Japan Piloting Digital Yen

How stable and secure?  Simulation tests  to be run. . 

Japan to Launch Pilot Program for Issuing Digital Yen,        By Reuters  February 23, 2023

If everything goes as planned, the Bank Of Japan could issue a central bank digital currency in 2026.

The Bank of Japan (BOJ) said Japan will in April initiate a program to test a digital yen following two years of experimentation.

BOJ's Shinichi Uchida said the bank will simulate transactions with private entities in a test setting.

The bank said the program will help BOJ prepare for the government's potential issuance of a central bank digital currency (CBDC).

The central bank's Kazushige Kamiyama said the test program will extend over several years, and entail negotiations with commercial banks, non-bank settlement firms, and carriers.  Japan and other advanced economies aim to catch up with China's CBDC launch, which has placed the country ahead of others in the digital currency race.

From Reuters   View Full Article    

Banks Need Confidential Computing

 Yes, makes Sense

CLOUD COMPUTING:  Microsoft, Google, IBM pitch banks on confidential computing

By  Penny Crosman    in The American Banker.

November 10, 2022, 3:53 p.m. EST 

Three cloud computing providers, Microsoft, Google and IBM, are all pitching the concept of confidential computing to banks.

Today in cloud computing deployments, data is protected at rest (sitting in a database) and in transit (being sent from one system to another), but not while it's being used by a software application such as a marketing, fraud detection or cybersecurity program. 

Confidential computing fills this gap, cloud providers say. It puts sensitive applications in a walled-off area within a computer called a hardware-based secure enclave or trusted execution environment, so the data used cannot be seen by outsiders.   ... ' 

Quick Look at AI and Banking

Not too much here, but made me think about the broader problem. 

AI Is Transforming How We Bank

By The Information,  August 11, 2022

Crypto is far from the only technological innovation causing problems for financial regulators. Advances in machine learning (ML) are changing how banks allocate credit and manage their own risks internally, how financial advisers construct portfolios, how fraud and suspicious transactions are detected, and how certain back-office operations like customer service are performed. And that is just the beginning. Consumer protection regulators, for example, are concerned that the use of ML algorithms may already be violating fair lending laws.

Although we might hope that automating decisions about who gets credit and on what terms would eliminate discrimination, the reality is that if the data used to train the algorithm reflects human biases, the algorithm will perpetuate those biases.

From The Information

Banking Malware Threats

Banking malware threats surging as mobile banking increases – Nokia Threat Intelligence Report

Press Release Banking malware threats surging as mobile banking increases – Nokia Threat Intelligence Report 8 November 2021 Espoo, Finland – The Nokia 2021 Threat Intelligence Report announced today shows that banking malware threats are sharply  .... ' 

Read in GlobeNewswire: https://apple.news/Aek0q2gjPRPW3S_iM0DNGQA

Digital Version of the Euro?

Complementing the existing monetary system.   Considering security too.  

ECB Starts Work on Digital Version of the Euro

CNBC,Silvia Amaro, July 14, 2021

The European Central Bank (ECB) has launched an initiative to produce a digital euro currency. The ECB expects the design and investigation stage to take two years, while the currency's actual implementation could add two more years to the project. ECB’s Fabio Panetta said, "Private solutions for digital and online payments bring important benefits such as convenience, speed, and efficiency. But they also pose risks in terms of privacy, safety, and accessibility. And they can be expensive for some users." The digital euro would let consumers make payments electronically, but also would "complement" the existing monetary system rather than supplanting physical cash and eliminating the commercial lending business.

China Blocking Banks

 Complete implications unclear.

China Says Banks Must Block Crypto Transactions; Market Falls

China's central bank says institutions must not provide trading, clearing, and settlement for crypto transactions ... 

By Omkar Godbole, Jun 21, 2021 at 6:30 a.m. EDT

China Says Banks Must Block Crypto Transactions; Market Falls

The People’s Bank of China (PBOC) on Monday told the country’s major financial institutions to stop facilitating virtual-currency transactions, increasing the negative sentiment in crypto markets.  ... '

McKinsey Talks AI Banks of the Future

The challenge is in how our behavior will adapt.  My recent banking interactions are less than pleasing.  Good non-technical overview piece.

