Tag: banks

Apple stops Aussie banks negotiating together for mobile payments

 

Apple has managed to stop banks from banding together to negotiate a better deal for Apple Pay, at least in Australia.

The banks did not want to agree to Apple’s outrageous transaction fees for its mobile banking service and instead wanted to band together to force Apple to agree to something cheaper create something that would not cost them so much.

Apple, of course said no, and complained to the regulator that the banks were ganging up on it.

Australia’s competition watchdog agreed and said that the banks could not work together to introducing their own mobile applications on iPhones and Apple Watches that could be used for contactless payments instead of the Apple Wallet.

Australian Competition and Consumer Commission Chairman (ACCC) Rod Sims said: “If others need to think it through … we’ve at least got something out there which they can kick off from.”

If the four Aussie banks won two-thirds of the nation’s credit card market, would have given them more negotiating power, and could have sparked similar appeals to regulators for access to Apple’s systems in other jurisdictions around the world.

This would have given Apple a huge headache as it has been running a divide and conquer system all over the world forcing each bank to negotiate for access to Apple gear individually.  If it had to deal with the Aussie banks as a group they could have simply told it to go forth and multiply.

But the Australian watch dog was concerned that giving the banks bargaining power could reduce competition by forcing Apple to act more like Google which owns the more open Android operating system that allows contactless payments from individual apps.

An Apple spokeswoman said it was a great decision for Australians who wanted the “easiest, most secure and private payment experience possible with Apple Pay”.

It is now thought that Apple will extract a pound of flesh from the banks that dared to oppose it by making them pay more for not doing its bidding early.  Although quite why the banks should even bother with Apple Pay is open to question.

Android man could save the banks with his blockchain

blockchainA British Google engineer, whose speech recognition software is used in more than a billion Android smartphones, has launched a company that uses blockchain technology to build a better operating system for banks.

Paul Taylor from Cambridge University started working on the system, called Vault OS, two years ago. His blockchain technology has already won the hearts of bankers, which is odd because few people thought they had any. The reason it is so good is that it has the potential to shake up how markets operate. The technology, which shares ideas with the digital currency bitcoin, creates a shared database in which participants can trace every transaction ever made.

The ledger is tamper-proof and transparent, meaning that transactions can be processed without the need for third-party verification.

Taylor’s idea is that the banks are using software which was written in the 80s and 90s, and they just are not ready for the security-conscious internet app age. But blockchain provides a very secure way of storing transactions. It means that there is no need for in-house data centers because everything is on the cloud.

He said that high-street banks were spending around $1.3 billion a year on computer technology, much of which he said was being used for propping up the current “legacy” systems rather than on any innovative technology.

Blockchain could be five to 10 years away from widespread adoption. It street cred was damaged by its association with bitcoin, but it is working with ten banks and a trial of the new system will start in August.

 

Bank Robbers use SWIFT exploit

the-great-air-robbery-movie-poster-1919-1020417131Bankers drew a deep breath this morning after it was revealed that the hackers who nicked $81 million from the Bangladesh central bank probably hacked into software from the SWIFT financial platform that is at the heart of the global financial system.

Insecurity experts at BAE Systems had a look at the malware, which the thieves used to cover their tracks and delay discovery of the heist. The cyber criminals tried to make fraudulent transfers totaling $951 million from the Bangladesh central bank’s account at the Federal Reserve Bank of New York in February.

Most of the payments were blocked, but $81 million was routed to accounts in the Philippines and diverted to casinos there. Most of those funds remain missing.

SWIFT, a cooperative owned by 3,000 financial institutions has admitted that it is aware of malware targeting its client software. SWIFT, swiftly said it would release  a software update to thwart the malware, along with a special warning for financial institutions to scrutinise their security procedures with some extra scrut.

BAE believe they discovered malware that the Bangladesh Bank attackers used to manipulate SWIFT client software known as Alliance Access.

Investigators probing the heist had previously said the still-unidentified hackers had broken into Bangladesh Bank computers and taken control of credentials that were used to log into the SWIFT system. But the BAE research shows that the SWIFT software on the bank computers was probably compromised in order to erase records of illicit transfers.

Swift claims the malware had no impact on SWIFT’s network or core messaging services.

The SWIFT messaging platform is used by 11,000 banks and other institutions around the world, though only some use the Alliance Access software, Deteran said.

SWIFT may release additional updates as it learns more about the attack in Bangladesh and other potential threats, Deteran said.

