Improving Banking Security
There is an article about the security level of chip and pin on the BBC’s web site. It got me thinking.
I am careful with my bank debit and credit cards and feel that with on-line banking, not enough is done to create a more flexible and much more secure system, by using the power of the servers to make things difficult for a criminal.
Logging In
I always log in from memory, rather than use the little machine that my bank gave me. As the customer number and passwords are not written down anywhere, even with the card and the machine, it would be difficult to log in to my account, unless they had co-operation from someone inside the bank.
There is a big flaw in the bank’s security, in the fact that all the machines are identical, which means criminals only have to get one to use this method of logging in, if they have a stolen debit card and the customer number. I needed a new one and just went into a branch and asked for one. They didn’t ask me any questions, before I got a new one.
I very much like the login system used by Zopa. It is very secure and very simple, and I would suspect most people would not need to write anything down to login first time. Something, you can’t say about many systems I’ve seen.
Restricting Cash Withdrawals
I have never understood why thee is nowhere in your on-line banking account, where you can set parameters about how and where you can draw money out through cash machines.
In a simple case, you might impose limits on the amount of money that could be withdrawn at any one time, or say in a week or month.
I would impose a limit of up to a hundred at any one time. If I needed more, I could always change the limit. You wouldn’t want to make it too complicated, as it would start to get onerous.
Better Bank Statements
When I look at my bank statement on-line, the cash withdrawals, just say how much I’ve withdrawn and the name of the bank. Some of the direct debits are well documented either.
it would be very easy to say give every cash point machine a unique reference, so when you checked the statement, you would quickly notice a transaction that was perhaps done with a cloned card.
The more information you gave customers, the more likely they would be to spot something that wasn’t correct.
An Emergency Pin Number
You hear stories about criminals threatening cash point users and getting them to draw money out. So why not have an emergency pin number, that smallows the card, perhaps gives out a few pounds and then says something like.
This machine as run out of money, please try another machine.
Whatever the system did would have to be carefully thought out, to avoid the criminal taking it out on the victim.
SMS Confirmation Of Bigger Transactions
I’ve never understood, why this couldn’t be done, as any message relating to a purchase you hadn’t made, would give you warning.
I’ve always felt that this would be very effective, even if only a few cards were setup this way. But would criminals take the chance of using a card that was, when it might start an immediate chase.
In some ways, what seems to be sad is that all on-line banking is so similar, when there are so many things that can be done to make the system much more secure for both the bank and its customers.
Banks are just so conservative and don’t innovate. Which is why they’re going to fail even more.
Delay In Getting Funds Into Zopa
On Monday, I initiated a transfer of £2000 into Zopa from my bank account.
It arrived today, so it took three days, all because that is the speed of our banking system.
Surely, they can do better, after all the pain they’ve put the world through over the last few years.
But then they wouldn’t be able to lend that money overnight at good rates!
Are Zopa Rates Dropping?
I have been looking at my Zopa spreadsheet and it would appear that the lending rates now, are not as high as they were.
If I look at the average rate on all loans so far in January 2013 it’s 6.33%. In January of 2012, 2011 and 2010, the rates were respectively 6.27%, 6.90% and 7.43%. As I’ve been using the same lending philosophy for a few years, it would appear that rates have fallen.
Bad debt at the end of 2010 was £334.53, with 2011 and 2012 being £408.24 and £466.23.
So rates may be dropping, but bad debts seem to be well under control.
I have wondered if that money from the government and new borrowers will depress rates, but as the ratio of money available to money required seems to vary quite a lot, it is probably classic supply and demand.
I shall watch this variability with interest.
Marks And Spencer Give Out Fivers
I sometimes get cash out of the machine in the side of Marks and Spencer at The Angel.
The last twice, it has given me a large number of fivers.
So that’s where they all are!
The machine was still at it on the 15th January.
Marks And Spencer Give Out Fivers
Note the warning notice!
The notes were as tatty and old as the cash machine, but no-one has rejected any so far.
