Via discussions hosted on the Capco Institute Blog, members debate high profile issues, with frequent and provocative contributions from Capco thought leaders. For institutions around the world, how will the changing financial services landscape form the future of finance?
Authors Marc Mulford, Jason Malcolm Published May 29, 2015
Ok. Let’s just go through this one more time for any recent joiners to the Crypto-discussion. You must separate the concept of virtual currency and blockchain technology. Crypto-currency is virtual currency: a means of transferring value digitally, without a physical representation of the value exchanged (like a dollar). The technology that makes this possible is something called “blockchain”: a series of distributed databases that record and verify transactions between owners of a crypto-currency. The transaction information is masked, and made publically available, providing verification of transactions and transfers for future use. Think of Bitcoin and blockchain like e-mail and the Internet. Can you e-mail using the Internet? Yes. Is there a plethora of other things you can achieve using the Internet? Yes. As it goes with blockchain technology.
Authors Jibran Ahmed , Owen Priestley Published May 21, 2015
In parts I and II of our series, “Biometrics: The Good, The Bad and The Ugly”, we investigated the pros, and cons, of biometrics’ use in financial services. Now its time to turn our attention the realities of using biometrics, and the attention to detail that will make this approach work, or not, in global banking. Trust is a critical factor that often doesn’t get the attention it deserves. In a recent global survey by FIS*, security and the protection of one’s identity ranked highest in customer concerns and demands. With the spate of recent hackings, data losses and intelligence agency scandals, the general public has as good a reason to be cautious about giving up their biometric data. Organizations collecting this data need to be transparent about how the data will be used, and provide adequate assurances that user data will be held securely and not made available to third parties without permission. They also need to make registration as easy as possible, and highlight the security advantages of the new technology in order to encourage people to register.
Authors Jibran Ahmed , Owen Priestley Published May 20, 2015
In Part I of our series “Biometrics; The Good, The Bad and the Ugly” – “The Bounty of Biometrics”, we explored the many plusses of biometrics for the financial services industry – improved security, lower identity theft, vast cost re-capture. But do biometrics also carry potential negatives for big banks and their customers? One con to consider is this; where will all the criminals go? As biometrics makes it more difficult for criminals to pretend to be someone they’re not, and steal from private citizens, it could force sophisticated crime syndicates to target bank systems directly instead. A rise in hacking and cyber-attacks on financial institutions has already begun. Cyber crime is more organized than ever before and more than 50% of attacks now focus exclusively on financial and e-commerce services*.
Author Peter Springett Published May 19, 2015
Join your peers at the eighth annual gathering of risk experts, the Cass-Capco conference: Risk Rebooted June 10, Barbican Centre, London.
Authors Jibran Ahmed , Owen Priestley Published May 15, 2015
According to the Association of Certified Fraud Examiners (ACFE), U.S. organizations lose an estimated 5 percent revenue to fraud every year. Five cents on every dollar has a way of really adding up. Based on projected U.S. Gross World Product, fraud costs will enter the trillions* for US businesses, with no signs of stopping. As millions of customers migrate onto digital infrastructures for their shopping and banking needs, fraud and cyber-crime have officially become a major concern for financial services institutions.
Author Sam Menahem Published May 14, 2015
A company’s archives are a unique source of stories, anecdotes, artefacts and content that tell the story of the organization since its birth. They are usually informed by colleagues, historians, academics and the media. We had an opportunity, for one of our global banking clients, to select some of the most frequently requested content and make it more accessible through an interactive, web-based experience.
Authors Maxalan Vickers, Charles Mbaruguru Published May 11, 2015
Remember, back in the day, when corporations used to put a handful of guys in a room, with a bunch of computers, and hoped they were ensuring cybersecurity? And then the inevitable outrage – “we’ve got a whole bunch of guys looking at this! How could there have been a breach?” Well, the game has officially changed. Fact is that in 2014, companies reported 42.8 million detected cyber-attacks worldwide, and that’s a 48% Y/Y increase from 2013*. The forceful push of companies, governments and just plain people, onto a digital infrastructure is driving unprecedented cyber security risk. This year, annual federal government spending on cyber security will reach $13.3 billion, earmarked to combat cyber-attacks, which have increased a whopping 445% since 2006. Over the last year alone, federal agencies have seen a 78 % growth in cyber incidents*. The genie, as they say, is out of the bottle.
Authors Tommy Marshall , Markus Sander Published May 08, 2015
Everyone knows that Blockchain technology can solve many problems we currently have in financial services. Blockchains can help banks offer more competitive products, and also run their businesses more profitably. Blockchain technology can bring banks savings on processing costs because this elegant new innovation can be adapted to make highly complex processes, simple again.
