Tag: banks

By Phillip de Wet for Business Insider SA

All of South Africa’s biggest retail-network banks are now in breach of national disaster regulations aimed at curbing the spread of the novel coronavirus.

On Tuesday, co-operative governance and traditional affairs minister Nkosazana Dlamini-Zuma published back-dated amendments to rules that slightly reduced curfew, defined “beaches” (for purposes of banning their use) – and created new obligations for banks. On top of managing queues at their ATMs to ensure social distancing, all banks are now required to “ensure that all automated teller machines… have hand sanitisers for use by the public at each automated teller machine”.

But that is simply “impossible”, said one bank representative privately, and a show of significant ignorance by the government of how modern banking operates.

On the record, each of the big five retail banks – FNB, Absa, Nedbank, Standard, and Capitec – have confirmed that they are not in full compliance, at least not yet. In some cases, ATMs are sanitised only once a quarter, during routine cleaning.

The government has taken a hard line, threatening penalties for banks that do not comply.

“This is very important, because, if not, the ATMs could become super spreaders,” said Dlamini-Zuma.

See also | ATMs can become Covid ‘super-spreaders’, says gov – banks will need to obey new lockdown laws
Between them, banks have tens of thousands of ATMs, some of which provide the only banking service in far-flung areas. With little to no prospect of reliably ensuring the availability of hand sanitiser, those are the machines most likely to be shut down if government seeks to enforce the sanitiser rule.

Discussions are now underway via the the Banking Association South Africa (Basa).

The major banks all stressed that they were taking various measures to keep customers safe, including close management of ATMs at their branches, which tend to have high volumes.

But several also pointed out that they simply do not have the people available for what would be a gigantic logistical exercise.

Here is what each of the banks with big ATM networks told Business Insider South Africa about sanitiser at their machines.

First National Bank
FNB’s CEO of its points of presence, Lee-Anne van Zyl, said the bank’s onsite ATMs at branches – which see high volumes – are “regularly” sanitised by its staff, and also have pedal-dispensers with hand sanitiser.

But its “offsite” machines are serviced once or twice a week, when they are sanitised with a solution FNB says lasts for seven days.

It also has in-store ATMs, which are operated by retailers who are responsible for sanitising them, and “managed” ATMs, which are handled by a cash-in-transit company. Those are cleaned, and sanitised, once every quarter.

Standard Bank
Standard Bank said its high-volume ATMs are sanitised twice a day.

When it comes to having hand sanitiser at every machine, it is “reviewing the current requirements in consultation with all the relevant stakeholders to formulate the appropriate response”.

Capitec
Capitec said that ATMs at branches are “regularly disinfected” by staff – but that off-site machines do not have staff servicing them.

Absa
Absa’s managing executive for physical channels across retail and business banking Tshiwela Mhlantla said foot-operated sanitiser dispensers are available at “many” of its ATMs located at branches.

“Maintaining sanitiser infrastructure at remote sites can be challenging and so, where possible, we have requested landlords to support our non-branch ATMs with sanitising solutions.”

Nedbank
Nedbank said that, after the new regulations were published on Tuesday, it “immediately commenced a process of installing hand sanitiser dispensers at all our ATMs as quickly as is practically possible and this should be completed shortly.”

In the meanwhile it has “manual dispensing” on offer “where possible”.

 

Bank Zero is getting closer to launch

Source: MyBroadband

Bank Zero co-founder Michael Jordaan has confirmed that Bank Zero’s closed beta has started.

This follows Bank Zero previously telling MyBroadband that it planned to launch this beta early in the second half of 2020.

“At first this will be small groups which will then be enlarged over time,” said Jordaan in May 2020.

He said that Bank Zero would use feedback from these customers to improve its processes and functionality.

“This type of beta launch is quite common in the tech world and the opposite of large, often hyped launches in the corporate world,” said Jordaan.

Jordaan has now confirmed that this closed beta period has officially begun.

“Bank Zero is live and is operating across six payment rails. The closed rollout has started,” Jordaan said.

“Customers (individual and businesses) are being added in this closed rollout. It will then be followed by general public availability.”

He said that Bank Zero intends to be publicly available before the end of 2020, and more information regarding this will be provided soon.

