Foreclosure Process And Foreclosure of Mortgage May Contain Bank Lender Mortgage Contract Fraud

The foreclosure of a mortgage is a simple foreclosure process where a home owner fails to make a monthly mortgage payment to the bank and the banks takes the borrower’s home or commercial property. Both home and commercial property foreclosure process work basically the same way for a foreclosure of the mortgage. In many cases, the bank lender commits mortgage contract fraud.

  1. You have underwater value and want a loan modification
  2. You fail to make the mortgage payment due to financial situations
  3. Bank gets paid by insurance company and IRS
  4. Bank starts foreclosure of mortgage in a foreclosure process in court as plaintiff
  5. You do nothing and let the bank take your property easily
  6. You fight the bank foreclosure of mortgage and process in court:

A. Bank wins 99.9% of cases

B. Home owner or commercial property owner wins free and clear mortgage 97% to 99% of foreclosure cases

Being underwater in value means that your home or commercial property is worth less than what you owe on your mortgage. You ask the bank that you make your monthly payments to for a mortgage loan modification under the government program and the bank tells you that you have to miss a few payments to qualify for the modification. You don’t pay your mortgage for one or two months and apply for the modification. While you are in the modification process the bank gives you a notice of default and starts a foreclosure. You don’t know why the foreclosure process was started.

You become ill, have an accident, lose your job, have a job transfer, or some other financial situations and setbacks and fail to make your mortgage payment. The banks sends you a collection notice as a debt collector under TILA. You cannot pay, so you miss another payment. The bank gives you a notice of default and starts a foreclosure process against you to take your home or commercial property.

On the 91st day of you failing to pay the bank, the dirty bank collects the insurance money for the full amount of the loan from the mortgage insurance company that you have been paying since your mortgage and note closing upon purchase. The bank also collects 85% of the total amount of your note and mortgage loan from the IRS. The bank and all third parties have been paid in full for the loan.

Then the bank gives you a notice of default and starts the foreclosure of mortgage in a foreclosure process against you in local court as the Plaintiff, the one being harmed, to take your home or commercial property.

You do nothing and let the bank take your property easily while thinking, ‘Let them have the damn home or property.” and wait for God to help you keep your home or commercial property. You let the bank have your property and are evicted by the sheriff and lose your home and most of your possessions that you left in your home or property, because the sheriff only gives you up to 15 minutes to take what you can out of the dwelling and locks the doors for the bank to resell.

You fight the bank foreclosure of mortgage and foreclosure process in court with two different outcomes.

A. The bank wins 97% of cases, because you go into court, Pro Se, without an attorney, with your Federal laws and State statutes and feel confident that you are going to win your foreclosure, but you don’t know the court rules. The judge does not listen to you, because the foreclosing attorney tells the judge that you are a deadbeat and want your home or commercial property for free and you are behind on payments and in default as per your mortgage contract that you signed. The judge, being an attorney card carrying member of the BARR corporation the same as the foreclosing attorney, listens to the attorney and allows the foreclosure of mortgage to be carried out and you lose your home or commercial property. OR…

B. You, the home owner or commercial mortgage property owner are prepared with an attorney representing you and proper evidence, proof that the mortgage and note have been paid in full by you with a BOE or bonded promissory note, dishonored Notary admin process, and the best securitization audit, with expert proof of bank fraud and go in front of the judge. Your attorney argues your case and the judge finds that you prevail and win the case and signs the final order to dismiss the case with prejudice, release and remove your mortgage lien and give you your home or commercial property without any more payments, because the bank and all interested parties were paid in full many times. This happens in 97% to 99% of all foreclosure of mortgage cases in the United States with help from a little known consumer advocate company.

This is the Foreclosure Process And Foreclosure of Mortgage That May Contain Bank Mortgage Contract Fraud. Are you going to fight to keep your home or property?

Top 10 Largest Banks in The World

In total assets, the largest banks all over the world start from three billion dollars as of number one in the list, and end with two billions and a half. Chinese banks take a big bite of the world finance, Japan and America follows next. Let us have a look at the largest banks in the world as estimated by relbanks.

