Posts

How reliable is biometric data in tightening bank cyber security?

Multi-factor authentication (MFA) is one important pillar of cyber security in banking. Financial services interests have realised that requiring consumers to provide their personal information before processing transactions can deter data breaches.

And it has worked. Despite the numerous cases of successful high-profile hacking in the past 10 years, involving prominent names in the industry such as JPMorgan Chase and SWIFT, Fortunly believes more people would have been defrauded had there been lax customer authentication policies in place.

However, cyber robbers have managed to exploit a weakness in text-based MFA. In February, The Telegraph reported that Metro Bank and some smaller financial institutions were hacked. The attackers were able to get their hands on the codes sent to customers by capitalising on a flaw in SS7. Telecoms rely on this set of protocols to exchange SMS text messages and calls between one another anywhere in the world.

Clearly, more secure MFA is necessary to protect the integrity of financial services organisations as custodians of sensitive data of billions of people on the planet. This is where biometrics come in.

Unlike texted codes, pieces of biometric data are harder to steal since they are unique to individual consumers. Then again, biometrics are not equal and may not provide different levels of protection.

Fingerprint

Fingerprints, as well as finger-vein patterns, are being used by banks to authenticate customers at brick-and-mortar branches. Scanners for both biological characteristics can deliver fast, accurate results, which allow frictionless in-building and ATM transactions.

The availability of scanners in consumer electronics makes fingerprint authentication a feasible solution to boost cyber security. In fact, it has been adopted by the Royal Bank of Scotland (RBS) for mobile banking. With just one touch, fingerprints can authenticate users to complete card payment transactions made via RBS’s mobile apps.

Face

What is advantageous about facial features as biometric details is that they are hard to cheat. Unlike fingerprints that could be reproduced with tape, the distinct qualities of a face could not in any way, shape or form be mimicked.

Voice

Voice biometric technology is sophisticated, for it considers up to 80 of the distinguishing vocal-tract attributes of a person. As biological data, the voice is actually more unique than the fingerprint.

Citibank has been using voice authentication since 2016. The consumer arm of the Citigroup analyses the voice pattern of a caller based on a pre-recorded voice print to help detect identity thieves more accurately.

Online Behaviour

Signatures, keystroke patterns and website browsing tendencies are some peculiar customer identifiers being tested by some banks to prevent fraud. Behavioural biometric tech may require a ton of historical data to be considered helpful, but its readings are claimed to be 99% accurate.

Conclusion

Ultimately, biometrics are imperfect. Physical characteristics and individual behaviours can change, so they can’t be reliable 100% of the time. Nevertheless, biological data is a potent tool for cyber security all banks should adopt to stay ahead in the game of cat and mouse they play with hackers until the next MFA innovation comes along.

CommerceWest Bank helped children find their forever families

CommerceWest Bank helped children find their forever families by supporting Seneca Family of Agencies. Seneca has had a 100% success rate in placing children from foster care with their forever families for over 35 years. Seneca improves services and support for the most vulnerable children and their families. It is their commitment to provide unconditional care and they will do whatever it takes to help children and their families thrive.

Ivo A. Tjan, Chairman and CEO of CommerceWest Bank commented, “CommerceWest Bank is grateful to be able to help children and families that have faced challenges such as poverty, trauma, and community violence.” He continued, “Seneca is a special agency, as no child is ejected due to challenging behaviours. They truly provide unconditional care.”

CommerceWest Bank is a California based full service commercial bank with a unique vision and culture of focusing exclusively on the business community. Founded in 2001 and headquartered in Irvine, California. The Bank serves businesses throughout the state with an emphasis on clients in Orange County, San Diego, Los Angeles, and Riverside Counties. We are a full service business bank and offer a wide range of commercial banking services, including concierge services, remote deposit solution, online banking, mobile banking, lines of credit, working capital loans, commercial real estate loans, SBA loans, and treasury management services.

Mission Statement

CommerceWest Bank will create a complete banking experience for each client, catering to businesses and their specific banking needs, while accommodating our clients and providing them high-quality, low stress and personally tailored banking and financial services.