Jordaan previously explained that Bank Zero selects who joins its public beta from interested parties who supplied their details on the Bank Zero website.

Bank Zero thrives under lockdown
Jordaan told MyBroadband that the closed rollout is currently performing well under the national lockdown and during the work-from-home conditions.

“Bank Zero was made for a pandemic world as it has zero paperwork (registration and transactions), can be operated fully remotely (no visit to branches/kiosks/brokers required), and will bring significant savings to hard-pressed individuals and businesses,” said Jordaan.

“We continue to gain useful insights from our current customer base which is being incrementally added into the platform and app.”

He said that this process means that Bank Zero is on track for full public operations.

Jordaan also previously told MyBroadband that Bank Zero had managed to switch to remote working relatively easily.

“The Bank Zero team all used to work in one open-plan office, so they could ill afford even one COVID-19 infection,” said Jordaan.

“Consequently they started working-from-home even before the lockdown was announced.”

However, Jordaan said that since a large number of the Bank Zero team are software developers, they adjusted to remote working easily.

“Everyone in the team has a broadband connection and simply switched to Zooming,” said Jordaan.

“Nevertheless the absence of all face-to-face meetings is not ideal and in some cases resulted in slightly lower efficiency than we would have liked.”

No CVV needed
MyBroadband asked Jordaan about potential competition against its card technology from FNB’s recently-launched virtual card feature, whereby a customer’s CVV number is changed every hour for improved security.

Jordaan said that Bank Zero doesn’t comment on competitors or their products, but noted that the patented Bank Zero Card technology has been live for some time and is “unrelated to virtual cards or CVV changes”.

Jordaan also said that CVV numbers are not completely secure.

“In our experience, criminals bypass CVV by shopping at merchants who don’t check for it,” said Jordaan.

 

According to a recent article by MyBroadband, a large number of South Africans have asked their banks for payment holidays and cash flow relief during the Covid-19 pandemic.

  • Absa has seen almost 570 000 account holders benefit from relief
  • This amounts to R7.8-billion cash flow relief
  • Nedbank has assisted more than 225 000 clients, out of a total credit active client base of approximately 2.5-million
  • Standard Bank granted instalment relief to nearly 150 000 clients in the wake of the national lockdown
  • This amounts to over R1-billion in instalment relief per month
  • FNB said it has offered almost R6 billion in relief to customers since 1 April 2020
  • Nearly 700 000 account holders benefited from relief
  • A total of 1.64-million South Africans have received payment holidays

Source: Fin24

An infamous Russian-speaking hacking group – referred to as Silence – is the likely culprit making thousands of attempts to hack major banks in sub-Saharan Africa, cybersecurity company Kaspersky Labs said on Monday.

The group is called Silence because of the silent monitoring done via their malware. They have already carried out a number of successful campaigns targeting banks and financial organisations around the globe.

According to Kaspersky, the typical scenario of an attack begins with a social engineering scheme, as attackers send a phishing e-mail that contains malware to a bank employee.

From there, the malware gets inside the banks’ security perimeter and lays low for a while, gathering information on the victim organisation by capturing screenshots and making video recordings of the day-to-day activity on the infected device.

“Once attackers are ready to take action, they activate all capabilities of the malware and cash out using, for example, ATMs. The score sometimes reaches millions of dollars,” says Kaspersky.

“The attacks detected began in the first week of January 2020 and indicated that the threat actors are about to begin the final stage of their operation and cash out the funds. To date, the attacks are ongoing and persist in targeting large banks in several SSA countries.”

Kaspersky accordingly advises financial organisations to introduce basic security awareness training for all employees so that they can better distinguish phishing attempts. Banks should also monitor activity in enterprise information systems and prepare an incident response plan to be ready for potential incidents in the network environment.

In August 2019 Kaspersky reported a cyber attack in which South Africa was apparently among 17 countries targeted by North Korean hackers, related to the activity of the so-called Lazarus group. They also targeted banks and other financial institutions.

By Kaye Wiggins for Bloomberg / Fin24 

Barclays, Citigroup, HSBC, JPMorgan and three other banks are set to be fined by EU antitrust regulators in coming weeks for rigging the multi-trillion dollar foreign exchange market, two people familiar with the matter said.