  • 10 Barclays PLC

Barclays is one of the big names in Britain. It was founded in London in the beginning of the 17th century. Still, the bank has branched all over the world. Nearly there is no one type of transactions Barclays are not working in from investment to wholesale and retail.

  • 9 Credit Agricole

The bank’s headquarter is located in France and was founded in 1885. Credit Agricole service is friendly as they have founded the Point Passerelle in which customers suffering from any problem like threatened with getting their accounts suspended can find solutions and a helping hand.

  • 8 Bank of China

Founded in 1912 in the Chinese capital Beijing, the Bank of China has different branches around the world.

  • 7 Agricultural Bank of China

Built in 1951 in Beijing, the bank branched out in Japan, U.S, Australia, German, Korea and Singapore. It has around hundred million customers across these branches. It has an advanced rank among the top ten in the world, in number of transactions. The bank witnessed a number of bad circumstances that affected its presence, however it continued to be.

  • 6 JPMorgan Chase & Co

Known as Chase, JPMorgan Chase is a public bank that was founded in 2000 in the United States of America. Chase is the largest bank in the States. Its total assets are estimated to be around above $2 trillion.

  • 5 MUFG

The Mitsubishi UF J Financial Group is based in the Japanese headquarter, Tokyo. It was founded in 2005 and has an average of $2.5 trillion in assets. Although it was founded only 20 years ago, it was able to precede other banks in number of transactions. As usual, this big bank merged with other important bank in Japan; Bank of Tokyo-Mitsubishi and. Such merging always increases the bank’s scope and power and adds to its security.

  • 4 BNP Paribas

Founded in France in 1848, BNP Paribas had enough time to spread its branches worldwide. Like Barclays, Paribas is stretching a hand in every transactional sector like retail, investment and wholesale.

  • 3 China Construction Bank

Founded in Beijing in 1954, is one of the four biggest banks in China as a whole. In addition to the various branches around the world, the Bank of America staked around $3 billion in 2005 and holds above %10 of its shares as well. However it decided that it would sell half of those shares.

  • 2 HSBC

The world known bank HSBC is mainly British with its headquarter in London, the bank was founded in 1865. The bank’s total assets are above $2.6 trillion and big revenue of $68 billion. This is mainly because of its wide scope that covers many countries in America, Asia, Africa, and Europe.

  • 1 ICBC

Founded in 1984, the Industrial & Commercial Bank of China is the major bank in the country. Take into consideration the amount of transactions made with China, now all this money comes here! The ICBC as a company ranked first in Forbes list of biggest companies in the year 2000. Unlike the widespread of HSBC branches all over the world, ICBC is doing it timidly. Only four of its banks are built in the Middle East in Dubai, Abu Dhabi, Doha, and Kuwait.

Is your company a home for one of those banks above? It could be a yes if we speak about multinational banks. Let me hear from you in the comments’ section below!

What is Online Banking and How You Can Benefit From It

The internet has become an important part of our lives. There are many of us who rely on the internet to communicate with our friends and family. Online shopping is also making buying new and used merchandise easier. If you enjoy using the internet to communicate with those that you know or to shop, you may also enjoy banking online. Online banking is rapidly increasing in popularity. If you do not already participate in some form of online banking, it is likely that you will in the future.

When it comes to online banking, there is often some confusion. Many individuals, maybe even yourself included, feel that online banking involves a bank that does not have a physical branch location. There is such a thing as an online bank, also sometimes referred to as a virtual bank, but that is not all that online banking is about. You can also participate in online banking with your local bank. In fact, this is the most popular type of online banking.

If you are interested in participating in online banking, you will first have to determine whether or not your bank offers the service. A large number of banks do, but not all of them. You will find that many national or statewide banks offer online banking. Smaller banks, often only consisting of five or so branches, do not always offer the service. Even if you have never heard of online banking being offered at your local financial institution, you are still encouraged to ask about it. You never know, but if enough customers are interested in it, your local bank may decide to start an online banking program.

Online banking means different things to different financial institutions. You may find that different banks offer different online services. Despite the difference in services, you will find a number of common services. These services are likely to include the online paying of bills, the online ordering of a debit card or checks, or the altering of your bank account information. Perhaps, the feature that most enjoy is the ability to pay bills online.

