Reasons To Use An Online Bank

Online banks are not recent evolutions in the financial world, with humble beginnings starting in the early days of the internet around 1995. Today, using an online bank is universal and widely popular.

We’re speaking of internet banking, with all the product and service found in traditional banks, but with much of the overhead removed. Internet-only banking is the marriage of cloud computing with high-tech efficiency. It delivers a transparent super-charged system of personal money management.

A word to the wise, here, it’s not the same as using your traditional banks e-commerce or mobile services. The online bank experience has advantages not matched by the traditional banks with their widespread physical presence and higher operating costs.

Savings Accounts

Savings account balance requirements are rather friendly with online banks. On average you only need a balance of $350 or higher with online banks before service fees kick in.

Traditional banks average $4,500 minimum balance to get out of fee charges. My personal bank requirement is $3,500. A $12 per month fee applies if the balance drops below $3,500, even if for one day.

Beyond lower fees, interest rates paid by online banks are higher. The four largest brick and mortar banks in the U.S., all with worldwide presence, pay 0.01% annually compared to 0.95 – 1.00% with their online siblings.

Framing this in real dollars, $10,000 in a savings account at 0.01 percent interest will earn a whopping $1 after a year. However, $10,000 at 0.95 percent will yield $95 in interest. That’s $94 extra dollars before the power of compound interest growth kicks in.

Checking Accounts

You can open most checking accounts with $0.00 – $50 at internet-only banks, and account fees are generally lower than store-front banking. Often, standard checks are at no cost, plus free re-orders are common.

Other bank assessments like overdraft fees, transfer charges, and special service costs are lower, too. There are some online banks that charge nothing for overdraft transfers, ACH transfers and cashier’s checks.

ATM’s

No doubt ATM service is a must in banking and lets traditional banks run with a smaller footprint. While online services can’t top the corner bank for branded ATM locations, they do offer a functional alternative.

Allpoint ATM network is predominantly used for automated teller services by online banks. Allpoint ATM has 55,000 free for use ATM’s in North America in retail locations like CVS Pharmacy, Target, Costco, and others. Some internet banks will reimburse for fee’s charged at non-network ATMs as a way to offset site limitations.

Deposits

While this is a bit tricky for some people, depositing money into an online account really isn’t difficult. As with local banks, you can easily deposit checks or cash into a network ATM.

Using a mobile banking app, deposits are possible from anywhere and at anytime, as long as a wireless network is available. Mobile deposits are as simple as snapping a picture of a check. The bank app records the deposit directly into your account.

Moving funds between accounts and transferring funds outside the bank system are just as convenient. Direct deposit of paychecks is straightforward with the app, too. It’s no surprise that brick and mortar banks have moved into the mobile app arena.

Security

Security always seems to come up when internet and cloud computing is the topic. I won’t say much about this other than data theft is a problem, but no more so whether with an online bank, private company, physician’s office, or any business that stores data electronically.

This is scary to a lot of people, but I can tell you that banks with physical buildings don’t offer any more comfort. Their data storage is cloud centered and transactions are electronic data transmissions.

Financial institutions ranging from Federal facilities, to Wall Street institutions, to local banks house our personal information in big data centers. In fact, data center companies are a huge business sector in America. While cyber security is a serious issue, it is not any greater issue with an online bank than the bank down the street.

Summary

The comforts found in a traditional bank are still important to a lot of people. Face to face contact is still a need at times, and traditional banks beat in areas such as loan officer availability, brokerage services, real estate & mortgage specialists, and other professionals.

But, it also comes down to the fact that brick-and-mortar branch banking carries a lot of costs, with the greatest being physical buildings and staff. This overhead passes straight to customers through fees, charges, and low-interest rates.

Online banks are cheaper to run because they don’t have buildings to keep up nor large staffing needs. You can do everything done in traditional banking, but with efficiency, lower cost, and higher earnings return using an online bank. With the online bank, it’s all about low fees and higher interest rates.

For many people, online banking is not the best option. For others, however, mobile app’s, cloud technology, and mobile communication are second nature in their lives already. The online bank could simply be an extension into their current virtual world.

I have been an active investor for over 35 years. My investments have always been self directed. I favor value stocks with dividend growth and income potential. My tendency is to hold long positions in equities qualifying as Dividend Aristocrats.

The Seeds To Harvest personal blog came out of a lifelong interest in personal finance. This interest has led to teaching community classes to a variety of groups. Retirement activities include travel and volunteer site coordinator with the VITA Tax Program.

A Guide to a Banking Career

With new banks coming up in the Indian market every year, the banking sector has become the thriving career option. The Indian banking sector is expected to record 25% growth in the next few years. Moreover, with the entry of international banks, the banking sector is ready to produce abundant bank jobs.

Some of the common bank positions available in the sector

1) Tellers
2) Auditors
3) Cashier
4) Brokers
5) Probationary Officer
6) Clerks
7) Loan Officers

If you also want to build a career in the banking sector, the below comprehensive guide would give you a steady start.

Requisite professional education & qualifications

To get into the bachelor program, you need to secure good percentage in Class XII. In India, both private and government colleges are offering banking programs to equip students with important concepts, tools and techniques. It is strongly advised that you should start preparing for the CAT (Common Aptitude Test) right from the college onwards so that you are fully prepared to clear the entrance examinations because then only you will be able to get into prestigious b-schools.

Broadly, the banking program offers specialization in below areas-

1) Micro Economics
2) Equity Debt
3) Cost Accounting
4) Banking Communication
5) Corporate Laws
6) Taxation

Here it is imperative to note that bank jobs are open for students from all streams, be it commerce, science or arts. However, to build a great career in banking, you should be good in mathematics.

Top banking colleges in India-

1) Delhi School of Economics
2) The Indian Institute of Banking & Finance (Mumbai)
3) National Institute of Bank Management (Pune)
4) Maharaja Sayajirao University of Baroda
5) Indira Gandhi National Open University (Delhi)

Where to look for bank jobs?

In India, job opportunities for graduates and post-graduates are excellent in the banking sector. Once you complete your banking course, you will immediately get a job as a banking sales officer. Nowadays, students are showing keen interest towards probationary officer (PO) jobs also. Students interested in PO jobs have to appear for the all-India entrance test. You can find such bank jobs both in private and government sectors. Moreover, positions in loan, insurance and back office operations are available in the market. If you are from a top college like IIMs, you can expect to get an employment in foreign companies like Fidelity, JP Morgan Chase, etc. Top-notch banks like Barclay’s, Royal Bank of Scotland, American Express, Standard Chartered and other financial institutions need thousands of professionals every year for their divergent banking operations.

Future of Indian banking sector

In the recent years, the Indian banking sector has recorded an extensive growth. According to the report of the Boston Consulting Group, Federation of Indian Chambers of Commerce and Industry and Indian Banks’ Association (IBA), the banking industry of India would become the third largest in the world by 2025. Even the Ethiopian government has requested the State Bank of India (SBI) to open a representative office in its nation. All these new initiatives and development would trigger the job market and there would be a demand for employees in sales & marketing divisions. Due to the mobile and internet banking, there is a high demand of IT professionals in the banking sector also.

Newton Gang Robs Two Banks in One Night

On January 9, 1921, the Newton Gang drove into Hondo, Texas, a small town 30 miles west of San Antonio, to rob one of the two banks in town. It was just past midnight and the temperature was near freezing.

The Newtons knew the night watchman in Hondo, and as was his habit, they found him huddled around a pot-bellied stove in the depot. They cut all of the telephone wires and then went back to check on the night watchman. He had not budged from his spot by the stove so Joe was placed across the street as a lookout while the rest went to the bank.

In his 1979 interview, Willis proudly told his version of the story:

“Sometime you just get lucky ’cause they had left the vault door open. They had left it unlocked so we didn’t need no nitro or nothing. We jimmied the window, walked over to the vault, tried the handle and she opened! You would be surprised how many times them banks would just close the door so it looked locked during the night.

“We had the vault cleaned out in no time and went to see if the night watchman was still in the depot. Sure enough, he was reading a magazine and drinking coffee by the stove. Well hell, we figured we had plenty of time so we’d go over to the other bank and give it a try. I kept Joe and Doc watching the night marshal while Jess and I went down to the other bank.

