FINANCIAL ORGANISATIONS NEED TO PROTECT CUSTOMERS FROM THEMSELVES
With so much sophisticated security technology about, you might think that credit card details couldn’t be safer. Customers know how to use chip and pin, Verified by Visa and 3D Secure. PCI DSS regulations ensure that businesses are controlled and checked to the last PAN number and encryption and multi-factor authentication help to keep the fraudsters out. Yet there is a significant hole in the system and if we don’t fix it, the price will be paid not by the customer, but by business.
The problem is people. To be more specific, people on the telephone, who forget that they may be overheard as they read out their name, address and card details without so much as a glance over their shoulder. This is particularly true in spaces where people feel comfortable, such as open plan offices, where we are used to holding telephone conversations in front of colleagues.
Purchasing financial products over the telephone is understandably still extremely popular, despite the growth in online payments. We get to talk to a human being rather than a machine, we can ask about those bits of small print (automatic renewals, cancellation periods, etc) that are so hard to find online, and we can feel confident that we know what we are paying for. We also have a named person to refer to if it all goes wrong.
The problems only arise when it comes to paying. If we are switched to an automated system, we are back in the man-machine scenario. One error and we’re stuck with no alternative but to hang up and start again; so most of us prefer to talk to someone as we pay. We have generally established a relationship with the agent during the sales process and want to keep that support as we carry out the delicate task of communicating card numbers. Unfortunately this means that we frequently forget all that we’ve been told about privacy and card details and say them loudly and clearly, wishing to be helpful, but oblivious to the world around us.
There is also a psychological explanation for this behaviour. Most of us will be familiar with the phenomenon of the pedestrian talking on a mobile phone, weaving across the pavement as they walk. And anyone who regularly takes public transport at rush-hour is likely to know a great deal more about his or her fellow passengers’ private lives than is necessary. This is because we become single-minded once we are on the end of the phone. We shut out everything else and imagine that we are in a private conversation, away from the rest of the world.
According to scientists, this is due to our limitations with regard to “cognitive load”; humans are not terribly good at multi-tasking despite what we, or others, may think! Aside from the fact that talking out loud in public is scientifically proven to be extremely annoying to other people, it is a real security issue. Only last week I overheard a man shouting his card details into his mobile phone as we both stood in the queue at a coffee shop. Evidently it was an urgent booking and a bad line, so he had to repeat some of the information several times, apparently unaware that he was sharing it with at least 12 other people. I can still remember his 3-digit security code.
Saying card details out loud also carries a risk at the other end of the line, where it is received by the merchant or the call centre agent. According to Strathclyde University, 22% of staff in contact centres believe that they work with people they consider ‘suspicious’ and that 11% had allowed customers to access their account without asking any security details. So, there too, you’re highly sensitive personal information can be unsecured and potentially subject to fraudsters. The measures necessary to secure data at this point can be draconian, from surveillance cameras to the “clean rooms,” in which agents are deprived of all objects that might be used to record numbers, from pen and paper to a mobile phone. In truth, none of these methods is truly secure. To be absolutely certain that details are safe, the customer must not be asked to speak their card details out loud.
Until recently, the only technologies that avoided the need for the customer to speak aloud their details were entirely automated, obliging customers to interact with a machine while they entered their details. Any problems that occurred during the process meant abandoning the call and starting again. Now, however, technology is available that means the customer can key in his or her own card details while continuing the conversation with the call centre agent. There is no need to read out the numbers, but the agent is on hand to resolve problems should they occur.
Any organisation accepting card payments today is not only responsible for the cost and effort of securing credit card information, but also runs the risk of terrible, irreversible damage to its reputation if anything goes wrong. Not to mention the significant fines that will be imposed if a security breach takes place. You should make it a priority to invest in technology that allows you to maintain the reassuring voice contact with the customer, but which does not require them to say any personal details out loud.
In the meantime, make sure that your customers are aware of the following points. These are pure common sense, but could potentially save us all both time and money.
- If you are asked to read your card numbers aloud, think about who might be listening. If you aren’t sure, go somewhere that you can’t be overheard.
- If you must speak in public, assume that someone will be listening. If you need to read out numbers, cover your mouth. You are likely to speak clearly when communicating numbers so will be easy to lip read.
- The person on the other end of the phone is a stranger. Make sure you know their name before you tell them all your credit card information.
- If you are paying someone who telephoned you, be cautious – check the number and call them back.
- Before you read out your card numbers, ask the customer service agent how these will be protected.
- Ask if the organisation is fully compliant with Payment Card Industry (PCI) regulations? Ask the question or check on the website!
- Diligently check your statements and look out for malicious transactions, and report any immediately to your card issuer.
Tim Critchley is the CEO of Semafone, which provides secure voice payment software to contact centres. The Secured by Semafone Trustmark is used by Semafone’s clients and partners as a sign to customers that their card data is secure.
Bank of England’s Haldane says inflation “tiger” is prowling
By Andy Bruce and David Milliken
LONDON (Reuters) – Bank of England Chief Economist Andy Haldane warned on Friday that an inflationary “tiger” had woken up and could prove difficult to tame as the economy recovers from the COVID-19 pandemic, potentially requiring the BoE to take action.
