What We’re Reading: Free Checking, Online Banking and Malware Attacks

Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below or Tweet @bankingdotcom.

  • Majority of Malware Attacks Occur from Within the U.S.: Survey

American Banker

Contrary to popular belief, the majority of malware attacks originate from within the United States. That’s one of the findings from a recent report published by Perimeter E-Security, Milford, Conn., a company that provides security services to financial institutions. Indeed, Perimeter E-Security found that more than half of all attacks and threats (55.62%) originated from within the United States during the first six months of 2012. The company, which tracked data from 861 of its financial institution customers, credits the “made in the USA” trend to two likely factors: One, the majority of its customers block traffic to and from non-U.S. IP address ranges. And two, the majority of financial institutions “under scrutiny” are almost all U.S.-based.

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  • Mobile, Cloud Security Guidance Needed

Bank Info Security

Last year, federal regulators issued FFIEC authentication guidance for online transactions. But, unfortunately, regulators apparently don’t plan to issue additional guidance on the security issues involved in mobile banking and cloud computing. Larger institutions don’t really need guidance on these topics. Most are addressing risks out of necessity. Higher transaction volumes expose them to more fraud.

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  • Banks Need to Re-imagine Online Banking

Bank Systems & Technology

Banks can revitalize their online banking and bill pay products by shifting from a traditional transactional role to a more consultative one, says Javelin Strategy & Research. Banks can revitalize their online banking and bill pay products by shifting from a traditional transactional role to a more consultative one, making online banking the cornerstone of interactive financial management and pursuing new consumer segments, according to a new report from Javelin Strategy & Research. According to the report, adoption of online banking, bill pay and bill view at banks has maxed out, with minimal growth projected over the next five years. However, banks can reverse this trend by meeting consumer’s expectations that their financial institution help them be smarter with their money, says Javelin.

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  • Free Checking Is Great, But Don’t Forget Quality Service


Today’s rising popularity of credit unions can be attributed to the consumer-driven movement revolving around Bank Transfer Day in November of last year. Hundreds of thousands of bank customers who were sick of fees switched to credit unions — a free checking account was often the reward for those who made the move. Free checking is a wonderful thing indeed. But is it worth it if the cost is poor service? A checking account is likely to be the hub of a consumer’s financial life — it’s where the paycheck goes and how bills get paid. In 2009, a free checking account was common at the nation’s biggest banks.

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  • Payments’ Perfect Storm Makes Way for Mobile


At least one payments executive thinks 2013 will be an enormous year for the advancement of mobile payment technology and usage in the United States. Consumer awareness is up. Smartphones and other new technologies are making mobile payments accessible. And the upcoming switch to EMV (yes, it’s happening) will necessitate a massive turnover in point-of-sale technology anyway. So given this “perfect storm” of major factors, why wouldn’t 2013 be the year for mobile payments? Of course, plenty of mobile payment technology is already available to consumers, but perhaps only Starbucks has really taken off in terms of adoption.

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  • Mobile payments haven’t yet caught on in the United Kingdom

QR Code Press

A recent survey showed that contactless has yet to be seen in a positive light by most people. Although smartphones are spreading like wildfire throughout the United Kingdom, the same cannot be said about mobile payments, regardless of significant efforts that had been made to boost their popularity throughout the Olympics in London. Only 17 percent of people in the U.K. feel that a “cashless future” could be a more convenient one. This information came from a report about the results of a survey performed in the U.K. by Bank Machine, an ATM operator from that country.

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A Kinder, Gentler Banking Industry?

In genre-defining books like “The Bonfire of the Vanities” and “Liar’s Poker,” there’s a particular image that comes across of the highest echelons of the financial services. They’re the Masters of the Universe, Wall Street titans who live so large they make rock stars look puny. They’ve got swagger to spare and the talent and instinct to back it up. All consumption is conspicuous, and reality is what they make of it. This is a world where unlimited budgets are too small, braggadocio is a virtue and nothing succeeds like excess.

All this was years ago—and again, as popular as the image got, it realistically applied only to a tiny sliver of the industry. But like so many other attention hogs, it helped (ill)-define the discipline.

Well, that was then. Today, not so much.

Battered by everything from bankruptcies and bailouts to criminal investigations and convictions, across-the board compliance is the order of the day. In sum, bankers are being told to behave themselves, and that’s having some odd implications.

CNBC reports of ‘paranoid’ environments in European institutions, with executives encouraged to attend behavioral sessions where they learn how to interact in social settings, such as bars. If someone brings up a sensitive subject or gossips about bank business, everyone else must say something like, “No, don’t talk about that,” and perhaps walk away. Those who fail to comply will pay the price.

These are not just empty threats. While policing every pub where investment bankers gather might be a little difficult, companies are certainly going out of their way to maintain a high standard of self-policing.   There are regular sweeps of emails and other recorded conversations, with special software that can identify keywords from phone conversations.

The official explanation is that bankers who play by the book have nothing to worry about. However, that still leaves many finance professionals on the edge—given the natural ebb and flow of any business-related dialog between longtime colleagues, the feeling is that it’s too easy to be found wrong, and trying too hard to be right imperils day-to-day operations.

In the U.S., meanwhile, the path to ensuring full compliance is hitting road bumps too. Imagine a customer service representative who gets fired from the job he’s had for seven years, after the bank learns there’s fraud in his past.  Sounds fair, except that the employee in question is a 68-year-old Vietnam veteran who’s apparently led a clean life since his dark days. His crime: Putting a cardboard cutout of a dime inside a washing machine. . .in 1963. The dastardly deed from his teen years was not expunged from his record, and he paid the price with his termination in May of this year.

This is (hopefully) an extreme case, but the passage of new federal banking and mortgage employment guidelines in the past two years has had some harsh effects. While exact numbers are hard to come by, it’s been reported that many low-level employees have been dismissed because of alleged transgressions.

No one is suggesting that fraud be taken lightly. The new regulations have been put in place for a reason, and they’re designed to rebuild trust in an industry that surely deserves at least some of the blame it’s gotten. It’s also understandable that in the wake high-profile scandals and other problems, the pendulum can swing too far the other way.

That said, it may be time for a reality check. Main Street turned on Wall Street not because of small problems but big ones—corporate malfeasance, big payments that were perceived to be undeserved and taxpayer-funded bailouts of supposedly rich companies. If the industry’s brand is in trouble, then efforts should be made to fix it. But it’s also important to ensure that the measures being taken help solve the problem, not exacerbate it.

This article originally appeared as a guest post on MyBankTracker.com.