Most banks offer online banking free of charge, but you may find a financial institution that charges you to use this online service. If you have yet to choose a bank to do business with, you may want to keep this potential fee in mind. If your bank will charge you a fee, you may want to consider whether or not online banking is right for you. As with all other services, online banking does have its advantages and disadvantages.

As previously mentioned, the greatest advantage of online banking is being able to do a number of things right from your home. If you are looking for an easier way to pay your bills, you will enjoy online banking. Instead of having to pay for postage or write a check, you can simply use the click of a mouse to pay your bills. There are also banks that offer online calendars. Combined with quickly being able to pay your bills, you may find that an online calendar will help to eliminate any late payments.

The biggest disadvantage of online banking is having your information online. There are many individuals, maybe even yourself included, who are concerned with the security of the internet. As long as your bank’s website is hosted on a secure website, which most are, you should experience no trouble at all. Aside from getting over the issue of trust, there are very few, if any, disadvantages to banking online.

Before making a decision as to whether or not you want to participate in online banking, you are encouraged to speak with a bank representative. You may be surprised just how convenient and easy it to use the internet to do your banking.

PC Banking – Get Your Bank at Your Doorstep

The concept of PC Banking is very much similar to Internet banking. This article intends to provide you a brief overview regarding the same.

Advantages Of PC Banking

Following are some of the advantages of PC Banking:

o PC Banking allows you round-the-clock access.

o You do not need to stand in queue in order to perform important banking transactions. The PC Banking allows you to do just that right from the ultimate comfort and privacy of your homes.

o In comparison to the Internet banking system, the PC Banking provides you increased security.

o Since the level of security is much higher in PC Banking, you can access much more services than what you can through Internet banking.

o What is more, even the speed of the banking transactions is much faster than Internet banking.

o If you are using a personal financial management software and want the inputs from your checking, savings and money market accounts, PC Banking makes it possible for you to download the relevant data right into the software program.

o You can also check your balances and enjoy the convenience and power of electronic fund transfer. In fact, you can get all the advantages that Internet banking has to offer.

This way, we can say that PC Banking is just an advanced version of Internet banking.

Disadvantages Of PC Banking

Following are some of the drawbacks with PC Banking system.

o You can find the Internet banking facility with almost every bank, but PC Banking has yet not gained that much popularity.

o The biggest disadvantage of using this banking system is that it lacks personal interaction between you and bank.

o You need to install a specialist software program in your PC in order to use the PC Banking system.

o Unlike the internet banking, where you can access your bank account from any PC with an internet connection, the PC Banking system allows you to access your banks accounts only from the PC on which the required software has been installed.

o Deposit and withdrawal of cash is not possible through PC Banking system. You need to walk into the bank branch or ATMs for such transactions.

Technical Requirements for PC Banking

You need the following things to access PC Banking system.

o A personal computer with access to Internet

o Any of the specialist financial software programs, including Quicken®: version 2005 or later, QuickBooks®: version 2005 or later, and Microsoft Money®: version 2005 or later. These are some of the specialized software programs that work with PC Banking.