Author Quentin Waddell Published May 06, 2015
Every day all of us use data from the moment we wake up in the morning to moment we go to sleep. Data is one of the foundations on which we make decisions in our lives, both important and otherwise. What often determines the impact of any data is its relevance to us at a given moment in time. Take for example the time in which you get up in the morning. If you remember back to your college days this time had little relevance - if you scheduled your classes right! Today time as a piece of data has relevance and it drives us to get to a client site, the office for a meeting or even a family function.
Authors Nikita Blanarik , Adam Davis Published May 05, 2015
Ever since FinTech found life outside of Silicon Valley, it was only a matter of time before London established itself as the most desirable location for FinTech growth. The UK capital received $539 million in venture capital investment in 2014, three times the amount raised in 2013 and accounting for over a half of all FinTech investments across Europe.
Author Mark Cheng Published April 28, 2015
Many are aware that FATCA is perhaps the broadest and most complicated international tax code ever written, designed literally to “span the globe.” FATCA requires all foreign financial institutions to report to the IRS information on U.S. held accounts, including those with material U.S. ownership interests. Those in violation of FATCA are subject to a 30% withholding penalty tagged to each party. Starting 2015, institutions that do not accurately deduct and remit FATCA withholding will be liable for 100% of the amount not withheld plus penalties. It’s no wonder that some businesses want to sever ties with the U.S. altogether so that they can operate freely in non-FATCA zones.
Authors Daniel Hu (maomao Hu), Shabnum Gulati Published April 23, 2015
Think about how much everything has changed. Can you imagine getting ready to pay your bills by running around the house, looking for stamps, envelopes and your checkbook? Today, consumers worry more about remembering all the passwords and usernames associated with a variety of accounts when it comes to paying bills. Mobile payments are now used for everything ranging from cable and Internet services to credit card payments. Apps like Venmo, that allow people in your social circle to exchange payments via your smartphone, have become mediums of choice. Mobile payments are used not only amongst friends, but also between teachers and students, landlords and tenants, even contractors and homeowners. In 2015 we are officially in the digital age, making electronic payment the dominant method of transferring money…right? Actually – Wrong.
Author Sandeep Vishnu Published April 22, 2015
The growth in big data has been monumental, and continues to accelerate. We are awash in data, but often bereft of insight. It brings to mind the old adage, “Water, water, everywhere, but not a drop to drink.” Analytic tools are typically inadequate, and while visualization helps in the processing of data, true insight is often lacking.
Author Arunima Haque Published April 21, 2015
The D-day for UK pensions has arrived. On April 6th 2015, alongside the usual scramble to capture personal ISA allowances, new UK pension reforms came into force affecting arguably the most important savings vehicle. The new rules mean greater freedom for individuals regarding how they manage and draw their pension. The most significant adjustment is that from now you can take as much cash as you like from a defined contribution pension, with no obligation to buy an annuity. What do these rules mean for insurers and wealth managers?
Authors Tommy Marshall , Markus Sander Published April 20, 2015
Well, we’ve all heard about it. We know it’s coming. It’s almost here – April 24th 2015 - it’s the Apple Watch! But how does it work, will it work and what does it mean for the payments industry? The concept of wearables that interact with your smart phone is not new, and many suppliers have already tried to capture their share of the market. Now it's Apple's turn. But many pain points will have to be overcome to prove that this new device is actually a game changer.
Author Christine Ciriani Published April 15, 2015
Other industries can seem way out in front when it comes to their version of onboarding, or that first taste of the brand promise in reality.
Author Isabel Naidoo Published April 14, 2015
Gender equality is finally making progress, but the pace of change is frustratingly slow. The International Labour Organization (ILO, a UN agency) recently said that without targeted action, at the current rate, pay equity between women and men will not be achieved before 2086, or at least 71 years from now.
Authors Avra Liakounakos, Andrew Cassetti Published April 03, 2015
IBM and the Federal Reserve are discussing plans to combine the best of both worlds: Bitcoin technology, that allows for speedy, safe money transactions, and a currency backed by the entire US economy, the US dollar. Hence the name. Fedcoins* could be used just the same as US dollars, but instead of physical cash, the owners would have digital tokens that could be used to make transactions at any time.
Author Jennifer Liu Published April 01, 2015
The looming Volcker Rule is poised to be the key piece of financial regulation to decisively end Wall Street trading as we know it. With banks expected to comply, beginning, for some by July of this year, the industry is getting dead serious about understanding exactly what compliance will look like. Virtually all trading desks, across business lines, will be impacted, and right now banks on Wall Street are facing the risk of wide gaps between comprehensive compliance programs and everyday business implementation realities on a desk level.