Compliance will kill the bank

Chris Skinner

I was talking with a banker at a recent conference, and was surprised by his attitude.

The five key levers for radical transformation in financial services for digital success

Insights on Business

If Charles Darwin were still alive, I wonder what he would think about the evolution of banks? Once again, banks are being forced to evolve or die. And financial institutions that fail or refuse to become cognitive and digital will get left behind. It’s survival of the fittest at its finest.

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Bank Innovation Launches Public Telegram Channel

Bank Innovation

EXCLUSIVE – Interested in the latest trends in payments, digital banking, blockchain technology, API, security, big data and all the other hot topics in the fintech space? Come join Bank Innovation’s Telegram Group.

The curious case of rising cash demand in a digital age

Mobile Payments Today

Cash demand has risen right along with payment card transactions during the past decade-and-a-half. What's up with that? We went looking for an answer in "Payments are a-changin' but cash still rules," a publication from the Bank for International Settlements

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2018 Data Breaches: The List No One Wanted To Make


So far this year (and there’s still one more day), Verizon reported that there have been 2,216 confirmed data breaches across 65 countries. Even more disturbing, perhaps, is that 68 percent of those breaches took months for the breached companies to discover.

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Rebeca Romero Rainey: Community service is at our industry’s heart

Independent Banker

“Community service is a timeless tradition that’s core to every community bank.”. By Rebeca Romero Rainey, President and CEO, ICBA. As I work on this column, I’m in Santa Fe, preparing to speak at the Independent Community Bankers Association of New Mexico’s annual convention. I was chairman of this great organization 10 years ago, and the theme of that convention was “Independent Community Banks—A Timeless Tradition.”

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Gartner: you’re better than this

Chris Skinner

I got this headline today: Most banks will be made irrelevant by 2030 – Gartner Within 12 years time, 80% of financial firms will either go out of business or be rendered irrelevant by new competition, changing customer behaviour and advancements in technology, according to forecasts by Gartner. And it … The post Gartner: you’re better than this appeared first on Chris Skinner's blog. Digital Bank Fintech Grid Opinion

Financial Institutions Aren’t Prepared for the Digital Revolution

Chris Skinner

I recently did an interview with my American friend Jim Marous over on The Financial Brand. It’s a good interview so I thought I would post my answers here. Feel free to comment!

How AI will change banking

Chris Skinner

The World Economic Forum has been conducting research over the last year around how AI (Artificial Intelligence) will change banking that was published last week. Here’s the lowdown: Artificial intelligence is fundamentally changing the physics of financial services.

Are you pulling my blockchain?

Chris Skinner

I just gave a presentation on blockchain. I haven’t been asked to make a specific presentation on blockchain for over a year, so it meant dusting off some rusty notes and slides and thinking about where we are today.

Banks and Telcos? Two become one!

Chris Skinner

Twenty years ago, I worked on a strategy for the future of banking. My conclusion was that banks would merge with telecommunications firms and become hybrid institutions. Twenty years later, it hasn’t happened. But will it?

Celebrating International Women’s Day with more than 100 years of IBM empowering women

Insights on Business

“If the bringing of women – half the human race – into the center of historical inquiry poses a formidable challenge to historical scholarship, it also offers sustaining energy and a source of strength.” ” – Dr. Gerda Lerner.

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Funding for Startups in FIS-Backed Fintech Accelerator Reaches $38 Million

Bank Innovation

EXCLUSIVE – If the future of banking is partnering with fintech startups, then finding the most innovative and efficient fintechs becomes crucial for banks’ success. This demand has led to the rise of third-party run accelerator programs. One such program is Little Rock, Ark.-based

Convenience will be at the center of how retailers answer Amazon Go

Mobile Payments Today

Go isn't necessarily a new concept, but Amazon's take on cashierless shopping brings with it questions about the future of retail, and changes the way we as consumers buy goods

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Amex Touts Success In Ripple Cross-Border Payments Pilot


In a renewed show of support for blockchain technology , American Express General Manager of Corporate Payments Carlos Carriedo has suggested that its pilot tests with partner Ripple to enable real-time cross-border corporate payments have been a success.

Clash of clans … or new bank versus old bank (Fidor, BPCE) 

Chris Skinner

I was talking with some friends at the most innovative bank in Europe that has stopped getting on my radar for the past few years. I first blogged about them back in 2012, when I met the founder at an event. That bank is called Fidor.

From sandbox to sandcastle

Chris Skinner

Another lively discussion followed my meeting with the FinTech communities in Asia. It was interesting as we had a chat about all aspects of what was happening in South-East Asia, and the overwhelming message that came back to me was that the regulatory sandboxes had become sandcastles.

Account opening? Oh, 1-2-3. Easy as A-B-C. Not!

Chris Skinner

There’s nothing like a true story to bring a point home, so here’s my latest one. I’m starting a new venture. It’s a philanthropic thing, thing to do with banking, but because we are seeking sponsorship, we need to open a bank account.

What is digital transformation?

Chris Skinner

We talk about platform companies, and many use the famous TechCrunch quote to illustrate this: Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory.