The Future of Regulation – What This May Mean For Banks

Where to After the Crash?
After every major financial “crash”, governments and regulators impose new regulations to try and prevent a re-occurrence of the crisis. The Glass Steagall Act, for instance, which was passed after the stock market crash of 1929, defined the structure of the banking sector in the US for the following seventy years.
Paradoxically, the fragmentation this imposed on the US banking system gave rise to a securitisation business model which stands partially accused of being behind the present crisis. While banks were constrained from operating across county lines, the act imposed no such restrictions on insurance and pension companies. As a result, banks found they were able to be more profitable and to report better growth if they were able to offload assets from their relatively smaller balance sheets to these much larger institutions. Restrictions on banking in the US also played a key role in the globalisation of merchant and investment banks, the growth in the offshore Eurodollar market, and the rise to prominence of the City of London.
This cycle repeated itself in 2002, when regulators in the US promulgated the Sarbanes Oxlet Act following the burst of the dot com bubble. Amongst other provisions, the act encouraged the accounting profession to adopt stricter financial disclosure rules and fair value accounting, which included the requirement that asset value be based on current market conditions.  These “mark to market” accounting rules have also been accused of exacerbating the current crisis.
How then are regulators thinking this time around? Some interesting insights are emerging from various inter-governmental forums, central banks and regulators around the world.
What is coming to light is a list of “complaints” and matching “remedies”. Obviously, not all complaints are of equal merit, and not all remedies will be considered, but it is clear that major changes are underway in the banking sector. The question that bears asking in this climate is how some of the proposals under consideration may come to affect banks in the GCC. To answer this, it is important to examine some of the issues more closely.
The culprits & remedies
 Macro credit cycle management. There is little doubt that the governments and central banks of the leading OECD nations did not react to the bubble in asset prices early enough. For, as Greenspan famously indicated, it is very difficult to spot bubbles in the making. In the UK, however, Greenspan’s counterpart may simply have lacked a convincing mandate to spoil the party while inflation was so subdued.
New instruments that target the credit process itself are therefore now high on the agenda. According to Charlie Bean, Deputy Governor of the Bank of England, “We need a regulatory regime that works against the natural cyclical excesses of the credit cycle”. Precedents for this include the Spanish “dynamic provisioning model”, where provisions levels are set by regulation to reflect losses over an entire business cycle, and thus grow rapidly even when in boom times actual losses are limited.    
Traded securities markets. One of the hottest topics in the debate about regulation is what the future approach to tradable securities will be. Whereas securitisation is the source of many of the so-called “toxic assets” in the financial system, it should not be forgotten that it has been around for at least forty years, and has both enabled healthy specialisation in financial services and supported increased competition in retail banking, which has benefited consumers greatly.  
What has contributed enormously to the current crisis is not only the extent to which the traded securities market expanded before the crash, but the extent to which the securities were kept within the system, ending up on the balance sheets of many banks as part of their trading books. This resulted in a reliance on the tradability of these assets to maintain appropriate levels of liquidity, which could be calculated by means of sophisticated value-at-risk calculations.
The fact that so many of the world’s leading banks, which were presumed to have developed by far the most sophisticated of financial models, failed to get it right will undoubtedly make regulators around the world far less trusting of sophisticated models, and more determined to rely on more traditional liquidity measures and forms of provisioning. So although regulators are not suggesting that banks whose capital adequacy is presently stretched should have a higher capital adequacy in the short term, it is likely that in the medium term capitalisation requirements will be increased, especially against trading positions. These will, in all likelihood, be supplemented by the re-introduction of some core funding ratios to ensure more adequate levels of liquidity.
The parallel financial system. It is clear that one of the many problems which contributed to the current crisis was a change in the nature of financial intermediation. This saw significant growth in the range and complexity of off-balance sheet entities and vehicles that were not adequately regulated, and which were permitted to grow to such a scale that they were able to introduce risk into the financial system.
In the future, regulators will increasingly focus on ensuring that, even if such entities remain outside the ambit of financial regulation, banks carry the appropriate capital for exposures to such entities.
Cross-border banking. One of the most sobering aspects of the current crisis is the extent to which risks have turned up in unexpected places and, as Mervyn King, Governor of the Bank of England has suggested,  the way in which “global banks are global in life but national in death”. 
Although, in almost all instances, depositors that took bets in jurisdictions where the liabilities of the banking system exceeded the capabilities of the national government to support them have been protected, regulators and depositors will need to think very carefully about delegating responsibilities to lead regulators, who have themselves been found wanting, as well as about investing in banking operations in jurisdictions with limited fiscal resources. Local regulators will undoubtedly be much more concerned about the possibility of a withdrawal of capital from local subsidiaries, and the need for appropriate liquidity ring- fencing.  

The impact on banks in the Gulf
Although the financial crisis has affected many banks in the region differently, and there are as many regulators as there are countries, regulatory principles are very quickly shared. In the Gulf there are examples of banks and countries which have been affected by each of the factors, although not necessarily by all of them at once. Once the dust has settled and the appropriate fiscal and monetary relief has been provided, banks are most likely to face a new regulatory regime characterised by requirements for:

  • Higher provisions over the economic cycle;
  • Higher levels of capital;
  •  A more conservative approach to liquidity; and
  • More rigorous regulation of cross-border activities.

