Snippings

xxx

Two years after the White House teased an executive order on identity theft in public benefits during the 2022 State of the Union, such an order hasn’t materialized, leaving stakeholders frustrated at the lack of action to address vulnerabilities and prevent fraudsters from siphoning off government money.

“We continue to work in this area very rigorously across government,” Clare Martorana, the federal chief information officer, told Nextgov/FCW at an event this week when asked about the state of the executive order. “This is top of mind for all of us. We want to make sure that we accelerate people’s use of digital [to access government], but safely, securely.”

The order as it was previewed two years ago was said to be focused on preventing fraud in government benefits programs, which spiked during the pandemic, in part due to identity theft. The Government Accountability Office estimated in September that up to $135 billion in unemployment insurance alone went to bad actors during the pandemic.

From: White House stalls on digital identity mandate, despite billions in fraud – Nextgov/FCW.

xxx

There’s an interesting 2022 paper about this from Valdimir Mukharlyamov and Natasha Sarin at the UPenn Law School. The paper, “Price Regulation in Two-Sided Markets: Empirical Evidence from Debit Cards”,  concludes that regulation to limit that amount banks can charge for debit transactions (ie, the Durbin Amendment of the 2010 Dodd-Frank Act) led to higher checking account fees  for consumers (previously subsidized) and accelerated the adoption of credit cards with higher interchange fees (cutting down on potential savings for merchants). In summar, the regulation’s stated objective of enhancing consumers’ welfare through lower retail prices was not met. Having looked at this issue across different markets and over many years, I have to say that I am not surprised and remain convinced that regulators should focus on more competion (from instant payments, for example) than trying to fix prices.

xxx

Specifically, consumers and small businesses sent 2.9 billion transactions totalling $806bn in 2023, both up 28% year-over-year. And some 120 million consumer and small business user accounts leveraged Zelle through their financial institution in 2023. The fourth quarter of 2023 was the largest quarter to date with users transacting more than $219bn across the Zelle Network. That means an average of more than $100m was sent per hour.

From: Zelle transactions rise by 28% y-o-y to hit $806bn – GlobalData.

xxx

xxx

the company has been loading more ATMs with $100 bills lately. The note is especially popular among ATMs in barbershops, tattoo shops, hotels and convenience stores.

From: The $100 Bill Is America’s Most Common Currency, and Its Most Annoying – WSJ.

xxx

xxx

Tomorrow’s Transactions is turning 21!  And we’re celebrating the birthday in historic surroundings at the Tower of London. It’s always a great opportunity to look back at the lessons that have been learned across the past decades and cast an eye out to the future – where will technology and regulation, take our world of transactions?

From: .

xxx

xxx

In the UK I bank with Monzo. With 9M customers and a valuation of £4BN, they are now the 7th largest bank in the country.

And they have zero branches, and no online web banking.

Instead, it’s an app. That’s it.

It’s fair to say they are a Digital Bank.

But last week they asked me for a manual ID check. They needed a selfie of me holding an ID document, which I had to email them. Whaaat?

From: “Ripping” IDs Should Go the Way of CDs, Klarna’s AI Assistant and the Future of Loyalty.

xxx

xxx

David Kelts has been working on this stuff for years, and is a digital ID expert. He makes the same point about digital vs. digitized, and likens scanning ID documents to ‘ripping CDs’.

It’s an analogy that won’t make sense to anyone under 35 (you’ll need to Google it). But it’s a helpful way to think about today’s nonsense of taking selfies and photos of documents.

“Remember endless hours ripping your CD collection to digital… why are we spending endless hours scanning analog ID documents over and over again? Alternatives exist.

“”Let’s think differently about how Mobile KYC fails customers

Manually taking a quality, flat, well-lit, high-res picture of a card is hard
Taking an ICAO-quality, well-lit, machine-matchable portrait is difficult. Everybody wants to smile (or make duck lips …idk…) in a selfie
Webcams are very low resolution compared to phones and vary widely
PDF417 Barcodes from the back of DL/ID cards are easy to generate and nearly every Fake ID has the same information on the back and front
Connections to databases that would verify the authenticity and validity of a DL/ID are expensive or restricted to law enforcement (makes sense)
Most hard-to-forge security features of an ID card require multi-spectral light, are tactile, or require magnification. Phones capture visible light
Cropping the card portrait results in a small, low-res photo for machine-matching that has security lines, holograms, and indicia through it
Cropping a portrait from a poorly captured, low-res ID card will not give sufficient resolution to measure the facial features for matching
You need cloud/phone processing power to determine that a human is live and real for the probe image — called Presentation Attack Detection
I have to ID myself repeatedly with each new service that wants (notice I didn’t say “needs”) ID and each KYC system differs, creating doubt
He goes on to say it’s time to fix this mess. And that a Mobile Driver’s License (mDL) is a smart option. Not least because it’s already available for nearly 1 in 5 people in the US who carry an identity card.