AI-bank of the future: Can banks meet the AI challenge?

AI in banking may be the next big differentiator. Success requires a holistic transformation spanning multiple layers of the organization.  ... " 

AI in Banking

Useful survey of AI uses in Banking..Notable use of BPM.

Barclays Innovating in use of AI in Banking

Barclays Bank is emerging as an innovator in the use of AI in financial services. The UK bank, ranked 20th on the S&P Global’s list of the top 100 banks, works with suppliers of AI products and services more than it develops AI applications in house, according to a recent account from  emerj.

Here are three AI initiatives underway at Barclays and the industry partners working on each one:

Risk Modeling with Simudyne, employs predictive analytics to assess loan risk
Voice Recognition for Authentication, with Nuance, aims to apply verification and authentication using voice recognition;

Business Process Automation with IBM, a project to automate debit card deactivation, and analyze customer feedback.

IoT and Fintech

FinTech probably not an area you would first think of IOT,   but this non technical piece outlines some useful thoughts in the space.

How IoT Changes Banks and FinTech Companies  By Vova Shevchyk in ReadWrite

Can financial services benefit from the Internet of Things? Absolutely, and to the fullest extent. Not only for gathering more and better data about assets but IoT also changes the way we access banking and manage wealth, invest, and monitor assets.  Let’s see how IoT changes banks and FinTech companies.

To improve efficiency and customer service, banks eagerly invest in the Internet of Things. The technology has great potential and a wide range of uses.

How to ensure your financial company makes the best use of this technology? What are the benefits of implementing IoT? What does it take to build an IoT project? We’ll lay out and explain all of the above in this post.  ... " 

Ultimate ID: Facial Recognition?

Where you would expect it, but the results are still less than perfect.  And where it is mostly likely to be spoofed for direct fraud. 

Facial Recognition Making Its Way in Banking    By AI Trends Staff

Facial recognition technology is making its way into the banking industry, used primarily for physical security and ID recognition.

A handful or startups have emerged to serve the niche, the largest being Yitu Technology, a company with some 200 employees based in Shanghai, according to a report in emerj. Started in 2012 by a founder with a PhD in statistics from the University of California, the company employs a number of machine learning researchers. The company makes the Yitu Dragonfly Eye Intelligent Security System.

Another is Cloudwalk Technology of China, which had raised $507 million as of September 2018. They have contracts with the Bank of China and Bank of Chongqing. The president has a PhD in electrical engineering from the University of Illinois- Urbana Champaign. In facial recognition, the company appears to be in startup mode with few data scientists and machine learning researchers employed.

Other startups include IntelliVision, which offers Face Recognizer, which can recognize a customer’s face as shown on a stored image, when the customer is trying to access their bank account from an ATM with a camera, for example. If the customer’s photo is not stored in the bank’s database, the ATM can record the persons face and associate it with the account being accessed. IntelliVision has raised $6 million.

FaceFirst is offering software of the same name for access control using machine vision. The system is able to authorize identities, deliver mobile notifications to the security team, and recognition priority customers so that they receive the appropriate preferences. The companies say clients can integrate the software with existing image databases and with video footage. FaceFirst has raised $9.5 million in investment capital.  ... "

JP Morgan's AI Initiatives

A Podcast and transcript. Useful case study. in Knowledge@Wharton 

Apoorv Saxena, global head of AI and machine-learning services for JPMorgan Chase, discusses the bank's AI initiatives.

When America’s biggest bank, JPMorgan Chase, hired Apoorv Saxena in August 2018 as its global head of AI and machine-learning services based in San Mateo, Calif., finance industry watchers saw that as a sign that the bank was making a big bet on artificial intelligence to shape its future strategies. Saxena previously headed product management for cloud-based artificial intelligence at Google. At JPMorgan Chase, he also oversees asset and wealth management artificial intelligence technology.

