I have written earlier about problems in banking security and credit card security issues. But what about some other banking issues?
Banking is Broken: A Financial Revolution is Coming article tells that a trio of startups are seeking to change the way we manage our money, by focusing on the customers traditional banks are ignoring. Banks have been slow to embrace new technology.
Finland’s Holvi, Sweden’s iZettle and Estonias TransferWise all took the stage at the Slush startup conference in Helsinki last week, and while they all offer completely different services, they are share a similar goal – to empower the customers that they believe traditional banks are ignoring.
Holvi offers customers an alternative type of current account, integrating bookkeeping and money management in a clean, simple online interface. TransferWise, founded by the first ever Skype employee Taavet Hinrikus, is looking to bring the essence of Skype’s ethos of offering cut rate international phone calls to the money exchange market. Speaking at Slush last week de Geer said that iZettle was “effectively about democratising card payments.”
Keep in mind that Holvi, TransferWise and iZettle are just three of the hundreds of companies looking to cash-in on the revolution that is coming to the banking industry.
What made the article really interesting to me is that I happen to know one of the Kristoffer Lawson, Founder and CEO of Holvi. I have personally heard the story of how the company was put up, that they were applying the needed license and when they got it. But the article includes some a bold new statement: traditional banks are ignoring 80% of their customers.
Lawson believes that Holvi’s new type of account is “the future of banking” and his company is rethinking what it means to be a bank: Holvi offers customers an alternative type of current account, integrating bookkeeping and money management in a clean, simple online interface. It is designed for use by groups and organisations so they can collaborate, making it ideal for events such as Slush, which used the Holvi system for all its budgeting and ticketing operations this year.
And I have also heard of some other events in Finland do the same. The reason why such events have actively started to use the system is that Lawson had been earlier active on organizing different computer events, so he knows the needs of this type of organizations.
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Tomi Engdahl says:
Bitcoin on Amazon! Sort of…
http://www.linuxjournal.com/content/bitcoin-amazon-sort
There are several places to use Bitcoin on a regular basis. One of my favorites, which I’ve mentioned before, is the Humble Bundle. I’ve also ordered from Overstock.com using Bitcoin. I often look for places I can spend Bitcoin and try to shop at them when possible. Like most people, however, I usually end up buying things on Amazon.
Thankfully, with the help of Purse.IO, you can indirectly purchase items from Amazon using Bitcoin! I’ve been using Purse.IO for more than a year, but it seemed too good to be true, so I hesitated writing about it. The premise is this: some people have Amazon gift cards but would rather have Bitcoin. I have Bitcoin and want to buy stuff from Amazon. Using wish lists and an escrow system with Purse.IO, we trade.
I’m sure there are people who try to scam others by ordering items with bad credit cards and so on, but since you release the escrow only when the item actually arrives, the risk is pretty low.
Tomi Engdahl says:
French Banks Offer Credit Card Numbers That Change Every Hour
https://tech.slashdot.org/story/16/10/02/1929242/french-banks-offer-credit-card-numbers-that-change-every-hour
What if the numbers on your card changed every hour so that, even if a fraudster copied them, they’d quickly be out of date? That’s exactly what two French banks are starting to do with their new high-tech ebank cards… The three digits on the back of this card will change, every hour, for three years. And after they change, the previous three digits are essentially worthless, and that’s a huge blow for criminals…
This high-tech card is being rolled out by French banks to eliminate fraud
http://www.thememo.com/2016/09/27/oberthur-technologies-societe-generale-groupe-bpce-bank-this-high-tech-card-is-being-rolled-out-by-french-banks-to-eliminate-fraud/
Your bank security is pretty broken. It’s not your fault, it’s just really hard to keep people’s money safe, especially online.
Part of the problem is that once your card details are stolen – whether through a phishing attack or by someone copying the digits on the back – fraudsters are free to go on a spending spree until you notice something’s up.
They’re getting away with millions, and it’s a problem affecting over half a million people in the first half of 2016 alone.
Normally by the time you get around to actually cancelling your card, it’s all too late.
But what if the numbers on your card changed every hour so that, even if a fraudster copied them, they’d quickly be out of date?
That’s exactly what two French banks are starting to do with their new high-tech ebank cards.
The three digits on the back of this card will change, every hour, for three years.
“MotionCode is exactly what you’re doing today – copying the three digits from the back of your card – but with a huge additional level of security.”
As most fraud happens a few hours or days after your card details are actually taken, this would leave criminals essentially with a bunch of useless numbers.
Tomi Engdahl says:
Digital Storm hits: “Banks can not become a mere pipe”
Imagine the phone one mobile application. It’s almost your whole life to marry off spending a single interface: everyday banking business, asset management, investment tips, shopping, tickets, health and holidays.
Application can see your account information. Since you’ve been in car sales last time five years ago, your dealer offer new expenditure of the game. Or, if you bought a frequent flight tickets, you will receive the offer of the airline Late Deals in Europe.
Such a mobile application could be a reality surprisingly soon. It would be a kind of fintechin ie financial technology climax.
German pankkistartup N26 are already on this path. It is building a broad-fintech market place.
What kind of fintech?
Fintech can become a revolution that terrified the traditional banks. They may suffer from stronger impact than any of the financial crisis has caused. According to the forecasts of the fiercest fintech-ax cleaves the business quarter of the field, and a third of the banking sector jobs in the past ten years.
“Broadly defined fintech means a new kind of technology, but above all, the use of new types of digital business models in the financial sector,”
Mobile applications, analytics, machine learning and development to facilitate the programming interfaces are technologically center of everything.
“Fintech describes how technology can bring to customers taking advantage of consumer-oriented services. It is not only startups. Banks found fintech can do, ”
Great hype going
Fintech stir up all over the world a furious narcotics, especially outside the traditional financial world. There is already a lot of new services to both consumers and businesses. Startup addition, in the picture are the big technology firms, such as Google, Facebook and Apple.
Fintechin background may increase banks’ digitalisation in three stages. First, online banking were born in the 1990s, then the 2000s, banks in mobile applications.
Next in line are made possible by digital broadcasting entirely new services and business models.
“Finnish banks have been the best in the world, but after the development of on-line banking has faded. No one has challenged, what else might be available, ”
Source: http://www.tivi.fi/Kaikki_uutiset/digimyrsky-iskee-pankeista-voi-tulla-pelkka-putkisto-6593153
Tomi Engdahl says:
Android Pay expands its reach via new partnerships with Visa and MasterCard
https://techcrunch.com/2016/10/24/android-pay-expands-its-reach-via-new-partnerships-with-visa-and-mastercard/
Google announced this morning two strategic partnerships with Visa and MasterCard aimed at expanding the reach of its mobile payments service, Android Pay. The company says that Android Pay users who are shopping online from their smartphones will soon be able to make payments on hundreds of thousands of new sites where either Visa Checkout or Masterpass are accepted at checkout.
Visa Checkout and Masterpass are Visa and MasterCard’s own attempts at carving out their own space in online payments, as a competitor to services like PayPal and Apple Pay, for example, the latter of which arrived in Apple’s Safari browser, on both desktop and mobile, this September.
Android Pay partners with Visa and Mastercard to bring simple checkout to more places online
https://blog.google/topics/shopping-payments/android-pay-partners-visa-checkout-and-masterpass/
Today, Google announces strategic partnerships with Visa and Mastercard to bring Android Pay to more places on the mobile web.
Android Pay users will soon be able to pay on hundreds of thousands of new sites where Visa Checkout or Masterpass are accepted using their preferred device authentication method – like fingerprint recognition. No longer will users have to remember multiple usernames and passwords in order to checkout, saving them time and hassle.
Tomi Engdahl says:
Charles Bovaird / CoinDesk:
Zcash, a cryptocurrency based on Zerocash protocol that promises anonymous transactions using zero-knowledge proofs, launches October 28 — “Deafening.” — That’s how market analyst Arthur Hayes describes the enthusiasm ahead of the upcoming launch of a new digital currency called Zcash – and he’s not alone.
