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?
Author Dr. Dimitrios Geromichalos Published July 01, 2015
In finance, social media is generally perceived as a major source of reputation risk. Anyone can post an opinion, good or bad, that can spread all over the world in a matter of seconds.
Author Bethel Desmond Published June 30, 2015
Experts predict that the home of the future will be so convenient, so connected, it will actually anticipate your desired environment, and deliver it. As you walk from room to room, everything about the space begins to change to please you, anticipating your wants and needs. Temperatures and lighting alter according to historic preferences, over-laid with information regarding present mood, determined biometrically. Even the artwork, they say, will change as you enter, based perhaps on your Pinterest* account? Recent Google* searches? Your heart rate?
Author Arunima Haque Published June 29, 2015
Pensions are back in the headlines and flavour of the month online. In March 2015, Google Trends in the UK saw a spike in the number of searches for ‘pensions’ and related terms, as the deadline for reform approached.
Authors Tommy Marshall , Tim White Published June 24, 2015
Fact. Being a professional, charged with shaping and building the future payments strategies for the world’s financial institutions, is one of the most challenging positions in the industry today. The trifecta of tension; regulation, customer demand and legacy systems, is helping to build pressure from within, as bold new entrants batter the door from without. Instantaneous, opaque and yes – even… free – are words being used to describe assumptions in payments, no longer asked for, as much as expected. Although the regulatory mandates come whipping past, a blinding blizzard pressing for speed, the real challenge for banks will be to take an informed, future, global view, and be able to translate that tactically. Here are some things to consider:
Authors Bernd Richter , Carsten Hahn Published June 22, 2015
Fines aren’t fine any more. That should be a message resonating loud and clear around financial institutions, as another year of the rolling regulatory tsunami gets fully underway. We’re braced for the ever-rising tide of compliance-related complexities and non-compliance penalties. We need more than ‘business as usual’. Why?
Authors Geraldine Balaj, Tim Jennings, Mei Ling Liew Published June 10, 2015
Adapting blockchain technology to enhance legacy post trade processing and asset servicing is quickly becoming a reality on Wall Street. Banks and other financial services firms are investing time and money to determine the best adaptation of blockchain technology into their enterprise strategies. One example is what’s going-on over at Coinsetter. Coinsetter, a global Bitcoin exchange based in New York City, recently announced a new venture called “HighLine” that aims to improve how trades across Wall Street are cleared and settled through the application of Bitcoin’s blockchain technology*. Their new “On-Blockchain Settlement” system, attains a never before seen, level of stark transparency.
Author Samit Desai Published June 09, 2015
Now, we have a choice. Collateral. Damaged. Or … Collateral. Managed. With an estimated $1.2 trillion of additional collateral needed to meet new margin requirements, urgent action is now unavoidable to tackle the ‘Great Collateral Squeeze’ head-on.
Authors Geraldine Balaj, Tim Jennings, Mei Ling Liew Published June 09, 2015
Think about this. When I started commodity derivatives trading in the 80’s on Wall Street, I booked trades by writing up tickets. Archaic I know, but it’s the honest truth. Each commodity had a code (AU for Gold), and each futures contract had a symbol for the month (Q for August). When I wanted to sell August Gold, I would take out a ticket, circle ‘S’ for sell, write AUQ and the volume, and then, get this, time stamp it, and throw it in a basket. At the end of the day, I would go through the trades, rip off the top copy for my records, and take the carbon copies left, literally, to the 'back of the office’ (back office), where, hopefully, they would be processed into the bank’s central system. Seems absolutely antiquated I know, but yet, what if blockchain technology is about to make us feel that way about how we process trades today? Is blockchain about to change the way we trade?
Authors Nevil Nayak, Bryce Vandiver Published June 01, 2015
US payments history is being made, or re-made, right in front of our eyes. OK. OK. Maybe not as fast as some of our European and Latin American neighbors, but with the National Automated Clearing House Association’s (NACHA) May 19th announcement, the game irrevocably changed. The regulatory mandate approved changes to provide same day payments on the US ACH network, a computer-based clearing and settlement facility, which in 2014 handled over 23 Billion electronic payments, moving funds in excess of $40 trillion. It seems, in payments, the perfect storm is brewing. One in which regulatory push, and customer demand, face off against the manual operations, legacy systems and cumbersome cores of many US banks. Will current banking systems be able to uphold new regulatory requirements, and what will it take to get there?
Author David Rapsas Published May 30, 2015
I’m sure a lot of people just hoped it would go away. That the idea of holding the world’s financial institutions responsible for the risk management of their third party vendors, would stay just that – an idea. But when the OCC issued its directive declaring, “The board of directors and senior management are ultimately responsible for managing activities that control risk in third party relationships*”, things got personal. And very serious, fast. The fact is, that describing, monitoring and reporting third party vendor risk is a moving target in an ever-connecting world, and its challenging banks.
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.