Kate Fitzgerald

💥 New security controls have been introduced by the team over at Monzo Bank. This trio of new measures - known as Known Locations, Trusted Contact and Secret QR Codes - will aim to provide a much-needed layer of protection for customers when making large transfers or taking out savings.   The opt-in will require customers to select at least two of the three security controls (and will be in addition to the typical biometric of PIN authentication checks they already use).   ⚖ Getting the balance of friction and convenience in payments has its challenges. Sure, consumers want it to be easy, but the industry has a responsibility to prevent fraud and adding friction is a key part of that.   Not only are banks battling with friction and convenience, but the upcoming APP fraud requirements are adding even more pressure by requiring them to reimburse victims.   😢 It's not easy!   But compliance must be embedded in a firm's culture, just as firms are constantly seeking to evolve, innovate and protect their customers. (Drop me a note if you want to chat about how to make this work 👀 ).   ( ⬇ Link to the The Fintech Times article - https://lnkd.in/e4Kcwytx ) #fraud Thistle Initiatives

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Monzo's new features for fraud are amazing 📍 Known locations or "leave your money at home". Places you're comfortable moving large amounts of money but fraudsters are unlikely to access 🤝 Trusted contacts. If a large transfer is requested your trusted friend must approve. Hugely helpful if your phone is stolen or for vulnerable populations. 🤫 Secret QR codes. Print out a QR code and keep it in a safe place to scan when needed. If these aren't available the fallback is step up KYC. 🧠 Thoughts - All of this is possible with smart device and user behaviour tech but the user education and experience is key - I love how these are announced to a community. Show me another large bank who does that well? - You never see the big banks innovating on these types of features even though they talk a lot about "trust" being their most - I give it a year before most other big banks have copied and pasted these features. Let's raise the bar

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Now that we have had a week to digest the FCA's new proposal on payment firms' and e-money firms' safeguarding regime, the impact of the new rules are becoming clearer. The proposed changes will bring the safeguarding regime a lot closer to the CASS regime already in place for investment firms. Some of the key provisions that will affect the industry are: - Designated senior manager responsibility for safeguarding - Monthly regulatory return on safeguarding arrangements - Prescribed methodology for reconciliations of safeguarded funds and bank accounts - Immediate segregation of client funds upon receipt - Resolution pack to facilitate the return of client funds in case of insolvency   In the interim phase, the changes to the reconciliation methodology are significant, as firms will have to perform effectively two calculations for funds required to be safeguarded (on D) and funds required to be deposited (on D+1) in a bank account. Implementing the safeguarding return will also pose challenges, as investment firms found out when the CMAR was introduced. For the end state, the 'immediate segregation' proposal to receive funds directly into a bank account could make the biggest impact on the operating models used in the industry. It will affect the role played by agents and distributors, as they will no longer be able to hold client funds. The new proposals also confirm the regulator's view that accounts with payment and e-money firms are not adequate options for holding client money. What do you think of the new proposals and how will it affect your business? Please contact me, Nisha Sanghani or Jake Green if you want to discuss the impact of the new proposals in more detail. #AshurstRiskAdvisory #safeguarding #cp24/20

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On 12 July the Payment Systems Regulator published their latest policy statement on the forthcoming changes in relation to APP fraud set to kick in from 7 October 2024 It states that: 👉 PSPs must register with Pay.UK by 20 August 2024 👉 This will help identification of a PSP as being in scope and help facilitate the shared directory - the FPS Reimbursement Directory (i.e. contact details for PSPs to communicate re notification by a customer in relation to APP fraud). 👉 The data PSPs need to retain and report to Pay.UK (so that compliance with the rules can be monitored) 👉 The limits on use and disclosure of the data captured by Pay.UK 👉 The expectations on informing consumers of their rights. It is clear the 7 October deadline is achievable in the eyes of the Payment Systems Regulator. Given the volume of APP fraud that continues to take place, we are expecting to see an increase in consumer fraud disputes as well as disputes between PSPs in relation to when a receiving bank might challenge the decision making processes of the customer's bank on assessing, for example, if an event was in fact a first party fraud or if there were grounds for arguing gross negligence. If you have any questions around the topic please reach out to Rebecca Craig in our team, an experienced litigation lawyer specialising in Authorised Push Payment Fraud cases supporting clients who have been victims in this area and working with the banking industry around the Contingent Reimbursement Model (CRM).

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Digital verification innovation will transform how consumers and businesses engage with the financial services sector  Centre for Finance, Innovation and Technology (CFIT) leadership bringing together a range of stakeholders in tackling economic crime will make it easier for businesses to access financial services.  The White Paper published today highlights how this industry leadership can have real positive impact. Terrific leadership by Leon Ifayemi Teresa Lam #FinTech #Innovation #FinancialServices #EconomicCrime #DigitalVerification  Charlotte Crosswell OBE Alex Marsh ★ Madush Gupta ★

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Surely, sharing exposure and other data to protect your organisations shareholders from unnecessary losses and you and your employees from job losses due to fraud is a no brainer? Beware of complacency and inertia, fraud is a growth industry and those fraudsters will shortly be targetting your weaknesses.