 According to Saxena, AI will help financial services companies expand banking penetration worldwide, launch new products and deepen customer engagements. AI has helped technology companies and others outside of traditional banking enter financial services, such as with mobile banking and digital money offerings. However, only firms that can earn customer trust, meet regulatory compliance requirements and enhance customer service will make the cut, he notes. Meanwhile, regulations will have to come up to speed with the impact of AI’s advances and help make way for the industry to grow. The U.S. could learn some useful lessons from other countries like China, as it seeks to promote innovation as well as growth at scale, he adds.

JPMorgan Chase is making a significant investment in AI research, Saxena notes. For now, he is focusing on building “a rock-star team” to lead AI initiatives at the bank, he says on social media. Knowledge@Wharton spoke with Saxena at the recently held AI Frontiers conference in San Jose.

An edited transcript of the conversation follows. ... "

Ditch the term Blockchain?

I agree, when hype exceeds reality you have to take great care.  Start with a good business case.

Via Fortune, a short talk by execs.

Time to Ditch the Word 'Blockchain', Report Says

A new report from Forrester Research says the buzz around blockchain, a technology that creates tamper-proof records across multiple computers, is so over-hyped that some companies are dropping the word altogether.

According to Forrester, firms are ditching the b-word in favor of “DLT,” which is shorthand for distributed ledger technology—a more descriptive, if less catchy, term.

The report comes at a time when blockchain marketing is everywhere, including during the recent World Series, when IBM touted its blockchain services in TV commercials.
While blockchain is an important new technology, some firms are over-hyping its usefulness or simply repackaging existing services—a practice the report, which endorses the use of “DLT,” describes as “blockchain washing.”

“The networks that are live or under development vary greatly and frequently lack key characteristics that many regard as essential components of a blockchain,” the report states, adding the term blockchain can also carry negative “wild west connotations” of cryptocurrency.  ... " ... '

Process Automation with RPA for Banking

Was just introduced to
    Automation Innovation newsletter from IBM,  See:https://www.ibm.com/automation
    Here is an excerpt from a sample article on RPA in Banking:

How one bank is using RPA to save millions   By Cheryl Wilson

“So far so good. The results we've seen have been pretty positive. We’re aiming, by end of the year, to record about USD 10 million in savings just by automating the processes we’ve identified so far.”  – Luis Benitez, VP, Digital Workplace Strategy, Banco Popular *

When it comes to robotic process automation (RPA), there’s hype around the promise of big, quick, easy ROI. True, there’s been localized success, especially for certain back office processes with lots of repetitive, cut-and-paste-between-systems work. However, with hype comes disappointment. Companies that rushed to install bots, often in isolation, are now rethinking and resetting their approach. They’re taking a more start to finish view of what success really looks like and rethinking what the technology needs to do based on real people doing real work with real outcomes on the line.

With approximately 8,000 employees and 880 branches in Puerto Rico, the US Virgin Islands, New York, Chicago and Florida, Banco Popular seems to have avoided the “love at first sight” RPA pitfalls. These pitfalls include seeing RPA as something more than just the tech tool it is -- a tool that needs to be part of an orchestrated and expertise-supported approach.   ... " 

Capital One Rethinking Banking: Multimodal Skills

A useful example of multimodal assistance development. Voice plus visual.   Following with another example of skill in this space.

Session recording now available! How Capital One Rethought Multimodal Voice Experiences and Brought Banking to the Kitchen with Echo Show (and the Echo Spot)   #AmazonEcho #Alexadev #IoT #VoiceDesign #AWS #reinvent2017    By Dave Isbitski  @theDavedev

Conversational Banking Assistant Pilot

Intriguing statement of how this is operating, and how it can deal with a messy conversational interaction.   Because of the nature of the interaction, this would appear to be particularly important and difficult to assure correctness.   How exactly is this beyond rules or a chatbot interaction?   Sentiment also included.  Learning too.    More detail at the link.  ...