Unfortunately, all of these changes will have a direct negative impact on the bottom line, which will need to be balanced through deep changes in strategy. Most banks will find it impossible to achieve pre-crisis levels of profitability without major improvements in efficiency.

For many, this will be difficult to achieve, and some banks and bank funders will come to recognise that banking is less of a ticket to status or a license to print money than a complex, regulated and low-return activity, which may lead to a wave of mergers amongst smaller institutions. Timing, however, will be critical. Shareholders will need to find a window between appearing to be distressed in the current environment and the time at which valuations become internalised as new realities.  

Balance sheet management will achieve a growing importance. Banks that maintain largely passive investments in “liquid instruments” – often offshore – will need to completely re-define their strategies and risk management policies.

As has already been seen, almost all institutions will need to pay much more attention to their liability franchises, but not everyone can win in this race.  Investments made in growing a liabilities business have a long lead time.

Calculating the improvements in operating margins required is relatively simple; achieving these improvements will dominate the banking landscape for at least the next five years.

Are There Advantages to Keeping Your Money With a Credit Union Instead of a Bank?

In today’s difficult economic environment, Americans are beginning to use credit less and to save more. Saving is a good thing – for too long many people have overspent and have been unprepared for life’s emergencies. But when deciding where to keep their money, consumers have many choices. Both banks and credit unions (CU’s) offer savings account and checking account services. How do you decide which one is right for you?

The first thing to do is to learn something about each one. Then you can decide which is the better choice.

Broadly speaking, a bank is a regulated financial institution that provides a wide range of money services to its customers. In the United States there are many different types of banks.

• Savings bank: Most consumers are familiar with savings banks, which can be local, regional, or national. They provide easily accessible services to a wide range of consumers. Most have a focus on retail banking, including personal savings accounts, checking accounts, and loans.

• Co-operative bank: A bank that is owned not by stockholders but by its members, who are also customers of the bank. Co-operative banks are often created by persons who have a common bond. Co-operative banks provide their members with the same banking services as savings and loan banks.

• Mutual bank: Like co-operative banks, mutual banks are owned not by shareholders but by their customers.

• Commercial bank: Refers to a bank or a division of a bank that mostly provides account services for large businesses and corporations. Owned by shareholders.

• Community banks: These are locally operated financial institutions whose employees can make local decisions to better serve their customers.

• Community development banks: These banks specialize in providing financial services and credit to under-served markets or populations.

• Private banks: These banks manage the assets of wealthy individuals. A private bank may have minimum deposit amount of $100,000.

• Offshore banks: Located in nations with low taxation and regulation, most offshore banks are similar to private banks.

Banks make money from fees they charge for their services and from interest they make on loans.

Credit unions
Unlike commercial banks, which are business enterprises designed to earn a profit like any other business, credit unions are non-profit membership organizations, owned by their members, and are governed by volunteer boards. The first credit union was opened in 1844 by a group of weavers in Rochdale, England. It resembled a modern-day buyer’s club. Shares were sold to members with the intention of raising funds to buy goods at wholesale prices. The goods were then sold to members at below retail prices.

Choosing a bank or credit union
Consumers may wonder what the differences are between having a savings or checking account at a CU and a bank. A key benchmark is interest rates: how much you will earn when you save, and how much you will pay when you borrow. According to the Credit Union National Association (CUNA), rates offered by credit unions are sometimes better than the rates offered by banks. This is because CU’s are not trying to operate at a profit.

Are credit union deposits insured?
Most people know that the Federal Deposit Insurance Corp. (FDIC) insures bank deposits up to $250,000 per depositor per bank. Most CU belong to the National Credit Union Share Insurance Fund (NCUSIF), which protects CU deposits up to $250,000. If you join a credit union, make sure it is a member of NCUSIF.

Joining a credit union
Unlike banks, the law places limits on who can join a CU. A credit union’s “field of membership” is defined by its charter. Eligible people could be employees of a company, members of a church, students at a school, or members of an ethnic group. Chances are good that if you are interested in joining a credit union, you’ll be able to find one that will accept you as a member.