“We got inside that bank and cleaned it out. Damn, two banks in one night and the night marshal, he never come out of the depot!”

The local newspaper, the Hondo Anvil Herald, carried the story with a splash headline:

Yeggs Rob Hondo Banks

One of the Most Daring Robberies Ever Staged in Texas Occurred Here Sunday Morning

The people of Hondo were amazed and angered Sunday morning when it became known that both banks had been entered by yeggs, between midnight and daylight, and robbed of both money and valuables. Entrance to the First National Bank was effected by forcing the front doors; while the entrance to the State Bank was effected by prizing down the bars over the last window in the alley between Parker’s and the bank.

The newspaper went on to give an elaborate description of the robbery:

Owing to most of the money in both banks being in the money safes, with time locks set, the loss in cash was not serious, the First National losing a total of $2,814 while in the matter of actual cash loss the State Bank was a little more fortunate, its loss being $1,879; both banks losing a total of $4,694 nearly all of which was silver coin.

The funds of both banks were covered by burglary insurance, consequently neither will suffer loss. [Just like Willis had assured his brothers.]

Owners of private boxes, who had put their valuables in the vaults of the banks, are the heaviest losers, and their actual loss will not be definitely known for some time-probably a month-as the owners of the boxes are the only ones who can clear up the loss, the officials of the banks not being advised of the contents of the boxes.

The safety deposit box owners had cash, government bonds, War Savings Stamps, jewelry, and other valuables in their boxes so it was impossible to determine the exact amount taken in the robbery. Estimates of as high as $30,000 were never confirmed.

The article continued to describe the “safe experts:’

… That the robbers were experts is borne out by the fact that they were able to work the combination on the vault of the First National Bank. [Willis said it was left unlocked.] They were also experts in the use of explosive, the vault doors of the State Bank being blown open by one of the most powerful explosives known-TNT [ Willis swore in his interview that he never used dynamite-only nitroglycerine.]

The vaults were thoroughly ransacked and the floors were strewn with papers about two feet thick.

From the thoroughness with which the robbers made their search for securities it is evident that they spent two hours or more in the vaults of the banks and the private boxes of the customers are in a sad plight, most of them showing that they were beat open by some heavy instrument, probably with a sledgehammer that had been stolen from the blacksmith shop of Mask & Co.

… That the robbers were no tyros (archaic word meaning beginners) in the business of robbing is again borne out by the fact that they took every precaution against being apprehended by the possession of jewelry, gold coins, and so forth, which might lead to their identity. The floors of the vaults were literally strewn with such articles as might lead to their detection. Notes and other articles of value that could not be turned into money were cast aside and left behind.

It is generally believed that the band was composed of from six to eight men, and that both banks were robbed simultaneously, a gang being assigned to each bank.

Another circumstance that indicates that the robbers were not new to the game of bank robbing is borne out by the fact that every telephone line in town was cut, apparently, before the banks were robbed. And this part of their plans was carried out most effectively and by an expert telephone man.

… Cables were severed, apparently with saws, and single wires were cut with wire clippers. Only three telephones connected with the local exchange were working Sunday morning.

The robbery was discovered by the night watchman about five o’clock Sunday morning and immediately reported to Deputy Sheriff C.J. Bless.

… Harry Crouch, our local telegraph operator, was summonsed and messages were sent east and west in an effort to intercept the robbers, but as far as the general public is advised, nothing was learned as to the direction in which the robbers went.

Detectives from San Antonio and the surrounding area converged on the Hondo banks searching for clues to the duel-heist robbery.

… One of the most remarkable coincidences of this whole business is that these robberies could have occurred right in the heart of the town and not more than 200 feet apart, and not one among our people being any the wiser until daylight it was revealed what had transpired, and that too, it was since developed that the night watchman and the two other men were in the waiting room of the depot, not more than sixty yards from the front doors of the First National Bank, while the robbery was being accomplished. The robbers must have done their work very silently to avoid detection. [It is hard to image a “silent” explosion of nitroglycerine.]

The word the newspaper used for the night burglars was “yeggs,” a popular vernacular expression of the era. It is interesting to compare the newspaper reporting to Willis’ account in which the vault of the First National Bank had been left unlocked and they used nitroglycerine (rather than TNT) to blow the vault door on the State Bank. Even more interesting was the fact that there were no follow up articles on the robbery. There was not a single mention of the multi-bank burglary over the ensuing months-although it contained large advertisements from both banks. It was as if both banks had never been robbed.

The Galveston Daily News on January 10 reported the robbery describing a “clew” that proved to be a red herring:

Robber Heel May Lead to Arrest

Telephone Connections Cut When Banks at Hondo Are Looted

San Antonio, Texas-January 10-A rubber heel, lost from a shoe, may lead to the identification of the bank robbers who made a successful haul of $20,000 from the First National Bank of Hondo and the Hondo State Bank early Sunday morning.

The bank robbers gained entrance to the two banks by prying the iron bars loose from rear windows of the buildings and manipulating the combinations of the vault in the First National Bank, but blew off the door of the vault in the state bank.

The haul was made from the safety deposit boxes in both banks, the robbers obtaining only $1,500 in cash from the First National and $29,350 of the state bank’s money. The smaller vault safes in both institutions were untouched.

The balance of the loot, it is estimated by officers at the two banks, was secured from owners of safety deposit boxes in the banks. Hondo was not aware of the visit of the bank robbers until almost noon Sunday, when the open windows at the rear of the two bank buildings were discovered.

Heel lost in bank.

Sheriff J.S. Baden, during his investigation was given the lost rubber heel, which had been found in front of the vault of the First National Bank. Further investigation disclosed a set of burglar tools consisting of a pipe wrench, saw, and chisel, which had been left by the robbers. These however are not considered as important for they are of a standard make, easily purchased at any hardware store.

Just outside of the window through which the robbers entered the state bank, Sheriff Baden found the numerals 13,555 scratched on the brick work. This, bank officials believe, indicates the amount the robbers secured from the deposit boxes in the bank. [This curious piece of information appears to have been just another “red herring.”]

Sheriff Baden believes the robberies were committed by a band of six men, who sent an advance guard of two into Hondo last week.

… Hondo citizens, who were up at an early hour Sunday morning, reported to the Sheriff that they saw a high-powered automobile leaving the outskirts of town occupied by six men. These, the Sheriff believes, were the Hondo robbers.

[Ironically] Sheriff Baden suffered a loss by the early morning visit of the robbers, as his safety deposit box in the First National Bank was broken open and $300 in stamps and $150 in bonds were taken. A $100 Liberty bond, the property of his son O.J. Baden, of Donna, was left in the box.

In light of the erroneous “clews’, the Newtons were never tried for the Hondo bank robberies.

Willis Newton was born in 1889 and died in 1979, making him the longest living Texas outlaw. He and the Newton Gang hit trains and banks in the early 1920s but their biggest haul occurred in 1924 when they robbed a train outside of Rondout, Illinois-getting away with $3,000,000. They still hold the record for the biggest train robbery in U.S. history.

G.R. (Ron) Williamson is a historian, a western writer and a born storyteller. He has published three non-fiction books on the West, many magazine and newspaper articles, and several Western movie screenplays. His home is in Kerrville, Texas where he lives with his wife and Chihuahua, “Shooter.”

His books include Frontier Gambling, The Texas Pistoleers, and Willis Newton: The Last Texas Outlaw.

Biometric Payment Authentication (BPA) – Corporate Banking Transactions: Pakistan Perspective

1. Introduction

The term ‘authentication’, describes the process of verifying the identity of a person or entity. Within the domain of corporate e-banking systems, the authentication process is one method used to control access to corporate customer accounts and transaction processing. Authentication is typically dependent upon corporate customer users providing valid identification data followed by one or more authentication credentials (factors) to prove their identity.

Customer identifiers may be user ID / password, or some form of user ID / token device. An authentication factor (e.g. PIN, password and token response algorithm) is secret or unique information linked to a specific customer identifier that is used to verify that identity.