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Run the bank or change the bank

Chris Skinner

I was surprised to see that JPMorgan Chase is now hiring people as bankers and, as a mandatory part of their induction programme, they are taught to code.

Five digital transformation lessons

Chris Skinner

In a final write-up on leadership, there was a fantastic presentation about the lessons DNB had learned in trying to make digital change happen.

How Lehmans collapse started the FinTech fire

Chris Skinner

It’s interesting that the Global Financial Crisis (GFC) sparked by Lehman Brothers collapse in September 2008 sparked the FinTech revolution, according to some.

How AI is redefining financial crimes detection technologies

Insights on Business

There is a quote in the most recent Star Wars movie, “The Last Jedi” that gets me thinking about innovation; ‘We are the spark, that will light the fire” The Star Wars movies, books, games and mythos is a masterfully woven tapestry telling the tale of a little guy triumphing over an established, organized and technologically advanced pan galactic empire. This is accomplished through the disruption of established norms and with a lot of luck. While some would argue the Empire did nothing wrong I think we can all agree that if you staunchly refuse to change how you go about business you are enticing challengers to step up. Technological innovation is a reality that is impacting every facet of society. No area of human endeavour from retail, to transportation, to banking has not seen some form of disruptive technology replace the long-established modus operandi. Financial crime detection is primed for a similar renaissance to drag it from antiquated costly approaches to embrace a new era of cognitive intelligence and automation. People and organizations with a focus in financial crimes have been looking for transformative approaches for the last decade. The technologies that have the potential to radicalize the approaches to solve these problems have really only begun to emerge in the last two years. The key technologies at play are artificial intelligence techniques and enterprise scaled automation that impact every layer of the financial crime detection process from data acquisition to operations. Real world experimentation by the biggest banks in the world has begun to assess the applicability and scalability of these technologies. Some banks have already proven the value of these solutions, but maturity is necessary in order to win over the regulatory sector and prove out the power of artificial intelligence to a sector that is hesitant to embrace it due to fear of regulatory upheaval. The banks need this machine-driven revolution to succeed in order to battle rising regulatory costs globally. The estimated global cost of compliance is $320bn and the penalties for not meeting regulatory obligations continues to skyrocket impacting share value and the banking sectors bottom line. Part of the issue is being able to affect change by removing cognitive biases from critical financing crime decision processes. Cognitive biases like the Anchoring Effect, Confirmation Bias, Ingroup Bias and Planning Fallacy to name a few, are key traps financial crime operational teams fall into. Analysts end up forming cognitive biases based on their individual experiences over the course of their careers and subconsciously apply them in their day-to-day activities. Only through the utilization of technology can a bank avoid these biases by taking into account the experiences of the broader enterprise and team and ensuring the right decisions are made. Regulatory enforcement actions are on the rise. Focus on corporate entities and understanding the intricacies has become burdensome as the complexity of payments infrastructure continues to evolve and due to the burgeoning use of technology by criminal elements for illicit intent. As the regulatory and enforcement environment continues to be embattled by continued use of enforcement actions, it is becoming clear that governments will focus on individuals to be more impactful in deterrence mechanisms. As a result, the need for better and more cohesive technologies around entity resolution will become a compulsory capability to avoid punitive measures by governments cracking down on banks that do not have critical visibility on whom they are banking and ultimate beneficial owners associated with their book of business. Returning to our analogy we can understand that artificial intelligence technology is the spark which will light a fire to build a new wave of technological disruptors across the financial crime sector. We can already look at the marketplace and see evidence of how these disruptors are challenging the established norms of detecting illicit activity in complex financial data patterns. The regulators are taking notice and have already begun to invest themselves in capturing a snapshot of the state of the art and to understand what provisions will need to be made in national legislation to allow this revolution to take hold. Unlike the movies it took years for the empire to fall within the literature that builds out the Star Wars universe. We don’t have years to play with as the cyber-criminals of today are a smarter and more technologically savvy breed then we’ve previously encountered. In order to combat them we need to bring this innovation to the forefront of our business plans and execute against it. Only then will we be able to use the power of the machine to better our society in terms tackling the burdensome yoke of financial crime. Learn more how IBM is driving innovation in Financial Crimes surveillance technologies. AI Featured Carousel Featured Homepage RegTech AML cognitive FinCrimes FinTech IBM RegTech Innovations innovation KYC

BofA Eliminates Free Checking Accounts, Now Charging $12 Fee to Low-Balance Customers

Bank Innovation

EXCLUSIVE- Bank of America has quietly shuttered its free checking account, now requiring customers to keep a certain minimum balance in their accounts, or set up direct deposit of at least $250, to avoid a $12 monthly fee, the Wall Street Journal reported yesterday.