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

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.

Offshore Online Banking Guide – Critical Information You Must Know

There are several legal and regulatory compliance implications with offshore banking that I’d like to cover in this article. However, please don’t construe information on this site as legal guidance. I am providing this information for free based on my own experiences. Please consult your professional attorney or CPA (accountant) before you get involved with offshore internet banking.

What is an Offshore Bank

To be over simplistic, an offshore bank is a financial institution outside the shores of your country. If you are in Australia, a bank in the United States is an offshore bank to you. If you are in the United States, a bank in Singapore is an offshore bank to you. Therefore, the idea of offshore banking is relative.

A business or an individual, in this case you, may select an offshore bank account in a jurisdiction that is typically favorable in terms of taxes (often referred to as a tax haven by media), as well as in terms of legalities. In addition to choosing a jurisdiction with no to little income tax, for many, privacy and “secrecy” of banking activities are two of the bigger key considerations.

It goes without saying that access to your funds is important, as well as protection from corruption and stability in terms of certainty.

List of Common Offshore Online Banking Services

This is a brief list of services offered by offshore banks. This list is by no means a full comprehensive list of an offshore bank’s offerings, but rather a list of some of the most common offshore online banking services that businesses and individuals are offered:

  • Remote Deposits of funds
  • Direct Deposits of funds
  • ACH / Wire Transfers / EFT – Electronic Fund Transfers
  • Consumer and Commercial Lending
  • All Basic Credit Activities
  • Access to Capital – Offshore Debit Cards
  • Forex – Currency Exchange
  • Wealth Management
  • Offshore Trading Account
  • Offshore Brokerage Account
  • Administrative Services
  • Trustee Services

Note: Offshore banks typically tend to focus on either consumer or commercial banking. Within consumer, banks differentiate between retail consumer (the average individual) or private banking (meant for high net worth individuals).

Because each concentration involves a different cost structure from the bank’s perspective, when selecting an offshore bank for yourself, be clear on what type of consumer you are and what offshore online banking services you need. Gaining this clarity will ensure you are not disappointed in your choice.

List of Common Offshore Banks

No doubt the two most common names in offshore online banking are Switzerland and Cayman Islands. Just pick up any business journal or pop in a business based Hollywood flick. There is likely a mention of a Swiss bank account somewhere.

This is because as of at least 2012, these two jurisdictions held the most number of total deposits amongst all offshore online banks. Some other jurisdictions that offer offshore online banking are the following:

  • Singapore
  • Malaysia
  • Panama
  • Cook Islands
  • Dominica
  • Saint Kitts and Nevis
  • Antigua
  • Malaysia
  • Anguilla
  • New Zealand
  • Luxembourg
  • Bahamas
  • Barbados
  • Bermuda
  • British Virgin Islands
  • Cyprus
  • Cook Islands
  • Channel Islands
  • Monaco
  • Mauritius
  • Hong Kong
  • Malta
  • Macau
  • Regulating Offshore Online Banking

With complexity comes increasing regulation. The regulation around offshore online banking activities has steadily increased over the years, but according to many of its supporters it is still not enough. This means much more is in the pipelines. Regulation has particularly increased significantly after the significant events of September 11, 2011.

Regulatory guidance is issued and monitored by global bodies such as the International Monetary Fund or the IMF, who require financial institutions worldwide to maintain a certain level of operating or performance standard, specifically in terms of capital adequacy and liquidity. These key performance indicators are to be reported by banks on a quarterly basis to its designated regulator (such as the Fed or the FDIC in the United States).

The list of regulations is endless and quite comprehensive to say the least. Some notables are the Anti Money Laundering (AML) regulation and the Bank Secrecy Act (BSA). These acts require banks and financial institutions to immediately report suspicious activity resembling money laundering to local government authorities despite stepping out of the BSA jurisdiction.

Another example is the information sharing requirements between a certain group of countries with regards to capital flow and taxation which was initiated by members of the European Union. On the other side of the pond, the taxing body of the United States, the Internal Revenue Service (IRS) requires financial institutions to report to it names of businesses and individuals who benefited from interest income resulting from deposits in US based institutions.