Generally, the way to authenticate customers is to have them present some sort of factor to prove their identity. Authentication factors include one or more of the following:

Something a person knows – commonly a password or PIN. If the user types in the correct password or PIN, access is granted

Something a person has – most commonly a physical device referred to as a token. Tokens include self-contained devices that must be physically connected to a computer or devices that have a small screen where a one-time password (OTP) is displayed or can be generated after inputting PIN, which the user must enter to be authenticated

Something a person is – most commonly a physical characteristic, such as a fingerprint. This type of authentication is referred to as “biometrics” and often requires the installation of specific hardware on the system to be accessed

Authentication methodologies are numerous and range from simple to complex. The level of security provided varies based upon both the technique used and the manner in which it is deployed. Multifactor authentication utilizes two or more factors to verify customer identity and allows corporate e-banking user to authorize payments. Authentication methodologies based upon multiple factors can be more difficult to compromise and should be considered for high-risk situations. The effectiveness of a particular authentication technique is dependent upon the integrity of the selected product or process and the manner in which it is implemented and managed.

‘Something a person is’

Biometric technologies identify or authenticate the identity of a living person on the basis of a physiological characteristic (something a person is). Physiological characteristics include fingerprints, iris configuration, and facial structure. The process of introducing people into a biometrics-based system is called ‘enrollment’. In enrollment, samples of data are taken from one or more physiological characteristics; the samples are converted into a mathematical model, or template; and the template is registered into a database on which a software application can perform analysis.

Once enrolled, customers interact with the live-scan process of the biometrics technology. The live scan is used to identify and authenticate the customer. The results of a live scan, such as a fingerprint, are compared with the registered templates stored in the system. If there is a match, the customer is authenticated and granted access.

Biometric identifier, such as a fingerprint, can be used as part of a multifactor authentication system, combined with a password (something a person knows) or a token (something a person has). Currently in Pakistan, mostly banks are using two-factor authentications i.e. PIN and token in combination with user ID.

Fingerprint recognition technologies analyze global pattern schemata on the fingerprint, along with small unique marks known as minutiae, which are the ridge endings and bifurcations or branches in the fingerprint ridges. The data extracted from fingerprints are extremely dense and the density explains why fingerprints are a very reliable means of identification. Fingerprint recognition systems store only data describing the exact fingerprint minutiae; images of actual fingerprints are not retained.

Banks in Pakistan offering Internet-based products and services to their customers should use effective methods for high-risk transactions involving access to customer information or the movement of funds to other parties or any other financial transactions. The authentication techniques employed by the banks should be appropriate to the risks associated with those products and services. Account fraud and identity theft are frequently the result of single-factor (e.g. ID/password) authentication exploitation. Where risk assessments indicate that the use of single-factor authentication is inadequate, banks should implement multifactor authentication, layered security, or other controls reasonably calculated to mitigate those risks.

Although some of the Banks especially the major multinational banks has started to use two-factor authentication but keeping in view the information security, additional measure needs to be taken to avoid any unforeseen circumstances which may result in financial loss and reputation damage to the bank.

There are a variety of technologies and methodologies banks use to authenticate customers. These methods include the use of customer passwords, personal identification numbers (PINs), digital certificates using a public key infrastructure (PKI), physical devices such as smart cards, one-time passwords (OTPs), USB plug-ins or other types of tokens.

However addition to these technologies, biometric identification can be an added advantage for the two-factor authentication:

a) as an additional layer of security

b) cost effective

Existing authentication methodologies used in Pakistani Banks involve two basic factors:

i. Something the user knows (e.g. password, PIN)

ii. Something the user has (e.g. smart card, token)

This paper research proposes the use of another layer which is biometric characteristic such as a fingerprint in combination to the above.

So adding this we will get the below authentication methodologies:

i. Something the user knows (e.g. password, PIN)

ii. Something the user has (e.g. smart card, token)

iii. Something the user is (e.g. biometric characteristic, such as a fingerprint)

The success of a particular authentication method depends on more than the technology. It also depends on appropriate policies, procedures, and controls. An effective authentication method should have customer acceptance, reliable performance, scalability to accommodate growth, and interoperability with existing systems and future plans.

2. Methodology

The methodologies applied in this paper build on a two-step approach. First, through my past experience working in Cash Management department of a leading multinational bank, implementing electronic banking solutions for corporate clients throughout Pakistan and across geographies.

Secondly, consulting and interviewing friends working in Cash Management departments of other banks in Pakistan and Middle East for better understanding of the technology used in the market; its benefits and consequences for successful implementations.

3. Implementation in Pakistan

Biometric Payment Authentication (BPA) i.e. biometric characteristic, such as a fingerprint for authorizing financial transactions on corporate e-Banking platform implementation in Pakistan will be discussed in this section. First the descriptive, then the economic benefit analysis for adopting the presented methodology.

As technology is very much advanced today, fingerprint scanners are now readily available on almost every laptop or a stand-alone scanning device may be attached to a computer. Also with the advent of smart phones, now the fingerprint scanner is available on phones as well (e.g. Apple iPhone, Samsung mobile sets etc)

In Pakistan, end users shouldn’t have trouble using a fingerprint-scanning device on a laptop or on a smart phone as all work which needs to be done has to be done by banks introducing this methodology.

Besides this Pakistan is a perfect location to implement biometrics based authentication, mainly because:

a. CNICs are issued after taking the citizen’s biometric information – especially fingerprints

b. Telco companies needs to maintain and validate an individual’s fingerprints before issuing a SIM card

These examples show that a large population Pakistan is already familiar and comfortable with biometrics (fingerprints) methodology. However, banks have to develop their e-banking portal or application in accordance with and by accepting fingerprints for corporate users. The e-banking portal would invoke the fingerprint device of the end user for either login or authenticating financial transactions. Enrollment can be performed either remotely through first time login into e-banking platform after user has received setup instructions and passwords or at the bank’s customer service center.

This article suggests banks in Pakistan to move multifactor authentication through PIN and; fingerprints. Fingerprints are unique and complex enough to provide a robust template for authentication. Using multiple fingerprints from the same individual affords a greater degree of accuracy. Fingerprint identification technologies are among the most mature and accurate of the various biometric methods of identification.

Now let’s discuss the economic benefits of using PIN and; fingerprints instead of token devices for authentications. And before we deep dive into the statistics, first just look into the current process of token inventory ordering to its delivery to the end user and then its maintenance if any token is lost or faulty.

Mostly banks in Pakistan order and import tokens from a US based company called ‘VASCO Data Security International Inc.’. Once order is placed, the VASCO ships the token to the respective ordering bank and the bank receives the tokens after clearing the custom duties. Banks settles the invoices of VASCO by sending back the amount through outward remittance along with the courier charges. Banks then initialize the token and upon customer written request issues the token to an end user. The token is couriered to the end user and training is conducted via phone or physical visit of the bank’s representative to the customer office. Any lost or faulty token are replaced with new ones and again couriered to end users. Tokens are returned back to banks if any end user resigns their organization or is being moved into some other role that doesn’t involve banking related operations or use of e-banking platform.

Theoretically it seems pretty simple, but practically these are very time consuming activities and cost is associated to each and every step mentioned above.

Now, let’s do some cost calculation which are associated to the above activities and build some statistics so that cost benefit analysis can be done.

Currently, some of the banks in Pakistan, locally, have introduced fingerprint recognition technologies to authenticate ATM users and are in the phase of eliminating the need for an ATM card which will eventually help banks in cost saving of replacing lost or stolen cards.

Cost calculations are approximations and not to be taken as true cost for any budgeting.

3.1. Descriptive Statistics

The descriptive statistics for token inventory ordering to its delivery to the end user and then its maintenance if any token is lost or faulty (statistics built on roughly 1000 tokens consumption per year per bank) are shown in the below statistics.

Descriptive Statistics

Tokens Cost (1000 tokens) 15,000USD (1,569,000PKR)

Custom Duty 4,610USD (482,206PKR)

Courier to End User 922USD (96,441PKR)

Training Cost 7376 (771,530PKR)

Total 27908USD (2,919,177PKR)

The above stats shows that, approximately 28000USD (amount in USD rounding off to thousands) is spent on tokens by a single bank which can easily be saved if the token is replaced by fingerprints. It’s not only cost saving for a bank but also ease off banks in administration and maintenance.

