Click here to close now.

Welcome!

AJAX & REA Authors: JP Morgenthal, Lori MacVittie, Elizabeth White, XebiaLabs Blog, Cloud Best Practices Network

Related Topics: Web 2.0, Search, AJAX & REA, Security

Web 2.0: 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.

@CloudExpo Stories
Even though it’s now Microservices Journal, long-time fans of SOA World Magazine can take comfort in the fact that the URL – soa.sys-con.com – remains unchanged. And that’s no mistake, as microservices are really nothing more than a new and improved take on the Service-Oriented Architecture (SOA) best practices we struggled to hammer out over the last decade. Skeptics, however, might say that this change is nothing more than an exercise in buzzword-hopping. SOA is passé, and now that people are ...
Cloud computing started a technology revolution; now DevOps is driving that revolution forward. By enabling new approaches to service delivery, cloud and DevOps together are delivering even greater speed, agility, and efficiency. No wonder leading innovators are adopting DevOps and cloud together! In his session at DevOps Summit, Andi Mann, Vice President of Strategic Solutions at CA Technologies, explored the synergies in these two approaches, with practical tips, techniques, research data, wa...
The WebRTC Summit 2014 New York, to be held June 9-11, 2015, at the Javits Center in New York, NY, announces that its Call for Papers is open. Topics include all aspects of improving IT delivery by eliminating waste through automated business models leveraging cloud technologies. WebRTC Summit is co-located with 16th International Cloud Expo, @ThingsExpo, Big Data Expo, and DevOps Summit.
WSM International is launching a DevOps services division that offers assessment, consulting and implementation to large enterprises and organizations with complex infrastructures. This is the first independent services company to create a dedicated practice to help organizations looking to transition to the DevOps model. The concept of DevOps is to blend information technology (IT) software development with operations to optimize the computing infrastructure according to the specific needs of ...
The term culture has had a polarizing effect among DevOps supporters. Some propose that culture change is critical for success with DevOps, but are remiss to define culture. Some talk about a DevOps culture but then reference activities that could lead to culture change and there are those that talk about culture change as a set of behaviors that need to be adopted by those in IT. There is no question that businesses successful in adopting a DevOps mindset have seen departmental culture change, ...
SYS-CON Events announced today that Cisco, the worldwide leader in IT that transforms how people connect, communicate and collaborate, has been named “Gold Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Cisco makes amazing things happen by connecting the unconnected. Cisco has shaped the future of the Internet by becoming the worldwide leader in transforming how people connect, communicate and collaborat...
15th Cloud Expo, which took place Nov. 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA, expanded the conference content of @ThingsExpo, Big Data Expo, and DevOps Summit to include two developer events. IBM held a Bluemix Developer Playground on November 5 and ElasticBox held a Hackathon on November 6. Both events took place on the expo floor. The Bluemix Developer Playground, for developers of all levels, highlighted the ease of use of Bluemix, its services and functionalit...
Temasys has announced senior management additions to its team. Joining are David Holloway as Vice President of Commercial and Nadine Yap as Vice President of Product. Over the past 12 months Temasys has doubled in size as it adds new customers and expands the development of its Skylink platform. Skylink leads the charge to move WebRTC, traditionally seen as a desktop, browser based technology, to become a ubiquitous web communications technology on web and mobile, as well as Internet of Things...
"Our premise is Docker is not enough. That's not a bad thing - we actually love Docker. At ActiveState all our products are based on open source technology and Docker is an up-and-coming piece of open source technology," explained Bart Copeland, President & CEO of ActiveState Software, in this SYS-CON.tv interview at DevOps Summit at Cloud Expo®, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events announced today that robomq.io will exhibit at SYS-CON's @ThingsExpo, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. robomq.io is an interoperable and composable platform that connects any device to any application. It helps systems integrators and the solution providers build new and innovative products and service for industries requiring monitoring or intelligence from devices and sensors.
