The Bankwatch

Tracking the consumer evolution of financial services

Archive for the ‘Uncategorized’ Category

If we think about it what is the problem with security service surveillance?

Totally of banking topic. The consternation about NSA and government surveillance displays an enormous lack of historic perspective on the topic.

What Americans Need to Know About the History of Spying | The Big Picture

5,000 Years of History Shows that Mass Spying Is Always Aimed at Crushing Dissent

For thousands of years, tyrants have spied on their own people in order to crush dissent.

Keith Laidler – a PhD anthropologist, Fellow of the Royal Geographical Society and a past member of the Scientific Exploration Society – explains:

The rise of city states and empires … meant that each needed to know not only the disposition and morale of their enemy, but also the loyalty and general sentiment of their own population.

There are articles about tunnels and other obscure methods of information gathering.

However on a much simpler scale I am aware of someone who subscribed to certain magazines in the 1990’s that were related to that persons (legal) hobby. It turns out that hobby and the magazines set off alarm bells in the post office which found their way to the local RCMP. Fortunately that person knew someone in the local detachment, who made contact and all was sorted out uneventfully. But even if that were not the case a quick interview with the RCMP would have clarified the situation.

The point is that the Post Office and the RCMP were connected at the hip, and have been forever. Personally I have no issue with this. The Post Office and the security services have been connected closely for hundred of years in British based society. And we are the stronger for it. Security does not need to be managed on CNN.

Back the the NSA. Of course they are listening to stuff. Its a worthwhile debate about how and on what guidance or regulation they are permitted to do so, but really at the end of the day are we so so concerned that we actually want them to stop? Really? The internet world is complicated and that requires complicated solutions which build on age old practices. The latest dissertation on your most recent restaurant or family spat is hardly going to be something intelligence agencies will care about, but if that gets gathered, I say so what. (And yes, the 1990 magazines story was in fact yours truly, and thats for an over a beer conversation)

Written by Colin Henderson

June 30, 2014 at 20:39

Posted in Uncategorized

BBVA implement HCE in their wallet deployment

BBVA who recently purchased digital only Simple Bank announce their first and the worlds first (apparently – requires validation) implementation of HCE which in practical terms is the recently uncovered method for bypassing the telco’s previous hold on payments using mobile phones. For more read my earlier review of Dave Birch’s discussion on HCE here.

BBVA introduces HCE-based mobile NFC payments | Finextra

Spain’s BBVA has become the first major global bank to commercially launch a host card emulation-based mobile contactless payments service.

Relevance to Bankwatch:

In summary from my earlier post and subsequent study, HCE (Host Card Emulation) is a method by which phone app developers can bypass the phone hardware usually embedded by telco’s in their SIM card and known as “secure element”. The secure element was designed to have telco’s own, and take a fee, for every payment transaction using phones using their network. As you can imagine the development of HCE is huge, even game changing, for payments and future revenue flow associated with payments.

Question: do the Canadian Banks employ secure element in their wallets? I think the answer must be yes, but reaching out to hear.

Written by Colin Henderson

June 30, 2014 at 16:20

Posted in Uncategorized

Industrial robots complicate inter country relative advantage

Every once in a while a headline pop up that makes one wonder what it could mean. Here is one – what does the future look like with a China that is significantly more automated? What happens when most robots are in China?

China becomes largest buyer of industrial robots |

China, once the manual labour “workshop of the world”, has become the largest buyer of industrial robots, as rising wage costs and growing competition from emerging economies have forced manufacturers to turn to technology.

We have grown accustomed to the idea that wage disparity will level off and the natural benefit will disappear. However the advent of robots could alter that balance in ways we cannot comprehend as yet. The future is not linear.

Written by Colin Henderson

June 1, 2014 at 20:06

Posted in Uncategorized

The inevitability of disruption in financial services and some reasons why

As one of the “seven” readers of Ron’s blog, he makes a good point about disruption that I would defend. Its all too easy to get caught up on the new shiny object of any one innovation, but thats hardly disruption. When we look at the big 5 banks in Canada each making well north of $1 bn – $2 bn per quarter, and having assimilated all digital/direct banks before them, there is little sign of immediate disruption.

Define Disruption – Snarketing

Should’ve taken a cue from Bill Clinton, and when asked about the potential for disruption, I should’ve said “Define disruption.”

Having said that though disruption is eventually inevitable. While I agree that millenials will grow older, want to buy things and require credit, I don’t believe they will grow to be like previous generations.

Online banking is 18 years old this year. There is no longer anything new about performing self service transactions using internet. What has changed (in Canada) is that 97% of the population is online, and online banking penetration is north of 60%. When online banking began, internet penetration was 5% – 7% and online banking penetration was 0%.