Forex interbank rates as of December 23, 2016 http://www.forex.com.pk

4. Change Management Grid

Stage One: “Coming to Grips with the Problem”

Mind-set (Thinking/Understanding)

a. Currently banks are paying lots of cost on physical token purchasing which can easily be eliminated by using biometric methodology such as fingerprints.

Motivation (Emotional/Intuitive Dynamics)

a. The current old methodology of token ordering takes time and cost till it reach banks. Then specific training needs to be conducted for end users for token device activation and usage. Maintenance is another huge activity for banks. As biometric scanners are easily available on laptops and smarts phone therefore this new change is easily achievable without any huge cost. Fingerprint authentication will ease end users from remembering too many password and they have not to carry the physical devices along with them all the time.

Behavior (Capability)

a. Banks in Pakistan needs to be visited and proper presentations will be conducted to brief their I.T. team with this easy to and; secure technology, finance team for the cost benefits and to their operations team about reducing their operation maintenance.

b. Demos will also be arranged to show in live how this new technology assist banks.

c. End user will have to use fingerprint to login or authenticate transactions instead of using physical tokens.

Stage Two: “Working through the Change”

Mind-set (Thinking/Understanding)

a. Biometric authentication will help banks to reduce cost and reduce operational hassle. This technology will also ease off end users with their day to day e-banking activities. Proper training to the bank concerned team will be conducted. End user will also be guided with the fingerprint enrollment.

Motivation (Emotional/Intuitive Dynamics)

a. Banks has to invest first to adopt this new technology but this will eventually help them to reduce the recurring cost and operational maintenance.

b. End users will no more have to carry any gadgets and will perform banking activities with a touch of a finger.

Behavior (Capability)

a. Post implementation reviews will help banks about the feedback of their customer whom have started using the new technology and client experience will help banks to enhance their product.

b. With fingerprint technology, corporate customer will no more have to pay any additional cost for requesting tokens.

Stage Three: “Attaining and; Sustaining Improvement”

Mind-set (Thinking/Understanding)

a. Banks to hold Client experience forums which will assist them on customer feedbacks and also give new ideas on any future enhancements.

b. Banks to update Departmental Operating Instructions (DOI) for employees, emphasizing on their roles and responsibilities across this new technology.

Motivation (Emotional/Intuitive Dynamics)

a. Banks can launch reward campaign for employees who will successfully migrate the e-banking users from token to fingerprints technology.

b. Likewise some promotion of fee waivers can also be offered to customers for availing this technology.

Behavior (Capability)

a. Training and; retraining to be conduct for any new bank staff or existing staff to emphasize the benefits of biometric authentication.

b. Customer can be retrained or refreshed about this technology by send regular product brochures and short videos on trainings.

c. Quarterly feedback will be conducted across all customers to assess their knowledge for the biometric authentication and gather new ideas on future enhancements.

5. Monitoring / Evaluating

Banks being a service oriented industry always focus on ‘Customer First’. Through client experience forums customer feedbacks will be attained and issues, if any, faced will be addressed through keen follow-ups and final feedback on will be taken from customer upon resolution.

Post implementation review will give a clearer picture of the new biometric methodology implemented and will also get further view points for future enhancements.

6. Conclusion

This study aims to examine the replacement of physical token usage of corporate e-banking platform users with the end users fingerprints for their login into e-banking channel and financial transactions authentication. Findings of this study reveal that this new technology will not be only beneficial for the banks in cost and; maintenance perspective but will also ease corporate end users with a peace of mind of not remembering too many passwords or carrying the physical token wherever they roam.

Charting the Waters at Cordell Bank

Until 1978, no diver had explored the Cordell Bank. This extraordinary place is now a National Marine Sanctuary. There’s an interesting history behind how this part of the ocean off the coast of California, northwest of San Francisco became a sanctuary.

The bank was discovered by George Davidson while conducting surveys along California’s north coast in 1853. Sixteen years later, in 1869, a more extensive survey was conducted by Edward Cordell, after whom the bank was named. What follows is some of the experiences shared by the first divers to view the bank.

At 150 feet, air bubbles slide out of my regulator sounding like gravel being poured from a metal bucket. We are 20 miles from the nearest shore on a ridgetop of a large Pacific seamount named the Cordell Bank and the scene below is incredibly bright. Anemone, hydrocoral, sponges, and algae cover everything in sight, in many places growing on top of each other.

While collecting some of these organisms, we are suddenly flushed with a euphoric giddiness. We try to smile, but numb lips and the regulator make the effort that much sillier. Struggling to control the narcosis, we keep collecting and exploring. All too soon, however, my buddy waves a thumbs-up in front of my mask. Now, where’s the ascent line? A flashing strobe catches my eye and I swim toward it. The line’s there, so we follow our bubbles – but not to the surface. At 10 feet, we both grab the regulators of full scuba tanks. The decompression wait seems eternal as we can hardly wait to tell the others about our dive to where no one has been before.

These experiences were shared with the author from Robert Schmeider, Ph.D., of Walnut Creek, California, who was obsessed with the exploration of Cordell Bank. In 1977, while studying a chart of northern California’s coastline, this atomic physicist became intrigued by Cordell Bank, which is 20 miles (32 km) due west of Point Reyes and to the northwest of San Francisco. The chart showed there was at least one shallow place with a depth of 20 fathoms or 120 feet (37 meters). It could be dived using regular scuba tanks, so Schmeider assumed it had been. But when he asked a few diving friends if they had ever been there, he discovered none had. So he talked to people with the Coast Guard, the Navy, the California Academy of Sciences, the University of California at Berkeley, the Department Fish and Game, the Geological Survey, the National Oceanic and Atmospheric Administration (NOAA) and others. After a couple of months, Bob realized to his amazement, no one knew much about the bank at all. The idea of exploring Cordell Bank soon became a serious goal.

But Bob expected many dangers. Deep-diving can always be dangerous, especially with compressed air scuba diving due to the possibility of nitrogen narcosis and decompression problems. Additionally, he knew the water was cold, and a fairly stiff current of one or two knots ran in the area. Two knots is nearly impossible to do any work in. To make matters even worse he expected to encounter lots of sharks, including great whites since Cordell Bank lies about midway between Tomales Bay and the Farallon Islands, both places where great whites are known to congregate.

The fisherman in Bodega Bay knew the Bank well as an excellent fishing area, so Bob lined up a boat and skipper from there. After extensive discussions with several of his regular diving partners, he announced his plan to divers in the Sierra Club’s Loma Prieta chapter from the San Francisco Bay area in October of 1977. He knew exploring the bank would require a large support group. At an organizational meeting held in the U.S. Geological Survey chambers in Menlo Park, the group elected a divemaster and all but one of the 40 people attending pitched in $40 a piece to kick off Cordell Bank Expeditions.

After a few practice dives at Monterey and at the Farallon Islands, Bob felt his group was ready to go to Cordell Bank. Unfortunately, he ran into numerous difficulties. Most importantly, a number of divers had dropped out of the group, so Bob had trouble gathering enough divers for a trip. Finally, on October 20, 1978, with just five divers, Bob made it to Cordell Bank.

As Bob recalls, “What we saw on that day absolutely astonished us. We were totally unprepared for the light level. Not only was it not dark, it was incredibly light. After I made the first dive with a buddy, I told the other drivers not to take their lights, as they simply would not need them. It was so light you could almost read. And we had been to a depth of close to 150 feet.”

“There were enormous aggregates of 12-inch (30 cm) fish swimming around above the pinnacle. To us, it seemed an incredible snowstorm of fish. When we finally broke through the fish on our way down, our entire field of vision was just filled with this miraculous sight. We could see colors – reds and oranges and yellows – and the rocks were covered, just inundated, with organisms. Sponges, especially Corynactics (Strawberry anemone), pink hydrocoral, hydroids, and a lot of large-bladed algae. It looked as if someone had landscaped it. We were just overwhelmed.”

On the first dive, they collected nearly 50 species, including at least one new genus of algae and one new species. By working closely with a number of professional biologists at the University of California at Berkeley, the California Academy of Sciences, the Los Angeles County Museum, the Geological Survey, the Smithsonian, and other institutions, they sorted and identified their new collections until the list included more than 400 species.