In a clear break from other members of the Monetary Policy Committee (MPC) who are more relaxed about the outlook for consumer prices, Haldane called inflation a “tiger (that) has been stirred by the extraordinary events and policy actions of the past 12 months”.
“People are right to caution about the risks of central banks acting too conservatively by tightening policy prematurely,” Haldane said in a speech published online. “But, for me, the greater risk at present is of central bank complacency allowing the inflationary (big) cat out of the bag.”
Haldane’s comments prompted British government bond prices to fall to their lowest level in almost a year and sterling to rise as he warned that investors may not be adequately positioned for the risk of higher inflation or BoE rates.
“There is a tangible risk inflation proves more difficult to tame, requiring monetary policymakers to act more assertively than is currently priced into financial markets,” Haldane said.
He pointed to the BoE’s latest estimate of slack in Britain’s economy, which was much smaller and likely to be less persistent than after the 2008 financial crisis, leaving less room for the economy to grow before generating price pressures.
Haldane also cited a glut of savings built by businesses and households during the pandemic that could be unleashed in the form of higher spending, as well as the government’s extensive fiscal response to the pandemic and other factors.
Disinflationary forces could return if risks from COVID-19 or other sources proved more persistent than expected, he said.
But in Haldane’s judgement, inflation risked overshooting the BoE’s 2% target for a sustained period – in contrast to its official forecasts published early this month that showed only a very small overshoot in 2022 and early 2023.
Haldane’s comments put him at the most hawkish end among the nine members of the MPC.
Deputy Governor Dave Ramsden on Friday said risks to UK inflation were broadly balanced.
“I see inflation expectations – whatever measure you look at – well anchored,” Ramsden said following a speech given online, echoing comments from fellow deputy governor Ben Broadbent on Wednesday.
(Editing by Larry King and John Stonestreet)
Bitcoin slumps 6%, heads for worst week since March
By Ritvik Carvalho
LONDON (Reuters) – Bitcoin fell over 6% on Friday to its lowest in two weeks as a rout in global bond markets sent yields flying and sparked a sell-off in riskier assets.
The world’s biggest cryptocurrency slumped as low as $44,451 before recovering most of its losses. It was last trading down 1.2% at $46,525, on course for a drop of almost 20% this week, which would be its heaviest weekly loss since March last year.
The sell-off echoed that in equity markets, where European stocks tumbled as much as 1.5%, with concerns over lofty valuations also hammering demand. Asian stocks fell by the most in nine months.
“When flight to safety mode is on, it is the riskier investments that get pulled first,” Denis Vinokourov of London-based cryptocurrency exchange BeQuant wrote in a note.
Bitcoin has risen about 60% from the start of the year, hitting an all-time high of $58,354 this month as mainstream companies such as Tesla Inc and Mastercard Inc embraced cryptocurrencies.
Its stunning gains in recent months have led to concerns from investment banks over sky-high valuations and calls from governments and financial regulators for tighter regulation.
(Reporting by Ritvik Carvalho; additional reporting by Tom Wilson; editing by Dhara Ranasinghe, Karin Strohecker, William Maclean)
Britain sets out blueprint to keep fintech ‘crown’ after Brexit
By Huw Jones
LONDON (Reuters) – Brexit, COVID-19 and overseas competition are challenging fintech’s future, and Britain should act to stay competitive for the sector, a government-backed review said on Friday.
Britain’s departure from the European Union has cut the sector’s access to the world’s biggest single market, making the UK less attractive for fintechs wanting to expand cross-border.
The review headed by Ron Kalifa, former CEO of payments fintech Worldpay, sets out a “strategy and delivery model” that includes a new billion pound start-up fund and fast-tracking work visas for hiring the best talent globally.
“It’s about underpinning financial services and our place in the world, and bringing innovation into mainstream banking,” Kalifa told Reuters.
Britain has a 10% share of the global fintech market, generating 11 billion pounds ($15.6 billion) in revenue.
“This review will make an important contribution to our plan to retain the UK’s fintech crown,” finance minister Rishi Sunak said, adding the government will respond in due course.
The review said Brexit, heavy investment in fintech by Australia, Canada and Singapore, and the need to be nimbler as COVID-19 accelerates digitalisation of finance all mean the sector’s future in Britain is not assured.
Britain increasingly needs to represent itself as a strong fintech scale-up destination as well as one for start-ups, it added.
The review recommends more flexible listing rules for fintechs to catch up with New York.
“Leaving the EU and access to the single market going away is a big deal, so the UK has to do something significant to make fintechs stay here,” said Kay Swinburne, vice chair of financial services at consultants KPMG and a contributor to the review.
The review seeks to join the dots on fintech policy across government departments and regulators, and marshal private sector efforts under a new Centre for Finance, Innovation and Technology (CFIT).
“There is no framework but bits of individual policies, and nowhere does it come together,” said Rachel Kent, a lawyer at Hogan Lovells and contributor to the review.
Britain pioneered “sandboxes” to allow fintechs to test products on real consumers under supervision, and the review says regulators should move to the next stage and set up “scale-boxes” to help fintechs navigate red tape to grow.
“It’s a question of knowing who to call when there’s a problem,” Swinburne said.
($1 = 0.7064 pounds)
(Reporting by Huw Jones; editing by Hugh Lawson and Jason Neely)
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