Banking online through web is ubiquitous and mobile is growing at an astonishing rate. Mobile is driving new behaviours amongst people simply from its utility, ubiquity, and frankly fun.

Back to millenials. They have known nothing else. Living digitally is a natural for them and they will always gravitate towards the financial service providers that live as they do.

Disruption will come from two areas I believe:

  1. banks will be worn down by many innovative players, each potentially small, but in aggregate beginning to make a difference, but
  2. real disruption will come from something we haven’t yet seen and probably in the co-opetition space that exist between banks in Canada in particular, but between US banks also in their reliace on common service providers

Using Ron’s dinosaur metaphor, there is evidence they were gradually outgrowing their environment, but that also were hit by event(s) in the form of a volcano, or meteorite.

Relevance to Bankwatch:
I look at what Paypal who have a renewed energy are doing with their payment app. I see Stripe who still come across as a bit techy but who have major valley players behind them. Paypal and Stripe have one thing in common. They bypass one co-option area called interchange. They facilitate bank account to bank account payments.

Rons own definition of disruption follows the Christianson model which says disruption occurs when a business model is dislodged. Payments are not the only source of revenue for banks, but they form the gateway to financial service relationships through the primary account.

Banks have a weakness behind the apparent strength of their co-opetition in areas of payments, cheque handling, statement handling and back room processing. Those co-operative efforts, often driven through Government restriction on bank mergers form a straight jacket for banks that contractually ties them to legacy approaches, and this makes innovation more difficult and complex from inside the bank.

Written by Colin Henderson

May 30, 2014 at 00:04

Posted in Uncategorized

Internet of things is being trapped in paradigm of wearables

Off topic for this blog, at least for now is the concept of Internet of Things (IoT). I remain convinced there will be a convergence between IoT and financial services that we just haven’t seen yet.

Meantime wearables based on health matters are the next big shiny thing that fan folks are focussed on.

WEARABLE APPS: Inside The Race To Create A New App Ecosystem

On wrist-worn devices, we believe the health and fitness category will produce the killer apps. The whole field of personal fitness and health apps will boom as the hardware matures and adds more advanced sensors. Dieting apps, workout apps, and medical apps will try out different approaches — e.g., gamification, social media integration, and data visualization — to see what sticks.

Written by Colin Henderson

May 23, 2014 at 00:35

Posted in Uncategorized

eBay – “One of the biggest data breaches in the history of the internet”

When eBay became aware of the data breach that provided hackers access to the user information of 128 million users it heralded one of the largest data breaches to date. This gave the hackers access to the names, addresses, telephone numbers, email addresses and passwords of its 128m active users.

Lessons from the eBay cyber attack |

The company said it had only become aware of the intrusion two weeks ago. As a result, it is now asking its active users to reset their passwords – aiming to rectify what is probably one of the biggest data breaches in the history of the internet.

The eBay database that hackers accessed also contained no financial information on customers, such as credit card numbers, the company said in a statement.

The breach seems to have begun with hackers gaining access to employee credentials. It is not yet clear how that happened. Was it a hack, an inside job, social engineering or what. eBays own blog post gives us no more information on how the employee credentials were obtained.

What this really speaks to is that the concept of one person having the keys to the kingdom and under a simple username password combination is an out of date concept. Furthermore there needs to be logging and constant vigiligence of access to secure systems all the time.

This from the comments on Krebsonsecurity and if you read past the youthful wording it shows the weak methodologies behind eBays security even at the password level.

So, I changed my ebay acct pwd. Haven’t used it in 6+ months. Contact info is incorrect (old ph# from a job long gone). CC# expired and paypal not even linked.

Ebay uses a pathetic pwd algorithm check. Fails you if you use spaces. I had non-repeat, alpha-numeric, symbol and cases at 30 minimum characters and it said it was weak! It was generated by…1Password (agilebits) and *still* said weak or had white spaces. WTF? …

Written by Colin Henderson

May 22, 2014 at 22:45

Posted in Uncategorized

Nationwide to the future!! – Digital brings cups of tea to branch customers :-/

Really? I mean seriously …. really????

Tech breathes life into branches – Nationwide chief Beale

“A lot of people say that the impact of digital is going to remove branches from the high street. We’re forming an alternative view,” says Beale.

Nationwide says that 94% of customers who have used the video links think that the service is a good or excellent replacement for face-to-face meetings. Beale tells Finextra that the building society has made moves to make the system as personal as possible. For example, advisors ask customers if they want a cup of tea and then contact the in-branch team to get one delivered.

Written by Colin Henderson

May 19, 2014 at 23:25

Posted in Uncategorized


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