Trends in Banking 2017 and onwards

The changing nature of the relationship between a retail bank and its customers is examined, particularly with respect to new financial concepts, debt and regulation. The traditional image of a bank is portrayed as a physical building a classical Doric portico. This image conveys concepts of service, soundness, strength, stability and security ("five-S"). That "five-S" concept is changing, and the evidence for changes that affect customers directly is considered. A fundamental legal problem associated with those changes is highlighted: a bank is no longer solely responsible for the safeguard of customer monies. A solution to this problem is proposed: banks should be jointly liable with perpetrators of criminal activity in the event of frauds as an encouragement to recognise and mitigate fraud.Comment: Proceedings 29th SASE Conference, Lyon France, June-July 201

Financing of small and medium enterprises (SMES): facilitation through rotating credit and savings associations (ROSCAs) in Lahore

SMEs are the backbone of Pakistan’s economy but they have limited access to the formal sources of finance. According to the SME Development Authority (SMEDA) of Pakistan, 90% of start-ups exit within four years. The current research was carried out to discover the extent of the contribution of Rotating Credit and Savings Associations (ROSCAs) to the SME, explore their weaknesses and to develop measures to transform them into a significant source of SME finance. The study was conducted in the city of Lahore. Purposive sampling technique was adopted to collect the data from 433 entrepreneurs and eight informants. Nearly 90% of the respondents resort to ROSCAs-financing. The ROSCAs system finance the 386 sampled SMEs to the tune of Rs468 million every cycle. The average contribution per SME is Rs1.08 million per cycle. Only 9.8% of the sampled population had obtained formal loans during the last five years. The current study does not support the findings of SMEDA which reported that 80 to 90% of the start-up's exit within the first four years. The majority of respondents expressed fear of failure of ROSCAs is due to fraud or mismanagement and felt that management of ROSCAs by banks can assist in preventing mismanagement or fraud. Laws and procedures for managing cases of dishonoured checks are very weak. Since ROSCAs are extra-legal and un-registered, ROSCAs-related disputes have to be settled out of courts. Furthermore, the concept of Shirkah al-Wujuh was found to be widely practised in the form of ROSCAs for the interest-free (Islamic) financing of SMEs. The recommendations of the current study can be helpful in fortifying the existing ROSCAs system as well as promoting easy and secure access to finance. Moreover, banks can use these findings to position themselves as guarantor and play effective role in the entrepreneur- driven SME finance market

BIG DATA ANALYTICS FOR FINANCIAL FRAUDS DETECTION

Criminals and criminal organizations often make use of companies and other corporate entities to hide their identity, conceal illicit flows of money, launder funds, finance terrorist organizations, evade taxes, create and hide slash funds, commit bribery, corruption, accounting frauds and other financial crimes. These legal entities are frequently organized into complex ownership schemes set up in different countries, and with a “Chinese boxes” structure, in order to make it harder to determine who ultimately controls them and benefits of the illegal conduct. Currently there are a lot of competitors in the market of Financial Fraud Detection but the software that they propose are mainly oriented to supervise and manage the institutions’ internal compliance processes such as the management and transmission of Suspicious Activity Reports (SAR) instead of providing intelligence tools for proactively discovery potential threats and identify the final beneficiaries of illegal operations. Consequently there is a potential for Financial Fraud Detection focused on the on-line, real-time statistical analysis of transactions, operators behaviour, price movements and the use of data mining algorithms that work on heterogeneous sources of big data. After having described the schemes used for executing the three most relevant financial frauds this research proposes a novel approach for the detection of illicit behaviours and suspect transactions. The approach benefits of a multidisciplinary approach for the analysis of the big data streams coming heterogeneous sources such as TV stream, social media and public (official and unofficial) data bases

The Rise of the Fringe Financial Services in Winnipeg's North End: Client Experiences, Firm Legitimacy and Community-Based Alternatives

This report documents research undertaken... to examine the rise of fringe financial services in Winnipeg's North End. Fringe financial services include a variety of financial services such as loans and cheque-cashing that are offered by fringe banks. Although fringe banks are becoming more common today they generally operate on the margin of the mainstream banking and credit union system in Canada. Fringe banks include pawnshops, cheque-cashing firms, payday lenders, rent-to-own firms, tax refund advancers, finance companies and 'white-label' automatic teller machine providers. This report explores client experiences with fringe banks, it examines the issue of fringe bank legitimacy and it develops a model and provides a preliminary feasibility assessment of an alternative model to fringe banks for low- income people