Fintech makes the world go around

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April 23, 2018  10:35 AM

TSB IT system chaos as bank cuts rope from Lloyds systems

KarlFl40 Profile: KarlFl40

TSB customers have experienced a weekend of problems with online banking services as the bank migrates from Lloyds Bank systems to its new core banking system.

This demonstrates the challenge traditional banks will have when trying to compete with the new smaller digitally focused players. Challenger banks don’t have legacy systems to deal with.

When TSB was acquired by Spanish bank Sabadell in 2015, it outlined its plans to move TSB IT systems, which were hosted by Lloyds, to its own in-house core banking platform, Proteo.

Proteo4UK, as it is known, was rolled out to the bank’s staff in November 2017 with a full range of banking services. It is now moving to a full roll-out. The full migration was originally scheduled for November but was put back to the first quarter to avoid potential confusion at the time of the expected interest rate rise, which would be the first for a decade.

The upgrade mean TSB no longer pays Lloyds Bank a couple of hundred million a year for hosting, and it will be able to implement its own customer-facing systems, which it couldn’t while being hosted. Proteo4UK is a version of Sabadell’s in-house core banking platform Proteo designed for TSB.

But at the weekend customers have experienced serious problems as a result of work on the migration, which was to be carried out over the weekend.

According to reports one customer was even mistakenly credited with £13,000. Other customers questioned whether some of the problems were leaving customers open to breaches.

Last year TSB CEO Paul Pester said more than 2,500 man-years of effort by TSB and its owner, Sabadell, had gone into the bank’s migration to the new core platform.

TSB is currently re-inventing itself as a challenger bank with fintech at the heart of its strategy. Migration problem s might harm the company’s reputation before it moves fully to its all singing and dancing platform. The Proteo IT platform will enable the bank to make regular product and service releases. Pester added: “The new platform will enable TSB to redouble its efforts to bring more competition to UK banking, in both the retail and SME banking markets.”

Read an interview with TSB’s CIO about the digital transform ation  here.

April 18, 2018  9:03 AM

Lloyds slashes more jobs and people as fintech is deployed battle of the cost bases

KarlFl40 Profile: KarlFl40

Another 49 branches and 305 jobs have gone as Lloyds bank replaces people and premises with digital services as part of the current battle of the cost basses being fought in the retail banking sector.

The cuts include people serving customers in branches as well as those working in the 49 branches closed.

Lloyds said that the increased use of digital banking channels mean the bank simple doesn’t need as many people or branches.

“Customers are increasingly choosing to use digital and mobile channels for their everyday banking needs,” said the bank in a statement. “As a consequence, the number of customers visiting some of our branches has declined in recent years. In response to this, we have confirmed the locations of some branches which will close next year across Lloyds Bank, Halifax and Bank of Scotland.”

Fintech challengers to banks are offering banking services to customers at a lower cost. This is because they use the latest digital technology and not only avoid the high costs and complexity of legacy systems but also operate with hundreds of staff rather than tens of thousands.

Leading fintech industry figure Anne Boden told the audience at the recent Innovate Finance fintech event that the big battle in banking involves the cost base rather than innovation. All traditional banks can innovate. They have huge budgets so there is nothing stopping them creating the same fintech services as challengers. They are already doing it. But rather than having hundreds of staff they have tens of thousands. As a result the new players have a huge advantage in terms of cost base.

Lloyds is not alone amongst traditional banks in closing branches and eliminating customer facing roles. Figures from the European Banking Federation (EBF), which include the UK, revealed more than 9,000 bank branches were closed across Europe in 2016, and more than 50,000 people working at those banks lost their jobs.

Barclays and Santander have announced branch closures on my local high street in South East London.


April 16, 2018  11:11 AM

Fintech professional’s tech predictions: 5 – better understanding of privacy settings

KarlFl40 Profile: KarlFl40

This is the fifth prediction from a fintech contact of mine making tech predictions for the next five years.

Previous blog posts in this series predicted that tech firms will soon need government certificates if producing news content, to fight against fake news, and the cyber security risks associated with smart energy meters, the risks associated with sharing data, and how social media will fall under increasing government regulation.

In this post the fintech IT professional looks at how the public will become better informed about the privacy settings online and how website operators will be forced to adopt rules including default settings that protect consumers. Data is valuable to a raft of businesses but its use, if not carefully controlled, can potentially harm its owners, the consumers.