After that first dive, made possible by the Sierra Club divers and by grants from such organizations as the San Francisco Foundation and the National Geographic Society, the Cordell Bank Expeditions evolved into a member-supported, systematic, data-gathering organization that bought its own research vessel, the Cordell Explorer, which was retired in 2014. They bought a LORAN-C receiver and carried out depth surveys back and forth across certain areas, measuring depths and recording positions. From that data, they were able to generate their own set of charts. Those charts became a major help in carrying out more successful dives, as they could more reliably find the pinnacles and ridges they wanted to dive. In the summer of 1985, Bob and a colleague were able to obtain state-of-the-art hydrographic survey data on the Bank as a result of a project conducted by the National Oceanic and Atmospheric Administration (NOAA) and the U.S. Geological Survey (USGS). That survey covered the 200-mile Exclusive Economic Zone (EEZ) off the coast that the U.S. claims control over. Cordell Bank may well be the best-surveyed feature off the coast of North America.

Aside from collecting specimens and surveying, the expedition also used 35-millimeter photography, plus Super 8-millimeter, 16-millimeter, and videotape cinematography. Some of their photographs have been useful in identifying species that didn’t show up in their collections and in showing physical features the divers may not have noticed during their dives.

They have found this seamount is roughly elliptical and, at the 50-fathom depth, it is 9-1/2 miles long by 4-½ miles wide (15.3 x 7.25 km). It lies right on the edge of the continental shelf and is the northernmost such shallow place all the way to Canada. The bank is a distinct plateau with its flat top rising to the 30- to 35-fathom depth. Atop this plateau, at least four cliffy ridge systems, two in the north and two in the south, and several pinnacles reach to diveable depths. In fact, the shallowest point the expedition has found is about 19 fathoms (114 feet or 35 meters) and is part of a ridge system in the northeast. Geologically, it is considered a piece of the ancient Sierra Nevada that was sheared off by the Pacific Plate, thus explaining its granite composition.

Growing on this 19-fathom peak is a dense, whitish cap of barnacles and red algae. Below this, from 20 to 25 fathoms (36.6 to 45.7 meters), the sessile community grades to nearly foot-thick piles of sponges, anemones, including the common Strawberry Anemone Corynactis californica, California Hydrocoral Allopora californica, hydroids, and tunicates. Space is the limiting factor. The organisms are very brightly colored with reds, yellow, white, and pinks. At 30 fathoms (55 meters), the community thins to a few large, widely spaced creatures, mainly sponges, urchins, and anemone. By 35 fathoms (64 meters), bare rock dominates the scene. Around 200 feet in various places, brilliant white sediments of almost a hundred percent shell fragments accumulate.

The Cordell Bank community is very healthy showing little evidence of disease or death because the California Current brings clean, clear, cold (50 to 55 degrees F. or 10 to 13 degrees C.) water, with a high nutrient content, upwelling to the relatively shallow bank. When the disruptive El Niño current occurs off California’s coast, the water temperatures at the bank rise to over 60 degrees F. or 15.6 degrees C. The sun’s rays penetrate this water so deeply divers can take photographs using available light at 150 feet (46 meters). Visibility is sometimes as good as 100 feet (30.5 meters). Because of the water’s clarity and nutrient load, photosynthesizing organisms support a vast and complex food chain up to large fish, birds, and mammals.

Cordell Bank has long been known as a superb fishing area. Groups of rockfish congregate around the pinnacles, sometimes so thickly, divers report whiteout conditions. Besides rockfish, sport fishermen regularly catch lingcod, yellowtail, salmon, albacore, and shark. Oddly enough, the divers have yet to see great white sharks, in spite of the fact that the great white’s favorite prey, seals and sea lions, are at the bank. They have, however, seen blue and mako sharks.

Like rockfish, seabirds often congregate around the pinnacles, and it was just such gatherings that enabled the expedition to initially home in on shallow points to dive. On surveying and diving trips since 1978, volunteer observers from the California Marine Mammal Center and San Francisco State University have recorded many sightings of seabirds and mammals at or near Cordell Bank. They’ve seen 33 species of seabirds including black-footed albatross, northern fulmar, surf scoter, south polar skua, common murre, pigeon guillemot, tufted puffin, and brown pelican. The previously endangered brown pelican was particularly noteworthy because it was sighted on about two-thirds of the trips.

The observers also recorded fourteen kinds of marine mammals. Of special interest were two endangered cetaceans, the humpback and blue whales. Both species feed at the bank. The team’s most exciting encounter with blues occurred on October 10, 1982, when a pair approached from off the port bow, surfaced 30 yards away, visibly swam under the ship, and surfaced again several hundred yards astern. Marc Webber and Steven Cooper, reporting for the group, felt the number of blue whale sightings “represents a substantial number of records for this species over the continental shelf in the Cordell Bank area, and along with probable observation of feeding suggest this area is an important autumn habitat for this species.” Also of particular interest were sightings of northern elephant seals whose pelagic habits have only recently become better understood. Other observed mammal species were Minke whale, Dall’s porpoise, harbor porpoise, orca, Pacific white-sided dolphin, Risso’s dolphin, Northern right whale dolphin, California sea lion, Steller sea lion, northern fur seal, and harbor seal. These have all been autumnal observations. The expedition has restricted their trips to the autumn because the weather is most predictable at that time and because the California and Davidson currents more or less cancel each other out, which makes diving more practical.

The greatest mysteries Bob and his divers have encountered are a number of large, cylindrical holes that lie right on the sharpest, highest parts of the region. Some holes appear to be man-made, but others look natural. Hearsay has it the holes were made by the U.S. Navy during the 1960’s in a project related to submarine detection. Bob’s expedition was once followed for nearly an hour by an unidentified submarine. In spite of his security clearance, Bob has been totally unsuccessful in learning anything from the Navy about any of this.

Cordell Bank is now a national marine sanctuary. The Sanctuary Programs Division (SPD) of NOAA, which is in charge of the sanctuaries program held its first informational hearing on the bank in San Francisco on April 25, 1984, and published a draft Environmental Impact Statement and other documents.

Bob is optimistic about Cordell Bank’s future. He believes, “It’s incumbent upon those of us who wish to preserve certain areas of our environment like museums, to set up the legislation to protect those areas. We don’t give any thought whatsoever to commercially developing Yosemite because it’s become part of our national environment, our cultural heritage. And our marine sanctuaries will become the same way. I hope and believe that 50 or 100 years from now, areas like Cordell Bank, which had long since been designated marine sanctuaries, will be part of our national heritage and will be considered inviolate.”

Creating a Marine Sanctuary

The federal marine sanctuaries program was established by Title III of the Marine Protection, Research, and Sanctuaries Act of 1972. This law provides that areas in the ocean as far out as the edge of the continental shelf and in the Great Lakes may be protected.

During its first 5 years, the program crawled slowly along, because no funds were appropriated. By 1977, only two marine sanctuaries had been designated. The first was a six square mile site off Cape Hatteras, North Carolina, to protect the wreck of the U.S.S. Monitor, and the second was Key Largo Coral Reef Marine Sanctuary adjacent to John Pennekamp Coral Reef State Park in the Florida Keys, which covers 100 square miles. In that year, 1977, President Carter, in an environmental message to Congress, expressed support for the program and boosted funding. In contrast to the law’s original intent, Carter was trying to protect areas threatened, in this case, by offshore oil development. As it turned out, one of Carter’s last official acts was the designation of three new sanctuaries: Looe Key in Florida, Gray’s Reef in Georgia, and the Gulf of the Farallones off California. (Cordell Bank neighbors this sanctuary.) Once again, the program was slowed by restricted funding under the Reagan Administration.

The slowness of the marine sanctuaries program was especially disheartening because all the land is under state or federal control already and doesn’t require acquisition funds. Money was needed only for evaluating potential sites, managing a site after it becomes a sanctuary, and enforcing the protective laws.

The marine sanctuaries program works in the following way. Any organization or member of the public may send nominations to the Sanctuary Programs Division (SPD) in the Commerce Department’s National Oceanic and Atmospheric Administration (NOAA) for consideration. The idea of nominating a place need not be intimidating. As Bob Schmeider found out, “the nomination itself doesn’t need to be very specific at all. Of course, if the (SPD) already knows about a site, which they had already known about Cordell Bank from information I had given them well before the nomination, (then) the actual nominating step was simply a letter from me to them saying I would like to nominate Cordell Bank. If a site is totally unknown and you’re preparing a nomination, then you need to include some details and some information, so that they will have some knowledge of it. That’s all.”

