Barclays is spearheading a new £10m nationwide drive to increase the public’s awareness of financial fraud risks, and help them to stay safe in the digital age with information, tools and tips.

This major initiative is being launched as latest crime figures show 5.6m fraud and cyber offences in the UK making up half of all recorded crime, and costing the UK £11bn*.  Yet, these numbers could be even higher as new Barclays research reveals a quarter of people in the UK (25 percent) have experienced a cyber-fraud or scam in the past three years, 18 per cent of them more than once, suggesting that many cyber-crimes go unreported.

The new national Digital Safety Index survey, released today, also shows that:

• London, Bristol, and Birmingham are the scam capitals in the UK, with the largest gaps in public resilience.
• London and Bristol also top the tables for the most reported cases of fraud, with Manchester joining them in the top three.
• Newcastle reported fewer cases of fraud and scams, while Liverpool reported a particularly high number of impersonation scams.
• Highly-educated Londoners (Masters degree and above), aged 25-34 are the UK’s most vulnerable group, with men slightly more at risk than women.
• Younger people (25-34 year olds) are twice as likely to be victims of online fraud than older generations, putting to bed the notion that older people are more at risk of being “duped” by cyber criminals.
• Nearly a fifth (17 per cent) of people who have been a victim of a fraud or scam take no action to boost their digital defences as a result.
• Only 17 per cent of people in the UK can correctly identify basic digital threats such as social media messages intended to trick users into sharing personal details or downloading malware.

Barclays UK CEO is calling for the public, police and businesses across the UK to unite and tackle this growing issue of public concern. 

Under the new Digital Safety drive:

• In a UK high street bank first, Barclays is giving customers new levels of control over when and where and how their debit card works, offering customers the choice to instantly turn ‘on’ and ‘off’ whether their card can be used to make remote purchases, and even set their own daily ATM withdrawal limits on their Barclays Mobile Banking app. 
• A new online quiz is available to everyone in the UK from today. By answering simple questions people can assess their own digital safety level, and receive useful tips on how to strengthen their defences at barclays.co.uk/security Barclays aims to help at least 3m people to boost their digital safety levels by using the test.
• A new £10m national advertising campaign is being launched across national TV, print, online and billboards. It will alert people to the risk of fraud unless they take proper precautions, and will include content targeted towards younger people and in urban areas.
• Barclays will be hosting regular fraud awareness takeovers on its online and mobile banking sites, prioritising fraud prevention over products.
• Barclays’ nationwide force of 17,000 Digital Eagles will provide digital safety teach-ins to people, and free support clinics for the 1million UK SMEs we serve. Barclays LifeSkills is also launching new Digital Safety learning content specifically designed for younger people.
• Barclays is also leading industry efforts to prevent instances where customers are duped into withdrawing all their cash from branches and handing it to a scammer posing as a trusted person, through a new police hotline for branch colleagues to call.

Ashok Vaswani, Chief Executive of Barclays UK, said:

“Fraud is often wrongly described as an invisible crime, but the effects are no less damaging to people’s lives. As a society our confidence in using digital technology to shop, pay our bills and connect with others has grown faster than our knowledge of how to do so safely. This has created a ‘digital safety gap’ which is being exploited by criminals. I believe the need to fight fraud has now become a national resilience issue, and we all need to boost our digital safety levels in order to close the gap.

“That is why we are launching this new national campaign on digital safety, and we will do all in our power to arm people with the tools and information they need. But we also need to support and encourage the public to take action to protect themselves, such as changing passwords regularly. They can take the first step by completing our new free online quiz and discover how to boost their defences.

“I want to help make digital safety as commonplace as locking your front door. I want businesses, the police and the public to unite and stand shoulder to shoulder together so that we can block and frustrate the bad guys at every turn.”

Laura Flack, Barclays Head of Digital Safety, said:

“Each one of us probably knows someone who fallen victim to a criminal fraudster. Crooks are using ever more sophisticated tactics to trick people into handing over their bank details, or to pay money to a fraudster when they believe they are simply paying their builder or solicitor.

“It’s alarming that younger people and those in cities are more at risk. We need to super-charge our digital know-how and talk to our friends and relatives to prevent these crimes from happening. Often staying safe isn’t rocket science. A few practical steps and a dose of vigilance can boost your safety immeasurably. Remember if something sounds too good to be true, it probably is.”

Barclays estimates that if people implemented these three top tips we could help to cut levels of fraud by up to 75 percent

1.                   Never give out your full Online Banking PIN, Passcode or Password to anyone, even a caller claiming to be from the police or your bank.

2.                   Do not click on any link or open an attachment on any e-mail you receive which is unsolicited.

3.                   Avoid letting someone you do not know have access to your computer, especially remotely.

Innovate Finance, the membership association for UK’s global FinTech sector, is pleased to announce that Natalie Ceeney CBE will join the Board of the Company as Non-Executive Chair, taking over from Alastair Lukies CBE. 