From: “Ripping” IDs Should Go the Way of CDs, Klarna’s AI Assistant and the Future of Loyalty.

xxx

 

For instance, a recent Bankrate survey demonstrates that monthly service fees for banks range from $5 to $15. On top of that, banks routinely earn between $4 and $5 every time a customer withdraws money from an ATM or utilizes a service such as obtaining a cashier’s check. Finally, uncertainty in the form of unexpected bills can lead to bank accounts being overdrawn, resulting in additional overdraft fees.

The collective impact of all these fees is that about one in every five people in the U.S. has little or no connection either to banks or to financial institutions more generally.

From: The human cost of cashless transactions – Rochester BeaconRochester Beacon.

This is why I continue to propagate my slogan “unbanked is not the problem and banks are not the solution”.

A great many people do not need a bank account, they need a payment account. Or, to put it another way, they need a digtial wallet that they can send money from and receive money to.

xxx

A lawyer in Canada is under fire after the artificial intelligence chatbot use she used for legal research created “fictitious” cases, in the latest episode to expose the perils of using untested technologies in the courtroom.

The Vancouver lawyer Chong Ke, who now faces an investigation into her conduct, allegedly used ChatGPT to develop legal submissions during a child custody case at the British Columbia supreme court.

From: Canada lawyer under fire for submitting fake cases created by AI chatbot | Canada | The Guardian.

xxx

The CEO of Japan’s biggest recruitment agency Recruit Holdings (which acquired Indeed in 2012) says that artificial intelligence (AI) will resolve the country’s labour shortages, but has warned that its usefulness will be limited “until people gain more trust” in the technology. He may be right, but I wonder if most people really care whether they are being served by a person or by a robot?

The world of fintech sat up and paid attention when the Swedish giant Klarna accounced that their AI assistant that is now handling a workload equivalent to 700 full-time staff members. Their CEO Sebastian Siemiatkowski has long been enthusiastic about AI and said in December that “We’re not currently hiring at all, apart from engineers”.

Is AI 

The AI boost for software companies has begun to wane. The iShares Expanded Tech-Software ETF (IGV) — comprised of many of the major enterprise software players — which generative AI excitement push up almost two-thirds has gained only 4.7% this year vs. the Nasdaq composite index’s 7% advance. 

(By contrast the chipmakers, the people selling the shovels for the goldrush, are still on a tear. The PHLX Semiconductor Sector index is up 18% so far this year.)

So perhaps AI isn’t going to replace you right away.

xxx

An AI bot could act as your intern.
One reason chatbots like the one Holding used might not take over tons of jobs right away is there are limits to what AI can do — for now. Generative AI tools often still require oversight, much like an inexperienced worker might.

From: How AI Is Tackling Jobs Humans Don’t Have Time for.

xxx

xxx

Countries with the highest rates of automation and robotics, such as Japan, Singapore and South Korea, have the least unemployment.

From: Your job is (probably) safe from artificial intelligence.

xxx

During an excellent fireside chat about the future of payments at Money20/20 Asia in Bangkok, Farhan Ahmad (the CEO of PayNet) made many very interesting points, paticularly around the need for a strategic framework for dealing the coming change to bots, rather than people, as customers. Financial services organisations of all kinds have many, many years experience in selling to people. But how do you sell to a bot? I think this might be a good idea for a book…

Farhan also said that if you are trying to develop strategies for the longer term, then ”don’t ask consultants about the future, ask science fiction writers or historians”. I could not agree more, which is why I enjoyed taking part in the creation of the Cybersalon collection “All Tomorrow’s Futures”, an anthology of future fiction  recently launched in the universe and a metaverse at the British Science Fiction Convention.

Who should be turn to for a longer term view then? Well, the renowned science fiction writer Arthur C. Clarke (the man who predicted communication satellites) said in a 1964 interview with the Australian Broadcasting Corporation commented that “Men will no longer commute, they will communicate”) and once commented that “The goal of the future is full unemployment, so we can play”. I have to say that I find this an admirable manifesto for change. Provided that society finds a way to distribute the benefits of turbocharged productivity, I’m all in favour of turning Japanese.