Snippings

The American Bankers Association commissioned the management consultant Oliver Wyman to research the growing importance of digital identities on the U.S. Financial Services sector. 

A previous paper Oliver Wyman developed with the International Banking Federation (IBFed)11 explored the role of banks in digital identity ecosystems and set out the business case for their doing so. Currently there is no such bank-led ecosystem in the U.S. Recently, the three largest U.S. wireless service providers (i.e., AT&T, Verizon and T-Mobile) withdrew their combined support for Zenkey, which was arguably a bid  

towards creating a national, federated identity scheme that leveraged phone-centric ID information [11]. 

The bank-owned consortium, Early Warning Services (EWS), after successfully launching Zelle, now appears to be entering this space with a recently launched product Authentify, which currently represents a “single sign up” service that leverages the previously verified customer data of the banks that own EWS. The implication of this in the medium-term is that smaller banks might be able to rely on (and perhaps pay for) services provided by Authentify to verify, authenticate, or perhaps even authorize their customers, in the same way that the Zelle payments product has been integrated into many other banks’ native mobile banking apps. 

 

 

There is not yet the equivalent of a ubiquitously recognized, granular consumer credit score for digital identities. 

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Overall, illicit addresses sent nearly $23.8 billion worth of cryptocurrency in 2022, a 68.0% increase over 2021. As is usually the case, mainstream centralized exchanges were the biggest recipient of illicit cryptocurrency, taking in just under half of all funds sent from illicit addresses. That’s notable not just because those exchanges generally have compliance measures in place to report this activity and take action against the users in question, but also because those exchanges are fiat off-ramps, where the illicit cryptocurrency can be converted into cash.

From Crypto Money Laundering: Four Exchange Deposit Addresses Received Over $1 Billion in Illicit Funds in 2022 – Chainalysis.

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TSB is urging the public to remain vigilant on all platforms, and highlights Facebook and Instagram as the main offenders – as scammers create fake profiles with ease. TSB also recorded cases on Match, Plenty of Fish, Snapchat, Grindr and Tinder.

From Romance scammers break over 60 hearts and wallets every week, warns TSB as Bank reveals fraudsters’ cruel tricks.

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My guess is that the idea of launching a bank digital wallet in its early whiteboard days didn’t have as much to do with cards as it did with moving consumers away from cards and the card networks, and towards bank rails and account-to-account payments, including payments to merchants.

From Banks Want to Prove They Can Innovate Digital Wallets, But Can They? | PYMNTS.com:

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Social commerce refers to an increasingly popular subsector of e-commerce in which goods and services are promoted, researched, and sold entirely on social media platforms. This capitalizes on the enormous popularity of social media by allowing consumers to complete the entire customer journey without ever having to navigate away from the social media site.

Social commerce is made possible through the development of reliable and secure social payment technologies that allow transactions to be completed through the social media portal. Social commerce offers consumers an unprecedented measure of convenience, speed, and security in progressing from interest to purchase.

But consumers are by no means the only party to benefit from the rise of social commerce and social payment technologies. The social commerce revolution is giving retailers an extraordinary capacity to reach a truly global market, increasing brand awareness and engaging with consumers around the world.

From The Rise of Social Commerce and Social Payments:

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Verifiable Credentials means something that is fully conformant to the W3C Verifiable Credentials standard, and it IS NOT a generic term to describe any and all digitally signed documents and attestations!

From Battle for the brand:

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Hidden patterns purposely buried in AI-generated texts could help identify them as such, allowing us to tell whether the words we’re reading are written by a human or not. These “watermarks” are invisible to the human eye but let computers detect that the text probably comes from an AI system. If embedded in large language models, they could help prevent some of the problems that these models have already caused.

In studies, these watermarks have already been used to identify AI-generated text with near certainty. Researchers at the University of Maryland, for example, were able to spot text created by Meta’s open-source language model, OPT-6.7B, using a detection algorithm they built.

From A watermark for chatbots can spot text written by an AI | MIT Technology Review:

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Incentivise banks and building societies to prevent APP scams – because responsibility for allowing fraudulent payments is the responsibility of both the sending and receiving banks or building societies.

From CP22/4: Authorised push payment (APP) scams: Requiring reimbursement | Payment Systems Regulator:

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Alongside a great many foolish things that have been said about the future, only one really clever thing stands out. It was a “law” coined by a Stanford University computer scientist and long-time head of the Institute for the Future by the name of Roy Amara. He said that we tend to overestimate the impact of a new technology in the short run, but we underestimate it in the long run. Quite when he said it and in what context is not clear but colleagues suggest he was articulating it from some time in the 1960s or 1970s.

From Amara’s Law | Matt Ridley.

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Some may be delaying their investment in the DeFi space out of a belief that the advent of Central Bank Digital Currencies (CBDCs) will consolidate the market. While nothing is set in stone, OpenZeppelin believes a reasonable observer might instead anticipate a possible future in which different stablecoins respond to different market needs. It is possible that central banks will design CBDCs with more limited functionality and composability than those issued on public blockchains using flexible smart contract designs.
In such a scenario, more programmable assets—such as A$DC—would open up new investment opportunities by enabling token integration with other smart contracts. Such assets would require expert-level security reviews, but they would spur innovative uses that less functional CBDCs would not be able to match.

From OpenZeppelin partners with ANZ Bank to help secure world’s first bank-issued stablecoin transaction – OpenZeppelin blog.

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