Investors Are Going Wild for a Digital Currency Called Zcash (And It’s Not Even Out Yet)
http://www.coindesk.com/investors-going-crazy-new-digital-currency-called-zcash/
Tomi Engdahl says:
“Many fintech-challengers departing from the idea to compete with it on the grounds that the banks charge excess costs. It is not a sustainable advantage, because at some point the big banks react. The only sustainable way to succeed is to be relevant, ”
“Traditional banks are saying that they are mobile and in a sense trying to shrink the bank’s mobile. We are created there natively, the user experience has been optimized for the digital world. ”
Source: http://www.tivi.fi/Kaikki_uutiset/tata-on-fintech-pankin-uusi-asiakas-ottaa-selfien-6594995
Tomi Engdahl says:
Estonian mobile banking to sue the Finns: “The banks have become too complex”
Estonian mobile banking Pocopay Finland aims to conquer the market.
The application is available in the Netherlands, Spain, Finland and Estonia, where the goal is to have by the end of next year, at least one hundred thousand customers. The target group is young people in particular.
“Banks have become too complex. I believe that significant changes are taking place in the field within ten to fifteen years ”
Pocopay’s idea, he says, provide the best service for everyday banking affairs. Therefore, the mobile application is designed to be easy and intuitive, so that as much as possible functions may perform a drag-and-drop method.
As an example, Neivelt mentions how you can manage your account related to MasterCard debit card restrictions.
“You can choose whether the NFC proximity payments on or not, what are the countries or the use of what are withdrawal limits. If you use the card for online shopping, you close the card, when the transaction is completed, and open again when you shop. ”
Pocopay has a pan-European payment institution license.
In the background Pocopay transfer the amount immediately to another bank, where it has a customer asset accounts.
“For example, if a user wants to borrow money, he can get an offer from at least five, and decide which is best for itself,”
Source: http://www.tivi.fi/Kaikki_uutiset/virolainen-mobiilipankki-haastaa-suomalaiset-pankeista-on-tullut-liian-monimutkaisia-6595175
Tomi Engdahl says:
Suzanne Barlyn / Reuters:
New York’s aspirations to become a global hub for Bitcoin fade, as delays in licensing process and strict requirements drive companies away — New York’s financial regulator had sights set on becoming a global hub for innovations like bitcoin when it adopted trailblazing virtual currency rules last year.
New York’s bitcoin hub dreams fade with licensing backlog
http://www.reuters.com/article/us-bitcoin-regulations-dfs-idUSKBN12V0CM
New York’s financial regulator had sights set on becoming a global hub for innovations like bitcoin when it adopted trailblazing virtual currency rules last year. But the state lost that momentum when the agency’s chief left, putting a licensing process in limbo and allowing rivals to catch up.
Since June 2015, New York has required virtual currency firms doing business there to get a “BitLicense” to hold customer funds and exchange virtual coins for dollars and other regular currencies.
Tomi Engdahl says:
Web Pioneer Tries to Incubate a Second Digital Revolution
https://www.technologyreview.com/s/602731/web-pioneer-tries-to-incubate-a-second-digital-revolution/
Twenty years ago, Brian Behlendorf helped kick-start the Web—now he’s betting the technology behind Bitcoin can make the world fairer.
Brian Behlendorf knows it’s a cliché for veteran technologists like himself to argue that society could be run much better if we just had the right software. He believes it anyway.
“I’ve been as frustrated as anybody in technology about how broken the world seems,” he says. “Corruption or bureaucracy or inefficiency are in some ways technology problems. Couldn’t this just be fixed?” he asks.
This summer Behlendorf made a bet that a technology has appeared that can solve some of those apparently human problems. Leaving a comfortable job as a venture capitalist working for early Facebook investor and billionaire Peter Thiel, he now leads the Hyperledger Project, a nonprofit in San Francisco created to support open-source development of blockchains, a type of database that underpins the digital currency Bitcoin by verifying and recording transactions.
Many governments and large companies are exploring blockchain technology not because they want to use digital currency—Bitcoin doesn’t look likely to become widely used—but as a way to work with other kinds of data. They think blockchains could make things as varied as financial trades, digital health records, and manufacturing supply chains more efficient and powerful.
“If we do our job right you won’t ever hear about us—we become plumbing.”
Hyperledger exists to accelerate development of the software needed to get blockchains working, and has almost 100 corporate backers including IBM, J.P. Morgan, and Airbus. Behlendorf says that blockchains will have additional benefits beyond large corporate commerce. He’s had frustrating experiences trying to improve government and public infrastructure using technology, and says in retrospect blockchains would have helped.
Tomi Engdahl says:
Making Mobile Payments Simple – Part 1: The Current Landscape
https://www.rambus.com/make-mobile-payments-simple-the-current-landscape/
Plastic may have replaced paper, yet fundamentally, the brick-and-mortar experience has remained static for hundreds of years. Fortunately, mobile payments are allowing retailers to positively disrupt an outdated paradigm and bolster their engagement with shoppers.
To be sure, mobile payments offer a plethora of benefits for consumers, retailers and financial institutions. For consumers, mobile wallets provide a convenient, “tap and go” frictionless commerce experience that seamlessly integrates loyalty cards, boarding passes, ID cards, coupons, event tickets, alerts and notifications. For retailers, mobile wallets offer businesses the ability to engage users with an immersive, in-app experience that starts at the beginning of a retail journey and continues indefinitely with notifications, reminders of upcoming expiration dates, archived digital receipts and a real-time tally of current loyalty bonus points. For banks, digital wallets, which are far more secure than credit or debit cards, have fast become a strategic focus as consumer interest ramps up.
Tomi Engdahl says:
Vanjoki: “Banks are in a panic when money is no longer a business”
Lappeenranta University of Technology Professor Anssi Vanjoki keep the OP Bank Group’s idea to offer electric cars for leasing services as a good example of what digitalisation leads.
“Banks are in a panic when money is no longer the business,” Vanjoki evaluate the OP Bank Group’s activities.
“Technically, the banks no longer use. They exist only because of the laws and regulations so require.”
Vanjoki believes that online shopping is the norm in the future
“Coming up is an ongoing auction of everything.”
Drastic changes are also in the energy sector.
‘Energy networks is done the same as for data networks after the Internet. Information and energy networks combine into a single network in the long term. ”
“The sun is the solution. After all, it produces per hour on Earth as much energy as what on earth are consumed per year.”
Digitalization and the Internet can all Vanjoki, the change in values.
“It may happen that privacy is no longer in 20 years not a major issue. The benefits of openness are so great that privacy may no longer talked about.”
Source: http://www.tivi.fi/Kaikki_uutiset/vanjoki-pankit-ovat-paniikissa-kun-raha-ei-enaa-ole-bisnes-6603331
Tomi Engdahl says:
Exclusive: SWIFT confirms new cyber thefts, hacking tactics
http://www.reuters.com/article/us-usa-cyber-swift-exclusive-idUSKBN1412NT
Cyber attacks targeting the global bank transfer system have succeeded in stealing funds since February’s heist of $81 million from the Bangladesh central bank as hackers have become more sophisticated in their tactics, according to a SWIFT official and a previously undisclosed letter the organization sent to banks worldwide.
The messaging network in a Nov. 2 letter seen by Reuters warned banks of the escalating threat to their systems, according to the SWIFT letter. The attacks and new hacking tactics underscore the continuing vulnerability of the SWIFT messaging network, which handles trillions of dollars in fund transfers daily.
“The threat is very persistent, adaptive and sophisticated – and it is here to stay,”
Tomi Engdahl says:
Hedgefund Startup Powered By Crowdsourced Code
http://hackaday.com/2016/12/19/hedgefund-startup-powered-by-crowdsourced-code/
In the financial sector, everyone is looking for a new way to get ahead. Since the invention of the personal computer, and perhaps even before, large financial institutions have been using software to guide all manner of investment decisions. The turn of the century saw the rise of High Frequency Trading, or HFT, in which highly optimized bots make millions of split-second transactions a day.
Recently, [Wired] reported on Numerai — a hedge fund founded on big data and crowdsourcing principles. The basic premise is thus — Numerai takes its transaction data, encrypts it in a manner that hides its true nature from competitors but remains computable, and shares it with anyone who cares to look. Data scientists then crunch the numbers and suggest potential trading algorithms, and those whose algorithms succeed are rewarded with cold, hard Bitcoin.
The encryption, which is reported to be similar to homomorphic encryption, is necessary to protect Numerai’s proprietary secrets. While it slows down computation, it does allow the company to more comfortably farm out its algorithm development to the wider public.