Do People Pay Off Loans At The End Of The Year?
Looking at my Zopa figures it seems to show that more loans are paid up early around the turn of the year.
I can’t get any decent figures from my database, but it could be that at that time, people take a hard look at their finances and other factors might come in, such as parents paying off their children’s loans as a Christmas present.
Or it could be a one off effect this year as the Bank of England has said that mortgage lending has increased.
On the other hand, Zopa still seems to be lending money at the same rate, so perhaps the losers in this pincer movement are those providing traditional loans and overdrafts.
Verified By Visa Just Lost Nationwide A Customer
I shall be changing my bank from Nationwide, as I just tried to book a ticket using my debit card and the dreaded Verified by Visa screen came up.
I don’t use any card on-line with this facility, so I phoned them to ask them to remove it.
They wouldn’t, so I’ll remove myself from the bank and find one that doesn’t use such an annoying system.
In the end I paid £4 to use my American Express card.
Do We Need Retail Banks?
There was another cash machine fiasco last night, when Lloyds and Halifax had a big computer system failure. Read about it here in the Daily Mail.
This problem hit so many people, as they didn’t really plan their day out properly.
I’ve never been hit by one of these periodic cash point failures, as probably more by luck than judgement, Nationwide haven’t had a problem.
But one thing I do, is make sure when I’m down to my last twenty or so in my wallet, is get a cash injection. But then in places where I spend money, there are lots of cash machines. Take yesterday on my trip to Notting Hill. I passed machines in Kings Cross station, just outside Notting Hill station and close to Otto. But then I didn’t need any money.
So although yesterday’s failure was disastrous for some, with a bit of planning, it could have been avoided.
On the other hand, I’ve heard of people queuing on pay day by cash machines, so they can draw their money out to get some cigarettes.
These failures will do one good thing and that is get customers to look at how they keep and use money.
More and more we’ll question, whether we need to have a retail bank at all.
What is really needed for most of us, is a simple bank account to hold our working capital, accept our salary or pension, pay our standing orders and other bills, and tell cashpoint machines that we have money to withdraw.
Spanish Bank Of Snow White And The Six Dwarfs Is Worthless
This headline on this article in today’s Times, gets my vote as one of the best headlines of the year.
It refers to the Spanish bank called Bankia. The BBC has the story here, but the headline isn’t as good.
And we reckon our banks were bad enough.
After reading the two articles, I will make sure, I don’t go anywhere near a branch of Santander, as I might be kidnapped to help sort out the Spanish banks. After all, I’m worth more than Bankia, which according to the BBC article has a negative value of over ten billion euros.
I suspect that everybody in the UK, Canada, Germany, Sweden, Australia and many other countries is actually worth more than Bankia. Even if they have unfortunately been declared bankrupt.
The Zopans Worked Hard Yesterday
If I look at the two loans, I chalked up on Christmas Day, both are now in my portfolio of loans. Five loans that were applied for yesterday have also been added.
It looks to me, that the Zopans worked hard yesterday.
My bank, Nationwide, is fully open today, but it won’t be again until the 3rd of January.
Julian Knight Hits Two Targets With One Stone
I have a trawl looking for peer-to-peer lending stories and it picked up this article in the Independent by Julian Knight.
He starts by giving an excellent review of peer-to-peer lending and the broadening of financial services in general, saying it is broader in the United States. He concludes by saying.
This, I’d argue, is one of the reasons why in the US they are more entrepreneurial and start-ups get a chance to, well, start up.
He then goes on to talk about some of my least favourite people; chuggers. This his concluding paragraph.
The town of Shrewsbury blazed a trail by banning these individuals last year and now we seem finally to be consigning chuggers to the same place as the likes of the squeegee merchants.
Incidentally, a chugger at the Angel last week, virtually chased me into the road. If there’d been a policeman about, I’d have made a complaint. On the other hand, life is too short.
I shall follow Julian in future.
The Anonymous Widower 