EY PHOTO

How EY is innovating financial services corporate finance

Growth, development, innovation and opportunity: these four words perfectly encapsulate the working environment within EY’s Financial Services Corporate Finance team in London.

“Our growth rate at the moment is incredible,” says Ian Cosgrove, Partner and Head of Financial Services Corporate Finance at EY. “In the last 18 months our deal volume has doubled.”

Ian’s Corporate Finance team started expanding in earnest in 2015, increasing its coverage to include FinTech and asset servicing, and hiring financial services debt advisory specialists to sit alongside M&A advice professionals. Ian expects to keep recruiting at the same rate over the next two years to reflect the market demand.

“We’re constantly bringing in talent to help execute the expanded pipeline of work we’ve got, and to make sure we are well resourced to keep up with the pace of demand,” he says.

“A strong part of our identity is innovating and thinking ahead to what corporate finance should look like in the years to come,” explains Ian.

This desire to be innovative and stand out from the competition is reflected in the fact that Ian’s Corporate Finance team has brought M&A and debt advice under one umbrella. Many other professional services firms as well as boutique advisory houses splits these two services.

“This gives us an edge,” says Ian. “In many sectors, there are difficulties around talking about one side of your balance sheet and not being able to discuss the other side. We can to the entire capital structure and bring a holistic view to clients. It enables us to think about the bigger picture; we can ask ‘what is on your agenda and what are you looking to achieve?’ We don’t just have a single product, but a broader solution.”

The market is moving at a rapid pace in terms of embracing digital technology. The Financial Services Corporate Finance team is looking to harness technology to improve analytics, find new sources of capital, and streamline the whole M&A process. “Any client embarking on a corporate finance transaction knows it’s a long and intensive journey. We’re investing in technology to speed that up because momentum is important, while at the same time improving the quality of the deal,” says Ian. “Also, we are developing a tool that will use Artificial Intelligence to improve our ability to match those looking for capital with those who have it.”

The team is also using technology to take clients’ underlying data and present it back to them in new and insightful ways. “Not just in a transaction context, but to help them make other business decisions too,” says Ian.

Kaidi Kuusk, an Assistant Director in Financial Services Corporate Finance at EY, describes her work in Ian’s team as “incredibly exciting, fast-paced and innovative”. Kaidi joined EY’s graduate programme in 2008 and enjoyed fast career progression to her current rank. She says her rapid rise reflects a working environment that encourages career development.

Kaidi has been supported in her career by both the Corporate Finance team and the broader Transaction Advisory business, and says she enjoys the variety of her job. “I’ve been able to get involved in transactions in an accelerated way, so I work on anything from banking to payments to some niche insurance sectors, and with clients ranging from founder-owned companies to major corporations,” she adds.

She likes the fact that she sees transactions through from start to finish and can therefore build relationships with key stakeholders and really get under the skin of businesses to help solve their most complex challenges. “There’s also a lot of deep sector knowledge and expertise within EY’s Financial Services business, so I can quickly learn a lot about a variety of sectors and transactions,” she says.

Kaidi has recently taken on a secondment opportunity at EY. Working in the firm’s Global Banking Leadership team, she is helping to grow the banking and advisory transaction business. “This came about through conversations in my review. I was encouraged to take advantage of the breadth of areas at the firm and improve my understanding of how it works,” she says.

For those interested in joining EY, there is a clear, structured path to improve knowledge. “The Corporate Finance team in our financial services business is a small, supportive family, with lots of opportunity for progression,” says Ian. “There are a range of learning opportunities, delivered in our own team and across the firm, and covering sector-based topics as well as core corporate finance skills, such as valuation and modelling,” adds Kaidi. As EY staff progress their careers, there are plenty of opportunities to learn, collaborate and have fun achieve within the firm.