7,500 Faceless Coders Paid in Bitcoin Built a Hedge Fund’s Brain
https://www.wired.com/2016/12/7500-faceless-coders-paid-bitcoin-built-hedge-funds-brain/
Tomi Engdahl says:
Bitcoin jumps above $1,000 for first time in three years
http://uk.reuters.com/article/us-global-markets-bitcoin-idUKKBN14M0IF
Digital currency bitcoin kicked off the new year by jumping above $1,000 for the first time in three years late on Sunday, having outperformed all central-bank-issued currencies with a 125 percent climb in 2016.
Bitcoin may have been boosted in the past year by increased demand in China on the back of a 7 percent annual fall in the value of the yuan in 2016, the Chinese currency’s weakest showing in over 20 years. Data shows most bitcoin trading is done in China.
Tomi Engdahl says:
Banking has to become more simple…even boring!
https://society30.com/story/7-1-banking-has-to-become-more-simple-even-boring/
Tomi Engdahl says:
Banks should be small and boring – Prof. Eckhard Hein
https://horizon-magazine.eu/article/banks-should-be-small-and-boring-prof-eckhard-hein_en.html
We need to return to a diverse, small-scale banking system in order to reduce the risk of another financial crisis, according to Professor Eckhard Hein from the Berlin School of Economics and Law, Germany, who was involved in the EU-funded FESSUD project examining the causes and consequences of the 2008 – 2009 financial and economic crisis.
It’s almost 10 years since the last financial crisis began to take shape, what lessons do we need to learn to prevent another one?
‘We should go for banking that is targeted to the requirements of the small- and medium-scale businesses and to the requirements of households at a local or regional level. We should avoid big banks, in particular we should avoid too big to fail banks, and if we have them we should nationalise or socialise them. It’s about going for diversity, for small-scale banking, to make banking boring again, as it was in the 50s and 60s.
Tomi Engdahl says:
Rich McCormick / The Verge:
New Twitter accounts claiming to be from workers at federal agencies might or might not be genuine, thus requiring critical analysis and investigation — These new Twitter accounts claim to be federal agencies rebelling against Trump — Donald Trump’s gag order on federal science agencies …
PayPal continues to see strong revenue growth
https://techcrunch.com/2017/01/26/paypal-continues-to-see-strong-revenue-growth/
Tomi Engdahl says:
Nathaniel Popper / New York Times:
Startups that once aimed to disrupt big banks in the US are now working with the banks and building services on top of existing financial infrastructure
Silicon Valley Tried to Upend Banks. Now It Works With Them.
https://www.nytimes.com/2017/02/22/business/dealbook/silicon-valley-tried-to-upend-banks-now-it-works-with-them.html?_r=0
In 2011, Brett King was promoting his book, “Breaking Banks,” and creating a start-up that he hoped would do to the banks what Amazon did to the retail industry and Facebook did to media.
“We had grand ideas of being the Facebook of banking, and being a new form of bank account,” Mr. King said recently.
Six years later, his company, Moven, has opened only 60,000 of those new bank accounts. Mr. King has now transitioned to selling his software to the banks he once scorned, who use it as a component of their mobile apps.
“We realized that if you want millions of users as a bank, it is a very different proposition than building a social media network,” he said.
Tomi Engdahl says:
Bloomberg:
China’s central bank is developing its own blockchain-based cyptocurrency, has tested prototypes after assembling a research team in 2014
China Is Developing its Own Digital Currency
https://www.bloomberg.com/news/articles/2017-02-23/pboc-is-going-digital-as-mobile-payments-boom-transforms-economy
China’s central bank is going digital.
After assembling a research team in 2014, the People’s Bank of China has done trial runs of its prototype cryptocurrency. That’s taking it a step closer to becoming one of the first major central banks to issue digital money that can be used for anything from buying noodles to purchasing a car.
For users transacting over their smartphones or laptops, a PBOC-backed cryptocurrency probably wouldn’t seem much different to existing payment methods such as Alipay or WeChat. But for sellers, they would get digital payments directly from the buyer, lowering transaction costs as the middleman is cut out of the process.
Tomi Engdahl says:
The Promise of Blockchain Is a World Without Middlemen
https://developers.slashdot.org/story/17/03/09/2139242/the-promise-of-blockchain-is-a-world-without-middlemen
The Harvard Business Review has an interesting article about how Blockchain technology may bring down the cost of business transactions and enable new ways of doing things: “Consider the problem that small manufacturers have dealing with giants like Wal-Mart. To keep transaction costs and the costs of carrying each product line down, large companies generally only buy from companies that can service a substantial percentage of their customers.
The Promise of Blockchain Is a World Without Middlemen
https://hbr.org/2017/03/the-promise-of-blockchain-is-a-world-without-middlemen
The blockchain is a revolution that builds on another technical revolution so old that only the more experienced among us remember it: the invention of the database. First created at IBM in 1970, the importance of these relational databases to our everyday lives today cannot be overstated. Literally every aspect of our civilization is now dependent on this abstraction for storing and retrieving data. And now the blockchain is about to revolutionize databases, which will in turn revolutionize literally every aspect of our civilization.
IBM’s database model stood unchanged until about 10 years ago, when the blockchain came into this conservative space with a radical new proposition: What if your database worked like a network — a network that’s shared with everybody in the world, where anyone and anything can connect to it?
Blockchain experts call this “decentralization.” Decentralization offers the promise of nearly friction-free cooperation between members of complex networks that can add value to each other by enabling collaboration without central authorities and middle men.
Let’s start by examining the potential effects of this on an industry that touches all of our lives – banking. The banking industry is filled with shared resources.
In a world without middle men, things get more efficient in unexpected ways. A 1% transaction fee may not seem like much, but down a 15-step supply chain, it adds up. These kinds of little frictions add just enough drag on the global economy that we’re forced to stick with short supply chains and deals done by the container load, because it’s simply too inefficient to have more links in the supply chain and to work with smaller transactions. The decentralization that blockchain provides would change that, which could have huge possible impacts for economies in the developing world. Any transformation which helps small businesses compete with giants will have major global effects.
Tomi Engdahl says:
SEC shoots down Winklevii bitcoin ETF
https://www.axios.com/sec-kills-winklevii-bitcoin-etf-2309635551.html
The U.S. Securities and Exchange Commission today decided not to mainstream bitcoin, by ruling that it will not permit the public listing of an ETF (exchange traded fund) that would have effectively allowed people to buy and sell the digital currency like stock.
It also may dump a giant roadblock in the way of other future publicly-traded bitcoin investment vehicles. For example, the future is now a bit fuzzier for Barry Silbert’s Bitcoin Investment Trust, which recently filed for a $500 million IPO (although it’s structured differently from Winklevoss, and is already publicly traded on the OTC).
Industry reaction: “The Winklevoss ETF proposal was rejected because the SEC found that the significant markets for Bitcoin tend to be unregulated overseas markets that are potentially subject to price manipulation. But this creates a chicken and egg problem.”
Tomi Engdahl says:
OP bank is preparing for a big change with digital leap: “Banks are not necessary”
There are two types of digital leaders. Part of the push technological background and others are more specifically to change management.
“We were one of the first OP Services, which began in 2011-2012 to speak within the group that the industry will change the digital technology and its importance should think about more,”
It soon became apparent, however, that the OP needs a leader who will be able to focus on digital business and change management full-time.
He cites Bill Gates: “Banking is necessary, but the banks do not have”
The OP Bank predicts that the financial sector will disappear earned 30-40 per cent due to change in the next five to ten years. Financial Services will be purchased as part of larger entities.
Nummela stresses that it is important to recognize the difference between digitization and digital switchover.
