has ruled that a lawsuit alleging payment networks colluded over fraud liability can go forward, denying the networks’ motion to dismiss the lawsuit. Filed in March 2016 in U.S. District Court for the Northern District of California by two Florida retailers, the lawsuit accuses American Express, Discover, Mastercard and Visa of engaging in “a conspiracy” when shifting liability for transaction fraud to merchants that failed to upgrade their POS systems to accept EMV chip technology by Oct. 1, 2015.

U.S. Reps Urge CFPB to Rethink Short-Term Lending Rules

A bipartisan group of federal lawmakers has asked the CFPB to reconsider some of the agency’s proposed restrictions on short-term lenders, arguing that such loans provide much-needed access to credit for those who have few other alternatives.

Can banking “catch” the Pokémon bug?

Pokémon Go has taken the globe by storm, capturing the hearts and minds of adults and children alike in their endeavours to “catch ‘em all” in the latest version of the popular computer game, which builds cutting edge augmented reality (AR) technology into its original gameplay. What can banks learn from it?

SCOTUS to Hear Credit Card Surcharge Case

The U.S. Supreme Court on Sept. 29 agreed to hear arguments from a group of New York merchants who want the right to impose surcharges on purchases made with credit cards. The outcome of the case could have an effect on laws in 10 states that restrict such surcharges.

Meeting hackers head-on

Online hacks are rapidly replacing the bank heists of old. With banks increasingly at risk, early threat detection is imperative. Eleonore Fournier-Tombs* explains how banks can protect themselves. In a climactic conclusion to an insider threat story that has been developing since 2015, Morgan Stanley agreed to pay a fine of $1 million to the […]

Financial technology: gathering speed

Financial regulators globally are putting pressure on financial institutions to move to real-time solutions in both retail and wholesale banking. Advances in technology and a desire by regulators to reduce risks in the financial system are driving the trend. Discussions about real time technology and solutions span the banking world at this year’s Sibos. While […]

Sibos 2016 & innovation: crossing the next frontier

There has been a huge amount of hype at this year’s Sibos about financial technology and its role in financial services. Devie Mohan* looks at the technologies that will help financial institutions cross the next frontier of innovation. The world of financial technology has seen a clear and significant shift in the past year – […]

Artificial intelligence: mind games

Artificial intelligence (AI) isn’t new but the rise of mobile and cloud computing, combined with big data and cheap computing power, is driving a resurgence. Convergent technologies mean AI is finding new uses in financial services.

Digitising the transaction banking world

In the aftermath of the financial crisis, transaction banking was considered a reliable source of income for global banking groups. But nearly a decade on, multiple factors are putting pressure on transaction banks’ revenues. This year’s World Payments Report suggests banks increase their investments in digital solutions to offer more compelling propositions to their corporate treasury clients.

Digital security requires a complex hybrid approach

In early June, Reuters disclosed that the US Federal Reserve had detected more that 50 cyber security breaches from 2011 through 2015. It should be noted that this may only represent a small fraction of the Fed’s total exposure during this period. It turns out that, unlike the Washington-based Board of Governors, the 12 privately […]

Christmas in New York: New State Law Restricts Gift Card Fees, Lengthens Expiration Date

t’s been a bad month for the payments industry in the state of New York. Gov. Andrew Cuomo signed a law Sept. 26 imposing restrictions on gift cards and gift certificates sold in the state. The new law comes just weeks after the New York Department of Labor (DOL) issued a final rule regulating the use of payroll cards. The gift card law goes into effect Dec. 25, 2016, as that is 90 days from the governor’s signing.

American Express Wins Appeal in Anti-Steering Case

American Express scored a major legal victory on Sept. 26 when a federal appeals court ruled that Amex had the right to restrict retailers. Specifically, Amex had wanted to prevent Amex-accepting merchants from offering shoppers financial incentives to use other card brands. In its ruling, the U.S Court of Appeals for the Second Circuit New York tossed out a lower court’s decision that said language barring such “steering” in American Express’ contracts with its merchant clients violated anti-trust laws.

Research energises the modernisation journey in Canada

Canada is one of many countries around the world striving to make payments fast, frictionless and data rich. The country’s approach to payments system modernisation is rooted in collaboration and research, with an eye to the international experience and a deep dive into the needs and capabilities of the Canadian market, including an investigation into blockchain and cryptocurrencies.

The path to perfect harmony

The nitty-gritty work has been done with IS0 20022, but new technology and regulations mean that institutions will have to standardise their workflows as well.

Blockchain: mind the gap

Blockchain technology is far from mature and there is a danger that regulation could crush innovation and competition. Professor Michael Mainelli and Simon Mills argue that a more measured approach to the technology would be to develop voluntary standards.

Energising correspondent banking

Reports of the death of correspondent banking are highly exaggerated. But the business model is changing and Swift hopes its Global Payments Innovation Initiative will improve cross-border payments. Swift is often accused of moving slowly, yet the Global Payments Innovation Initiative (GPII) gives lie to that. First discussed at Sibos 2015 in Singapore, Swift will […]

Banks and fintechs: the time is now to join forces

Digital innovation has the potential to radically transform the payments arena, through solutions that enhance end-to-end speed, efficiency, transparency, security and cost effectiveness. Anthony Brady, global head of business strategy and market solutions, treasury services at BNY Mellon, discusses how banks are being spurred to drive forward new technology initiatives – with collaboration at their core – to deliver an enriched global real-time payments experience to clients.

Clearing and settlement: a moving target

Momentum is building behind the T2S securities settlement system as it gains critical mass. While expected benefits and outcomes have not fully materialised, the unexpected benefits have captured the imagination of the post-trade industry.