JPMorgan Chase & Co. and UBS Group AG are among five banks being sued over allegations of foreign-exchange rigging in a class-action lawsuit seeking more than £1bn ($1.2bn or just over R17bn).

Barclays, Citigroup and Royal Bank of Scotland Group are also among the targets of the United Kingdom suit that will say pension funds, asset managers, hedge funds and corporations lost out because of market manipulation between 2007 and 2013 and should be compensated.

The lawsuit centers on collusion on foreign-exchange trading strategies, for which the European Commission fined Barclays, RBS, Citigroup, JPMorgan and Mitsubishi UFJ Financial Group, a total of €1.07bn in May. UBS escaped a fine because it was the first to tell regulators about the collusion.

JPMorgan and UBS declined to comment. The other banks didn’t immediately reply to calls or emails seeking comment.

Traders ran two cartels on online chatrooms, the European regulator said. Many of them knew each other, calling one chatroom “Essex Express n’ the Jimmy” because all of the traders but one met on a commuter train from Essex to London. Other names for rooms were the “Three Way Banana Split” and “Semi Grumpy Old Men.”

It’s the latest development in a case that’s already triggered regulatory probes around the world, and billions of dollars in fines as well as $2.3bn (R32.69) in settlements in the United States last year.

“The message is really clear – we want markets to work fairly,” said Michael O’Higgins, a pension fund chair who’s spearheading the UK suit. “People involved in markets will argue the case for free markets. They’ve got to make sure they’re fair as well as free.”

The case will be filed in the Competition Appeal Tribunal in London by Scott+Scott Europe, whose US arm Scott+Scott Attorneys at Law led the class action that ended with $2.3bn in settlements.

O’Higgins, who chairs the Local Pensions Partnership, a UK public sector pension fund, and the Channel Islands Competition & Regulatory Authorities, said that on a conservative estimate the banks may have to pay out £1bn (R17.5bn) if he wins.

The lawsuit could take three to five years, he said, and thousands of institutional investors could be in line for payouts if it succeeds.

It’s one of the first cases to be brought under 2015 UK legislation that paves the way for US-style collective actions. The Consumer Rights Act rules mean any UK based investors who lost out will automatically become part of the claim. Investors based outside of the UK – except those in the US, Canada and Australia – can opt in.

A new advertising campaign is challenging the product transparency of South Africa’s financial institutions, and educating consumers in the process.

The #NothingToHide hashtag has been popping up all over the media lately, prompting consumers to question just how much local credit providers are keeping from them when it comes to credit life insurance pricing and terms & conditions.

The billboards anonymously challenged banks to be more transparent.

An unbranded teaser message ran for two weeks, before it was unveiled that the campaign was developed for Yalu Financial Services by advertising agency Think Creative Africa.

 

Yalu is challenging South Africa’s dominant financial brands to become more open about their products so customers are clear about every detail of the contract.

“Product transparency and consumer education go hand in hand,” says Tlalane Ntuli, co-founder and chief operating officer of Yalu. “Only when consumers are aware of how murky things are and how much money they are potentially losing will they demand greater transparency from banks – and only then will credit life insurance providers be forced to improve.

“It’s too easy to call for change, yet sit back and do nothing yourself,” concludes Ntuli. “At Yalu we see this campaign as our opportunity to set a new transparency benchmark in the South African financial sector. From strategic decisions through to product pricing and the way brands choose to communicate with consumers, change is very obviously required in our financial sector. We’re delighted to be the ones leading the process.”

By Lucinda Shen for Fortune

As of Monday’s market close, those who bought into Uber at its IPO are down roughly $1.4 billion.

But very early investors, and now, the bankers that helped take the company to market are in the green. Uber shelled out $106.2 million to a bevy of underwriters led by Morgan Stanley, per filings with the Securities and Exchange Commission. The group also includes Goldman Sachs, BofA Merrill Lynch, Barclays, Citigroup, and Allen & Company.

