We are back with the weekly news update, summarizing the most important tech stories from the past seven days. This week, we focus on FCA’s warning for the challenger banks, Nationwide’s solution to Visa dispute processes, SocGen’s brand new startup accelerator, a newly published report that highlights the need for data-centric capabilities among retail banks, impersonation fraud’s significant increase, PayU’s expansion strategy, UnaBiz’s new IoT acquisition, Russian cyberattacks threat, regulations regarding common chargers in the EU, and Lunit’s upcoming IPO.
After a recent review, FCA revealed that several UK challenger banks are not conducting the necessary financial crime checks on new consumers in a sufficient way. According to the review, there is a spike in the Suspicious Activity Reports filed in by challenger banks, suggesting the initial checks banks perform when accepting new customers may not be adequate.
While the FCA has encouraged the “innovative” use of technology in regards to quickly verifying customers, it did warn the banks that there are failures in the consistent application of enhanced due diligence.
“Challenger banks are an important part of the UK’s retail banking offering. However, there cannot be a trade-off between quick and easy account opening and robust financial crime controls,” Sarah Pritchard, the executive director, of markets at FCA, says. “Challenger banks should consider the findings of this review and continue enhancing their own financial crime systems to prevent harm.”
Nationwide Building Society has incorporated Pegasystems technology to streamline the Visa dispute process, after the 251% surge in challenges. By using Pega Smart Dispute for Issuers, the systems needed to resolve a dispute decreased from 15 to 2. Additionally, the dispute processing time takes 15% less time.
Martin Watkin, product owner of payment CIO at Nationwide Building Society, says: “We have now successfully completed thousands of consumer Visa dispute claims and have finally been able to retire our legacy forms system. With this digital transformation, our member-facing colleagues are able to consistently deliver an excellent experience in a simple and straightforward manner that is also hassle-free for colleagues in operational areas.”
Societe Generale has unveiled its new accelerator program for banking and trade finance cash management startups. The startups encouraged to participate in the program are meant to focus on topics such as client communication interfaces, CSR, fraud, or data.
Until the end of May, startups can submit their application for a six-month incubation. The ones selected will be provided the expertise of SocGen’s and will be able to test their offerings in the real-life environment.
Claire Calmejane, the chief innovation officer at SocGen, says: “With the ‘Payments & Transaction Banking Accelerator’, we are taking a strong role in supporting the startup ecosystem and in transforming transaction banking activities.”
Since Fintech started its quick-paced acceleration, there is a concern among retail banks that they will start lagging behind. The new report by Capgemini and Efma that collected insights from over 8000 customers and 142 banking executives across the world shows that ¾ of customers are more appealed by fintechs due to the good user experience, low cost, and quick support.
Capgemini claims that retail banks must adjust their business models and place their focus on customer engagement. However, this may be more complicated than it seems considering the report shows 70% of banking executives say they no to have adequate data analysis capabilities.
“The formula for growth sounds simple. Customers want to be provided with personalized experiences, regardless of wherever they may be on their own digital journey. The challenge, however, remains in execution,” Nilesh Vaidya, the global industry head of retail banking and wealth management at Capgemini Financial Services, says. “Retail banks must rethink their wider business models, restructuring to focus on providing the same personalized, lifestyle-enabled ecosystem journeys that customers have come to expect from their digital interactions.
“Without addressing the disparity and striking inconsistency between a customer’s digital and physical banking experiences, traditional banks risk losing customer value to their more agile FinTech counterparts,” he adds.
TSB has issued a warning as the impersonation fraud rates are growing rapidly and resulting in the victim of the fraud losing £4000 on average. Since the beginning of this year, impersonation fraud has amounted for ⅓ of TSB fraud cases. The number of cases increased by over 300 percent since 2019.
Paul Davis, director of fraud prevention, TSB, says: “Households are bombarded with scam calls, texts and emails every day – we’re urging them to remain suspicious of any unsolicited contact, to avoid falling victim to fraud at a time when the impact would be hardest felt”
“We continue to be the only bank to protect customers from fraud losses, through our Fraud Refund Guarantee, which is as important now as it’s ever been to the lives of our customers,” he adds.
The Colombian online payments startup Ding has just been acquired by PayU. After the deal is completed, Ding will strengthen PayU’s solution portfolio and is a part of the company’s LatAm expansion strategy. Apart from this acquisition, PayU participated in the financing round for Treinta, another Colombian startup that specializes in digitising the processes of Latin American SMEs.
Francisco León, PayU’s CEO for Latin America comments: “By acquiring and investing in businesses like Ding and Treinta, both global and local SMEs are able to expand their business within LatAm, providing the best payments service with the consumer experience first in mind. We are very excited to expand the reach of Treinta and Ding’s innovative solutions, particularly as these services are fully aligned with our strategic goal of creating a world without financial borders.”
