By Chris Stephens, Head of Banking Solutions at Callsign
Originally the Confirmation of Payee (CoP) scheme was scheduled to be introduced in July this year. And yet, the system designed to guarantee that names match on transactions in order to reduce fraud now isn’t expected to be officially launched until March next year. As a result of the delay many people are apprehensive that, until CoP is in place, consumers will be exposed to fraudulent scams.
And their concerns are justified. Right now, banks don’t actually have a means of verifying the name on the account that the money is being transferred to. CoP will encourage banks to implement the correct checks to offer end users of payment systems greater reassurance that they will be sending their money to the right person or organisation. Last year, bank transfer fraud soared to over £354m, as scammers managed to dupe victims into permitting payments into their account instead of the correct one. CoP is fundamentally a service for name checking bank accounts to help prevent the misdirection of payments as a result of human error, which inevitably creeps into payments administration.
Aware of the concerns, the Payment Systems Regulator has confirmed that HSBC, Lloyds, Royal Bank of Scotland, Barclays, Nationwide Building Society and Santander (who together control approximately 90 per cent of bank transfers) are obligated to have their CoP schemes fully functioning before the deadline next year.
The Payment Systems Regulator states that the primary reason for the postponement of CoP was due to an “unachievable” implementation deadline.While some have been vocal regarding what the impact of the delay could be for consumers, as a result of the lack of protection against fraud, there are murmurs within the industry that the introduction of CoP might not have the desired impact.
There is no disputing that CoP will bring with it some benefits. Its introduction will absolutely help tackle the burgeoning problem of bank transfer scams, although it will only serve as one piece of the bigger prevention puzzle. As regulation evolves, fraudsters’ techniques follow suit using a wide range of clever techniques to achieve their goals, therefore financial institutions must echo their tactics by employing a range of security measures. In order to overcome the restrictions imposed by CoP, fraudsters won’t be too challenged to simply create a new account in the victim’s name as a way of reassuring the victim that any money being moved is being directed into a genuine bank account.
Growth of consumer complacency is an additional worry as some consumers might perceive CoP as an added ‘safety net’ when banking online. Furthermore, while the new regulation will be a huge help in the fight against authorised push payment (APP) fraud, it could simultaneously cause a surge in more complex fraud, meaning we will see an overall reduction in the number of scams taking place, however their value will be far greater.
There is also the requirement for all banks to be on board with CoP for the measures to have any sort of reliability. For CoP to work properly, there needs to be a unified approach from all banks at the same time, i.e. CoP banks have to depend on what security measures their peers have enforced. If a fraudster is able to work out which banks don’t have CoP up and running, they immediately know that the requirement for the customer and the bank account details to match up isn’t in place. The outcome of this is that the last bank to use CoP will be the weakest link. Worryingly, it’s not just the customers of the last bank to implement CoP that will be sitting ducks. It’s a customer from any bank that is sending money to that bank. Implementing CoP involves both doing the check on outbound payments as well as providing the account names to other banks for inbound payments.
Irrespective of the delay, there is an urgent need for banks to implement dynamic authentication journeys now, founded on threat and risk intelligence. By doing so they will have the means to question why an individual is carrying out a payment and flag any risk of fraud – this is a particularly effective way of stopping APP fraud. However, for this system to work successfully requires ongoing management and regular updates to the system, which can be quite labour intensive. What’s more, the logic that underpins these types of management systems can be another stumbling block. In the absence of employees with the right skills, continuous policy management and monitoring can become overwhelming.
So, what else can banks be doing to mitigate against potential fraud? For them, data is crucial. By making the most of all the information and intelligence they can possibly have access to, they will have a far greater chance of protecting their customers. By entering this data into a strong and dynamic policy manager, which can adapt and be flexible in response to the evolution of financial regulation, banks will have tighter security and it will be easier for them to meet the CoP requirements when they are imposed. Rather than staying focussed on single point elements, banks must view how they manage security far more holistically. Using this approach, they will improve their chances of defeating the fraudsters and will simultaneously facilitate the seamless, friction-free service consumers expect from their digital experiences.
Staying connected: keeping the numbers moving in the finance industry
By Robert Gibson-Bolton, Enterprise Manager, NetMotion
2020 will certainly be hard to forget. Amongst the many changes we have come to live with, for many of us it has been adapting to a new style of working. Whatever your take on it is, remote working, working from home or even agile working, one thing remains clear – for many of us, this could be the new-normal for the foreseeable future. The professional services sector is no different. For example, many finance practices around the world are now allowing staff to work from home part of the time. In addition, a recent KPMG report found that half of the UK’s financial services workforce want to work from home after COVID-19.
Will this therefore become the de facto working practice for the finance industry too? We can’t say for sure, but this agile approach to working has certainly caused a major rethink for many firms. And as they evolve and adapt to meet the demands of a different way of working, firms need to ensure that their workforce can seamlessly interact with each other and their clients – this is key if they want to continue to deliver exceptional client service. Whilst financial services organisations everywhere are busy adopting innovative new technologies to better reflect the ‘work from anywhere environment’, they need to ensure secure access to resources and strive towards enhancing the end user experience. Success will be replicating the office working experience at home or wherever else they may be.
It’s all well and good for a firm to boast about the ability of their staff to work successfully from home, but how do they also establish that their people are just as productive as they were before? Whilst the IT department will have to grapple with security and compliance issues that arise from agile and remote working, they must also ensure that their people can connect securely, without eschewing user experience. And it needs to be completely seamless, without compromising the service level provided to clients.
Why all the fuss?