That comes as shares of Uber fell another 11% Monday—pulling its valuation down to $62 billion and representing a collective $1.4 billion loss for those who bought in at the company’s $45 IPO price. Assuming that Uber drivers took up all shares offered to them at the IPO price, they are collectively looking at paper losses of about $43.2 million.

On Friday, Uber CEO Dara Khosrowshahi sought to calm his employees regarding Uber’s stock price.

“Like all periods of transition, there are ups and downs,” he wrote in a note to workers.”Remember that the Facebook and Amazon post-IPO trading was incredibly difficult for those companies. And look at how they have delivered since.”

In particular—Facebook’s IPO may echo strongly with that of Uber’s. That IPO too involved Morgan Stanley in the lead role. Following a lackluster first day of trading, the bank’s fees, as well as trades stemming from its role as the lead in the deal, were heavily scrutinized. A Massachusetts regulator later fined Morgan Stanley $5 million over the IPO, arguing the underwriter had selectively disclosed information to certain clients over others.

It remains to be seen whether similar investigations will follow Uber’s IPO. But for now, count the banks as one of the few parties that have profited from this deal.

By Roxanne Henderson for Business Day

From free burgers and ride-hailing services to hip-hop concerts and discounted petrol, SA banks are going all out to win customers as competition hots up.

The biggest lenders are facing an onslaught of entrants for the first time in 12 years. And they are responding before the newcomers find their feet by pushing loyalty programmes, revamping digital offerings for technology-savvy millennials, targeting existing customers with extra products and services and cutting fees.

Read the full article here: https://www.businesslive.co.za/bd/companies/financial-services/2019-04-24-banks-entice-millennials-with-free-food-and-new-offerings/

By Kevin Lancaster for MyBroadband

Discovery Bank, Bank Zero, and TymeBank – South Africa’s newest banks – are set to “disrupt” the local banking scene in 2019.

Disrupt – an almost meaningless word which is akin to “millennial” in terms of its flagrant use by anyone who wants to show they understand trends and marketing – is not enough, however.

The new banks must destroy everything in their path, particularly the banking fees South Africans pay today.

We recently showed that compared to Bitcoin and Ethereum, and their respective blockchains, local banks are slow and cumbersome.

Where it took Bitcoin and Ethereum under 10 minutes to send tokens from one account to another, a local bank transfer from Standard Bank to Absa took almost 12 hours.

The cryptocurrency transfers did accrue a small transfer fee while the bank-to-bank transaction was free, but there are no monthly fees for most cryptocurrency wallets – unlike a bank account.

The potential of cryptocurrency transactions is not truly realised with local payments, however, and where they truly shine is in international payments.

While maintaining fast transfer times regardless of where in the world you send tokens, the fees you pay do not change. If you send Ethereum to Durban or Dubai, it will take the same amount of time and you will be charged the same fee.

The same cannot be said for bank transactions. “International fees” are charged when you make a payment across a border.

A practical example of this is when you pay your Netflix subscription fee, you pay extra – as the money goes to the company’s operation in Amsterdam.

A Netflix Premium subscription costs R169, with a transfer fee of R4.65 added on top of this.

International fees
These bank fees extend to “currency conversion” charges, too, which means that if you make a payment in an international currency with your card, you will have to pay for the pleasure.

Nedbank, Absa, FNB, and Standard Bank all charge this fee, which ranges from 2% to 2.75% – depending on which bank you are with. Capitec told MyBroadband that it does not charge a currency conversion fee.

While 2% does not sound like much, this accumulates rather quickly when making multiple transactions.

I discovered this on a recent work trip to the US, where I used my South African credit card to pay for items in US dollars.

After checking my online banking a couple days into my trip, I immediately switched to drawing cash for the day and sucking up the once-off withdrawal fee as opposed to making all payments with my card.

And yes, there is an “international fee” when withdrawing cash from an ATM in a foreign country.

Before switching to cash, these are the international fees which I accrued on my card:

R5.47
R6.99
R16.03
R13.56
R4.60
R0.79
R8.01
R3.37
R5.48
R313.72

The total: R378.02.

Whether these fees are implemented by the local bank, international banks, or a combination of the two is irrelevant – as the consumer this is what you pay.