Adrian Nish, BAE’s head of threat intelligence, said he had never seen such an elaborate scheme from criminal hackers.

“I can’t think of a case where we have seen a criminal go to the level of effort to customize it for the environment they were operating in,” he said. “I guess it was the realization that the potential payoff made that effort worthwhile.”

A senior official with the Bangladesh Police’s Criminal Investigation Department said that investigators had not found the specific malware described by BAE, but that forensics experts had not finished their probe.

Bangladesh police investigators said last week that the bank’s computer security measures were seriously deficient, lacking even basic precautions like firewalls and relying on used, $10 switches in its local networks.

Still, police investigators told Reuters in an interview that both the bank and SWIFT should take the blame for the problems.

“It was their responsibility to point it out but we haven’t found any evidence that they advised before the heist,” said Mohammad Shah Alamo, head of the Forensic Training Institute of the Bangladesh police’s criminal investigation department, referring to SWIFT.

 

 

Dell has a few problems buying EMC

Dell's Computer Shipments Increase 28% In ChinaTin box shifter Michael Dell is having a few problems getting the cash he needs to buy EMC.

The commitment deadline on $10 billion of pro-rata loans in a $45 billion financing package backing computer giant Dell’s  EMC purchase has been extended .

One of the problems was the Chinese New Year, which delayed approval of requests from foreign banks’ home offices to participate in the financing.

Asian banks — Chinese and Taiwanese — have balance sheets and an ancillary connection with Dell and EMC, and at the moment they are short on the paperwork.

But this, coupled with sinking oil prices, equity sell-offs and increased dollar funding costs are making it more expensive for some banks to lend and were expected to make Dell’s pro-rata loans a tougher than expected sell.

Some of the people behind the deal are a little worried. The size of the loans was challenging but trying to do it right now  makes it harder.

 

 

 

 

Dell’s $10 billion pro-rata loans include a $3.5 billion three-year term loan, a $3.5 billion five-year term loan and a $3 billion five-year revolving credit facility.

The loan package also includes an $8 billion seven-year Term Loan B that will be sold to institutional investors and $25 billion of high-yield bonds, both of which will come to the market before the acquisition is scheduled to close in August.

 

However the thought is that even if the deal takes longer to sell, Dell’s strong enterprise-oriented business model, the credit quality of the name (expected corporate ratings Ba1/BB+, expected debt ratings Baa3/BBB), and a focus on paying down debt are seen encouraging banks to absorb the pro-rata loans.

EU probes big data

European flagA report said that banks and insurers in Europe are facing regulation over their use of big data.

According to Reuters, three EU financial regulators issued a statement today saying they would look at the challenges big data poses by potential misuse.

The European Banking Authority, the European Securities and Markets Authority and the European Insurance and Occupational Pensions Authority said they would investigate big data to see if use of big data needed regulation.

The speed of computing allied with big data analytics could mean that peoples’ personal security could be compromised by profiling data based on an individual’s profile.

Analysing big data has become important to banks and to other financial bodies because they believe they can make money out of spotting patterns and such patterns could be misused.

Government pledges more support for SMEs

Houses of Parliament, Wikimedia CommonsThe UK chancellor of the exchequer has said the government has struck a deal with the European Investment Bank (EIB) in a bid to gain more support for small and medium enterprises (SME).

George Osborne said thatthe EIB lent seven billion euro to UK last year, with the European Investment Fund supporting 25,000 UK SMEs.

The UK government will make £6 billion of UK guarantees available to co-finance infrastructure projects in the UK and will soon sign a memorandum of understanding with the EIB to firm up the opportunities the fund brings.

Osborne said that an important element of the plan was to make sure that SMEs and infrastructure projects have the necessary finance.

The British Business Bank has just signed a memorandum of understanding with the European Investment Fund.

The fund’s CEO, Pier Luigi Gilbert, said that the moves reflect efforts to support small and medium sized companies that drive growth and jobs in the UK as well as Europe.

Mobile payments set to bloom

ContactlessApple Pay appears to have spurred the company’s competitors to get in on the mobile payment act and a report today said that global shipments of moble phones using near field communications (NFC) totalled 400 million units last year.

That, according to research company Topology, is about 20 percent of total shipments worldwide last year.

Topology predicts that this year that figure will rise to 30 percent this year but the story isn’t over yet. Analysts think the percentage will amount to 60 percent of 1.2 billion units in 2018.