Which brings us nicely to persistent connectivity. Persistent connectivity effectively allows you to do more. How frustrating for the user when connectivity drops, or when the device that they are working on can’t find a network to connect to (or if the device switches between different networks). When connectivity drops, and re-connection is required then there is that small period where the user is not connected at all. And the user might have to re-authenticate or log into their VPN again (most VPNs are rubbish when they lose connectivity). All of these different scenarios ultimately disrupt the user experience – persistent connectivity provides the flexibility to overcome these challenges. When you enjoy consistent connectivity, you are making sure that the technology works as it was designed to work, allowing staff to rely on optimum user experience, anytime, anywhere – in effect, supplying them with that office-like experience, wherever they are. Just think about how many hours might be spent on a train, in a hotel or even on a client site. Consistent connectivity is key here – consistent in any of these locations.
Connectivity will be a fundamental component for successful remote working as firms try to meet the demands of an increasingly mobile workforce. Ultimately, they need encrypted and reliable connections that enable them to quickly and easily reach business applications and services. Working in a disconnected environment can lead to frustrated workers, hardly fitting given all the new remote working policies in place.
Getting the user experience spot-on
When you fine-tune connection performance so that essential business applications run reliably across networks, you are essentially talking about traffic optimization. Mobile traffic optimization ensures that applications, resources and connections are tuned for weak and intermittent network coverage and can roam between wireless networks as conditions and availability change. When connections aren’t performing well, applications that are crucial for job performance can experience packet loss, jitter or latency that can make working on the hoof extremely tricky. Compared to wired networks, wireless networks operate under highly variable conditions, including such factors as terrain or congested mobile towers. When you optimise the flow of traffic, you are helping to manage packet loss. Effectively, packet losses are data loss, which happens very regularly when you’re on the move or transitioning between different networks. Applications that require a lot of data tend to become fairly unusable when you hit even minor packet loss, which can be a common occurrence for many on residential broadband or on local Wi-Fi. conversely, NetMotion can enable critical applications to work and prevent disruptions at over 50% packet loss – in this way, employees can rely on technology performing well in situations and locations where it simply could not before. That is incredibly powerful for firms.
The finance industry is facing many of the same challenges presented to other industries. It is a question of balancing the requirement for more sophisticated ways to ensure secure access to resources with the need to enhance the end user experience (key team members in particular). For finance firms everywhere, adopting the right technologies will ensure that their people can enjoy a ‘work-from-anywhere’ environment.
Hong Kong’s Cathay Pacific warns of capacity cuts, higher cash burn
(Reuters) – Cathay Pacific Airways Ltd on Monday warned passenger capacity could be cut by about 60% and monthly cash burn may rise if Hong Kong installs new measures that require flight crew to quarantine for two weeks.
Hong Kong’s flagship carrier said the expected move will increase cash burn by about HK$300 million ($38.70 million) to HK$400 million per month, on top of current HK$1 billion to HK$1.5 billion levels.
Hong Kong is set to require flight crew entering the Asian financial hub for more than two hours to quarantine in a hotel for two weeks, the South China Morning Post reported last week, citing sources.
“The new measure will have a significant impact on our ability to service our passenger and cargo markets,” Cathay said in a statement, adding that expected curbs will also reduce its cargo capacity by 25%.
The airline, in an internal memo seen by Reuters, requested for volunteers among its crew who could fly for three weeks, followed by two weeks of quarantine and 14 days free of duty, adding it will be a temporary measure and not all its flight will require such an operation.
“We continue to engage with key stakeholders in the Hong Kong Government,” the memo said.
The government did not immediately respond to a request for comment.
Separately, a company spokeswoman said the airline could not detail the impact on vaccine transport specifically in terms of cargo shipments.
The aviation industry has been hit hard by the COVID-19 pandemic as many countries imposed travel restrictions to contain its spread.
In December, Cathay’s passenger numbers fell by 98.7% compared to a year earlier, though cargo carriage was down by a smaller 32.3%.
($1 = 7.7512 Hong Kong dollars)
(Reporting by Shriya Ramakrishnan in Bengaluru; Additional reporting by Jamie Freed in Sydney and Twinnie Siu in Hong Kong; Editing by Bernard Orr and Arun Koyyur)
Travel stocks pull FTSE 100 lower as virus risks weigh
By Shashank Nayar
(Reuters) – London’s FTSE 100 fell on Monday, with travel stocks leading the declines, as rising coronavirus infections and extended lockdowns raised worries about the pace of economic growth, while fashion retailers Boohoo and ASOS gained on merger deals.
The British government quietly extended lockdown laws to give councils the power to close pubs, restaurants, shops and public spaces until July 17, the Telegraph reported on Saturday.
The blue-chip FTSE 100 index dipped 0.1%, with travel and energy stocks falling the most, while the mid-cap index rose 0.1%.
“Stock markets are crawling between optimism around the rollout of vaccines and worries that a jump in virus infections and fresh local lockdowns could further affect recovery prospects,” said David Madden, an analyst at CMC Markets.
Britain has detected 77 cases of the South African variant of COVID-19, the health minister said on Sunday while urging people to strictly follow lockdown rules as the best precaution against the country’s own potentially more deadly variant.
Prime Minister Boris Johnson had earlier warned that the government could not consider easing lockdown restrictions with infection rates at their current high levels and until it is confident that the vaccination programme is working.
The FTSE 100 shed 14.3% in value last year, its worst performance since a 31% plunge in 2008 and underperforming its European peers by a wide margin, as pandemic-driven lockdowns battered the economy.
Online fashion retailers Boohoo and ASOS surged 4.8% and 5.9%, each. Boohoo bought the Debenhams brand, while ASOS was in talks to buy the key brands of Philip Green’s collapsed Arcadia group.
Recruiter SThree Plc gained 0.9% after its profit, which nearly halved, still managed to beat market expectations and the company said it had resumed dividends.
(Reporting by Shashank Nayar in Bengaluru; editing by Uttaresh.V)
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