Recent banking research (“the Research”) from Accuity, the global financial crime compliance, payments and KYC solutions provider, has revealed that between 2009 and 2016, correspondent banking relationships, where one financial institution provides services on behalf of another in a different location to facilitate cross-border payments, have reduced globally by 25%. This comes despite the fact that global GDP per capita grew during the same period, following the 2008 financial crisis. 

Commenting on the findings, Henry Balani, Global Head of Strategic Affairs at Accuity, said, “Correspondent banking represents the cornerstone of the global payment system designed to serve the settlement of financial transactions across country borders. Our Research highlights some important trends in de-risking and its impact on international trade and global banking.

“The irony is that regulation designed to protect the global financial system is, in a sense, having an opposite effect and forcing whole regions outside the regulated financial system. This matters because allowing de-risking to continue unfettered is like living in a world where some airports don’t have the same levels of security screening - before long, the consequences will be disastrous for everyone.” 

Measuring the cost of global de-risking

Since the global financial crisis of 2008, regulators have imposed requirements for greater transparency, established higher liquidity thresholds for banks as well as stepping up enforcement actions on institutions that violate anti-money laundering (AML) regulations. 

In 2014, AML penalties peaked at $10 billion compounding the challenges banks face in high-risk geographies (Figure1).In this climate, the threat to banks of doing business in these geographies potentially outweighs the benefits of services to their clients, even if there may be good business opportunities to pursue.

The challenges of increased operational costs, competitive and regulatory pressures have driven banks to withdraw from correspondent banking relationships. Historically, these relationships were provided as services to international customers, but this is no longer viable, as banks cannot justify the increased compliance cost associated with offering correspondent banking services to their local customers.  As a result, businesses in the regions most affected are struggling to access the global financial systems to finance their operations. Without this access, local banks are forced to use non-regulated, higher cost sources of finance and expose themselves to nefarious actors and shadow banking.

Henry Balani added: “A number of factors have contributed to derisking, the most important being that the risk / reward balance has become unfavourable for large clearing banks and in response they have taken a country / region risk view in deciding who they can do business with. If we want to reverse this trend and begin to ‘re-risk’, then the ‘antidote’ will require more granular level due diligence and proper risk assessments to provide large clearers with the confidence that they can deal with low risk businesses in high risk jurisdictions.”

Decline in USD relationships is either indicative of a concentration in relationships or a reduction in USD dominance

·         The number of USD correspondent relationships declined by 15% with Euro relationships showing a steeper decline of 23%

·         The number of Chinese Renminbi (RMB) correspondent relationships increased by 8%

·         Global bank locations in developing economies increased by 31% since 2014

Findings from this research reflect the number of correspondent banking relationships transacting in particular currencies rather than the volume of currency transactions. Research shows a steady decline in the number of USD correspondent banking relationships globally since 2014. The USD was the currency of choice as the global economy recovered from the global financial crisis in 2008.  While USD continues to be the currency of choice, the rate of decline in the number of USD relationships further accelerated with a drop of 13% between 2015 and 2016 from a decline of 2% between 2014 and 2015. 

While the 25% drop in global correspondent relationships is greater than the USD correspondents decline, the trend for USD is particularly significant when compared to the contrarian increase in the number of Chinese RMB correspondent banking relationships.  Since 2014, research shows an 8% increase and since 2012, the number of the RMB relationships showed a dramatic increase from 3,600 to 8,800 relationships in 2016 (albeit from a low base). The research further reveals a peak in the number of RMB correspondent banking relationships in 2015 as the USD continued to decline.

There are two explanations for this decline in USD relationships when compared to the RMB. Either there is a concentration in USD relationships, with more transactions settled through fewer relationships, or there is a decline in the dominance of USD.

Global bank locations in developing economies have also increased by 31% since 2014, largely due to growth in China and APAC. This is significant as the number of banks in established global financial centers are in decline.  

China prevails as region with highest growth in correspondent banking relationships

Actions from US and European regulators have resulted in banks shunning higher risk economies while missing out on the potentially profitable use of their currencies for correspondent banking, in the process.

Our Research reveals that the areas benefiting from the changes are largely in the East. For instance, China has experienced a 133% increase in the number of banks since 2009 and an astounding 3,355% growth in correspondent banking relationships during the same period.

Balani added, “The decline in USD relationships has several explanations: either we are seeing a concentration in USD relationships among fewer correspondent banks, or we are seeing a decline in USD dominance. The shift can also be attributed to the potential AML penalties associated with using these currencies. Since the financial crash of 2008, we have also seen significant commitment from financial institutions in emerging economies to demonstrate they are not high risk. We see this playing out in the East and the increased number of relationships reflects their commitment.”

V-Key, a global leader in software-based digital security, announced the appointment of Tony Chew to the position of Chief Security Architect. Tony will spearhead V-Key’s engagement with banking regulators and financial institutions in Asia.

Chew is a recognised thought leader and veteran in the field. In his former capacity heading up the Technology Risk Supervision Division at the Monetary Authority of Singapore (MAS), he led crucial strategic initiatives to steer the course of cybersecurity strategy, implementation, and regulation in Singapore’s financial industry. Subsequently, Chew served as Citibank’s Head of Information Security for Asia Pacific and as Global Head of Cyber Security Regulatory Strategy, overseeing all aspects of information security and implementing voice biometrics for over one million customers in less than a year in Asia Pacific.