Today, IT is not just a cost center. IT is an enabler and driver of business. With the emergence of the hybrid cloud paradigm, IT now has increasingly more capabilities to create new strategic opportunities for a business. Hybrid cloud allows an organization to utilize multi-tenant public clouds, dedicated private clouds, bare metal hosting, and the associated support and services for the right use cases through an on-demand, XaaS model. This model of IT creates tremendous opportunities for busi...
Chef announced that James Casey has been appointed Vice President of Engineering. Casey has more than a decade of experience managing engineering and operations for CERN and is a three-year Chef veteran. Casey brings deep expertise in DevOps practices, as well as an innate understanding of the needs of Chef customers and the community. Casey will oversee the quality and cadence of product development for Chef's engineering and operations teams, and will report to Chef CEO Barry Crist.
DevOps tasked with driving success in the cloud need a solution to efficiently leverage multiple clouds while avoiding cloud lock-in. Flexiant today announces the commercial availability of Flexiant Concerto. With Flexiant Concerto, DevOps have cloud freedom to automate the build, deployment and operations of applications consistently across multiple clouds. Concerto is available through four disruptive pricing models aimed to deliver multi-cloud at a price point everyone can afford.
Docker is an excellent platform for organizations interested in running microservices. It offers portability and consistency between development and production environments, quick provisioning times, and a simple way to isolate services. In his session at DevOps Summit at 16th Cloud Expo, Shannon Williams, co-founder of Rancher Labs, will walk through these and other benefits of using Docker to run microservices, and provide an overview of RancherOS, a minimalist distribution of Linux designed...
Business as usual for IT is evolving into a “Make or Buy” decision on a service-by-service conversation with input from the LOBs. How does your organization move forward with cloud? In his general session at 16th Cloud Expo, Paul Maravei, Regional Sales Manager, Hybrid Cloud and Managed Services at Cisco, discusses how Cisco and its partners offer a market-leading portfolio and ecosystem of cloud infrastructure and application services that allow you to uniquely and securely combine cloud busi...
Businesses are looking to empower employees and departments to do more, go faster, and streamline their processes. For all workers – but mobile workers especially – utilizing the cloud to reconnect documents and improve processes without destructing existing workflows can have a dramatic impact on productivity. In his session at 16th Cloud Expo, Mark Grilli, vice president of Acrobat Solutions marketing at Adobe Systems Incorporated, will outline new ways that the cloud is changing the way peo...
Sonus Networks introduced the Sonus WebRTC Services Solution, a virtualized Web Real-Time Communications (WebRTC) offer, purpose-built for the Cloud. The WebRTC Services Solution provides signaling from WebRTC-to-WebRTC applications and interworking from WebRTC-to-Session Initiation Protocol (SIP), delivering advanced real-time communications capabilities on mobile applications and on websites, which are accessible via a browser.
SYS-CON Events announced today that Aria Systems, the leading innovator in recurring revenue, has been named “Bronze Sponsor” of SYS-CON's @ThingsExpo, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. Proven by the world’s most demanding enterprises, including AAA NCNU, Constant Contact, Falck, Hootsuite, Pitney Bowes, Telekom Denmark, and VMware, Aria helps enterprises grow their recurring revenue businesses. With Aria’s end-to-end active monetization platform, g...
SYS-CON Events announced today that Alert Logic, the leading provider of Security-as-a-Service solutions for the cloud, has been named “Bronze Sponsor” of SYS-CON's 16th International Cloud Expo® and DevOps Summit 2015 New York, which will take place June 9-11, 2015, at the Javits Center in New York City, NY, and the 17th International Cloud Expo® and DevOps Summit 2015 Silicon Valley, which will take place November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Media announced today that @WebRTCSummit Blog, the largest WebRTC resource in the world, has been launched. @WebRTCSummit Blog offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. @WebRTCSummit Blog can be bookmarked ▸ Here @WebRTCSummit conference site can be bookmarked ▸ Here