Mario Shiliashki, global CEO of PayU’s payments division adds: “Our recent activity in Colombia reflects PayU’s desire to provide seamless online and cross-border transactions for merchants and consumers. These are just two examples of how we are providing useful products and services to millions of people in their daily lives. PayU has helped to facilitate the evolution of online payments in Colombia since 2011 and we are proud to be extending our services to promote financial inclusion for SMEs in both Colombia and globally.”
The Singapore-based company UnaBiz has just acquired the struggling French-based startup SigFox. UnaBiz announced 110 out of the 174 existing employees at SigFox will be safaguarded and said it will make ‘financial and operational assessments’ to protect the backend system and mission-critical network.
“I want to thank the entire Sigfox community for supporting us, and the French government for authorising our investment,” said Henri Bong, Co-Founder and Co-CEO of UnaBiz. “While the transition of ownership marks a new beginning for Sigfox, UnaBiz will definitely guarantee the French sovereignty of Sigfox.
“As the world’s leading provider of IoT communication services and the pioneer of the 0G network in 75 countries worldwide, Sigfox is in a unique position to champion massive IoT adoption. “On top of securing the sales pipeline for Sigfox in the next 12 months as global markets emerge from the pandemic, UnaBiz and Sigfox will strive towards the convergence of LPWAN. The new Sigfox will reinvent itself and collaborate with other IoT communication technologies to seize new market opportunities,” he added.
In a report by The Cybersecurity and Infrastructure Security Agency (CISA), yet another warning over Russian cyberattacks on key infrastructure appears. The report was created in cooperation with global law enforcement bodies such as the Federal Bureau of Investigation, National Security Agency, Australian Cyber Security Centre, Canadian Centre for Cyber Security, National Cyber Security Centre New Zealand, and the UK’s National Cyber Security Centre and National Crime Agency.
The report highlights that there is a high threat of destructive malware, DDoS, ransomware, and cyber espionage conducted by Russian state bodies as well as Russian cybercrime groups. There is a series of actions that CISA urges all organizations to take, including:
- Prioritizing patching of known exploited vulnerabilities
- Enforcing multifactor authentication
- Monitoring remote desktop protocol (RDP)
- Providing end-user awareness and training
“Given recent intelligence indicating that the Russian government is exploring options for potential cyberattacks against US critical infrastructure, CISA along with our interagency and international partners are putting out this advisory to highlight the demonstrated threat and capability of Russian state-sponsored and Russian aligned cybercrime groups,” said CISA Director Jen Easterly. “We know that malicious cyber activity is part of the Russian playbook, which is why every organization – large and small – should take action to protect themselves during this heightened threat environment.”
This is another in a series of public warnings over Russian-led cyber attacks. However, it is the first one that is recently published with intelligence from such a large number of law enforcement bodies.
Last week, The Internal Market and Consumer Protection Committee yesterday voted 43 to 2 in favor of revising the Radio Equipment Directive which entails that the EU would require a standard USB-C charger for all electronics. The aim behind the new rules is to be able to use the same charger cable for all phones, tablets, headphones, and other small and medium-sized electronics.
The European Commission is supposed to show the strategy that would ‘allow for minimum interoperability of any new charging solutions.’ by the end of 2026.
The MEPs highlighted that several different cables in each household ultimately end up in a landfill which is not a sustainable solution. Moreover, they point out that consumers currently may feel forced to stick with the same brand due to already having a number of compatible cables for the devices.
“With half a billion chargers for portable devices shipped in Europe each year, generating 11,000 to 13,000 tonnes of e-waste, a single charger for mobile phones and other small and medium electronic devices would benefit everyone,” said rapporteur Alex Agius Saliba. “It will help the environment, further help the re-use of old electronics, save money, and reduce unnecessary costs and inconvenience for both businesses and consumers.
“We are proposing a truly comprehensive policy intervention, building on the Commission’s proposal by calling for the interoperability of wireless charging technologies by 2026 and improving information given to consumers with dedicated labels. We are also expanding the proposal’s scope by adding more products, such as laptops, that will need to comply with the new rules.”
The South Korean biotech startup Lunit which specializes in AI solutions for medtech is getting ready for an IPO, after receiving the green light for going public on the South Korean Kosdaq. The company announced they plan to file for a listing by the end of June of this year.
Lunit has been founded back in 2013 and is known for its AI programs that scan X-rays to detect common chest conditions and analyze breast mammograms, among others things. After the IPO, Lunit wants to expand its AI development work and commercial reach. They have already a few big deals in a bag, including the ones with Philips or Fujifilm that want to incorporate Lunit’s algorithm into their X-ray diagnostics.