However, there is one challenge vendors have to face, and that’s security.

Ariel Chen, Topology semiconductor analyst, said that trading money over mobile phones needs “very high” security standards and hardware here is better than software.

Chen claims that criminals can use their own iPhones to make payments with card information they’ve stolen.

The answer to this is semiconductor manufacturers working closely with banks and better verification for customers.

Tech companies are a threat to banks

Databroker_scrooge_mcduck-346x260The Royal Bank of Canada claims that technology companies pose a competitive threat to established lenders.

RBC Chief Executive David McKay said he was positioning Canada’s largest bank to compete with technology firms that have expanded into the money-moving business but don’t “bear the financial and social costs of being a bank.”

In other words the banks are heavily regulated because they have a nasty habit of crashing and asking the government for huge hand-outs while the technology companies do not.

“Many of these new entrants are excellent competitors – innovative, driven, and responsive to their clients, but they also may distort the financial system with unintended risks that regulators cannon clearly see,” he told the bank’s annual general meeting in Toronto.

Of course the Tame Apple Press insisted he was talking about Apple’s new Apple Pay service which is falling from favour with retailers and needs a plug, however he was more likely to be talking about Amazon and Paypal.

McKay said RBC was prepared to partner with small venture firms to develop applications for banking through mobile devices.

“It’s how do we apply the world of banking to the mobile phone? Not only from a payments perspective, but from pure banking perspective, how to you pay? How do you transact in general?” he told a media briefing.

“A second area where we’re certainly looking at technology to help innovate is in our processes, in the back office.”

New Italian job stole half a million euro

Kaspersky Lab has found proof of a targeted attack against the clients of a large European bank which has needed the robbers half a million euro in a week.

The campaign started on 20 January this year when a command and control server was detected on the net. The server’s control panel indicated evidence of a Trojan program used to steal money from clients’ bank accounts.

More than 190 victims could be identified, most of them located in Italy and Turkey. The sums stolen from each bank account, according to the logs, ranged between 1,700 to 39,000 euro.

Two days after Kaspersky Lab discovered the C&C server, the criminals removed every shred of evidence that might be used to trace them.

Vicente Diaz, Principal Security Researcher at Kaspersky Lab, said that the Bank had been notified and the coppers.

It is believed that key financial data was intercepted automatically and fraudulent transactions were carried out as soon as the victim logged onto their online bank accounts.

It is not clear what malware software was used in this campaign. However, many existing Zeus variations could do it.

The stolen money was passed on to the crooks’ accounts and participants in the scam receive some of the stolen money in specially created bank accounts and cash out via ATMs.

It is expected that the scam will re-appear somewhere else in the future. 

Movie industry can't profit from piracy

The UK courts have told Big Content that it can’t hope to profit from piracy after it tried to seize cash made by Usenet.

The England and Wales High Court of Justice, Chancery Division, has ruled that the movie industry has no rights to the profits made by the owner of Usenet-indexing website Newzbin2 by infringing on copyrights.

According to IT World,  the studios already obtained injunctions freezing Harris’ bank accounts and those of the NZB Foundation which seems to own the property in which Harris lives and those of his company Kthxbai, which is said to have received payments from Newzbin2, and another company Motors for Movies, which owns the McLaren car Harris uses.

But the studios wanted an even bigger pound of flesh. They wanted a proprietary injunction which would claim title to Harris’ assets and those of his companies. They argued that as copyright owners they had a proprietary claim to the proceeds of infringement of those copyrights.

But Judge Guy Newey said that a copyright owner does not have a proprietary claim to the fruits of an infringement of copyright and he refused to give such an injunction.

The Motion Picture Association of America (MPAA), represented by Universal Studios, Warner Bros., Paramount Pictures, Disney and Columbia Pictures, sued David Harris, the operator of the Newzbin2 website, and Christopher Elsworth, who used to run the site’s predecessor Newzbin.com.

The studios had hoped to make a bob or two on the money Harris derived from copyright infringement. After all it was money they did not make because at the time they were reluctant to sell legal content online.

Newzbin2 was a British website that indexed binary files posted on Usenet. The site also created files in the NZB format listing all the Usenet messages containing the constituent parts of a posted binary file, allowing users to download the posted files more easily.

So the High Court of Justice ruled in 2010 that Newzbin was liable to the studios for copyright infringement because its operators well knew that the vast majority of the materials in the Movies category of the website were commercial and so likely to be protected by copyright.