Fintech IT professional says: “There will be wider public understanding of privacy settings and how these can be undermined by website operators. Governments will introduce standard definitions for privacy settings, specify default settings and monitor compliance by operators. The public may also shy away from providing as much data as the understanding of how seemingly unimportant information can be assembled over a period of time and interpreted by data analysis, whether that be by commercial, governmental or criminal organisations.

Recently in further response to the controversy surrounding Facebook’s data sharing agreement with London-based data mining firm Cambridge Analytica, the social networking giant has announced further steps to improve privacy controls.

These blog posts came about following a conversation with one of my contacts. He had lots of predictions for tech over the next few years and I thought I should share them and get some comments from the wider public. A few of the predictions might be a statements of the obvious to those more closely involved, so he sent them in context of trends emerging over the next 1 to 5 years.

Read part 1 here.

Read part 2 here.

Read part 3 here.

Read part 4 here.


April 10, 2018  8:50 AM

AI will cut huge chunks out of banking compliance workforce and London high streets might die

KarlFl40 Profile: KarlFl40

Artificial intelligence will cut huge chunks out of banking compliance workforce and London high streets might die

Who is going to buy travelcards and pay for cappuccinos when London’s banking compliance workers are automated?

I live in South east London. Not far away from the City. As you expect there are lots of people that work at banks in my local community. You meet bankers when picking your kids up, walking down the high street, or grabbing a flat white.

I am always interested in what they do at banks on the off chance they might work in IT and be a potential source. But I must admit almost everybody I speak too works in compliance. It is not surprising given the thousands upon thousands of pages of regulations banks must adherer to

The reason I mention this is to highlight the huge number of people that work in compliance at banks and the fact that artificial intelligence could really eat into this.

When we think about artificial intelligence at banks we often picture customer services bots or software integrated into customers’ mobile apps. Yes they will take over customer services but that does not mean displacing thousands of jobs, many of which are high paid.

But behind the scenes AI is increasingly being used to carry out important work in the background helping banks comply with regulations. When AI replaces people in compliance we could really see huge job cuts and cost savings for banks.

This takes me to an article I wrote yesterday about HSBC using software from a big data startup, which includes AI, to help it automate the monitoring of transactions to flush out money laundering. An example of how AI can replace compliance resources.

Lowering costs is becoming more and more important amid the fintech revolution.

At the recent Innovate Finance Global Summit in London Anne Boden, CEO at challenger bank Starling said the big battle in banking involves the cost base rather than innovation. All traditional banks can innovate. They have huge budgets so there is nothing stopping them creating the same fintech services as challengers. They are already doing it. But rather than having hundreds of staff they have tens of thousands. As a result the new players have a huge advantage in terms of cost base.

When John Cryan, who was sacked as CEO at Deutsche bank, said last year that AI will take over a large number of jobs at Deutsche Bank he was probably thinking about all those compliance bods.

But Deutsche bank staff should not think they are safe now he is gone as it seems his bosses at Deutsche bank thought he wasn’t as wieldy with the axe as he suggested. According to a report in This is Money Cryan was forced to quit due concerns that his already-brutal programme of cuts does not go far enough.

But back to my question: Who will be buying coffee and using public transport in London when robots take over compliance roles?


April 9, 2018  10:13 AM

Fintech professional’s tech predictions: 4 – Social media regulation

KarlFl40 Profile: KarlFl40

This is the fourth prediction from a fintech contact of mine making tech predictions for the next five years.

The previous blog posts in this series predicted that tech firms will soon need government certificates if producing news content, to fight against fake news, and the cyber security risks associated with smart energy meters and the risks associated with sharing data.

Read part 1 here.

Read part 2 here.

Read part 3 here.

In this entry he talks about social media platforms facing an inevitable tightening of regulations they have to adhere to. Social media platforms are increasingly hitting the news for all the wrong reasons, hmm Facebook, so this makes sense.

“Governments will introduce regulation and monitoring for social media systems which may include limitations on functionality as well as stronger oversight, much in the same way banking regulation evolved following poor behaviour in that industry. This may lead to de-globalisation of the large operators if regulations differ in each country where they permit use today. Tougher criminal penalties will be introduced for website companies and management teams will be prosecuted personally. Authorities may seed test data into specific systems and trace its usage to build legal cases and generate evidence against website operators.”

This series of blog posts came about following a conversation with one of my contacts. He had lots of predictions for tech over the next few years and I thought I should share them and get some comments from the wider public.