The most notable in my opinion of recently enacted regulations is the US Patriot Act, which permits the US Government to seize all assets of a financial institution if it suspects that the institution holds assets that belong to a potential criminal. Several other countries have since followed suit.

I personally feel these regulations strengthen the global banking infrastructure. But then again I am just one person. There are others who feel in all sorts of ways about offshore online banking.

Interesting Fact: Did you know that just until the 1990s, individuals were allowed to create their very own offshore banks. This practice was stopped and now only large institutions are allowed to do so.

Connotations and Implications of Offshore Online Banking

It is not illegal to conduct offshore online banking, but such activities tend to carry with them a certain set of connotations and legal implications that you must be aware of and comply with. There can be severe fines, penalties and legal repercussions if you fail to comply with the legal and regulatory requirements.

Why you must be thinking? Because offshore banking historically has been used and abused by those who intended to evade taxes, as well as those that used funds for illegal causes. For example, organized crime networks heavily use offshore online banking to launder money.

But like I said, conducting offshore online banking isn’t an illegal activity. All persons conducting offshore online banking are required by most countries (depending on their residency) to disclose the activities and the outcomes, such as interest income for example.

Specifically in the United States for example, a US resident’s income is taxed on a global basis. This means that even interest earned overseas is subject to taxation by US authorities. Now although financial institutions are not required to disclose this information to countries of interest due the bank secrecy guidelines, individuals are required to disclose this information.

Similarly, one can legally avoid taxes in certain situations. For example, a resident of Country X living and working in the United Arab Emirates (UAE) may not have to pay taxes if Country X does not tax the individual’s global income.

Because there is no taxation on income earned in many Arab nations, interest income earned from deposits in a UAE bank account is not subject to tax. Further, the income is also not taxed in Country X. This is a common reason why so many affluent folks change residency and citizenship status, one that resonates most with their financial goals and objectives.

It’s a very interesting dynamic and there is a ton of opportunity for strategizing as you can imagine.

Dollar Concentration in Offshore Online Banking

Although offshore online banking is not a subject delved into by the average individual, the numbers involved (concentration of wealth and financial activity) are quite significant. You may find a lot of these simply fascinating.

For example, specialized banking economists and analysts indicate that half of the global capital (money) flows through one of the many offshore banks out there. The so called Tax Havens (think Switzerland) have over a quarter of the global wealth (think high net worth individuals and big companies). These Havens also hold over 30% of profits generated by companies based in the United States.

And that’s not it. Over 6 trillion US dollars owned by high net worth individuals are also reported to be held in offshore bank accounts in one shape or another.

Illegal Monies in Offshore Bank Accounts

Opportunists have identified weaknesses in the offshore banking system and thus have taken advantage of the systems to launder monies generated through illegal means and used for illegal purposes. According to the IMF, this amount is as large as 1.5 trillion US dollars on an annual basis. To put things in perspective for you, this is roughly 5% of the world’s total Gross Domestic Product (GDP).

In addition to illegal monies, there are also monies that have evaded taxation as well as monies that were generated through fraud, graft and corruption. All in all, the amounts are super significant. And as I stated above, the two jurisdictions with the biggest concentration of these amounts are the Cayman Islands and Switzerland (as of 2012).

Offshore Internet Banking for Corporations of All Sizes

I have already stated this earlier, but offshore online banking is not only for large companies, but companies of all sizes as well as individuals. There are a certain set of requirements that any institution, an individual or a company have to meet in order to open and maintain an offshore bank account.

In fact, it is easier for individuals to open and maintain an offshore bank account before companies are required to complete additional forms in a specific manner when establishing an offshore internet bank account.

Corporations typically engage in offshore online banking when they contemplate one or any mix of the following purposes.

  • Cost containment (bank fees and charges)
  • Paying and receiving payments from vendors and customers in local jurisdictions
  • Asset protection strategies
  • International acquisitions and investments
  • Compensating local employees in an offshore jurisdiction
  • Political reasons – Stability and predictability
  • Establishing a local business presence
  • Again, this is not a comprehensive list of why companies engage in offshore online banking. There are several other reasons why a company may decide to establish an offshore bank account. The only true way to find out the best offshore bank for you, and whether your objectives will be met through offshore internet banking is by speaking to a professional who can walk you through the entire process.