And this cross-firm collaboration extends into the workplace. “If you’ve got a regulatory or accounting problem for example, there’s someone a few desks down who can sit and have a coffee with you to explain it,” says Ian. “Working at EY is all about collaboration. It’s why we deeply value our connections with everyone – clients, like-minded organisations and individuals, and each other.”

All of this highlights the strong, inclusive people culture within the firm. EY is proud to have a number of employee networks, which celebrate and promote diversity and inclusion, and provided further opportunities for its employees to connect with like-minded people from other teams. It’s one of the main reasons why people choose to join and remain at EY – and the experience they have lasts a lifetime.

PRIVATE BANKING

Advisory Excellence for a Swiss Private Bank

In light of increasing standards within private banking, a clear definition of the services delivered to clients is necessary. An efficient delivery of these services requires an optimization of the processes and organizational adaptations as well as state-of-the-art IT systems.

The world of private banking is changing. Increasing expectations of clients, changing regulatory requirements in applicable jurisdictions, as well as innovation among competitors all force private banks to precisely specify their market positioning.

A clear definition of client services is an essential first element in providing advisory services of consistently good quality. Well-organized and standardized advisory processes come next, followed by a well-thought-out delivery model for the monitoring of client portfolios.

The project scope included analysis of client needs and specification of new service packages in the area of non-discretionary mandates. To enable an efficient delivery of client services, the processes within mid- and front-office were optimized and supporting IT systems engaged (e.g. daily monitoring of client portfolios). These measures took active account of both global and local regulatory requirements, thereby promoting excellence not only on the client side but also on the legal and regulatory side.

Our Contribution:

  • Program management (deputy)
  • Management and specification of all requirements to improve the processes and IT-systems
  • Program-Management-Office (PMO)
  • Creation of the rollout-, training- and communication concepts
  • Support of front staff during transition phase into the new service packages
City PHOTO

UK could lose £10bn a year in City-related tax revenue after Brexit

A leading City figure whose former role involved governing the Square Mile has said Brexit could result in the loss of 75,000 jobs and up to £10bn in annual tax revenue.

Sir Mark Boleat, who was chairman of the City of London Corporation until last year, said a seepage of jobs from the capital was already underway and that the political rows over a deal or no-deal outcome was now “irrelevant” to City chief executives.

Banks including JP Morgan, Lloyds, Barclays, HSBC and Goldman Sachs have already established subsidiaries in other EU countries, or moved part of their business because EU law requires them to be legally compliant from the day the UK leaves.

“It is no longer contingency planning. If you are running a bank it is non-negotiable. The regulators won’t allow it,” he said.

In an interview with Advisory Excellence before a keynote speech on Wednesday at the Cass Business School in London, Boleat said the City would not die as the financial capital of Europe but would be damaged by Brexit.

“These moves are bad for London, but they are also bad for the EU because they will make financial markets less efficient,” he said. “Financial services will be fine, but I would say if the City has 80% of international business now, in future it will have maybe 60%.”

Boleat said Brexit has prompted expensive and unwelcome processes and the damage would be seen over the decade to come.

“This is a 10-year operation. In the short term it won’t be noticeable in terms of staff. Banks won’t be putting out press releases saying they are moving some of their operations because of Brexit because they don’t want the publicity. They are just getting on with it.

“Moving costs millions. Banks have had teams of 100 working on Brexit. It is an expensive process. You have to identify which city to go to, applying for a [banking] licence costs millions, then you have to find the IT staff, find accommodation.”

He also believes the government is in such disarray that the Brexit deal will be pushed back to December, leaving business planning elsewhere perilously close to exiting the EU.

In his address, Boleat will say he does not think financial services will get a special passporting deal to allow them to continue pan-European services from London and that banks are already past that moment of truth, whatever politicians think.

“Those who suggested that some business would move were accused of scaremongering,” he will say before listing 15 major banks and financial services who have already set up on the continent or Dublin.

He will quote a report by the Oliver Wyman consultancy that says if the UK strikes a deal giving full market access, the impact on the City would be modest, the equivalent of 3,000-4,000 jobs and a loss of £500m in tax a year to the Exchequer.

