A skirmish over the future of U.S. fintech is underway in the new U.S. Senate, with two Democratic senators this week saying a new federal charter governing the industry “could weaken consumer protections, limit competition and threaten financial stability.”
Ahead of what could be some big changes for the CFPB during the incoming Trump administration, the agency has announced new appointments to several leadership positions.
Artificial intelligence (AI) interfaces and chatbots could be revolutionary for financial institutions – but only if they strike the right balance between human and machine interaction.
The CFPB’s emphasis on fee disclosures and marketing practices was highlighted in a major way this week, as the bureau levied a $23.1 million enforcement action against credit reporting agencies Equifax and TransUnion over allegedly misstating the cost and usefulness of their products and “luring” customers into recurring payments. Although targeted at credit bureaus, the enforcement action offers key takeaways for payments providers shaping their own compliance efforts to stay out of the CFPB’s cross hairs, according to industry observers.
The U.K. Competition and Markets Authority (CMA) is worried that Mastercard’s billion-dollar deal to acquire VocaLink could hinder competition, and the CMA is giving the two companies until Jan. 11 to address a concern or face an “in-depth investigation,” according to the authority.
Establishing if someone is who they say they are in today’s virtual world is a major headache for banks and fintechs, thanks to the strict regulations they operate under and the difficulty in providing non-physical, verifiable forms of identity.
Complaints about prepaid products dropped 59 percent from September through November in 2016 compared with the same period the previous year, according to the latest CFPB Monthly Complaint Report. That drop, to 183 complaints on average per month, represents the largest percentage decrease in complaints among all the products tracked by the federal agency, and comes as the CFPB in its new report focuses on debt collection.
Look back at some of the most interesting and thought-provoking opinion pieces on all matters fintech published by Banking Technology in 2016.
From a technology perspective, the family home has decided to rush headlong into the 21st century. When our home was built we thought we were being extremely progressive in having a Panasonic “4 lines, 10 extensions, PBX” installed with separate lines for my wife and myself and then a line for business and yes, one dedicated line for the fax machine. Cool… but fast forward a decade and a half and with the home up for sale, we were politely advised to take out all those handsets and close the door on the PBX.
A proposed plan by the European Commission (EC) to combat terrorism financing would require customs declarations for prepaid cards sent in postal parcels or freight shipments into or out of the EU. Currently, cards sent or shipped across EU borders are not covered by the standard customs declaration requirement. Coming in the wake of a truck attack in Berlin that left 12 people dead and dozens wounded, the proposal is part of the EC’s action plan against terrorist financing, an initiative unveiled in February 2016, designed to help EU nations cut off the supply of funding for terrorist activity.
While digital payments providers have enjoyed significant boosts in transaction volume—some as much as triple-digits—since the government banned two popular currency notes, the uptick in digital payments also has led to online traffic jams and fraud, according to several news outlets.
Building emotional bonds with customers is a strategic imperative, and why the change programmes currently being undertaken at banks need to recognise the hidden lessons of Uber.
A plethora of mobile wallets and payment apps are expected to flood the market in the next two years, and the sheer number of choices are likely to “confuse” many consumers, who ultimately might look to their financial institutions to be their mobile wallet provider, according to a recent report by Javelin Strategy & Research.
I am blind as a bat, and there are times when it’s an advantage to be blind, or deaf, or even dumb to certain insults, certain situations, certain obstacles. Clearly it’s a double-edged sword because being deaf, dumb, and blind to impediments, pitfalls, and danger zones is just asking for disaster.
Five months after Department of Education rules regulating financial aid disbursements went into effect, the CFPB released a report on Dec. 14 claiming that marketing deals between banks and colleges often promote financial products that lead to high overdraft and other fees. Meanwhile, industry observers note that overdraft—when permitted—requires students to opt-in and there are other ways to avoid fees.
A New York State law setting fee and expiration date restrictions on “gift certificates” could spell big trouble for providers of several types of open-loop prepaid products in the state, and may even render certain types of products impossible to offer in New York, according to industry experts.
President Obama signed a health care bill into law on Dec. 13 after the U.S. Senate—despite its lame-duck status—overwhelmingly approved legislation that’s been called the largest health care reform since the Affordable Care Act.
Regulations requiring two-factor authentication could force the industry to move away from frictionless payments experiences like Uber and one-click checkout.
On Dec. 1, retailers involved in long-standing litigation against Visa and Mastercard asked the Supreme Court to reconsider a landmark $7.25 billion settlement that was rejected by the Second Circuit Court of Appeals earlier this year.
Home Depot has scored a victory in the legal fight that followed the retail chain’s 2014 data breach. The retailer’s investors cannot sue its board of directors via a shareholder derivative suit, ruled a federal judge in Georgia, the home state of the chain.
