Welcome!

API Journal Authors: Harry Trott, Liz McMillan, Pat Romanski, Flint Brenton, Stefano Stabellini

Related Topics: Agile Computing, API Journal, IoT User Interface, Cloud Security

Agile Computing: Article

Retail Banks - Dinosaurs in an Online World

We have a recurring issue with our bank - they regularly flag transactions as fraudulent even though the transactions are fine

I had some interesting (sic) experiences with two separate banks with regards to two business accounts that we keep with each recently. The problem highlighted two issues that were both in some ways intertwined:

  1. False positive flagging of online transactions
  2. Identity Management between bank departments

First let me set the scenario. I am CEO of Storage Made Easy, a business that can be categorized (in bank speak) as an online internet business. We are a business that spends a fair amount on online advertising through various different channels and who also uses best of breed online services to make our life easier. Therefore we spend money with other online based internet companies including companies like Google, Amazon etc and we pay certain providers through merchant gateways such as Paypal. I suspect we are not that different to other similar companies in this regards.

We have  a recurring issue with our bank in which they regularly flag transactions as fraudulent even though the transactions are fine. These are what are referred to in the industry as 'false positives'. A false positive is a result that indicates a given condition has been fulfilled, in this case a transaction being flagged as fraudulent, when the condition was not or should have been fulfilled, and in this case the result is that the transaction should not have been flagged. The end result is that the credit card used to pay for such services is suspended until the end user (us) has negotiated with the fraud department of the bank to lift the ban and transactions that are flagged have to be re-submitted, a time consuming and costly process as it means all adverts stop running, payments are not made and someone within the business has to take time out of their day to sort the whole mess out.

You would think it would be fairly straightforward problem to fix. After all the transactions in question have a regular history of being paid each month, in most cases going back over 2 years. Unfortunately this is not the case, the bank merely says "our fraud detection system highlights these transactions as possibly being fraudulent and there is nothing that can be done". My ongoing question is why ? Why are you flagging transactions as being fraudulent that have a historic basis for payment in which the amount in most cases are identical to what was previously being paid over the past two years. This is largely a rhetorical question as no-one in the bank can answer it or even seems to care that it is a perfectly valid question that should be investigated.

The second issue involves getting in touch with the banks fraud department to arrange to have the block lifted. Normally when we speak with the bank we go through a telephone banking authentication process. The bank set this up with us and we have a pin and other personal and password details we have to give. The PIN relates to a challenge / response two factor authentication process. As a company we have a good knowledge of Identity Management, from Active Directory / SAML / Kerberos / LDAP through to OAuth OpenID etc and we also understand the challenges of integrating between the various identity management systems.

When we contact the fraud department they do not use our pre-defined identity management process at all. In fact they ask obscure questions about the account, such as "What was the debit amount for a transaction on 2nd January "etc. These are almost impossible to answer as a by-product of the fraud block is that online banking is also blocked and as we have paperless statements, there is no way to check or validate any of the questions being asked (which in any case are not in anyway related to the identity management process we have in place with the bank). When challenged as to why the fraud department is not using the existing identity management that we have in place the response is "We do not have access to that system". My guess is that as the fraud department seems to be outsourced to Mumbai, this is why, but this is not something we should care about or be impacted by.

My conclusion is that retail banking is akin to web 1.0 companies in a web 2.0 world. They have not changed their processes to work within the dynamics of the internet world, which is driven by online transactions, and their outsourcing exposes the lack of cohesion within their internal systems in which the customer suffers the consequences. There is also a certain type of arrogance within the culture of the bank that leaves me a little cold. There is a real "don't care' "can't do" type attitude.

It seems the option we have is to change banks but I really have little confidence this will solve the underlying issues as we already similar behaviour from the two banks we already use.

Banks now fail in the most fundamental thing you want them to be good at ie. lending money, storing your money and providing transparent secure access to it. They retain their position purely through lack of choice but it has often crossed my mind that a much better solution would be a consortium of similar minded tech companies who function as their own club that administer and provide their own financial services to each other.

More Stories By Jim Liddle

Jim is CEO of Storage Made Easy. Jim is a regular blogger at SYS-CON.com since 2004, covering mobile, Grid, and Cloud Computing Topics.