Admittedly, the example of international transactions is an extreme one but it nonetheless serves as a reminder of the culture of fees worshipped by local banks.

These fees extend far beyond international payments and see users being charged to send an email payment confirmation to a recipient.

Before you fill in the text box at the bottom of your online payment confirmation window, entering the beneficiary’s email address so the bank will send them a mail confirming your payment was made, first check how much it will cost.

For me it was R1.10. My bank charged me R1.10 to send an automated email confirming a payment – another discovery made during the fee investigation.

Discovery Bank, Bank Zero, and TymeBank have all talked a big game about disrupting the local banking scene when they launch.

Let us hope they can deliver on their promises and that they will do more than merely disrupt – they must destroy and replace.

Do credit card fees go beyond the law?

Source: Supermarket & Retailer

The National Credit Act (NCA) prohibits a credit provider from charging any fees or charges not listed in section 101 of the act. One of the permitted charges is a “service fee”. Regulations under the act cap this fee at R60 a month, unless an exemption applies.

So, is it legal for banks to charge credit card account holders a “card fee” or a “credit facility fee” over and above a monthly service fee? If not, why has the National Credit Regulator (NCR) done nothing to stop banks from doing so?

At the beginning of last year, Standard Bank started levying a “card fee” on anyone who has a standalone credit card, which is one that is not offered as part of an account with a bundle of transactions for a set fee.

The bank said the fee was to cover the costs of “the administration and maintenance of all the value-added services and features” associated with the credit card.

At the time, Nthupang Magolego, a senior legal adviser at the NCR, said the act provided a “closed list” of fees that a credit provider was allowed to charge under a credit agreement, and a card fee was not one of them.

She said the regulator would “investigate and take appropriate action” if an illegal fee was being charged.

More than a year later, the regulator will not say whether or not it investigated the issue. It has ignored requests for comment.

All of the big five banks are now charging either a card fee or a credit facility fee on some or all of their credit cards.

Ethel Nyembe, the head of card issuing at Standard Bank, also wouldn’t answer questions relating to an investigation by the regulator into the bank’s credit card fees.

Credit cards provide access to certain lifestyle offerings such as access to airport lounges and cinemas.

Customers who don’t want these benefits can use alternative credit offerings such as personal loans, overdrafts and certain credit cards from which such offerings are removed, says Nyembe.

Cilliers Kriel, CEO of the credit card division at FNB, says the bank’s credit card is more than a credit facility. It’s also a “financial services product”.

“The credit card account is a financial services product as defined in the Financial Advisory and Intermediary Services Act which can be used to make deposits, withdrawals, earn credit interest, make payments either by swiping at merchants or by debit order.

“The credit facility gives the customer the option to borrow, up to an agreed limit . The credit facility is attached to and maintained in association with the credit card account.”

Absa and Nedbank also separate the charges on the card account from those charged for a credit facility.

The NCA permits a credit provider to charge fees relating to the financial services agreement or account beyond those listed in the act for a credit agreement, says Kriel.

But Trudie Broekmann, an attorney who specialises in consumer law, says the act does not define a “financial services account”, so it’s not clear what the lawmakers intended by this.

Only if they intended to include a credit card account in the definition can the banks rely on the exemption and charge more than the R60-a-month service fee, she says.

In her opinion, the section of the act that treats the credit facility and the financial services account as separate components was drafted with an overdraft facility linked to a cheque or current account in mind. With an overdraft facility, it’s clear the credit facility (the overdraft) is secondary to the financial services account (the cheque/current account) and so regarding the two as separate components does not appear to be misplaced, she says.

“In the case of a credit card account, however, the credit facility and the financial services account are one and the same and it seems artificial to regard the account and the facility as separate components subject to separate service charges.”

No-one opens a credit card account without a credit facility and the primary function of a credit card account is to provide access to the credit facility, she says.

Treating them as separate components and charging you for each is like a supermarket charging you separately for an egg shell, egg white and egg yolk, she says.

Broekmann says it can be argued that the banks are in breach of the act when they charge you more than R60 a month on your credit card.

“This contention should be tested and I would be eager to represent a group of credit card holders . in taking the complaint to the National Consumer Tribunal to reach clarity on this aspect.”

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