“Digitization is the fact that handicraft becomes digital, but the process will remain unchanged. The digitalisation of the same business model will change, ”
The OP Bank currently seeks specifically to digitalize their business. “We do not want to be surprised when the business model of the industry is changing,”
“Accounts and the payment of the relevant part of the financial sector, but they are not the whole financial sector. If the data of securities data should also be open, the change would be bigger,
Source: http://www.tivi.fi/Kaikki_uutiset/op-varautuu-isoon-muutokseen-digiloikallaan-pankit-eivat-ole-tarpeellisia-6632688
Tomi Engdahl says:
Wells Fargo: All ATMs Will Take Phone Codes, Not Just Cards
https://mobile.slashdot.org/story/17/03/21/2031248/wells-fargo-all-atms-will-take-phone-codes-not-just-cards
Given the prevalence of smartphones nowadays, Wells Fargo has announced plans to upgrade all 13,000 of its ATMs next week to allow customers to access their money using their cellphones instead of traditional bank cards. Wells Fargo would be the first to upgrade all of its ATMs with the feature across the United States.
Wells Fargo: All ATMs will take phone codes, not just cards
http://abcnews.go.com/Technology/wireStory/wells-fargo-atms-phone-codes-cards-46283581
Wells Fargo plans to upgrade all 13,000 of its ATMs next week to allow customers to access their funds using their cellphones instead of traditional bank cards.
While banks like JPMorgan Chase and Bank of America have announced similar upgrades to their ATMs, those are still being rolled out. Wells would be the first to upgrade all of its ATMs with the feature across the United States.
To access their money, customers would get unique eight-digit codes from their Wells Fargo smartphone app, and enter the code into the ATM along with their PIN number. The machines will still accept debit cards as well.
“Whether a customer happens to have a card on them or not, (the upgrade) provides another simple and secure way to withdraw cash at any of our ATMs,” said Adam Vancini, head of virtual channel operations at Wells Fargo.
One limitation of the one-time code, though, is that it won’t work on the secure doors that many branches have for non-business hours that require a customer to swipe an ATM or debit card to gain entry
Tomi Engdahl says:
Nathaniel Popper / New York Times:
Banks and Silicon Valley startups like Mint are increasingly in contention over the sharing of financial data, with some banks arguing startups should pay fees
Banks and Tech Firms Battle Over Something Akin to Gold: Your Data
https://www.nytimes.com/2017/03/23/business/dealbook/banks-and-tech-firms-battle-over-something-akin-to-gold-your-data.html?_r=0
The big banks and Silicon Valley are waging an escalating battle over your personal financial data, including the amount you spent on dinner last week and how much you are paying for your mortgage.
Technology start-ups like Mint and Betterment have been building services that pull together your bank account and credit card records — after you supply the passwords.
But now big banks are making a concerted push to set new restrictions on how technology companies can get access to this personal financial data
Banks like JPMorgan Chase and Wells Fargo say they want to give consumers access to their data, but are seeking new rules
“When you think about millions of customers handing over their bank account credentials to third parties, who currently have no real oversight or examination of their security controls, you start to understand why our members get pretty nervous,”
The tech companies, in turn, complain that the steps being taken by banks will not lead to better security and are motivated, instead, by a fear that the data will allow the financial upstarts to offer better deals on loans and checking accounts.
The director of the Consumer Financial Protection Bureau, Richard Cordray, has made it clear that he believes banks have not been willing enough to give customers control over their own data.
Right now, few rules or standards exist for how technology companies can use the data they collect from customers. It is also not entirely clear who would be held liable if a data breach at a service like Venmo or Mint led to financial losses for a customer.
In January, both JPMorgan and Wells Fargo signed agreements with Intuit — the owner of Mint, TurboTax and QuickBooks
The negotiations with Yodlee are particularly important because it is the largest so-called data aggregator.
many banks publicly say they are sharing data while making it hard
Tomi Engdahl says:
What’s keeping cryptocurrencies from mass adoption?
https://techcrunch.com/2017/04/20/whats-keeping-cryptocurrencies-from-mass-adoption/?ncid=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Techcrunch+%28TechCrunch%29&utm_content=FaceBook&sr_share=facebook
Speculators flocked to Bitcoin and many of the alt-coins in hopes of getting in early and making a big exit, but everyday users haven’t warmed to cryptocurrencies.
There are many reasons why, but one of the largest barriers to mainstream adoption is the price volatility of cryptocurrencies.
So the question is, why do the prices change so much in the first place? It comes down to supply and demand: Most cryptocurrencies have only a fixed total supply, and yet demand for the coins is uncertain and constantly fluctuating thanks to speculation.
The need for stability is not unique to cryptocurrency. Any currency needs to be stable in order to be used as a trusted medium of exchange.
Tomi Engdahl says:
Mastercard Launches Fingerprint-Based Biometric Card
http://www.securityweek.com/mastercard-launches-fingerprint-based-biometric-card
Mastercard announced on Thursday the launch of a biometric card that combines chip technology with fingerprints in order to allow consumers to easily authorize financial transactions and verify their identity when making a purchase.
Before using the fingerprint feature, cardholders need to register the card with their bank. During this process, the user’s fingerprint is converted into an encrypted digital template and stored on the card.
When making an in-store payment, customers dip their card into the point-of-sale (PoS) terminal and scan their fingerprint on the embedded sensor. If the fingerprint matches the one stored on the card, the user is authenticated and the transaction is approved.
In the future, Mastercard plans to combine the new biometric feature with contactless technology in order to make purchases even more convenient.
The new cards have so far been tested in South Africa by supermarket chain Pick n Pay and Barclays Africa subsidiary Absa Bank. Trials are also being planned for Europe and the Asia Pacific region in the coming months. In the meantime, these cards work at any existing EMV terminal without requiring any software or hardware upgrades.
Tomi Engdahl says:
IBM Watson Now Being Used To Catch Rogue Traders
https://slashdot.org/story/17/04/25/1758207/ibm-watson-now-being-used-to-catch-rogue-traders
Referred to as Watson Financial Services, the new product will become a monitoring tool within companies to search through every trader’s emails and chats, combining it with the trading data on the floor. The objective? To see if there are any correlations between suspicious conversations online and activity that could be construed as rogue trading.
IBM Watson now being used to catch rogue traders
https://www.siliconrepublic.com/machines/ibm-watson-catching-rogue-traders
The power of IBM Watson’s analytical tools is now going to be harnessed within the financial sector to catch rogue traders in action.
The power of IBM Watson’s analytical tools is now going to be harnessed within the financial sector to catch rogue traders in action.
Now, according to the The Wall Street Journal, it is trying its hand at being a detective in the financial sector in order to spot any potential rogue traders.
Referred to as Watson Financial Services, the new product will become a monitoring tool within companies to search through every trader’s emails and chats, combining it with the trading data on the floor.
Tomi Engdahl says:
What Is Android Pay And How Does It Work?
A behind-the-scenes look at what’s needed to adopt this technology.
http://semiengineering.com/what-is-android-pay-and-how-does-it-work/
Tomi Engdahl says:
David Cassel / The New Stack:
Dwindling expertise a big worry as COBOL still underpins much of the US financial infrastructure — Think COBOL is dead? About 95 percent of ATM swipes use COBOL code, Reuters reported in April, and the 58-year-old language even powers 80 percent of in-person transactions.
COBOL Is Everywhere. Who Will Maintain It?
https://thenewstack.io/cobol-everywhere-will-maintain/
Think COBOL is dead? About 95 percent of ATM swipes use COBOL code, Reuters reported in April, and the 58-year-old language even powers 80 percent of in-person transactions. In fact, Reuters calculates that there’s still 220 billion lines of COBOL code currently being used in production today, and that every day, COBOL systems handle $3 trillion in commerce. Back in 2014, the prevalence of COBOL drew some concern from the trade newspaper American Banker.
“The mainframe was supposed to have been be replaced by farms of smaller commodity servers and cloud computing by now, but it still endures at many banks,” the trade pub reported.
But should we be concerned that so much of our financial infrastructure runs on an ancient infrastructure? American Banker found 92 of the top 100 banks were still using mainframe computers — and so were 71 percent of the companies in the Fortune 500. As recently as five years ago, the IT group at the Bank of New York Mellon had to tend to 112,500 different COBOL programs — 343 million lines of code, according to a 2012 article in Computerworld. And today a quick Google search today shows the Bank of New York Mellon is still hiring COBOL developers.
COBOL was originally developed in the 1950s as a stop-gap by the Department of Defense, but then computer manufacturers began supporting it, “resulting in widespread adoption,”
There’s now some concerns about where the next generation of COBOL programmers will come from. In 2014, American Banker reported banks are “having trouble finding talented young techies who want to work in a bank and a shortage of people with mainframe and COBOL skills.”