Formerly, a nomination was automatically placed on a List of Recommended Areas, but this has been replaced by a Site Evaluation List (SEL) that includes nominated sites meeting certain preliminary criteria. After review by the SPD staff, the SPD can promote the area to active candidacy. At that point, they’ll produce draft documents, including a management plan, environmental impact statement (EIS), and a designation document. These will be circulated among interested individuals, organizations, and governmental agencies. They’ll also schedule public hearings in the communities nearest the candidate site to get additional input. From that, they’ll produce final documents and circulate those and hold more hearings. Congress has the opportunity to review a site’s candidacy and hold their own hearings. Cordell Bank was the first marine sanctuary candidate to receive such scrutiny. If the site is within state jurisdiction, then that state’s governor may veto the designation, but this won’t necessarily cancel a site’s candidacy altogether. (Cordell Bank wasn’t in state waters.) After all of these steps, the Secretary of Commerce can sign the designation document and the site will become a national marine sanctuary.

Offshore Banking Services

Banking is one of the most important sectors of the world economy as it influences investment, consumption and other business activities. Furthermore, banking has a substantial impact on the circulation of money and thus influences economic growth. Offshore banking provides a unique opportunity to individuals, business people and companies to access the international market and implement their business and investment plans since offshore banking encompasses stronger privacy and security features. That is to say, the activities you launch through your offshore private banking are more confidential and secure. It should be underlined that you will be able to offer the same privacy to your customers together with other related benefits.

The procedures you need to follow in order to open an offshore bank account are not complex. In other words, every individual may open an offshore bank account within few hours. Note that each offshore banking jurisdiction has its own requirements. Among the most popular offshore banking centres are the Cayman Islands, Seychelles, Saint Vincent and Grenadines, Bahamas, Gibraltar and Netherlands Antilles.

BASIC REQUIREMENTS:

As it has been mentioned before, opening an offshore bank account is rather simple. The procedures you need to follow in order to open an offshore bank account are similar to the procedures you follow in order to open a bank account in your home country. First of all, offshore banks will ask for your personal details: name, date of birth, address, citizenship, occupation and submit a copy of your passport, identity card or any other identification document issued by a governmental authority. Second of all, you will have to verify you residence address by presenting a utility bill or any other document. It should be mentioned that all the submitted documents must be certified.

Some considerable benefits of offshore banking are:

Minimised political risk. In many cases, the biggest threat is not the market risk but the governments, i.e. capital controls measures and bail-ins.
Asset protection.
Currency diversification. Holding foreign currencies leads to the minimisation of the risks you confront.
More options for your business and investment plans.

JURISDICTIONS:

Cayman Islands:

One of the major advantages of the Cayman Islands is the political stability. The annual license fee is 9.000 US dollars. The international banking infrastructure is well-developed with many facilities. Another considerable advantage of the Cayman Islands is the zero taxation on international banking income. Nevertheless, the state’s approach toward international private banks owned by non-banker is poor. Despite the fact the Cayman Islands have well-developed banking structures, the poor attitude towards international banks owned by non-bankers discourages many investors and business people to launch offshore banking activities in the Cayman Islands.

Seychelles:

The major advantage of Seychelles is confidentiality since state authorities have no direct access to bank information without a Court order. Note that Seychelles has double tax treaties with Barbados, Botswana, China, Cyprus, Indonesia, Malaysia, Mauritius, Oman, Qatar, South Africa, Thailand, United Arab Emirates and Vietnam. Furthermore, it should be pointed out that Seychelles has signed Tax Information Exchange Agreements only with the Netherlands.

Saint Vincent and Grenadines:

The country maintains a degree of flexibility and confidentiality that many bank owners prefer. In particular, confidentiality regarding the incorporation and the launch of business of an International Banking License has been ensured by the Confidential Relationships Preservation (International Finance) Act 1996 and by the International Banks Act 1996. Among the major advantages of Saint Vincent and Grenadines is the absence of exchange control restrictions to offshore transactions and stamp duties. Furthermore, there are no corporate taxes, no income tax, no withholding tax, no capital gain tax and no estate/inheritance/succession duties.

The country has political stability, well-developed international banking infrastructures and skillful labour force.

The International Banks Act 1996 issues the following licenses:

Class I Offshore Banking License: The Licensee is involved in offshore banking activities outside the country. The minimum class requirement for Class I license is 500.000 US dollars.
Class II Offshore Banking License: The Licensee is engaged in offshore banking with individuals or groups detailed described in a written undertaking. The minimum class requirement for Class I license is 100.000 US dollars.

Bahamas:

Bahamas is considered one of the most attractive international banking centres in the world because of its excellent communications systems and the frequent air and sea connections with the USA. In addition, the country has a well-developed banking secrecy legislation. It should be taken into account that there are no taxes on international banking income.

There are two types of licenses, the unrestricted and restricted license. The unrestricted license can be obtained by private individual given that they can prove that they have a considerably high net worth. On the other point of view, restricted licenses are granted to financial institutions. Note that a restricted license enables the holder to offer banking and trust services exclusively to a particular class of associated individuals or businesses.

Gibraltar:

Gibraltar is a full member of the European Union. Therefore, banks incorporated in Gibraltar operate under the same legal framework as the banks in the UK. Nevertheless, Gibraltar has some additional advantages such as the efficient and effective bureaucratic procedures. Moreover, banks may operate completely free of tax.

Retail Banking – A New Way For Customer Service

With the Independent Commission on UK Banking recently issuing its long awaited report on the state of our current banking landscape, the opportunities contained within it to improve retail banking customer service have been seemingly ‘lost in the noise’ – with our government apparently wanting to deflect attention by kicking it into the long grass.

But there is no escaping headline issues that emerged from the final report of Sir John Vickers and colleagues, namely how do we cope with banks that are too big to fail and how do we stop the risk of speculative investment banking toxifying retail accounts?

Retail UK banking, in contrast to investment banking, should be a simple business in which the bank takes our savings, marks them up and lends them to others, or vice versa. But this simple process has become an unwieldy beast with almost everyone you talk to having a retail bank atrocity story.

A recently conducted study of 1,000 nationally representative retail bank customers, with almost 70% believing that banks don’t care very much about what the public think of them, over 75% rating the public image and reputation of the banks’ retail operations as mediocre to dreadful, and an eye-watering 86% thinking that the image and reputation of the banks will not improve or will actually decline over the next six months.

Two influences, linked but not identical, seem to be at work. The first factor is the momentum towards online banking and the spotlight that puts on the slow and ponderous ‘old way’ of doing things. Ask yourself which is preferable – accessing a bank account from the train, your own home or an office, or trudging round to the bank in the rain and joining a queue? Older customers feel less habituated to the online world but the young customers ‘voting with their feet’ adds considerable impetus to this inevitable online momentum.

Thirty years ago a very senior UK bank official remarked in an unguarded moment that High Street banking was hopelessly and irredeemably uneconomic – and nothing that’s happened in the intervening years has made that judgment less telling.

The cost of maintaining a local branch network has become a dead weight hung from the necks of banks. If bearing this burden produced contented customers there might be something to be said for it, but it simply fails to do so. Branch managers have largely been deprived of the power to make decisions on loans, thereby further reducing the reasons to bother visiting the branch. When did you last do so? First Direct has responded to this economic reality with the intelligent stratagem of not having any branches. Yet how have other banks responded?

The second factor is the way retail bank brands are built, maintained and developed. Various studies show that marketing slogans, for example, have very low recognition amongst the public and the only one that had any genuine customer awareness was HSBC’s ‘the World’s Local Bank.’ This slogan was launched in March 2002, showing that it takes a long time and costs a great deal of money to get any sort of traction and make an impact.

The customers now pay more attention to the testimony of other customers than they do to promotional campaigns, with enthusiastic customers and ‘brand ambassadors’ being the market builders of the future.