Concluding Thoughts on Offshore Internet Banking

I gave you a ton of information to read and digest in this article. As you have read, offshore internet banking is used by several different constituencies for several different purposes with several different intentions.

There are some significant advantages that can be derived from opening an offshore bank account such as entering new global markets and some serious offshore tax planning. I obviously recommend opening an offshore bank account for the right reasons, with full compliance with laws and regulations. For those contemplating abusing the system, understand that bank secrecy is a weakening concept, and one that will continue to weaken over the years.

Countries are increasingly sharing information, some voluntarily and some while succumbing to pressure by more powerful nations such as the United States.

Banking Channels – Alternatives to the Branch

Earlier in my career I was the Chief Financial Officer for a regional savings bank. As the CFO my main concerns were focused on the overall financial health of the bank. I used a couple of high level metrics to measure my performance and the performance of the bank.

The first measure was capital adequacy, or did the bank have sufficient capital, not only to meet regulatory requirements, but also to position itself for growth and as a cushion for unexpected downturns. The second criterion was Return on Average Assets. That is, was the management team effectively utilizing the banks assets to generate a significant return to satisfy the investors as well as the regulators? A bank will want to maximize the percent of its assets that make money for the bank – earning assets. Conversely, it must minimize the percent of assets that don’t produce earnings – non-earning assets. A competent CFO will work with the management team to maximize the Return on Average Assets, thereby maximizing profits and increasing the banks equity or net worth. All this, of course, has to be balanced with providing an appropriate level of customer service consistent with the bank’s goals. So much for the accounting lesson, how does this relate to an optimized strategy for retail banking channels?

Banks have always been looking for the most effective was to deliver their services. As early as thirty years ago, the branch was the only means for the bank to interact with their customers. When ATMs were introduced, banks saw them as a way for customers to do basic transactions, freeing up branch staff for the more complex transactions. Even though ATMs were expensive, banks were banking (pardon the pun) that ATMs would help them reduce their overall branch expense thereby freeing up assets for more productive use – and to a certain extent they were correct.

Banks have used the same logic for the newer channels such as contact centers, IVR, Internet, mobile banking and now remote video connections. Each of these new channels has, to a greater or lessor extent, taken the burden off the branch network and, at least in theory, reduces the need for cost intensive stand-alone branches.

So with all the channels in use, what will be the retail delivery strategy of the future? What will be the combination of channels that will deliver the greatest value to the customer while helping the bank with the two criteria I mentioned above – driving a healthy Return on Average Assets that contributes to the bank’s overall equity or net worth?

Just for a moment, put yourself in the shoes of a CEO or CFO. All things being equal, what channels would you prefer your customer utilize? As a former CFO, my answer is simple. My choice would be for my customers to utilize Internet, home video and mobile channels. Why is this? Simply, these are channels where the customer assumes the interface costs. This certainly helps maximize the bank’s use of its assets.

But let’s also look at it from the customer’s perspective. Branch traffic is declining as customers embrace alternative channels. Certainly there is, and will be for a considerable period of time, customers who need or prefer the branch. The reasons for this are well documented and there is no need to enumerate them here. However, it is equally well established that in some markets, customers are eschewing the branch in such a way that some bank executives with whom I’ve spoken claim that Internet and mobile transactions now account for 99% of all financial transactions. These banks also report health balance sheets (think net worth) and Income Statements (think Return on Average Assets) and, importantly, very satisfied customers.

So, given both of these perspectives, I believe that – eventually – the home, with its Internet, video and mobile phone capabilities, will become the ultimate delivery channel for most retail banks. Certainly branches will remain, becoming less transaction oriented and devoted more to those interactions requiring personalized and intensive service. However a “home-branch” strategy enables banks to reduce their fixed costs allowing not only for better bank profitability, but the ability to offer better rates on both savings and loans products, as well as anytime, anywhere convenient service to their customers. It may be that this transformation will evolve slowly, but in my opinion, it is the ultimate win/win strategy for both the bank and their customers.