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This is the way.... In her Mansion House speech last night Rt Hon Rachel Reeves outlined plans to accelerate UK growth and competitiveness. She highlighted the continued importance of the UK's financial services sector - both as a contributor to national GDP and also as part of the global financial ecosystem. In the speech, she repeated her view that we are in a 'moment of flux'. As referenced by Yvonne Deane Harte below, digitisation, tokenisation and the use of Distributed Ledgers (blockchains) is now being adopted at the highest levels of the world's capital markets. In the Searching for Mana episode which accompanied the launch of MembersCap, Lloyd Wahed and Patrick Barrett spoke with Circle founder Jeremy Allaire about our shared belief that we are at an inflection point, at which a revolution in the way capital moves is quietly beginning. At MembersCap , we firmly believe that tokenisation enables greater efficiency, easier access and enhanced transparency in financial markets. View the episode here https://lnkd.in/eZqvSBxZ Slowly, slowly, then all at once. Visit memberscap.com for more information. #reinsurance #digitalassets #tokenization

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The information requests keep on coming from the FCA but I really like the transparency on timing and approach to help capacity planning and understanding of next steps.

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There have been lots of good summaries of the UK's National Payment Vision (NPV) since it was published on here so I thought I'd share something slightly different - the NPV in numbers. Looking at how often certain phrases or words are used is a good proxy for what the overall message is trying to say. I was pleasantly surprised to see innovation come out so highly. National Payments Vision - in numbers 🇬🇧 48.1 billion transactions in the UK last year 💳 29.1 billion payments made using credit or debit card in 2023 📆 4.9 billion Faster Payments made in 2023 📶 11 million current users of Open Banking services in the UK ⏰ 1500 transactions every second 💻 65 references to innovation 👐 61 references to open banking 🕵‍♀️ 48 references to fraud 👫 48 references to consumer 🏗 46 reference to infrastructure  🏃‍♀️ 26 references to competition 🏢 24 references to businesses  🏛 13 references to a digital pound 💪 6 references to resiliency 📱 5 references to digital wallets 🌍 2 references to stablecoins 💱 2 references to RLN Also, it's equally worth reading the joint payments remit letter sent to the Financial Conduct Authority and Payment Systems Regulator from HM Treasury that was published alongside the NPV. #nationalpaymentsvision #payments #npv #innovation #openbanking #fasterpayments

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Interesting read providing further proof of the benefits for both customers and creditors when field is included as part of your end to end process. #field #fieldvisits #customercare

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Can your bank tackle cross-channel scams? Cross-channel scams happen when criminals steal information from a variety of touch points to take control of a victim’s bank account, according to Featurespace’s Head of Analytic Products, Edmund Kay. This could include cloning a payment card in a customer’s name or steal someone’s identity to set up a bank account or take out a loan. Read Ed's full article here: https://lnkd.in/e3W9YX39

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Countless press articles over the past few days covering Monzo Bank posting its first annual profit of £15.4m since launching in 2015 (including this latest one from the Financial Times below) The business is now valued at $5.2b. Lot's of questions (mostly dodged!) about the potential of a London listing or the prospect of a US listing with a growing US focus. Also confirmation that it’s in the early stages of expanding into the broader European market via a new base in Ireland which is exciting. The company said that it expects to grow its customer count to 11 million in the coming year under the leadership of TS Anil. The UK neobank scene appears to be thriving which is great. We currently manage more than 40,000 retail investor positions in Monzo from when they invested in the company between 2016 and 2018. Investors who participated in the 2016 round came in at a pre money valuation of £23.6m 😎 https://lnkd.in/eHcsex_u

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Speaking at The Association Of Professional Compliance Consultants conference today, the Financial Conduct Authority delivered a crucial message to firms: know who your customers are. As highlighted in the FCA’s multi-firm review, defining your target market isn’t just a regulatory tick-box—it’s a business imperative. A clear understanding of your target market ensures that your products and services meet the unique needs and risk appetites of consumers. In my view, this goes beyond simply fulfilling Consumer Duty requirements; it plays a key role in preventing fraud and money laundering. The FCA emphasised the importance of defining target markets in detail, taking into account the characteristics, risk profile, complexity, and nature of the product to mitigate potential harm. While many firms may have a target market buried in a regulatory business plan, how relevant is that definition today? It is critical to understand who is actually using your services, which may differ significantly from your original target market. Does this sound daunting? It doesn’t need to be. Your firm is already gathering valuable customer data throughout the customer journey—whether through your sign up process, questionnaires, market research, or via your customer services team. The challenge is identifying and utilising these touch points to build accurate customer profiles. This requires a collective effort by teams across the business, from the likes of operations, marketing, and sales, to risk and internal audit. And it doesn’t stop at Consumer Duty. This exercise is invaluable across your entire compliance framework, particularly when applying a risk-based approach to financial crime prevention. When you truly know your customers, you can spot poor outcomes, detect unusual behaviour, and more effectively identify potential fraud or money laundering risks.