“COBOL isn’t as sexy as working with Elixir, or Golang,” argued The Next Web. COBOL historically hasn’t been the most attractive option for a hip young programmer
Another commenter complained that “You will most likely spend the rest of your career doing maintenance work rather than any greenfield development. There is nothing wrong with that but not everybody likes the fact they can’t create something new.”
They’re willing to pay almost anything, he told Reuters, and “You better believe they are nice since they have a problem only you can fix.”
There are strong reactions to a recent article arguing banks should let COBOL die. “The idea that large corporations are simply going to move on from COBOL is out of touch with reality,” one commenter wrote on Hacker News. “It really can’t be overstated how deeply old COBOL programs are embedded into these corporations. I worked for one that had been using them since the language itself was created, and while they all could see the writing on the wall, the money to do the change simply wasn’t there.”
Even if companies transitioned to Java, the problem could recur later. “Will a future generation of young programmers want to transition away from Java to a newer language — and companies will have to once again go through another expensive and time-consuming transition.”
Tomi Engdahl says:
Big Banks Will Fall First To AI, China’s Most Famous VC Predicts
https://news.slashdot.org/story/17/05/16/194210/big-banks-will-fall-first-to-ai-chinas-most-famous-vc-predicts
A famous venture capitalist predicts big banks will fall first to artificial intelligence
https://qz.com/984709/kai-fu-lee-a-former-google-china-ceo-predicts-big-banks-will-fall-first-to-artificial-intelligence/
Tomi Engdahl says:
Huw Jones / Reuters:
EU financial services chief opposes rules proposed by European Banking Authority that ban account info screen scraping and force fintech firms to use bank APIs
EU executive asks bank watchdog to rethink ‘screen scraping’ ban
http://www.reuters.com/article/us-eu-banks-regulations-idUSKCN18F1F3
The European Union’s financial services chief said on Friday he will ask the bloc’s banking watchdog to rethink its proposed ban on “screen scraping” or financial technology firms directly accessing bank accounts.
It marks a reprieve for fintech firms trying to wrestle market share from long established banks in the fast growing payments and apps sector.
European Commission Vice President Valdis Dombrovskis said he wanted a level playing field between banks and fintech firms in supplying new financial products and services to customers.
A revised EU law on payments services comes into effect next January to spur competition, but draft rules underpinning it have raised hackles at fintech firms.
Tomi Engdahl says:
Michael del Castillo / CoinDesk:
Global distributed ledger consortium R3 raises $107M to develop blockchain-like tech for banks from 40+ investors including Intel, HSBC, BoA Merrill Lynch
Distributed Ledger Consortium R3 Closes Record $107 Million Funding Round
http://www.coindesk.com/distributed-ledger-consortium-r3-closes-record-107-million-funding-round/
Global banking consortium R3 has closed the largest funding round in the history of distributed ledger technology.
Revealed today at Consensus 2017, over 40 financial institutions participated in the $107m round, including top member investors SBI Group, Bank of America Merrill Lynch and HSBC. Additional major investors include ING, Banco Bradesco, Itaú Unibanco, Natixis, Barclays, UBS and Wells Fargo, plus more from around the globe.
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The funds are expected to be deployed as part of plans for global technological development and, eventually, a push to bring what the firm calls Corda Enterprise to institutions around the world.
Global spread
Details about the share structure are not being disclosed, neither are details about the division of the intellectual property built atop the open-source Corda platform. However, Rutter did explain that while Corda itself is being open-sourced, the results of experiments conducted with partners within the R3 lab would be guarded more closely.
“We will license a Corda Enterprise,” said Rutter. “Which will come with service contracts and throughput and latency guarantees that wouldn’t otherwise be available through Corda open source.”
Missed target
While the investment is the largest single round in the brief history of distributed ledger tech, it was reportedly originally much higher.
A different model
As R3 has developed since it launched in 2015, it has helped define a series of distributed ledger consortia vying for the right to help define the future of finance.
While companies like Ripple and Axoni are creating custom solutions internally and bringing together small groups of banks for different trials, and industry agnostic platforms like Hyperledger work on a variety of business solutions using blockchain, JPMorgan released its own Quorum solution, which has become a central component of the recently launched Enterprise Ethereum Alliance.
By contrast, Rutter focuses on the fact that Corda was built from the ground up specifically for banks, but R3 is not itself a bank. This, he hopes, could give the members a sense of ease.
“We’ve kind of proven to a degree that we’ve never seen before that the collaborative model works very well,” he said.
Tomi Engdahl says:
Michael del Castillo / CoinDesk:
Blockstack releases developer edition of blockchain-powered browser, plans to introduce tokens later this year
Blockstack Releases Blockchain-Powered, Tokenized Internet Browser
http://www.coindesk.com/blockstack-blockchain-decentralized-browser/
Blockchain startup Blockstack has released a decentralized browser aimed at making apps more easily accessible.
In a way, the release is a kind of Netscape for the decentralized internet, running apps on a plethora of blockchains.
The startup is revealing plans for what might be considered a kind of initial coin offering, or ICO, using its own technology that sits on top of several other blockchains.
Blockchain browser
In many ways, the browser is the core of Blockstack’s suite of decentralized internet tools.
Built over the course of more than two years, the browser was built from the ground up with developers in mind.
As part of an industry wide effort to make blockchain applications that are actually serving real problems Blockstack aimed to reduce the complexity of building with blockchain. To get there, the startup hid the more complicated aspects of the technology behind a sleek user interface.
Part dashboard, part app store, the browser is designed to give users a seamless browsing experience by granting access to websites via a single identity login that — unlike profiles created on the traditional internet — they actually own.
“It allows you to run decentralized applications directly on your device,” said Shea. “And it allows you to plug into identity and data storage that you can control.”
A new kind of crypto-token
Similar to how domains are today registered for a fee on the internet, the new token will be used to file the registration fees paid directly to the network.
Though technical details about the distribution model and other aspects of the token have yet to be settled, Ali and Shea emphasized this is not an ethereum-based ICO, but rather the sale of tokens created by their own technology.
“Currently, we’re launching a single token for Blockstack,” said Ali. “And we’ll have more details on app-specific tokens later.”
The Blockstack token itself only grants access to the digital property associated with it and, for the time being, the plan is that the tokens will be destroyed when they are converted into a digital property, such as a domain name.
The founders say the tokens will not function like ethereum’s gas, which gives the user access to the network’s computing resources.
According to Shea, the token needed to be separate from the systems they support in the event of any major changes, like the recent ethereum hard fork.
Tomi Engdahl says:
Balaji S. Srinivasan:
How blockchain-based tokens will transform the financing of technology — Tokens are early today, but will transform technology tomorrow. — In 2014, we wrote that “Bitcoin is more than money, and more than a protocol. It’s a model and platform for true crowdfunding—open, distributed, and liquid all the way.”
Thoughts on Tokens
Tokens are early today, but will transform technology tomorrow.
https://medium.com/@balajis
Tomi Engdahl says:
Jon Evans / TechCrunch:
Despite their disruptive potential for powering infrastructure, it is unlikely that blockchains and cryptocurrencies will gain widespread consumer adoption — Cryptocurrencies are booming beyond belief. Bitcoin is up sevenfold, to $2,500, in the last year.
Blockchains are the new Linux, not the new Internet
https://techcrunch.com/2017/05/28/double-double-cryptocoin-bubble/
Cryptocurrencies are booming beyond belief. Bitcoin is up sevenfold, to $2,500, in the last year. Three weeks ago the redoubtable Vinay Gupta, who led Ethereum’s initial release, published an essay entitled “What Does Ether At $100 Mean?” Since then it has doubled. Too many altcoins to name have skyrocketed in value along with the Big Two. ICOs are raking in money hand over fist over bicep. What the hell is going on?
(eta: in the whopping 48 hours since I first wrote that, those prices have tumbled considerably, but are still way, way up for the year.)
But still, eight years after Bitcoin launched, Satoshi Nakamoto remains the only creator to have built a blockchain that an appreciable number of ordinary people actually want to use. (Ethereum is awesome, and Vitalik Buterin, like Gupta, is an honest-to-God visionary, but it remains a tool / solution / platform for developers.) No other blockchain-based software initiative seems to be at any real risk of hockey-sticking into general recognition, much less general usage.