A few of the predictions might be a statements of the obvious to those more closely involved, so he sent them in context of trends emerging over the next 1 to 5 years.


April 5, 2018  7:19 AM

Fintech professional’s tech predictions: 3 –Sharing data risks outweigh benefits

KarlFl40 Profile: KarlFl40

This is the third prediction from one of my contacts in the financial services IT sector.

The previous blog posts in this series predicted that tech firms will soon need government certificates if producing news content, to fight against fake news, and the cyber security risks associated with smart energy meters.

Read part 1 here.
Read part 2 here.

Here is the next prediction

3 – Personal data abuse:

“The public will increasingly realise that any data (words, pictures, sounds, videos or anything else) that makes its way online will be used and abused legally or illegally. Social media, businesses, advertising systems, websites and apps may well provide full details in T&Cs but not all users will read them or understand the consequences. As more data abuse scandals are uncovered, people may start to withdraw from certain platforms or participation in some types of connected technology. The risk-benefit perception will tilt more towards risk. The current Facebook situation is just another example of this.”

This series of blog posts came about following a conversation with one of my contacts. He had lots of predictions for tech over the next few years and I thought I should share them and get some comments from the wider public.
A few of the predictions might be a statements of the obvious to those more closely involved, so he sent them in context of trends emerging over the next 1 to 5 years.

He says we are approaching the point when an increasing number of people will realise how risky the connected world can be and start to minimise or withdraw from it where possible.

“This would have a profound impact on the current tech trajectory that most people believe in. Security, privacy and tackling cybercrime will continue to gain momentum as the most critical issues in tech,” he added.
Please let me know your thoughts and/or your own predictions.


March 28, 2018  10:53 AM

The first thing a refugee asks when they arrive at a camp is not necessarily for water or food

KarlFl40 Profile: KarlFl40

I recently commissioned an article about how Turkish telcos are offering services to the millions of Syrian refugees that have been displaced to conflict at home.

The article is here, but I wanted to blog about one specific quote in the article as I think it really helps hit home just how important being connected really is.

The quote in question is: “The first thing a refugee asks when they arrive at a camp is not necessarily for water or food, but the password for the Wi-Fi. Many people consider smartphones a luxury, but it is not a luxury for somebody who has left their family behind or who has other family members travelling ahead of them.” Just comprehend that for a moment.

This seems surprising when you first read it but then think for a moment and it appears obvious. People buy their kids mobile phones when they start secondary school as they enter the big world, so imagine if your kids, some younger than secondary school age are a separated from you in a different company alone. A connection enables refugees to contact their families, friends and support networks. It also gives them access to information about services they can get and gives them an identity and, through messaging apps, an address.

This goes way beyond reassuring family that they are ok or checking that family are ok, but can be the first building block for people to build a life in a new place. Food, water and shelter are not the only necessities.

It also shows how important fintech is. Making banking services easy to access and use is vital for these people.

The quote really does bring home the fact that internet access should be a human right.

Governments should be providing free connections to the poor and connections at a similar cost of water to the better off. The UK government has just guaranteed affordable high speed broadband to all the UK population by 2020, through its universal service obligation.


March 28, 2018  7:17 AM

Fintech professional’s tech predictions: 2 – Smart meter breaches

KarlFl40 Profile: KarlFl40

This is the second prediction from one of my contacts in the financial services IT sector. The previous blog post in this series predicted that tech firms will soon need government certificates if producing news content, to fight against fake news.

Read part 1 here.

Here is prediction 2 from the banking IT insider:

2 – Smart meter breaches

“Utilities smart meter infrastructure will be breached to interfere with billing data or disrupt supplies. This may take the form of minor (hard to detect) or major (disruptive) consumption adjustments in favour of the energy companies or consumers and could include remote supply disconnection where smart meters support this function. Interference may come from hackers, insiders, the infrastructure supply chain, activists, terrorists or other governments wishing to cause disruption. This may not use the internet, but it does use wireless communication and presents a potentially low cost and effective means of attack or retaliation between countries with a large number of smart meter users.”

This series of blog posts came about following a conversation with one of my contacts. He had lots of predictions for tech over the next few years and I thought I should share them and get some comments from the wider public.

He told me that a few of the predictions might be a statements of the obvious to those more closely involved, so sent them in context of trends emerging over the next 1 to 5 years. “I think we are approaching the point when an increasing number of people will realise how risky the connected world can be and start to minimise or withdraw from it where possible. This would have a profound impact on the current tech trajectory that most people believe in. Security, privacy and tackling cybercrime will continue to gain momentum as the most critical issues in tech.”