“We are thrilled to have Tony Chew join V-Key’s executive management team,” said Benjamin Mah, co-founder and CEO of V-Key. “As governments, financial institutions and enterprises continue to face security challenges in a mobile-first digital economy, it’s imperative that businesses and regulators in each country collaborate to develop regulatory and operating frameworks that facilitate convenience, trust, business confidence, and top of the line security. We are confident that with Tony’s wealth of experience as a regulator and as a leading voice in digital security and biometric technology, V-Key can help build the necessary foundations to unlock the potential of the digital economy.”

“With world-leading technology, V-Key is in a powerful position to lead and delineate a clear path ahead for digitisation, globalisation, virtualisation, and digital security interconnectivity,” said Tony Chew. “This is an urgent need as people increasingly rely on digital services in every aspect of their lives, and security is the foundation on which these services can be delivered by governments, enterprises, and institutions with confidence and assurance.”

Digital security is a rapidly growing challenge, especially in Asia, where Internet adoption, smartphone pervasiveness, and online payment volume and velocity are leading the world. In Southeast Asia alone, according to Google, nearly four million new internet users will come online every month for the next five years, which means the region’s user base will almost double from its current 260 million by 2020. This makes Southeast Asia the world’s fastest growing internet region, with a potential for online spending to increase from $30 billion to $200 billion by 2025 via a digitally savvy mobile first population.

Given the role of FinTech in unlocking the economic potential of Southeast Asia, several countries have taken proactive steps to enhance and evolve regulatory frameworks to support emerging FinTech innovations and ecosystems, including Singapore’s establishment of a Smart Financial Centre, and Malaysia and Thailand’s new equity crowdfunding regulations. With the right regulatory framework, Southeast Asia and its 636 million people are positioned to become one of the world’s top five digital economies by 2025 (AT Kearney 2015).

Visa Inc., today announced it will help its financial institution partners create customized digital card management experiences for their customers. As the Internet of Things (IoT) grows, consumers put their card on file and implement recurring payments in more places. 

Senjō Group, a leading privately-held payments platform operator and FinTech investor headquartered in Singapore, has successfully obtained a Payment Institution (PI) license in Lithuania. The company received permission from the Bank of Lithuania to acquire Lithuanian payment institution Finolita Unio. In doing so, the innovative global investor has gained enhanced access to the European payments system via Lithuania.

Senjō Group’s portfolio of companies gives it a presence in more than 30 countries worldwide, and includes fast-growing companies in global electronic payments and financial technology. These companies benefit from the Group’s global footprint, financial capabilities and operational expertise.

According to Gavin Lock, Senjō Group’s COO, Lithuania’s EU-leading regulatory environment for FinTechs played a decisive role in the Group’s decision to establish a presence in the Baltic country: “Lithuania has made rapid progress in streamlining its regulatory framework for FinTech companies recently. The Bank of Lithuania especially, has a positive attitude towards FinTech, and this was one of the key factors in our decision to choose Lithuania as a gateway for strengthening our presence in the European payments ecosystem.”

“Senjō is a new type of FinTech investor, and we are looking forward to growing our core payments business and build our track record of providing scalable and reliable payments solutions for our customers,” Mr. Lock added.

This latest announcement comes on the back of other significant acquisitions by Senjō Group. At the end of 2016, the Group announced that they were acquiring payments innovator Kalixa Group for a total consideration of €29.0 million. This deal includes a completion accounts adjustment that could take the final tally to as much as €35.5 million.

 “For FinTech, Lithuania has all the essential ingredients,” argues Mantas Katinas, General Manager of Invest Lithuania. “Fast, robust IT and banking infrastructure, a wealth of experienced talent, plus great quality of life at a really affordable cost. Moreover, more and more spaces are opening up in Vilnius offering a complete range of services for FinTech companies, from infrastructure and service packages to advice on starting and growing your business, all in a single location,” Mr. Katinas points out.

The Bank of Lithuania provides preliminary advice to financial institution licence enquiries within one week, regarded as one of the fastest turnarounds in the EU. Full authorisation is then issued within 2 to 6 months.

Lithuania has long been considered a recognised global FinTech hub. Payment and electronic money agencies in Lithuania can access the Single European Payments Area (SEPA) through the infrastructure of the Bank of Lithuania, enabling them to avoid the broking services of many commercial banks. Lithuanian regulations now allow the use of non-face-to-face identification systems for FinTech product development, fostering further growth and development.

Fintech start-up APEXX has appointed ex-WorldPay exec Toreson Lloyd as its Sales Director. Lloyd brings more than seven years experience in the payments industry, as an acquiring specialist and enterprise customer account manager. 

National Settlement Depository (NSD), Russia’s central securities depository, has completed development of the e-voting platform. The new service will be used for the first time at Sberbank’s annual general meeting of shareholders summing up the 2016 results. The e-voting platform is a universal voting mechanism. It enables security holders not only to remotely participate in shareholder meetings held via either joint presence but also to vote at AGMs held in absentia.