A new business model is consequently required for retail UK banking. The old business model was bank-centric where the bank saw itself as a central resource and the customer could approach the bank and humbly inquire whether any of its supplier-defined services met the customer’s needs. Motivated by incentives, bank staff tried to convince customers that products like Payment Protection Insurance met genuine needs. So much for ‘Customer Service’.

There is a clear demand for a customer-centric business model, but few banks appear to be working effectively to meet this demand. When used properly, ‘new media’ can create genuine conversations with their customers and, as that famous book ‘The Cluetrain Manifesto’ puts it, “the market becomes a conversation”.

Instead of their services being defined by what the bank wants to offer, they can be defined by what the customers need. The ‘bank to customer’ polarity is reversed and the customer becomes the market-maker of the future.

It all comes down to the culture of the banks themselves. In today’s globalised and commoditised world there is always ‘choice’ but retail banks have sidestepped this evolution because of customer inertia. The general perception is that it is simply too much hassle to change your bank account – and if you do then the next bank you move to will be no better.

This has resulted in a culture of complacency amongst UK banks. They’ve been too big and too powerful for too long to worry too much what the customer ACTUALLY thinks. But this will change.

There are new competitors like Metro Bank, dedicated to a customer-centric model, that are changing the game and there is little doubt that the tipping point will come soon.

The bank that will win this battle will be the one that changes its culture towards the agile, customer service centric ethos that is winning out in different sectors and industries across the world.

Of course this conversion is not going to be easy for the big banks to achieve. At board level the banks are often aware of what’s happening and what’s needed. But layers of die-hard middle management are convinced that the old bank-centric model has enough life left to see out their careers. One major UK bank told us that they already have a team working on customer conversations, and that our research was a day late and a dollar short. But one look at the detailed reports from their customers shows their efforts may be costly but are simply not working. Bank customers are keen – perhaps even desperate – to enunciate their real needs, provided the banks are ready to listen and respond.

Now that the Independent Commission on UK Banking has issued its final report there is a window of opportunity in bank customer service for those senior managers in retail banking who are savvy enough to see it. The question that needs to be answered is will it encourage the banks to hold meaningful conversations with that 86 percent of customers who think the reputation of the banks will fail to improve any time soon? Let’s hope so.

The 10 Commandments of Good Governance in Banks

Due to the banking crisis of 2008, the question of how banks can protect themselves against future failures has attracted the attention of regulators, banking experts and business media. An important area is the need for better transparency, mainly regarding remuneration in the banking sector, and how boards of banks should improve their corporate governance practices to reduce the chances of a repeat of the credit crunch.

The recent publication of Central Bank of Egypt draft Code of Corporate Governance for banks marks a significant step in this process. Banks together with their respective boards should pay close attention to the corporate governance guidelines.

There are several tips and recommendations for good governance available for the board of banks. Yet, I consider the following `10 commandments` are central in establishing a sound governance regime:

1-Set the right tone at the top.

The main concerns for the board should include guiding, approving and overseeing the bank’s strategic objectives, corporate values and policies. This could be achieved by developing a code of conduct for the bank employees, management, and board members. Likewise, the board should clearly define areas of responsibility, authority levels and reporting lines within the bank.

2-Adequate qualifications of board members

The board should have adequate knowledge and experience relevant to each of the material financial activities the bank intends to pursue to enable effective governance and oversight of the bank.

To ensure that non-executive directors have the knowledge and understanding of the business, the board should provide thematic business awareness sessions on a regular basis and each director should be provided with a tailored induction, training and development to be reviewed annually with the chairman. Similarly, suitable arrangements should be made for executive board members in business areas other than those for which they have direct responsibility.

Non-executive directors are encouraged to spend more time in the business to ensure that they can participate effectively to strategy and other board decisions.

3-Appoint independent non-executive directors

To foster an independent element within the board, banks must consider that independent directors should constitute a significant membership of the board, and that the board should have at least three independent, non-executives directors. Larger banks may have a higher proportion of non-executive directors.

Non-executives directors should be able to devote sufficient time to the role in order to assess risk and ask tough questions about strategy.

In UK, there are recommendations for banks to appoint a senior independent director (SID) whose role is to provide a sounding board for the chairman and serve as a trusted intermediary for the non-executive directors, when necessary.

4-Establish board-risk governance

Banks should establish a board risk committee to work in tandem with existing audit committee. The risk committee would concentrate on risk strategy and management, free from any conflict with demands placed on audit committees. The risk committee would report regularly (as part of the annual report) on risk strategy and risk management. The risk committee has authority to seek external advice to test its risk management assumptions, particularly in the context of risk related to significant banking transactions.

Given the importance of an independent risk management function, banks should appoint a chief risk officer (CRO) with sufficient authority, stature, independence, resources and access to the board. This executive should be reporting to both the risk committee and internally to the CEO. Removal of the CRO should be subject to board discussion and public disclosure.

5-Expand scope of the remuneration committee

The scope of the remuneration committee should be expanded to cover all aspects of remuneration policy on a bank-wide basis with particular focus on the risk dimension. The remuneration committee is responsible to review the compensation philosophy and major compensation programs.

In order to reduce the perceived excessive risk-taking within banks, this committee will also be expected to approve the links between performance targets and pay or bonus schemes. At least half of bonuses should be paid in the form of a long-term incentive scheme.

6-Develop Information Technology (IT) governance

IT governance provides the structure that links IT processes, resources and information to the bank’s strategies and objectives, enhances effective board decision-making and creates greater transparency and accountability. IT governance ensures that related risks are properly identified and managed. The board needs to approve IT expenditures and provide adequate oversight over all aspects of IT governance, including procurement, outsourcing, the efficiency of systems and procedures, IT security, customer data protection and adequacy of anti-fraud and anti-money laundering systems.

7-Improve efficiency through board evaluation

The board and board committees should be subject to a formal and rigorous performance evaluation with external facilitation of the process every three years. The evaluation statement should either be included as a dedicated section of the chairman’s statement or as a separate section of the annual report, signed by the chairman. Where an external facilitator is used, this should be indicated in the statement, together with their name and other meaningful details for the shareholders.

8-Manage conflicts of interest effectively

Banks should establish information barriers (“Chinese walls”) between the different departments so that decisions by staff in one department are made in ignorance of confidential information available to staff in other departments which might affect their decision. Conflicts by board members or senior executives should be disclosed to the banks’ compliance officer. A good corporate governance practice is to put in place and disclose a conflicts of interest policy.

9-Monitor the governance of banks’ clients

It is important for banks that their clients apply the principles of good governance. Banks may consider that it is in their own best interest to check the governance framework and practices of their corporate borrowers. Even in circumstances where a bank cannot directly influence the governance practices of their borrowers, it can have an important influence by “leading by example”.

10-Track potential governance failures

Banks should have in place a policy setting out adequate procedures for employees with concerns about the integrity of the bank’s operations or its staff (so called whistle blowing policy). Employees should be able to communicate their concerns with corporate protection from retaliation from the management. The procedure should facilitate the flow of confidential and direct or indirect communication to the board (or Audit Committee) outside the internal “chain of command”. The establishment of proper communication channels would allow bank staff to discuss their concerns in confidence without fear of retaliatory action.

Conclusion

Good corporate governance is crucial for today’s complex and dynamic banking environment to ensure long-term sustainability and trust of stakeholders including regulators, investors, clients and employees. Therefore, it should be cultivated and practiced regularly within banks at board and executive management levels. Remember; Corporate governance is like a muscle, should be exercised or it will atrophy!

Hany Abou-El-Fotouh is Chief of Staff & Group Board Secretary, CI Capital Holding – the investment banking arm of Commercial International Bank which is the largest private bank in Egypt. He provides advice and direction to the Board and management with respect to corporate governance practices and formulates corporate policies.

Hany is a leading expert on money laundering and terrorist financing controls in the MENA region. Founder of the Middle East Compliance Officers’ Forum (MECOF), he has been honored for his work in promoting compliance culture and awareness in the MENA region

Hany writes articles to different newspapers and journals on a variety of subjects. He is a public speaker and professional trainer. Previously, he worked in various senior positions in leading banks in Egypt and GCC countries like HSBC, Oman International Bank, Banque Saudi Fransi among others

The Proposed Islamic Banking By Central Bank of Nigeria – The Way Forward

The Banking institution is a place where individuals or corporate organizations alike deposit their money for personal or business transactions for the purpose of savings, current or fixed transactions that would yield profit over a particular period of time. Nigeria as one of the growing economies of the world has taken the right step to restructure the banking system in the country. Dating back to the year 2005 where all the existing banks were mandated to re-capitalize to a minimum balance of Twenty five billion Naira or risk losing its operating licenses during the leadership of Prof. Charles Chukwuemeka Soludo, the then Governor of Nigeria’s apex bank, Central Bank of Nigeria.