Decentralized blockchain solutions are vastly more democratic, and more technically compelling, than the hermetically-sealed, walled-garden, Stack-ruled Internet of today. Similarly, open-source Linux was vastly more democratic, and more technically compelling, than the Microsoft and Apple OSes which ruled computing at the time. But nobody used it except a tiny coterie of hackers. It was too clunky; too complicated; too counterintuitive; required jumping through too many hoops — and Linux’s dirty secret was that the mainstream solutions were, in fact, actually fine, for most people.
Sound familiar? Today there’s a lot of work going into decentralized distributed storage keyed on blockchain indexes; Storj, Sia, Blockstack, et al. This is amazing, groundbreaking work… but why would an ordinary person, one already comfortable with Box or Dropbox, switch over to Storj or Blockstack? The centralized solution works just fine for them, and, because it’s centralized, they know who to call if something goes wrong. Blockstack in particular is more than “just” storage … but what compelling pain point is it solving for the average user?
The similarities to Linux are striking. Linux was both much cheaper and vastly more powerful than the alternatives available at the time. It seemed incredibly, unbelievably disruptive.
It’s very easy to imagine a similar future for blockchains and cryptocurrencies. To quote my friend Shannon: “It [blockchain tech] definitely seems like it has a Linux-like adoption arc ahead of it: There’s going to be a bunch of doomed attempts to make it a commercially-viable consumer product while it gains dominance in vital behind-the-scenes applications.”
Tomi Engdahl says:
Stephen Chen / South China Morning Post:
Mobile payments in China reached $5.5T last year, more than half the nation’s GDP and 50x that of $112B in US, as the country sees an increase in QR code use — It’s being used to encourage tipping at restaurants, receive cash gifts at weddings…even beggars are using it to collect handouts.
The rise of the QR code and how it has forever changed China’s social habits
http://www.scmp.com/news/china/society/article/2095576/rise-qr-code-and-how-it-has-forever-changed-chinas-social-habits
It’s being used to encourage tipping at restaurants, receive cash gifts at weddings…even beggars are using it to collect handouts. The little barcode is driving China’s rapid shift towards a cashless society
A QR code is a two-dimensional barcode with a random pattern of tiny black squares against a white background, capable of holding 300 times more data than a traditional one-dimensional code. According to internet consulting firm iResearch, payments made via mobile devices by Chinese consumers last year reached 38 trillion yuan (US$5.5 trillion, HK$43 trillion), more than half the nation’s GDP.
Thanks to QR code’s rapidly increasing usage at off-line shops, the amount of mobile payments on the mainland is now 50 times greater than that of the US. Mobile payments in the US totalled US$112 billion in 2016, according to Forrester Research.
To consumer behaviour researcher Chen Yiwen, we are witnessing the dawn of “codeconomy”.
“China has started the transition to a cash-free economy faster than anyone could have imagined, largely because of the viral spread of two-dimensional barcode,” said Chen, a professor and researcher with the Institute of Psychology, Chinese Academy of Sciences in Beijing. “It creates a new economy based on scannable codes.”
Tomi Engdahl says:
Balaji S. Srinivasan:
How blockchain-based tokens will transform the financing of technology — Tokens are early today, but will transform technology tomorrow. — In 2014, we wrote that “Bitcoin is more than money, and more than a protocol. It’s a model and platform for true crowdfunding—open, distributed, and liquid all the way.”
Thoughts on Tokens
Tokens are early today, but will transform technology tomorrow.
https://medium.com/@balajis/thoughts-on-tokens-436109aabcbe
Jon Evans / TechCrunch:
Despite their disruptive potential for powering infrastructure, it is unlikely that blockchains and cryptocurrencies will gain widespread consumer adoption
Blockchains are the new Linux, not the new Internet
https://techcrunch.com/2017/05/28/double-double-cryptocoin-bubble/
Tomi Engdahl says:
Kevin Kelleher / VentureBeat:
Apple Pay coming to iMessage in iOS 11, letting you pay chat contacts; money received will go on your Apple debit card, which can offload to bank account — ANALYSIS: — Apple is adding person-to-person payments to Apple Pay and integrating the technology into Messages …
Apple Pay is suddenly a threat to PayPal and Square
https://venturebeat.com/2017/06/05/apple-pay-is-suddenly-a-threat-to-paypal-and-square/
Apple is adding person-to-person payments to Apple Pay and integrating the technology into Messages, the company announced today at its Worldwide Developers Conference in San Jose, California.
Venmo first popularized P2P payments, which became a feature of PayPal when it bought the company in 2013. Square added the feature through Square Cash, while other apps like Circle and Snapcash embraced the feature. Apple has been slow to bring P2P payments to Apple Pay, despite the 375 million users who have access to the app.
That will change with iOS 11. Apple is introducing the P2P payments feature into iMessage, so users can more easily send money to friends they are messaging with. During a chat, for example, machine learning technology will detect a mention of payments and include an Apple Pay button on the keyboard.
Apple also announced Apple Pay Cash, its own digital debit card that lets recipients of P2P payments transfer the cash to a bank account or spend it at ecommerce sites and physical retail stores.
Tomi Engdahl says:
Stan Higgins / CoinDesk:
Bancor, a platform for launching blockchain tokens, raises ~$150M in largest-ever ICO
$150 Million: Tim Draper-Backed Bancor Completes Largest-Ever ICO
http://www.coindesk.com/150-million-tim-draper-backed-bancor-completes-largest-ever-ico/
An initial coin offering (ICO) for a blockchain project called Bancor has set a new industry record, raising approximately $153m in ether, the native currency on the ethereum blockchain, as part of a crowdsale that concluded today.
Overall, 79,323,978 Bancor network tokens (BNTs) were created as part of the ICO, with the top token holders now possessing 83.96% of the tokens, or 66,601,702 BNT. Fifty percent of the total tokens, or 39,661,989 BNT, were sold to the public, while the remaining 50% were allocated for future use.
Tomi Engdahl says:
Nathaniel Popper / New York Times:
A look at Ether, which has risen 4,500% since the beginning of the year, is used in ICOs, and is likely to pass Bitcoin’s total value soon
Move Over, Bitcoin. Ether Is the Digital Currency of the Moment.
https://www.nytimes.com/2017/06/19/business/dealbook/ethereum-bitcoin-digital-currency.html
The price of Bitcoin has hit record highs in recent months, more than doubling in price since the start of the year. Despite these gains, Bitcoin is on the verge of losing its position as the dominant virtual currency.
The value of Ether, the digital money that lives on an upstart network known as Ethereum, has risen an eye-popping 4,500 percent since the beginning of the year.
With the recent price increases, the outstanding units of the Ether currency were worth around $34 billion as of Monday — or 82 percent as much as all the Bitcoin in existence. At the beginning of the year, Ether was only about 5 percent as valuable as Bitcoin.
The sudden rise of Ethereum highlights how volatile the bewildering world of virtual currency remains
Bitcoin, the breakout digital currency, is also hitting new highs — one Bitcoin was worth $2,600 on Monday. But the Bitcoin community has struggled with technical issues and bitter internal divisions among its biggest supporters. It has also been tainted by its association with online drug sales and hackers demanding ransom.
Against this backdrop, Ether has been gaining steam. The two-year old system has picked up backing from both tech geeks and big corporate names like JPMorgan Chase and Microsoft, which are excited about Ethereum’s goal of providing not only a digital currency but also a new type of global computing network, which generally requires Ether to use.
In a recent survey of 1,100 virtual currency users, 94 percent were positive about the state of Ethereum, while only 49 percent were positive about Bitcoin, the industry publication CoinDesk said this month.
Tomi Engdahl says:
Emin Gün Sirer / Hacking Distributed:
Bancor, which raised ~$150M in its ICO, has poor code quality, issues with its fundamental value proposition, and can be gamed by miners
Bancor Is Flawed
http://hackingdistributed.com/2017/06/19/bancor-is-flawed/
Bancor just did their Initial Coin Offering (ICO) last week and raised a record $144M within a few hours. They now hold the record for the biggest crowd-funding, ever, in the history of mankind.