Interview: Martin Coen, CEO of Dovetail

Payments software vendor Dovetail is one of the very few independent fintech beacons in the industry, having not fallen into the hands of a large tech conglomerate. The company pioneered the concept of a “payment services hub” – before analysts coined the term – and has maintained double digit growth over the last decade. So what’s next? Banking Technology talks to Martin Coen, Dovetail’s CEO.

Doing regtech right

Regulation is likely to be a hot topic at Sibos, both inside and outside of conference sessions. We assesses the main regulatory themes for this year’s event.

Security: survival of the fittest

The threat of cybercrime shows no sign of diminishing any time soon, but to what extent can market infrastructures and financial institutions protect themselves against hacking attacks?

When the ground is moving, banks need to shift to a smarter platform

The tectonic plates of the banking sector are shifting faster than ever. High street banks are under stress from the massive competitive threats generated by their leaner, technology-driven fintech rivals and challenger banks. These fintech companies are finding success simply by being more efficient or by taking advantage of emerging and highly effective technologies such […]

Viewpoint: What Tipping Means For EMV

As the U.S. payments industry marks the first year of the EMV rollout, questions abound about the spread and use of the technology. Among the concerns is how restaurants will handle tipping.

Viewpoint: Why Fintechs Want More Regulation

As regulators increase their focus on financial technology firms, some of those companies are eager to welcome more rules, which could lead to less expensive and complicated businesses. Much depends on one fintech’s application before U.S. regulators for a national charter.

Does the bank branch still matter?

The number of branches operated by major banking groups in the UK has halved over the last 20 years. In fact, Britain’s banks closed more than 600 branches across the UK between April 2015 and April 2016. This is hardly surprising as more and more people move online, often mobile-first, to complete most of their […]

Technology is galloping ahead. Time for IT to play catch up.

The technology era has come with its new aesthetic, economic models and philosophy about the meaning of value. It is not going away. And the people who thought economics was theirs to define and aesthetic and values were “hobbies” have a lot of catching up to do. That catching up is your hottest technology trend of 2017.

Mastercard Litigation Could Provide Example for Future U.K. Class Actions

One of the U.K.’s first-ever class action lawsuits is targeting Mastercard, providing a potential preview of future class actions in the country. The case stems from a 2007 finding by the European Union (EU) Commission that the network’s interchange fees were too high, in breach of EU rules.

Computer Scientist Cracks Security of Phone Model Used in San Bernardino Shooting

A computer scientist appears to have broken Apple’s iPhone security by simply opening the phone and replacing the main memory chip with a cloned version. As long as the researcher kept switching the chips, it allowed an unlimited number of password attempts. The researcher said that the technique, which is known and referred to as Nand mirroring, cracked a 4-digit code in 40 hours and a 6-digit code in “hundreds of hours.”

New Cybersecurity Rules on the Way in New York

The New York State Department of Financial Services (NYDFS) has proposed new regulations designed to protect against the rising threat of cybercrime targeting financial systems and consumer data. New York Governor Andrew Cuomo unveiled the plan, which would require banks, insurance companies and other financial services providers regulated by the NYDFS to establish a cybersecurity plan that meets standards set by the agency.

Manhattan Judge Latest to Rule that Bitcoin Is Money

In a Sept. 19 ruling in a case over a cyberattacks against JPMorgan Chase and others, a federal judge became the latest to declare that bitcoin qualifies as legal tender. Manhattan District Court Judge Alison Nathan rejected an attempt by Anthony Murgio to dismiss charges that the bitcoin exchange he operated was an unlicensed money transmitting business.

Regulators Put Marketplace Lenders on Notice

Federal regulators are planning to tighten the screws on marketplace lenders over concerns about consumer protections and reckless lending. At a marketplace lending policy summit, U.S. Comptroller of the Currency Thomas Curry told lenders to expect a new regulatory framework this fall that would support “responsible innovation.”

Artificial intelligence set to transform regulatory compliance

Most people have heard of the headline-making achievements in artificial intelligence (AI); systems winning quiz shows and beating world champions in chess. These are the poster children of the discipline but there is a quieter revolution taking in shape in other areas, including regulatory compliance in financial services. Writing for Banking Technology, Mike MacDonagh, London-based […]

Opening up may be good for you: making PSD II access to accounts work in practice

A new open ecosystem – where banks can enable third parties to develop mobile banking apps and cash management solutions for them – has many advantages over the previous closed world, where everybody tried to do everything themselves. The key to successful “opening up” is to provide a standard interface, such as a smart phone to a bank account, that is accessible to third parties whilst retaining the necessary control.

Harmonising high-value payments

While it sounds like something for which you’d need to visit a doctor, Swift’s HVPS+ will likely be a talking point during the payments industry panels at this month’s Sibos. Announced in mid-August, the high-value payments system task force is an important component of Swift’s ISO 20022 harmonisation initiative. A number of central banks, market infrastructures and banks from around the world are members of the task force.

Taking a nap isn’t a crime, but falling asleep at the switch could cause a disaster

“Give me a solid foundation to stand on, and I will move the Earth.” I am still looking for cement trucks that are pouring foundations – virtual or otherwise – for the new normal of banking, but I can’t find them. Bankers are really confused as to how to succeed in their own business. But like Johnny Lee, I might have been lookin’ in all the wrong places.

Mastercard Hit with U.K. Interchange Damage Claim

Mastercard faces a £14 billion claim ($18.6 billion) in the U.K. over interchange fees in a case filed with the country’s Competition Appeal Tribunal. The claim comes two years after the European Union labeled the interchange charged by the payment card network as unfair. European interchange caps went into effect in December of 2015.

FFEIC Updates its Information Security Guides

The Federal Financial Institutions Examination Council has revised the “Information Security” booklet of the agency’s FFIEC Information Technology Examination Handbook.

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