Please post your own thoughts in the comments section. I would also be interested in other predictions.


March 27, 2018  11:31 AM

Customers hit by shrapnel in banking’s battle of the cost bases

KarlFl40 Profile: KarlFl40

I was at the Innovate Finance Global Summit last week and listened to fintech companies describing the current battle between banks being about who has the lowest cost of delivery.

Anne Boden, CEO at challenger bank Starling, said all the fintechs and banks are offering different things to different people and all the big banks will follow what the fintechs are doing in terms of product innovation. “But what they won’t be able to do is match the cost base of the challengers.”

You can see why banks are closing branches when you consider the new challenger banks having hundreds of staff rather than the tens of thousands at the high street giants.

“This is going to be a battle of the cost base, not a battle over product innovation” said Boden.

Okay then, I have just been hit by some shrapnel. As a resident of Forest Hill in South East London and a customer of Barclays bank I received a letter this week informing me that the bank’s branch on my high street is closing.

Apparently people are banking in different ways and only 108 people use the branch exclusively to do their banking. This doesn’t surprise me. In the old days a busy high street in London would be a prime location for a bank, but today with Londoners leading the take up of channels like mobile banking the opposite is probably true.

Santander announced a similar move on my high street in December also citing changing banking habits for the reason to close.

Barclays also informed me in the letter that in the last two years 84% of user of Forest Hill’s Barclays branch also use other channels like telephone and online banking. It is also telling me that 53% of the b ranches customers are using other local branches. How did it get these figures? Nobody asked me or my wife and we are both Barclays customers.

I must confess I have rarely used the branch. I came close the other day when my card wasn’t working, but decided to try the chat function on the mobile app, which I have to say was very easy.

But some people do want a local branch and why shouldn’t a bank run one in every town?

Here are some comments about the closure of Barclays in Forest Hill from some of the other customers affected.

“I am a customer of Santander and was looking at moving my account to Barclays, as I don’t trust the internet banking system, now that is cancelled. I remember when I moved into the area over 30 years ago we had three building societies Woolwich, Abbey National (Santandar) and Peckham and two banks Midland next to old post office and Barclays.”

“The proposed closure will also affect local traders, was no prior notice given that Barclay’s are to close?”

“So much for Barclays promise 20 years or so ago to keep this Branch open, after a massive local petition and involvement of the local MP at the time, as a service to the local area seeing as it was the only Bank for miles around.”

“The letter is the identical form letter sent out to the one announcing the closure of many other branches recently.”

“It’s true, you could use the Post Office for some basic banking, but it isn’t the same as having a bank branch in Forest Hill. It’s a bit rubbish that Santander and Barclays are going in quick succession. I wasn’t in the area when the earlier campaign to retain Barclay’s happened, though I suspect the bank would now argue that things have changed, more business being done online, less in branches etc.”

So is it progress or neglect?


March 26, 2018  11:28 AM

Fintech professional’s tech predictions: 1 – Fake News

KarlFl40 Profile: KarlFl40

Tech firms will soon need government certificates if producing news content to fight against fake news.

I was having a conversation with a good contact of mine. He is an IT/finetch  professional in the banking sector with a particular focus on security.

He was recently giving me a few predictions for tech over the next few years and though I should share them and get some comments from the wider public.

He sent me his main predictions and I am going to put one on the blog everyday or so until I get through them. Please post your own thoughts in he comments section.

He told me: ”I expect a few of these predictions may be a statement of the obvious to those more closely involved, so I send them in context of trends emerging over the next 1 to 5 years. I think we are approaching the point when an increasing number of people will realise how risky the connected world can be and start to minimise or withdraw from it where possible. This would have a profound impact on the current tech trajectory that most people believe in. Security, privacy and tackling cyber crime will continue to gain momentum as the most critical issues in tech.”

Here is prediction 1 from the banking IT insider:

This one is a subject close to my heart as a journalist.

1 – Fake news:

“Governments will need to introduce certification schemes for any tech firms providing news style functionality. Certification will only be granted to those which demonstrate a credible and reliable ability to deliver accurate, unbiased information. The public will be educated to understand that any uncertified news source must be considered untrustworthy. News will be clearly identified to separate it from opinions, comments or other forms of information sharing. As widespread public opinion can have far reaching consequences, it will be a priority for governments to ensure populations know how to separate truth from fiction.”


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