We don’t want to dwell too much on what this illustrates about the current ICO craze. It’s a fact that raising that much cash through a standard VC process would require a credible team, multiple rounds of funding, with much due diligence and milestones along the way. None of that happened here — Bancor went from appearing on the scene 5 months ago to raising 9-digits cash with no demonstration that their scheme actually works.
In this post, we want to quickly make the case that their approach is flawed. To recap, they propose a scheme to provide liquidity for digital assets, using a smart contract. In essence, they propose a public algorithm by which they can always propose a bid/ask price for other people’s coins.
Tomi Engdahl says:
ITU thinks Blockchain and pals need interoperability
Calls for standards-setting conference to consider security, privacy, whatever other regs distributed ledger types want
https://www.theregister.co.uk/2017/06/22/itu_focus_group_on_application_of_distributed_ledger_technology/
The International Telecommunications Union (ITU) has decided the time is ripe to start talking about what standards might be developed for distributed ledgers, aka Blockchain and fellow-travellers.
The august body will therefore convene the The ITU-T Focus Group on Application of Distributed Ledger Technology (FG DLT) for the first time in October, for a three-day gabfest with the aim of “identifying the standardized frameworks needed to support the scaling up of applications and services based on DLT globally.”
Among the “specific tasks and deliverables” for the meeting is to “study and analyse the implications of mandating interoperability and interconnection of services based on DLT. This will include the development of a standardization roadmap for interoperable services based on DLT taking into consideration the interoperability challenges and best practices.
Tomi Engdahl says:
50th anniversary of the ATM opens debate about mobile payments
What’s the future of cash?
https://www.theregister.co.uk/2017/06/27/atm_at_50/
Today marks the 50th anniversary of the Automated Teller Machine (ATM), the first of which was installed outside Barclays Bank, Enfield Town in north London.
Actor Reg Varney from ’70s sitcom On the Buses was the first to use the cash machine. Fast forward half a century and cash machines have become a familiar high street sight with 70,000 in the UK alone and three million worldwide.
Originally designed as a way to get cash quickly, ATMs have evolved to become financial services service points with ability to pay bills, deposit checks, buy football tickets, print review investments and more.
The move towards a “cashless society” and mobile payments raises questions about whether ATMs will stand the test of time or decline, like coin-operated pay phones before them.
Research by global payment outfit PPRO Group suggests many Brits believe that within the next 10 years the country will be entirely cashless due the influx of alternative payment methods.
Despite this rise in mobile and contactless payments, 42 per cent of UK consumers still use ATMs just as much as they always have, according to a separate poll commissioned by ACI Worldwide. Around one in three (29 per cent) of UK respondents would like to see ATMs offer better and more secure means of authentication.
Cash machine security has always been a concern, with card skimming and more recently malware on compromised devices posing an increasing risk to ATM users. Some see incorporating biometrics into cash machines as a way of making transactions more secure.
“Of course, a big concern for ATMs is balancing convenience and security,”
Tomi Engdahl says:
Wall Street stock market view of “small” error – Amazon and Google crumbled 90%, mobile game company Zynga rose 3300%
Numerous technology shares listed on Nasdaq ended up on Wall Street’s secondary market on Monday at the same quotation, to $ 123.47.
According to Nasdaq, this was a technical error due to the “third party” test data coming to the right marketplace.
The problem concerned the data provided by Nasdaq and was thus reflected in, for example, Reuters and Bloomberg systems. There was no equivalent in the competitive NYSE trading data, the Financial Times says.
Incorrect quotes were still visible on Tuesday morning, for example, in Google Finance.
According to Nasdaq, the failure did not affect the fair trade. According to FT, extraordinary course reactions caused confusion in the Asian market.
Source: http://www.tivi.fi/Kaikki_uutiset/wall-streetin-porssinakymassa-pieni-virhe-amazon-ja-google-romahtivat-90-mobiilipeliyhtio-zynga-nousi-3300-6661627
More:
Financial Times (paywalled)
https://www.ft.com/content/fbb44c3e-6053-11e7-91a7-502f7ee26895
Tomi Engdahl says:
Issie Lapowsky / Wired:
A look at QuantaVerse’s AI tech that is increasingly being used to identify financial crimes in some of the world’s biggest ban
Banks Deploy AI to Cut Off Terrorists’ Funding
https://www.wired.com/story/quantaverse-ai-terrorist-funding
One thing that makes ISIS so hard to fight is that the terrorist network is diffuse and scattered, with small cells of operatives all over the world. Not only does this make it hard for law enforcement to predict where the group might strike next; it makes it incredibly complicated to track activity on the network—activity like banking transactions. Small sums of money flow from foreign fighter to foreign fighter, yet banks struggle to identify it within their systems.
Banks have long used anti-money laundering systems to flag suspicious activity, and in the aftermath of September 11th, they have turned to those same legacy tools to catch terror-related transactions, too. But these legacy tools are not up to the job. They rely upon hard-coded “if-then” rules about predictably suspicious behavior.
The pattern of small transactions a terrorist in hiding makes might not raise red flags for the usual anti-money-laundering systems.
Unless those systems use artificial intelligence.
Banks are increasingly turning to machine learning to mine vast quantities of bank data and find anomalies in accounts and transactions that might otherwise have gone unnoticed. “It’s a surgical approach to finding a needle in a haystack,”
Banks Must Help Find Criminals
Ever since the Bank Secrecy Act of 1970, banks have been required to assist government agencies in detecting money laundering. Software has helped automate that process somewhat. Yet, the process is beset by false positives, in which the system flags behavior that is not actually criminal. A recent Dow Jones survey of more than 800 anti-money laundering professionals found that nearly half of them said false positive alerts hurt their confidence in the accuracy of the screening process.
Still, to comply with governments, banks invest billions of dollars in these systems every year. “That’s billions invested—a lot of humans investigating the flags a legacy system will generate, and a large majority of those turn out not to be financial crimes,” says David McLaughlin, who founded QuantaVerse in 2014. “Meanwhile, the real financial crimes are going unnoticed.”
Tomi Engdahl says:
Hyperledger Fabric releases version 1.0 of open source distributed ledger
https://techcrunch.com/2017/07/11/hyperledger-fabric-releases-version-1-0-of-open-source-distributed-ledger/?utm_source=tcfbpage&sr_share=facebook
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Hyperledger Fabric releases version 1.0 of open source distributed ledger
Posted 1 hour ago by Ron Miller (@ron_miller)
Hyperledger Fabric, the open source distributed ledger project from Hyperledger, reached a significant milestone today when it released version 1.0.
Hyperledger Fabric is a distributed ledger, an open source blockchain. The blockchain has been typically used to prove ownership of digital currency, but Brian Behlendorf, the executive director at Hyperledger says that this project is more focused on business use cases such as smart contracts. You could use a distributed ledger to prove the ownership of anything of value — whether land, diamonds or the provenance of parts in a supply chain.
As a real-world example, the Swift banking network routes payments between banks around the world. In the current system, it takes 1-3 days to finalize transactions. They are working on a Hyperledger Fabric application that could reduce that to just a few minutes on the blockchain.
Tomi Engdahl says:
PSD2 and Open Banking Bring Problems and Opportunities for Global Banks
http://www.securityweek.com/psd2-and-open-banking-brings-problems-and-opportunities-global-banks
Global Banks Should Not Ignore Europe’s Payment Services Directive 2 (PSD2)
Payment Services Directive 2 (PSD2) is a new EU banking/finance regulation coming into force in January 2018. It is designed to shake up the finance sector — perhaps even designed to weaken the overall strength of the banks following the 2008 crash. While being European in origin, American and other global banks should not — and perhaps cannot — ignore it.
The banks are considered to be too powerful and monolithic with sole and complete ownership of their customers financial data. The European bureaucrats want to introduce some competition. Their chosen route is to force the banks to provide APIs that will allow third-party apps to access customer data and provide new services not currently offered by the banks. The bureaucrats then believe third-parties will re-invigorate the payments and finance markets for end users.
There are enormous difficulties for the banks — for while they are required to give third-party access to customer data, they will remain liable for the security of that data under the General Data Protection Regulation (GDPR).
Consider if this is done via a social media organization. That organization will build an app that provides access to, and uses, its customers’ financial data. The banks can authenticate the social media organization; but the social media app authenticates the user. It is possible, then, that access to customer financial data will be controlled only by social media logon; and that will almost certainly be less secure than the multi-factor and behavioral security measures that many banks currently use.
