Could Banks Help To Cut Fraud By Doing Simple Things?
A couple of days ago, I noticed a spurious and unknown payment in my bank account for £115.73. It was just labelled Bank Ctedit, with no indication as to who had sent it.
Checking for those that usually pay money into my account, I could not find a similar payment in the past. So I came to the conclusion, it was probably an error in the banking system. Or possibly some clever fraud! But then I’m cynical.
This morning it revealed itself as a rebate from nPower, who supply my electricity and gas. Perhaps four days ago, they read my electricity meter, so there is a possible explanation.
But supposing that the credit had been a debit, or I had not noticed it, as many people don’t check their bank statements every day, as I do.
Now if the banks put more information on the pending debits and credits, which they must have, it might help cut fraud, in that customers would be alerted to what was happening earlier.
It’s the same with cashpoint withdrawals, where the information is very minimal. How many people would spot a fraudulent withdrawal from their bank account, from the information given now. If the withdrawals were properly labelled, customers would probably spot an illegal one earlier and more easily.
Is Funding Circle Going To Sleep With The Enemy?
There are rumours around the Internet that Funding Circle is going to tie up with Santander. Read a report here in The Telegraph.
For many years ING provided funding to a host of smaller lenders in the UK. Then they changed tack and left these lenders up the creek without a boat, let alone a paddle.
The only possible tie-up that I would possibly do if I was the CEO of Funding Circle is to licence the technology for use in a non-competing market.
I certainly wouldn’t get involved in any direct tie-up in the UK, for a number of reasons. Most of these are detailed in the Telegraph.
But I was part of a small dynamic company taken over by a big US corporation and it just didn’t work. Santander and Funding Circle are so different, I’d only give them a few months before they fell out in a big way.
I hope that if they are talking, that Funding Circle see the light and withdraw.
But the rumours probably haven’t done their business a load of good.
Cash Flow Problems
In the last week, I’ve joined a few organisations like the Tate, the British Museum etc., where I pay my subscription by direct debit. Some have turned up in my bank account, but most haven’t!
I know it’s the holiday season, but surely speed is of the essence.
Is it the organisations or is it the banks? In two cases, everything was typed into the computer as I stood there, so surely that must be in the system by now!
The Archbishop In The Wonga
Before you open your mouth, it is always best to check your facts or in the case of Justin Welby, your church’s investments. If he had he’d have found that his target yesterday, was a company they’d indirectly invested in. It’s reported here on the BBC.
A few weeks ago, I wrote about Robert Peston’s views on Wonga. I said this.
Obviously, Wonga did a lot of analysis on their data and this has led them to their success, as they have the right model and technology. Peston says Wonga’s technology is world class. If banks such as RBS, Northern Rock and Bradford and Bingley had had world-class technology, they might not have gone bust.
I would add to that now. Perhaps, if when you sign any credit agreement or loan, how many would be refused if versions of Wonga’s technology is used. The success of any loan or credit company depends heavily on the quality of its lenders.
But the downside is that there would be a hard-core of people unable to get any form of credit. No reputable lender, and especially a credit union, would ever touch them.
Archbishop In Cloud Cuckoo Land
This story about how Justin Welby aims to compete Wonga out of business, is on the BBC today. Here’s the jist.
The Archbishop of Canterbury has warned the online lender Wonga that the Church of England plans to force it out of business – by competing against it.
He may have laudible aims, but like the poor, loan sharks, where legal or not, will always be with us.
What the people who use Wonga need is money and if everybody supported credit unions, that wouldn’t give any money directly to those who need it.
Credit unions, like all responsible lenders, don’t lend money to those who would be unable or unwilling to pay it back.
Does Danny Alexander Read My Blog?
Last week I published this post. The key part is this paragraph.
I would like to see a law, where all loan companies from the banks, through peer-to-peer lenders to the legal loan sharks, have to publish the amount of money they lend in various parts of the country.
Today I read this article on the BBC web site. Here’s the first paragraph.
Major UK banks will reveal details from January of their lending in thousands of local areas, Chief Secretary to the Treasury Danny Alexander has announced.
So did he read what I said?
Remember many years ago I used to analyse the costs in the various branches of what was then a major clearing bank. It was amazing the differences you got between branches causes by the odd mistake, malpractice or unforeseen circumstance.
Who Needs Outside Investors?
The Sunday Times has two articles today about very successful companies that have become that way and financially secure, without any external finance.
I’ve known about the first, Martin Baker for many years and in some ways it’s surprising that they haven’t sold out, as anno domini catch up with us all.
The other is a Cambridge company called Real VNC, who provide software for virtual network connections. They have just won the MacRobert Award as is reported here.
I like the quote from Andy Harter, one of the founders of the company.
We need to persuade young people that engineering means the people who built the Olympic Park and the internet, and that it is a great choice of career.
I’ve spend a life in engineering and would thoroughly agree. I’ve even applied engineering principles to banking and finance. Bankers have needed me more, than I’ve needed them!
On the other hand when I needed a good banker, I found an excellent one in my friend David, who came to me because of the quality of my work on an internal project he started in the bank. How many bankers these days would recognise a good engineer or scientist? Only after he’s sold his or her company, I suspect!
Cissé’s Stand On Wonga
Papiss Cissé is adamant he won’t wear a Wonga-branded shirt, as reported here in the Guardian.
I support his stand.
I would like to see a law, where all loan companies from the banks, through peer-to-peer lenders to the legal loan sharks, have to publish the amount of money they lend in various parts of the country.
That way we could see if shirt sponsorship was a good idea for lenders.
Zopa Tweaks The Alogorithm
I am a Control Engineer by training, so I’m supposed to be able to make systems perform in a safe and stable manner. As an example, when your train comes into the station and stops precisely in the right place, or an airliner lands itself automatically, a Control Engineer will have been responsible for working out the principles of how that is done. I have said before that Zopa is in fact a stable system, but now they have tweaked the algorithm to speed up the lending process without losing any of the stability. It’s all described here in their blog.
The most important way to lend money faster is to create a bigger demand. Zopa asks lenders to spread the word to those with good credit ratings, who might want to borrow money for sensible purposes.
But of course, you won’t get a bigger demand unless you have more money in the pot to borrow! So the whole process should spiral and feed in on itself.
The one thing that needs to be maintained to the highest possible level, is the checking of borrowers to make sure, they’re credit worthy.
But even this process should get better, as Zopa learns more about good borrowers and this feeds back into the system.
The whole system is a classic feedback control system, that has the ability to mutate and change itself by learning from its history.
Does your very average bank, like the Royal Bank of UK Taxpayers behave like this? Of course it doesn’t, as those at the top cast a strategy in stone and it gets slavishly followed to the letter. Unfortunately, it has no capacity to learn and change in a Darwinian manner.
But more importantly, it can’t respond easily to increased demand and a changed marketplace. Royal Bank of UK Taxpayers also has constraints placed on it, as regards to parameters like working capital.
Zopa just needs to balance their lending to the amount that is deposited by lenders, or as I prefer savers. If I look at my figures for Zopa over the last year or so, these figures have been moving towards balance.
Now with their Safeguard system enabled, the loop has been closed!
The Future Of Cash Machines
This article raises a few questions about cash machines and how they will look in the future.
I don’t have a problem with the machines themselves, but increasingly over the last few years, I’ve had problems with the placement of a few machines, due to being unable to read them in the sun. And it’s not just cash machines, as this post shows.
I also have problems with some touch-screen technology.
And of course, if they insists on a smart phone in some way, they can forget it!
As they can, if I get charged to take out my money!
I think we’ll see the standard design last a few more years yet!
The Anonymous Widower 