Blockchain 101: Mobile payments

Mobile Payments Today

Let's take a look at the what blockchain is, and how it can help transform the mobile payments industry

What An Alleged NSA Hack Reveals About Payments Cybersecurity


Not to ruin your holiday spirit, but let’s start this story with the cold and brutal truth: One of the largest risks that payments and commerce operators face in 2019 is being called to account by government officials, regulators or media about a failure to secure their organizations from cyberattacks. The past year brought a significantly increased focus on the security and privacy of online data, with not only consumers paying more attention to the issue but (much more importantly) lawmakers holding big tech executives accountable in political hearings. Sure, much of that is political theater, but interesting theater often sparks change – one reason that many executives from companies that drive the digital economy are trying to get ahead of the privacy and security issue. In any case, it’s hard to deny that the winds are shifting, given the May enactment of the General Data Protection Regulation , or GDPR, in Europe, and the move to set similar laws in the U.S. and other places. “When someone is called to the carpet by Congress, that can affect everyone,” said Ron Gula, a former white-hat hacker for the U.S. National Security Agency who, along with his wife, Cyndi, now runs Gula Tech Adventures , a venture capital firm that focuses on digital security. As well, if lawmakers and regulators are taking aim at Google and Facebook, that indicates that smaller members of the digital food chain are fair game, too, if they suffer a breach that catches the public’s attention. PYMNTS recently caught up with Gula to learn more about reports of hackers stealing NSA’s own hacking tools, and to learn more about how payments and commerce players should focus their own cybersecurity efforts in 2019. Upon first glance, the picture is pretty dim. But if you look closer, as Gula did, you can certainly find some bright spots and reason for optimism – even with the knowledge that hackers are well-organized, work on a global scale and are becoming ever more sophisticated. Hackers reportedly have stolen tools from the NSA that enables the agency (which certain estimates have said is, or recently has been, up to three times the size of the Central Intelligence Agency) to use digital back doors to access computers in search of signals intelligence. Now, “hundreds of thousands of computers are unpatched and vulnerable,” according to one recent report. It added that the stolen technology has been used so far for ransomware and cryptocurrency mining attacks, with the criminals behind the hack “using the leaked tools to create an even bigger malicious proxy network.”. Gula said the reports are just that — reports. And he cautioned that the NSA, like every other spy agency in the history of humanity, engages in deception (read into that what you will). And while the tools alleged to have been stolen are certainly powerful, it would seem foolish for the thieves to try to sell them on the Dark Web , a term that refers to digital black marketplaces where thieves fence their stolen goods, including consumer and payment data. “If you or I were evil cybervillians, I don’t think our plans would be to go on the Dark Web and tell people about” the stolen NSA tools, Gula said. After all, that’s a surefire way to be caught, given the prominence of the alleged theft and the digital know-how and power of the alleged victims. The larger use of the alleged NSA hacking theft is that all kinds of information is already circulating on the Dark Web, including data from pretty much every big financial institution and credit bureau information for virtually all U.S. adults (for starters). “The bigger you are, the more likely you are there,” Gula told PYMNTS. The good news, in his view, is that organizations with large roles in the digital economy are in fact sharing information about security and breaches. The bad news — and the other contrary lesson of the alleged NSA theft — is that “you don’t need a cyberweapon to break into most companies today,” Gula said. “You just need two or three insiders.”. That, of course, provides an argument for stronger vetting of employees, but even honest people fall prey to temptation. That said, a strong cybersecurity program — one that keeps up with the technologies and tactics used by criminals — goes a long way. “If you don’t have a good cyberhygiene program, it makes it easier for people to come at you.”. In years past, such tools — which could often trace their origins to military or other pricey federal government programs — might have seemed out of reach for many companies not operating at the highest levels of payments and commerce. That is still true, at least to an extent, according to new PYMNTS research. A new report entitled “ The AI Gap: Perception Versus Reality In Payments And Banking Services ” found that larger banks are more often drawn to advanced machine learning technologies, along with other divides between smaller and large financial institutions when it comes to fraud prevention. No matter the path and funding, however, doing nothing — or even doing the bare minimum — is clearly not an option, especially in 2019. The new year is certain to bring more lawmaker and regulator attention to online data and security, with more hearings to come, Gula said. “My main concern is that you have quick fixes,” he said. For instance, an effort to encrypt data will fail if the data collection process is full of holes that hackers can exploit. “You have to have a comprehensive approach to cybersecurity.”. And that stands as sound advice for the new year. Security & Fraud cyberattacks Cybercrime Cybersecurity data breach Featured News fraud Hackers News privacy Regulators Security

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What banks can learn from British Airways

Chris Skinner

Something happened to me this week that made me think of big bank friends. It’s a different industry and one that, last month, I said we could learn from:the airlines. So, here’s a sobering, learning lesson.

The digital divide: inclusion must not create exclusion

Chris Skinner

I have one slight concern as we go cashless, having experienced it myself. You cannot go cashless if it does not include everyone. I had this experience in China.

What’s your one move?

Chris Skinner

I talk about 1,000s of start-up companies doing one thing brilliantly well, and was looking for an anecdote that might help me talk about this better … and found one.

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When does digitalisation stop?

Chris Skinner

Another day and another discussion about digital transformation with a group of bankers. As the conversation progressed, several of the attendees touched on a subject in different ways but the core of what they were asking was this: when will we know we’ve done digital?

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