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Great article - really encouraging to see Banks looking to empower FinTech propositions....

The question will be, how many banks will allow / partner with FinTechs to solve their own internal operational processes.... 

As for Post Bank.....Im sure that would go the same way as the Williams and Glynn debarcle.... Another BCR round???

Proceeds from fraud are deposited to an account, the same way as they are for card based fraud. The card schemes worked out many decades ago that the desitnation account is where the risk is, not the iussing bank, this is why they have so many rules regarding becoming a merchant. Banks need to be focussing on in-bound payment models and identitying the  beneficiary of fraud. This would provide incentive to monitor fraud more closely, in addition could then provide a refund model that could work.

However, the biggest win here is simply ensuring known identities pay known identities. This is now possible with digital distributed identities - so why is Pay.UK not looking at this? Surely knowing exactly who you are paying is the best way to combat push or app based fraud???? As an outsider to the industry, it seems nuts that established models and ways of working are simply not being used. 

This will happen via a FInTech, thanks to PSD2 and Open Banking....Just a few tweeks to the friction points and it will happen....

Money is already digital, right now it is easy to bind transactions to real digital identities, we just chose not to do this. Crypto currency doesnt bind to anything other than a known end point, that is not the same as knowing who that identity is.....There are solutions out there to solve this.

The appeal for crypto is often associated with cross-border immediacy for a payment. This is also being solved today with RTGS.global and SWIFT GPI. These are fiat currency and therefore do not impact the leavers of a macro economy, rather they impower them....Crypto currency has a real risk that it does impact the leavers central banks have on macro economics - and they argument that crypto is digital is nonsensical....Value, currency is already digital, all we need to do is start thinking of everything around it as digital too!

From my experience, regulators are more advanced (here in the UK) than many give them credit for. If you are open, transparent and can prove you have the right system controls in place (security included), that you understand reslience, that you understand data residency and you have the right set-up with your chosen cloud provider, and that you can maintain that right to inspect. Then there should be no issues....Remember you can outsource the tech, the data region to the cloud, but NOT your firms or individuals accountability.

Many of the concerns raised are often due to a lack of knowledge regarding the actual implementation of a cloud based compound. For example, you can have entire subscriptions within Azure that have no public internet access at all! This means from an operational perspective you maintain it in the same ways you would a private datacentre that had zero internet cables running in and out of it. This is all possible, and no, you don't need to access the physical compound. The Cloud is far more resilient than any on-prem private infrastructure could be, and that includes protection from DDOS attacks etc etc....

Cloud providers are open to discuss and walk you through this stuff. Azure provides an FCA based ammendment for example, which, if you are thinking cloud, go and speak to Microsoft about, as it provides at a contratural level all the things you need, policies, process and procedures to support a financial based company.

If you aren't thinking a move to the cloud, then you will be left behind. That is the way of the world...

Any delay in a payment is a terrible idea. It also removes almost all concepts of alternative payment rails, backed onto the FPS infrastructure. The impact on Open Banking future models is also highly impactful. In all, this is a terrible, ill thought out idea.

The solution is simple, which is to move to digital identities paying other digitial identities that can be verified by the banks or individuals themselves. This is now a very real possibility as Digital ID solutions are moving forward at scale. FATF itself is calling out digital ID and this is a perfect use case.

Digital ID would also empower real-time fraud detection systems, such as those delivered by leading edge companies as FeatureSpace. Thats real time fraud detection right now, avavilale to use, right now. Add in digital ID and the banking sector has a very powerful way of tackling payment fraud (not just push fraud for initial set up of a payment), without impacting the economy or killing massive potential in business models and open banking.

My final point is to focus in What Michael has said above. The crediting bank should have some form of duty of care here when receiving funds. Accounts that open up immediately and then have lots of payments coming in from a wide range of creditors should be raising alarm bells. If anything, this is where payments should be credited from, not the sending bank.

Interesting how many banks are looking now to deliver Banking-as-a-Service type models. The issue here is though, your BaaS customers will feel you are competing with them for the ultimate end customer. Its a real challenge to be seen as BaaS and Bank to the end customer.....

I think this is a wise wise move. Hopefully will show how powerful good FinTech companies can be when backed sufficiently to deliver on their vision, and have access to the rails and networks that enable them to execute....

this is a tad clunky. FinTechs and new banking experiences will trump this very soon....