Interestingly, this paved way for an organized and thriving banking sector where some of the banks met the expected benchmark while others merged and few dropped by the wayside. Nonetheless, this reform created free flow of capital funds for the banks to play around with – ushering of universal banking. One would not forget the role the banks played in the Capital market during the boom era where investors’ borrowed loans or applied for a margin loan facility from these banks ranging from 7% to 20% interest rates in order to reap bountiful profits on their appreciated stocks invested. Unfortunately, the proliferation of all manner of deals in our capital market over time accounted for the down turn of the economy. It must also be mentioned that Africa was not alone in this economic impasse as most countries of the world suffered the same fate including the United States of America.

In their bid to restore the good old days, economic experts and world scholars proffered solutions to revive the economy. Nigeria was not left out in the fight. With the emergence of Mallam Sanusi Lamido Sanusi as the next Governor of Central Bank of Nigeria succeeding Prof. Charles C. Soludo, he swung into action to continue on the good works of his predecessor. Between 2009 and 2010, about five bank chiefs were indicted and prosecuted for wrong use of depositors funds ranging from personal misappropriation of funds, unauthorized loans with no collateral and wasteful expenses. While others are presently on trial. Having seen the good works of the new Central Bank of Nigeria Governor, the Presidency recently established the Asset Management Corporation of Nigeria. The objectives of the Asset Management Corporation of Nigeria is to acquire ‘toxic’ assets of the troubled banks and would take majority shareholding of the insolvent banks after plugging their equity shortfalls. The public commentators commended the government for this initiative which gradually restored the confidence of the investors to invest in both the money and capital markets. No wonder in 26 April 2011 the prestigious Times Magazine honored Sanusi Lamido Sanusi as one of the 100 Most Influential People in the World in a grand Time Gala Award ceremony held in United States of America. Though, in as much as the reforms may seem to check the excesses of the bank operations, the adverse effects are quite frightening as the capital and money markets are presently witnessing low investors confidence following another purchase of three banks (Afribank, BankPHB and Spring Bank) by three relatively unknown companies (Main street, Keystone and Enterprise) respectively on August 5th, 2011 by the Sanusi led Central Bank of Nigeria.

However, at the beginning of 2011, Mallam Sanusi Lamido Sanusi re-opened the implementation of Non-interest banking, popularly known as Islamic Banking, which was initially introduced by his predecessor as one of the verifiable tools to revive the negatively skewed economy. According to Wikipedia, Worlds free encyclopedia, “interest-free banking seems to be very recent origin whereby a working partner gets a greater profit share compared to a sleeping (non-working) partner” What this simply means is that both the banks and investors (working partner) would get a greater profit share after a certain business transaction. One would ask, would this build the economic growth of the nation as being practiced in United Kingdom, Malaysia, etc? Definitely, it would build the fortunes of our economy but how we go about it is what is technically wrong. Please read Business day online of 29th June, 2011 for more explanation. The CBN Governor has the right to talk about the benefits of any product or scheme the apex bank is rolling out, but attaching more of the religious sentiments than professional cum economic gains, would sway the country to a very rough edge.

This proposed style of banking has generated heated arguments and debates across sections of the country. Remember that Nigeria is a secular state with almost equal number of Christian and Muslim faithful in population not to talk of other religious and traditional groups. For instance, the leadership of the Christian Association of Nigeria (CAN) has strongly opposed to the implementation of the Islamic Banking citing some wrong approaches by the Sanusi led Central Bank of Nigeria as using the state funds to promote the implementation of the scheme with no recourse to other religious groups in the country. The country is still facing serious security threats arising from kidnapping, militancy and most worrying, the terrorist attacks by the dreaded sect, Boko Haram especially in the Federal Capital (Abuja) and other northern parts of the country. It is surprising to know that the Presidency have been silent on the matter which needs an urgent intervention to put the facts right as the masses want better governance in terms of economic and social-political gains.

Whatever the outcome of the proposed Islamic Banking by the Central Bank of Nigeria would be, the apex body should please consider the following points as the way forward:

1. That the implementation processes of the non-interest (Islamic) banking should be done in strict adherence to the laid down procedures of the regulatory authority – Central Bank of Nigeria.
2. That It should also have greater benefits for the investors of the Islamic banking without directly or indirectly affecting other investors of interest banking in the same sector.
3. That the Central Bank of Nigeria should please continue to create more public awareness of the non-interest (Islamic) banking by having a round table discussion with all stake holders which includes: Religious sects, Economic experts, Law makers, Government officials and the Media to douse any misconception of the proposed scheme.

The fact that the non-interest (Islamic) banking with its’ numerous economic benefits as been practiced by some countries of the world, the Central Bank of Nigeria under her current leadership have to convince the over enlightened 55% Nigerians on its benefits without negatively affecting the other interest party for economic growth and tranquility.

Kansas State Wildcats College Football Team History and News

The Kansas Wildcats play for the Kansas State University. It represents the university in the North Division of the big 12 Conference and is classified under Division I of the NCAA. The team is also widely known as Kansas State, KSU or K-State. The Wildcats started playing football in 1893 during a Thanksgiving Day game against St. Mary’s Academy which they won 18-10. The home stadium of the wildcats is the Bill Snyder Family Stadium in Manhattan, Kansas which has a capacity of 52,200. Bill Snyder was one of the coaches of the KSU. During his time, the Wildcats had 11 seasons won including an eleven consecutive bowl game appearances. Its current coach is Ron Prince. However, he announced in November 2008 that he will no longer coach the Wildcats next season. The teams major rival is the Kansas Jaywalks. KSU’s official mascot is Willie the Wildcat. Their all time record is 452-596-41 (.431).

Championships and Important Moments:

Kansas State won its first conference football championship in 1934. The New York Times called KSU “an established Middle Western leader” also in 1934. The Kansas State Wildcats competed in 13 bowl games. They had an 11 bowl appearance streak that lasted from 1993 to 2003. Wildcats players and coach won various awards such as the Lou Groza Award in 1997, the Jim Thrope Award in 2002, the Boddy Dodd Coach of the Year Awards in 1998, the Davey O’Brien Award in 1998, three Heisman Trophies in 1970, 1998 and 2003. Twenty two former Wildcats are now NFL players.

Quarterbacks in the current Roster:

— Josh Freeman – Tysyn Hartman – Bobby Hauver – Joseph Kassanavoid – Collin Klein – Carson Coffman – Trey Scott — Milton McPeek —

Kansas State Wildcats Recent News:

The team is currently on the look-out for a new coach. Ron Prince’s three-year reign ends on November 22. Many fans are blaming him for Wildcats’ losing streak. The coaching job is believed to go to Bill Snyder if he wants it. Kansas is said to desire a coach with Bowl experience and wants to hire as soon as possible. However, money might be an issue. There is still the matter of paying off Prince $1.3 to buy him out of the raise and extension given to him just last summer.

On the positive side, the November 15 loss against Nebraska Cornhuskers showed the abilities of the specials teams and the defense to score touchdowns off returns. They hope to sustain it by next season. On the players, Josh Freeman suffered a mild concussion during the Nebraska game. No further information however, was divulged by coach Prince. Questions on the future of some players, particularly Brandon Banks are being asked. Would he stay with the team now that Prince, who signed him, is leaving. Banks said that his stay will depend on the new coach that will be hired by the Kansas State.

Next game for Kansas Wildcats is on November 22, 2008 at 2:30 p.m. Against Iowa State. The venue of the game is the Bill Snyder Family Stadium in Manhattan, Kansas. The Kansas Athletics Ticket Office is located at the south end of the Booth Family Hall of Athletics, which is attached to Allen Fieldhouse. Fans will have the chance to see the Wildcats take on the Iowa State.