USAA Rolls Out Innovative Conversational AI Solution
Going beyond traditional rules-based voice or chatbot digital banking solutions, a non-bot, natural language banking experience is being offered to USAA members in an Amazon Alexa pilot with Clinc.    By Jim Marous, Co-Publisher of The Financial Brand and Owner/Publisher of the Digital Banking Report

Subscribe TodayLast September, a team of computer science professors at the University of Michigan introduced an application developed in their research lab that they believed would change the way consumers would do banking in the future. Combining the science and technology from academia, with the needs for a better voice-first mobile banking capability, Clinc won ‘Best of Show’ honors at Finovate in New York City with their Finie (“the financial genie”) application.

The intelligent personal assistant uses sophisticated natural language processing engines that have been trained with a deeper knowledge of the financial and banking industry as opposed to using a rules-based approach. Unlike solutions that currently exist from Siri, Alexa and Cortana, Clinc’s machine learning capability allows the application to expand knowledge and improve responses with every query. By identifying and analyzing dozens of factors like speech patterns, word structure and sentiment, Clinc is able to understand, to remember and to respond to unconstrained, contextual, messy human language.  ... " 

Walmart Sweepstakes Game

In Retailwire: With discussion.

Can Walmart’s sweepstakes game teach the unbanked to ‘bank’ their money? by Matthew Stern

In order to let the unbanked and underbanked portion of its customer base take part in things like online shopping, Walmart has launched programs that make the retailer look a bit like a bank itself. But with its Prize Savings program, Walmart has taken a step that banks have not — Walmart is incentivizing its customers to save.

Last year, Walmart introduced the Prize Savings program as part of its MoneyCard offering, as discussed in an article on Good. The program gives users the chance to win cash prizes in a monthly sweepstakes if they place money into the “Vault” portion of the MoneyCard pre-paid debit account. Since Walmart introduced the Prize Savings program, the number of customers keeping money in their Vaults has increased 130 percent to 100,000. ... " 

Voice Banking Assistants

Security will have to be very well done.

Voice banking arrives on home virtual assistants
by Jack Dougal, BANKING.COM

Amazon’s Echo device has been one of the biggest tech hits of the last year, with some estimates suggesting the firm sold more than nine million of the gadgets in the 2016 holiday season alone.

As the tools appear in more homes around the world and more companies develop add-ons for the platform, users can expect to be able to do a lot more than control their thermostats and start Spotify playlists using its Alexa voice-activated virtual assistant.

Indeed, banking activities may be the next step for the device. D3 Banking recently launched a new intelligent voice banking service for Alexa, which it said will offer a valuable new way for banks and credit unions to connect with customers.   ... " 

Future of Money Newsletter

O'Reilly is offering a future of money newsletter.  They usually do a good job.  This has come up in several think tank interactions lately.  Worth a further look.

Event Readiness Service for Demand

Interesting analytics effort.  We are all, in effect, thinking about how to react to events in our enterprise context.  Demand is a big example, but not the only one.  Response to these events needs to be prioritized.    Analytics can do this.

IBM Debuts Service to Help Brands Prepare for Spikes in Demand
Program Is Aimed at Retailers, Banks and Manufacturers

IBM Corp. on Tuesday introduced a new service called Event Readiness, which is designed to help brands prepare for unexpected -- as well as expected -- surges in online traffic due to  
holidays, special sales and sudden spikes in demand

The product is being offered as part of the IBM Commerce suite of services, and includes software, consulting and analytics. It's aimed at marketing and IT executives in retail, banking, consumer products and manufacturing industries   ....  " 

IBM and Design Thinking

Fascinating piece on design at IBM.     Have never thought of them as design oriented.   More marketing oriented, like my previous enterprise.   Is that changing?     Be careful too, what expertise you hire as design.  Technical design is different from external design.

IBM is banking on design’s ROI

Phil Gilbert on IBM’s deep design roots, change management, and hiring for culture fit. ... 

Companies of all sizes are recognizing that by taking a design-first approach to product development, they can improve profit. I recently sat down with Phil Gilbert, GM of design at IBM, to discuss how he is helping to lead the transformation to a design-first company within IBM. Adopting design as a key corporate asset may seem like a no-brainer, but for a company of more than 350,000 employees, it’s a massive undertaking. IBM hasn’t been quiet about its plans to hire 1,000 designers over the course of five years and embed design in product teams throughout the organization. ...  "