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The FCA released CP24/20 on 25 September setting out proposed changes to the safeguarding rules. The new requirements will raise the bar for payments and e-money firms by applying a CASS regime over client funds, with clearer requirements over internal records and reconciliations, a new monthly report that will need to be submitted to the regulator, and an introduction of formal accountability for the protection of relevant funds. Our article provides KPMG’s take on the new rules. Contact me or Michelle Plevey to discuss what the impact of the incoming rules will mean for you, and how we can help assess your readiness for compliance ahead of go-live in 2025.

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Bank of England Publishes Discussion Paper on Innovation in Money and Payments The Bank of England has released a Discussion Paper on its approach to innovation in money and payments, marking a significant step in shaping the future of the UK payments landscape. 🔶Key Points: 🔹Financial Stability Risks: The paper highlights the risks of financial markets moving away from central bank money and emphasizes the need to preserve its role as an anchor for confidence in the financial system. 🔹Technological Innovations: The Bank will explore enhancements to the Real Time Gross Settlement (RTGS) system and experiment with wholesale central bank digital currency (CBDC). 🔹Retail Payments: Ensuring ease, speed, and confidence in payments for households and businesses across the UK, with collaboration from HM Treasury, the Financial Conduct Authority, and the Payment Systems Regulator. 🔶The Bank invites responses to this Discussion Paper by 31 October 2024. This Discussion Paper is a call for responses to help shape an ambitious and secure agenda for the evolving UK payments landscape. https://lnkd.in/dGFcQNdG #BankofEngland #Innovation #Payments #FinancialStability #RTGS #CBDC #UKFinance #DiscussionPaper

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This week in banking news – banks to delay payments up to three days to investigate fraud, Visa Direct and APA partner, and Janet Yellen cautions against private credit risk The UK Treasury will empower banks to delay payments by up to 72 hours to investigate suspected fraud. While the increased fraud protection could increase confidence in the UK payment system, it is also likely to disrupt the speed of business transactions, especially for companies relying on rapid payments to maintain cash flow and meet supplier obligations. The impact of these cash flow challenges will be borne largely by SMEs. While SMEs deal with the added pressure of possible delayed cash inflows, what returns will the banks be making on their additional cash holdings, in the name of fraud protection? In other banking news: Global - Janet Yellen has called for increased regulatory vigilance over the growing systemic risks posed by private credit and non-bank lenders.   United Kingdom - Bank of America expands its Virtual Payables capabilities in EMEA with the launch of Virtual Payables Direct. Australia - Westpac has sold its remaining auto finance division to non-bank lender Resimac. - APRA has revoked the licenses of International Bank of Australia and its parent company upon request. Singapore - ANZ joins the MAS-led initiative to explore the use of tokenised real-world assets in financial markets. - Atlantic Partners Asia partners with Visa Direct to handle higher trade sizes and offer global payment services. United States - Apollo Global Management sets a goal to more than double its assets under management to $1.5 trillion by 2029, positioning itself to compete directly with banks. - Wells Fargo and Fiserv will terminate their long-standing merchant acquiring joint venture in 2024. #bankingnews #marketintelligence #financialservices #globaltrends Want to start your week with the intelligence behind leading decision-makers? Read the full stories and subscribe to East’s banking news in the comments below

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We did not see evidence of political views leading to account denial, suspension or termination - is one of the main findings of the recent update to the ‘UK Payment Accounts: Access and Closures’ report initially published by the FCA in 2023. As stated in the 2023 report, by far the most common reasons account providers gave for declining, suspending or terminating an account were because it was inactive/dormant or because there were concerns about #financialcrime. The follow-up report highlights four main findings: 📌  Basic Bank Account (BBA) customer journeys varied, leading to differences in apparent rejection rates, and firms were poor at making customers aware of BBAs. 📌  Data on account access was limited or unclear. 📌  No evidence of political beliefs or other views lawfully expressed being used as a rationale for account denial, suspension or termination. 📌  ‘Reputational risk’ is used in varying ways by different firms to deny or close accounts. Out of these four, I find the ‘reputational risk’ issue worth exploring further. It comes up frequently during FINTRAIL AML audits when we discuss firms’ risk appetite statements (or lack of them). The FCA sets clear expectations: 📍  have a clear definition of reputational risk and how it should be used in the context of account access, which is understood by relevant staff, 📍  be able to satisfy themselves that, when reputational risk is cited as a reason for an account denial or termination, the customer represented a material reputational risk to the firm’s business, 📍  consider what monitoring is required in relation to how they use reputational risk in the context of account access, and intervene appropriately if they identify that internal policies are not being applied consistently, 📍  maintain adequate records of account denial or termination decisions for reputational risk. Where firms are, on reasonable and properly considered grounds, deciding not to offer or to continue to provide a payment account to a customer, the regulator expect that firms’ communications should meet the consumer understanding requirements under the Consumer Duty, including by being clear on what their decision is, what this means for the customer and the steps the customer could take. #aml #amlcompliance #ffe

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