Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below.
- Gates Foundation, USAID Give Prize for Haiti Help
A $2.5 million prize to get Haitians buying, selling and banking with their mobile phones didn’t push the winner into the mobile banking business, but the Gates Foundation’s incentive did make the company move much faster. “It was a real gruesome race,” Digicel CEO Maarten Boute after the Bill & Melinda Gates Foundation announced Monday that his company had won the money for being first to establish cell phone banking in Haiti in less than six months. The Haitian mobile banking prize was announced in June as a way to push the marketplace toward change. Besides death and destruction, the Jan. 12, 2010, earthquake in Haiti also devastated the country’s financial system.
- How One Bank Is Counterattacking the Zeus Threat
Tompkins Financial Corp. of Ithaca, N.Y., is one of many financial institutions that have been attacked by the sophisticated malware known as Zeus. Now it’s fighting back — with sticks. To protect the funds of its largest commercial clients, which use its services to transfer up to $18 million at a time, Tompkins offered them a free USB stick. The device creates a secure connection to the bank, encrypting all instructions as they are typed. The technology appears to have successfully blocked Zeus attacks, and the $3 billion-asset Tompkins now plans to try to sell the sticks to smaller business customers. Tompkins is taking an unusual approach to a common problem. Zeus has caused hundreds of millions of dollars of fraud losses since it was identified.
- How Much Better Will 2011 Be Than 2010 — and for Whom?
Don’t you just cringe when the answer to a question like the one in the headline starts “it depends?” For many industry players, both institutions and bank technology firms, the answer will depend on their circumstances — just like every year, when you think about it. But then there are other interested parties, like investors, who are also interested in some answers, such as: -How much will U.S. bank and credit union IT spending increase? -Which solution categories are going to grow the fastest? -Which companies are going to do better than their peers and why? In conversations with institutions, bank technology vendors, and investors, intractable differences in their objectives lead to a range of possible answers to the headline question. The rest of the column explores what 2011 will look like for these three groups.
- Connect With a Web 2.0 Audience
The one area for improvement for the majority of banks is social media. Most financial institutions that are doing something with social media are simply dabbling with it. They’re not tying it to a business goal — they’re looking at social media as the business goal. That’s a mistake. Social media is probably the largest opportunity today. Unfortunately, banks don’t understand or don’t know how to approach social media. The entire gamut of social media activities still is misunderstood or ignored. The banks that don’t invest in social media are missing two big opportunities: first, the ability to listen — knowing what’s going on and what customers and the market are saying; and second, the ability to actively engage customers.
- Get Ready for new U.S. bank IT Security Guidance from the FFIEC
Gartner’s Avivah Litan participated in a meeting of the FFIEC IT Subcommittee the week of January 10th. Like the rest of the FFIEC, this subcommittee has key representatives from all of the agencies regulating U.S. banks and credit unions – the Federal Reserve Board, FDIC, OCC, NCUA, and OTS, and was the body that issued the last FFIEC guidance on secure electronic banking “Authentication in an Internet Banking Environment” in 2005. According to Litan, “not all financial institutions have kept up with the spirit of the 2005 guidance. The threats and associated risk levels have clearly moved ahead of the safeguards many banks and credit unions, and their service providers have in place today.
- Your Mobile Is Now Your Bank
Of the 600,000 villages in India, only approximately 50,000 have access to formal finance however on average, 6 out of 10 Indians have mobile connections. Will the mobile revolution that has enabled million of Indians to talk at rock-bottom prices now help usher in a banking revolution? The first step was taken Wednesday when two of India’s largest banks entered into tie-ups with two of the country’s largest mobile operators to offer banking and financial services over mobile phones. The ventures, if successful, may help banking reach millions who still don’t have bank accounts but have access to mobile telephones. They’re also probably one of the fastest reactions to a central bank move to foster a more democratic financial system.