The European Banking Authority working with the European Central Bank has released a consultation paper on guidelines for payment service providers to follow in the event of security breaches. Among the suggested mandates is notifying authorities of an incident within two hours from the moment the breach is detected—that’s significantly faster than the breach notification requirements set to go into force next year, which mandate notice within 72 hours and applies to some U.S. companies.
The IRS reports that there’s been a nearly 50 percent drop in fraudulent returns, and there has been significant progress in stopping fraudulent returns before refunds are ever paid, due in part to new information provided by industry and state partners.
Given the pace of change and innovation underway in traditional industries it would take a brave person to predict how the finance industry will look in five years’ time, however I don’t believe high street banks will disappear and be replaced by online blockchain alternatives, the regulatory hurdles are just too high.
Our new series of thrillers – produced and directed by CustomerXPs and Banking Technology – narrate the tales of the fight between the forces of good (the Clari5 analytics and anti-fraud software) and the forces of evil. Based on real events and guaranteed to keep you on the edge of your seat!
Prepaid will continue to be a key ingredient in bringing 2 billion people worldwide into the financial mainstream. But over the past five years, we’ve learned that public-private partnerships are mission-critical. And we’ve still got work to do.
The market is evolving from being dazzled by the flashy lights of innovation to buckling down and implementing plans to address the opportunities ahead. Emphasis is shifting from talking about the cool stuff to driving adoption of the most actionable innovations. Are you investing in the right trends?
As consumers start using mobile to pay each other, it’s only natural that they’ll expect businesses to pay them that way, too. For those of us who serve corporate clients, enabling electronic payments to those mobile-centric consumers is a significant opportunity.
Having achieved status as a “mainstream” financial services product, prepaid cards now must prove themselves indispensable to cardholders’ lives. To take prepaid to the next level, prepaid providers need to connect with and engage cardholders in ways that position the product as vital to their financial wellbeing.
While you might think younger millennials are more likely to make a purchase from their mobile devices, more likely to snap a selfie and more likely to want to use selfies for ID verification, in fact a new survey found just the opposite.
Having spent many years in the technology wilderness, has HPE finally determined the future of NonStop? Thinking about the more than 40 years that have passed since we were first introduced to fault tolerant Tandem Computers, particularly considering what transpired following the acquisition of Tandem Computers by Compaq and then Compaq by HPE, did we anticipate that there would be an expansion of the NonStop product portfolio? And to see not just one, but two distinct families of NonStop systems and with the possibility of further options featuring NonStop just around the corner? It is surprising to many that all this time hasn’t taken the sheen away from any of the magic that is NonStop!
The U.K.’s Payments Systems Regulator (PSR) plans a sea change to the U.K. payments system after determining an inability for new payments infrastructure projects to compete as alternatives to the three interbank payment systems, Bacs, Faster Payments Service (FPS) and LINK.
Cybercriminals have stolen about $31 million from Russian Central Bank accounts, according to a Reuters report. The hackers broke into bank accounts after faking a client’s credentials, a bank spokesman said at a briefing, disclosing few other details. In a separate instance, Russia had recently warned about a plot by foreign countries to wage cyberattacks on its financial institutions.
Reading the technology news these days you could be forgiven for thinking that some seismic revolution is occurring almost every day! Stories abound of Airbnb, Facebook, Uber, Alibaba taking over the world and demolishing our traditional business models – ushering in a new age where the “interface is king”. But are they revolutionary and game changing disruptors? I am not so sure…
Fintech companies seeking charters would have to fulfill multiple requirements under the proposal, including performing core banking services.
As with any long-term human relationship, our relationship with banks is complicated. There’s a sense of co-dependence, transgressions that shake our trust, the occasional fleeting thought of escape. How to reignite the magic spark between a bank and its customer?
Incentives that banks offer employees to increase sales can pose “significant” risks to consumers, the CFPB warned this week in a new bulletin following record fines assessed to Wells Fargo for opening millions of unauthorized consumer accounts.
Apple has scored a big win in Australia for the company’s mobile wallet. That country’s competition regulator has denied a request by big local banks to collectively negotiate over the introduction of Apple Pay there.
Who do you trust with your money? Well, if the latest talk in personal finance is anything to go by, we’ll soon be placing our trust in an altogether less warm-blooded beast. Move over mankind: the robots are coming. But not so fast!
The European Banking Authority in January is set to release its online transaction rules in response to the revised Payment Services Directive, or PSD2, which calls for “strong customer authentication” for online payments. Visa also opposes the measure.
The ATM is one of the most recognised and trusted pieces of technology on the high-street, but as it too has come under pressure from the wave of digitalisation sweeping almost every aspect of our everyday lives. The humble ATM is no longer a single physical touch point…