Tomi Engdahl says:
Don’t panic, but your Bitcoins may just vanish into the ether next month
Well, actually, do panic. A pending code change could bring a period of instability
https://www.theregister.co.uk/2017/07/13/bitcoins_might_just_vanish_into_the_ether/
The community-driven organization overseeing Bitcoin on Wednesday warned that any Bitcoins received after Monday, July 31, 2017 at GMT-0700 may vanish into thin air or be rejected as invalid.
Bitcoin.org said that at the end of the month, Bitcoin confirmation scores – a number that represents the difficulty of altering the associated transaction – may become unreliable for an unknown period.
“This means that any Bitcoins you receive after that time may later disappear from your wallet or be a type of Bitcoin that other people will not accept as payment,” the group said. It’s an effort to implement a code revision referred to as a Segregated Witness, or SegWit, a method for separating signature data from transaction identifier data in a Bitcoin transaction.
Doing so offers a number of ostensible benefits, including increasing the Bitcoin blocksize, limiting the extent to which transaction data can be modified by third parties, and simplifying scripting upgrades.
Harding said that if everyone accepts the proposal or if everyone rejects it, there would be no issue.
“Unfortunately neither of those happened,”
And for those who haven’t chosen a side, there’s uncertainty about which kind of Bitcoin will be valid.
“If we accept Bitcoins from someone who is boycotted and the UASFers win, that Bitcoin will disappear from our wallet,” Harding said. “The reverse is true; if we accept a Bitcoin from a UASF supporter and they lose, that Bitcoin could also disappear from our wallet.”
Harding stressed that Bitcoin marked as confirmed in a wallet prior to the start of the event will be safe. It’s the Bitcoins passing back and forth afterwards that are at issue.
“It’s a rather awful situation,” said Harding. “Unfortunately the only advice we can give to users is in the notice, which is to stop using Bitcoin on July 31st until we know whether or not the UASF succeeded.”
Tomi Engdahl says:
Bitcoin is also broken?
Chris Davies / SlashGear:
Disney unveils Star Wars: Jedi Challenges, which combines a Lenovo-made mobile AR headset and a smartphone app to allow users to play games including holochess
Star Wars: Jedi Challenges puts an AR lightsaber in your hands
https://www.slashgear.com/disney-star-wars-jedi-challenges-augmented-reality-game-15491577/
Disney has teased what Star Wars fans have long been demanding: an augmented reality game that allows you to wield your own lightsaber. Previewed at D23, Disney’s annual expo, Star Wars: Jedi Challenges combines an AR headset with a smartphone app and a number of games. While details are in short supply right now, there are already several hints at just what the system could do.
The headset is made by Lenovo, and looks like a riff on what we’ve seen before with Microsoft’s HoloLens. Two transparent displays are visible through the front visor, overlaying computer graphics onto the real world. Unlike a VR headset – such as the Windows Holographic headset Lenovo announced earlier this year – this transparent fascia means real and virtual elements can be combined.
Bloomberg:
The Segwit2x proposal for Bitcoin, which moves some data outside the main network, isn’t supported by 15% of miners, could lead to Bitcoin split if not forced
Bitcoin Is Having a Civil War Right as It Enters a Critical Month
https://www.bloomberg.com/news/articles/2017-07-10/bitcoin-risks-splintering-as-civil-war-enters-critical-month
New proposal SegWit2x aims for compromise ahead of Aug. 1
Failure to agree could lead to bitcoin splitting into two
It’s time for bitcoin traders to batten down the hatches.
The notoriously volatile cryptocurrency, whose 150 percent surge this year has captivated everyone from Wall Street bankers to Chinese grandmothers, could be headed for one of its most turbulent stretches yet.
Blame the bitcoin civil war. After two years of largely behind-the-scenes bickering, rival factions of computer whizzes who play key roles in bitcoin’s upkeep are poised to adopt two competing software updates at the end of the month. That has raised the possibility that bitcoin will split in two, an unprecedented event that would send shockwaves through the $41 billion market.
While both sides have big incentives to reach a consensus, bitcoin’s lack of a central authority has made compromise difficult. Even professional traders who’ve followed the dispute’s twists and turns aren’t sure how it will all pan out. Their advice: brace for volatility and be ready to act fast once a clear outcome emerges.
Behind the conflict is an ideological split about bitcoin’s rightful identity. The community has bitterly argued whether the cryptocurrency should evolve to appeal to mainstream corporations and become more attractive to traditional capital, or fortify its position as a libertarian beacon; whether it should act more as an asset like gold, or as a payment system.
The seeds of the debate were planted years ago: To protect from cyber attacks, bitcoin by design caps the amount of information on its network, called the blockchain. That puts a ceiling on how many transactions it can process — the so-called block size limit — just as the currency’s growing popularity is boosting activity. As a result, transaction times and processing fees have soared to record levels this year, curtailing bitcoin’s ability to process payments with the same efficiency as services like Visa Inc.
To address this problem, two main schools of thought emerged. On one side are miners, who deploy costly computers to verify transactions and act as the backbone of the blockchain. They’re proposing a straightforward increase to the block size limit.
On the other is Core, a group of developers instrumental in upholding bitcoin’s bug-proof software. They insist that to ease blockchain’s traffic jam, some of its data must be managed outside the main network.
But moving data off the blockchain effectively diminishes the influence of miners, the majority of whom are based in China and who have invested millions on giant server farms. Not surprisingly, Core’s proposal, called SegWit, has garnered resistance from miners
Support for SegWit2x has reached levels unseen for previous solutions. About 85 percent of miners have signaled they are willing to run the software once it’s released on July 21, and some of bitcoin’s largest companies have also jumped on board.
Some of Core supporters are pushing a separate agenda called UASF (user activated soft fork).
Starting from Aug. 1, it will reject transactions not compliant with SegWit. If a majority of miners do not adopt SegWit by then, two versions of bitcoin would come into existence, triggering a currency split.
“It’s moderates versus extremists,”
Many Core developers continue to reject SegWit2x
Tomi Engdahl says:
Camila Russo / Bloomberg:
Ethereum cofounder Charles Hoskinson says “over-tokenization of things” makes ICOs a “ticking time bomb”; Ripple CEO says ICOs operate in “Wild West of finance” — Startups have raised $1.3 billion through digital coin sales — Regulation is biggest threat to digital tokens, Hoskinson says
Ethereum Co-Founder Says Crypto Coin Market Is a Time-Bomb
https://www.bloomberg.com/news/articles/2017-07-18/ethereum-co-founder-says-crypto-coin-market-is-ticking-time-bomb
Startups have raised $1.3 billion through digital coin sales
Regulation is biggest threat to digital tokens, Hoskinson says
Initial coin offerings, a means of crowdfunding for blockchain-technology companies, have caught so much attention that even the co-founder of the ethereum network, where many of these digital coins are built, says it’s time for things to cool down in a big way.
“People say ICOs are great for ethereum because, look at the price, but it’s a ticking time-bomb,” Charles Hoskinson, who helped develop ethereum, said in an interview. “There’s an over-tokenization of things as companies are issuing tokens when the same tasks can be achieved with existing blockchains. People are blinded by fast and easy money.”
Firms have raised $1.3 billion this year in digital coin sales, surpassing venture capital funding of blockchain companies and up more than six-fold from the total raised last year, according to Autonomous Research.
Regulation is the biggest risk to the sector, as it’s likely that the U.S. Securities and Exchange Commission, which has remained on the sidelines, will step in to say that digital coins are securities, he said.
Startups raising money through ICOs usually skip the safeguards required in traditional securities sales, like making sure they’re dealing with accredited investors and verifying the source of funds. That could lead to lawsuits in the future, as digital coin buyers can sue the issuer claiming they didn’t know the risks of buying those assets, Hoskinson said.
“ICOs operating in the Wild West of finance isn’t sustainable,” Garlinghouse said. “If it talks like a duck and walks like a duck, the SEC will say it’s a duck.”
Besides the growing concern about an ICO bubble and regulatory concerns, ether trading outages stemming from the jump in transactions, companies cashing in on the money raised in crowdsales, yesterday’s $7 million CoinDash hack and even false rumors that Buterin had died