@ThingsExpo Stories
The cloud market growth today is largely in public clouds. While there is a lot of spend in IT departments in virtualization, these aren’t yet translating into a true “cloud” experience within the enterprise. What is stopping the growth of the “private cloud” market? In his general session at 18th Cloud Expo, Nara Rajagopalan, CEO of Accelerite, explored the challenges in deploying, managing, and getting adoption for a private cloud within an enterprise. What are the key differences between wh...
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with the 19th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world and ThingsExpo Silicon Valley Call for Papers is now open.
It is one thing to build single industrial IoT applications, but what will it take to build the Smart Cities and truly society changing applications of the future? The technology won’t be the problem, it will be the number of parties that need to work together and be aligned in their motivation to succeed. In his Day 2 Keynote at @ThingsExpo, Henrik Kenani Dahlgren, Portfolio Marketing Manager at Ericsson, discussed how to plan to cooperate, partner, and form lasting all-star teams to change t...
Connected devices and the industrial internet are growing exponentially every year with Cisco expecting 50 billion devices to be in operation by 2020. In this period of growth, location-based insights are becoming invaluable to many businesses as they adopt new connected technologies. Knowing when and where these devices connect from is critical for a number of scenarios in supply chain management, disaster management, emergency response, M2M, location marketing and more. In his session at @Th...
Machine Learning helps make complex systems more efficient. By applying advanced Machine Learning techniques such as Cognitive Fingerprinting, wind project operators can utilize these tools to learn from collected data, detect regular patterns, and optimize their own operations. In his session at 18th Cloud Expo, Stuart Gillen, Director of Business Development at SparkCognition, discussed how research has demonstrated the value of Machine Learning in delivering next generation analytics to imp...
SYS-CON Events announced today that ReadyTalk, a leading provider of online conferencing and webinar services, has been named Vendor Presentation Sponsor at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. ReadyTalk delivers audio and web conferencing services that inspire collaboration and enable the Future of Work for today’s increasingly digital and mobile workforce. By combining intuitive, innovative tec...
Amazon has gradually rolled out parts of its IoT offerings, but these are just the tip of the iceberg. In addition to optimizing their backend AWS offerings, Amazon is laying the ground work to be a major force in IoT - especially in the connected home and office. In his session at @ThingsExpo, Chris Kocher, founder and managing director of Grey Heron, explained how Amazon is extending its reach to become a major force in IoT by building on its dominant cloud IoT platform, its Dash Button strat...
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life sett...
19th Cloud Expo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterpri...
SYS-CON Events announced today that Bsquare has been named “Silver Sponsor” of SYS-CON's @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. For more than two decades, Bsquare has helped its customers extract business value from a broad array of physical assets by making them intelligent, connecting them, and using the data they generate to optimize business processes.
There are several IoTs: the Industrial Internet, Consumer Wearables, Wearables and Healthcare, Supply Chains, and the movement toward Smart Grids, Cities, Regions, and Nations. There are competing communications standards every step of the way, a bewildering array of sensors and devices, and an entire world of competing data analytics platforms. To some this appears to be chaos. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, Bradley Holt, Developer Advocate a...
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices - comp...
There is little doubt that Big Data solutions will have an increasing role in the Enterprise IT mainstream over time. Big Data at Cloud Expo - to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA - has announced its Call for Papers is open. Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is...
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, wh...
Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is expected in the amount of information being processed, managed, analyzed, and acted upon by enterprise IT. This amazing is not part of some distant future - it is happening today. One report shows a 650% increase in enterprise data by 2020. Other estimates are even higher....
Cognitive Computing is becoming the foundation for a new generation of solutions that have the potential to transform business. Unlike traditional approaches to building solutions, a cognitive computing approach allows the data to help determine the way applications are designed. This contrasts with conventional software development that begins with defining logic based on the current way a business operates. In her session at 18th Cloud Expo, Judith S. Hurwitz, President and CEO of Hurwitz & ...
In his general session at 18th Cloud Expo, Lee Atchison, Principal Cloud Architect and Advocate at New Relic, discussed cloud as a ‘better data center’ and how it adds new capacity (faster) and improves application availability (redundancy). The cloud is a ‘Dynamic Tool for Dynamic Apps’ and resource allocation is an integral part of your application architecture, so use only the resources you need and allocate /de-allocate resources on the fly.
The 19th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Digital Transformation, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportuni...
industrial company for a multi-year contract initially valued at over $4.0 million. In addition to DataV software, Bsquare will also provide comprehensive systems integration, support and maintenance services. DataV leverages advanced data analytics, predictive reasoning, data-driven diagnostics, and automated orchestration of remediation actions in order to improve asset uptime while reducing service and warranty costs.
Vidyo, Inc., has joined the Alliance for Open Media. The Alliance for Open Media is a non-profit organization working to define and develop media technologies that address the need for an open standard for video compression and delivery over the web. As a member of the Alliance, Vidyo will collaborate with industry leaders in pursuit of an open and royalty-free AOMedia Video codec, AV1. Vidyo’s contributions to the organization will bring to bear its long history of expertise in codec technolo...