“At the other end of the spectrum if the UK had no special status with the EU, now the most likely option, the industry would lost £18bn a year in revenue which would put 31,000 to 35,000 jobs at risk along with £3.5bn to £5bn in tax revenue.”

Add the knock-on effect for related industries and the loss of entire business units, there is an estimated further losses of £14bn to £18bn in revenue and 34,000 to 40,000 jobs and £5bn in tax.

Asked whether the government was aware of the daily bleed of financial services to the rest of the EU, Boleat said: “Not enough, that’s the worry. It needs business to talk to MPs, not to give their view on Brexit, but to explain to them ‘this is what I am having to do because of Brexit’. This is not scaremongering, this is reality.”

Grad Cap Throw PHOTO

Why an MBA still trumps a master’s in finance in banking

A decade ago, an MBA was clearly the top qualification to have if you wanted to start down the path toward a high-level job in banking. Then quietly, more top business schools began offering an alternative: the cheaper, more technical master’s in finance degree. By 2015, hiring totals suggested that a master’s in finance may actually have trumped the MBA as the top qualification. However, new data shows that MBA programs may be having a renaissance of sorts, at least when it comes to compensation.

Comparing salary expectations for MBA holders versus those with a master’s in finance is a difficult task. While MBA programs usually require some previous professional experience, you can often enter a master’s in finance program directly from undergraduate studies. This means an MBA should demand a higher starting salary than a master’s degree, and in fact it does. But MBA holders are also now seeing greater increases in salary post-graduation than they did previously. The picture is more muddled for recent master’s of finance graduates.

The average degree holder at eight of the top 15 master’s in finance programs recently ranked by the FT reported lower annual salaries after three years of experience than those who graduated one year earlier. This only occurred with two of the top 15 global MBA programs – IESE Business School in Spain and the University of Cambridge, both of which ranked outside the top 10.

Meanwhile, graduates of every top 15 MBA program but one reported at least a 100% increase in salary from the time they entered the program to three years after earning their degree. Even graduates from IESE and Cambridge Judge saw their salaries more than double over that period. That’s a stark difference from just a few years earlier, when graduates of every top MBA program reported three-year salary increases that were lower percentage-wise than the previous year. The value of an MBA appears to be on the rise.

When it came to the Masters in Finance courses where students didn’t have prior professional experience, the FT compared the starting salaries directly following graduation to what degree holders were making after three years. Among top schools, graduates from first-ranked HEC Paris saw the biggest three-year salary bump of 82%. The master’s program at the U.K.’s Imperial College Business School fared the worst, with graduates only earning a 43% increase in pay over three years. Imperial College alumni from 2015 now earn an average of $92k, meaning their starting salary was around $65k after graduation. At HEC, it was around $75k.

For MBAs, sticking around pays

There are several possible explanations for the new narrative that top MBAs are still a good deal. A masters qualification is well-aligned with lucrative sales and trading jobs, fewer of which exist now than in years previous. And of course, not as many MBAs enter banking as often as in previous years; many now take jobs in tech and consulting, so pay could be rising due to scarcity value. But the data seems to reject the premise that other industries are out-paying finance professionals, particularly in the early years for those who went to top schools.

Business schools that are the chief feeders into finance – Stanford, Wharton, Booth, Harvard and Stern – all saw their graduates who remained in the industry take home bigger salaries than those who left or never entered finance in the first place. Graduates of all five with the exception of Stern earned salaries north of $200k if they stuck around for three years.

Banks are thirsty for masters candidates

Perhaps the best news for master’s of finance grads is that they are clearly in high demand. Over 95% of students from nine of the top 10 programs had a job within three months of graduation, with four schools sporting 100% employment rates. For top MBA programs, the highest employment rate was 95% (Booth), while several languished in the 80%-90% range.

If you have little or no experience, a master’s in finance appears a near-lock to find a decent job in the industry. But it still pays to have an MBA. You just need to land a job first and handle the culture of banking for more than a couple years.