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Financial Crisis Causes More Bankers to Stray From Their Marriages

Posted on December 02, 2009

Here’s a sad commentary on how the financial crisis has affected people’s lives beyond their wallets. According to Reuters, the number of affairs among married bankers has increased significantly due to the crisis.

IllicitEncounters.com, described as a dating website for people seeking affairs (that’s a topic for a whole other discussion), said it has seen a huge increase in the number of financial workers signing up to have affairs after the collapse of the markets last October. Furthermore, “finance” continued to be one of the most represented professional areas on the site.

The site has over 380,000 members in the UK, 20,000 of whom work in financial services. Reuters said IllicitEncounters.com polled 600 male and female bankers and compiled a top 10 list of reasons as to why they sought to have affairs.

According to Reuters, the list shows that “public revulsion for bankers,” possibly combined with a lack of affection at home, was the top reason for having an affair. This was followed by the excitement of doing something risky, escaping boredom, feeding the ego and “one-upping the boys with a trophy mistress.” Working long hours and having long commutes do nothing to help the situation either.

For the entire article, see Bankers having more affairs in recession: website.

One can only hope that as the economy improves, so too will bankers’ marriages.

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The International Bank of Eeeeevil

Posted on February 03, 2009

You give them your money. You trust them. But what if they used your money for something else…?

OK. We all knew this was going to happen eventually and it finally has. Hollywood is taking its first shot at vilifying the world’s banks in the soon-to-be released film The International.

This thriller is set, as the name implies, on the world stage as stars Clive Owen and Naomi Watts try to expose the fictitious International Bank of Business and Credit for what it is--a financier of terror and war. Oh. And the bank will “stop at nothing” to continue its dark dealings. I guess KYC, AML, SARs and OFAC don’t mean much in Hollywood!

And I’m sure there will be some bank tech showcased in the film, such as the wire system. But I think the movie will probably consist of lots of scenes involving someone frantically working at a computer he shouldn’t be using, downloading files he shouldn’t have access to while the evil bank’s henchmen attempt to break down the door to the room he’s in.

Granted, it’s not about bankers’ greed and the credit crisis, but it could still be entertaining. It’s in theaters Feb. 13. Might make a good Valentine’s Day date movie. If you like that sort of thing.

If you're interested in the trailer, check it out at the Internet Movie Database. It's a bit more easy to navigate than the movie's site.

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Visa CEO Loses Credit Card

Posted on December 12, 2008

We’ve all have that heart clenching moment when we realize we lost our credit card (or worse yet, our wallet). It can happen to the best of us, even Visa CEO Joseph Saunders.

According to a report from Reuters, the head of the card giant was on his way to New York to speak at an event hosted by Goldman Sachs, but his card didn’t make it.

So if you’ve recently lost or misplaced one of your credit cards, take heart. It can happen to anyone—even the chief of the largest credit card company in the world. We’re only human.

We certainly hope Mr. Saunders is able to quickly and painlessly resolve the issue.

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Wall Street’s Fading Glory?

Posted on December 08, 2008

I was perusing my usual news sites and ran across this depressing article on foxnews.com. The gist of it is that New York is losing its luster as the financial capital of the world. Now, people have been talking about this for months once we realized the economy was going down the toilet. It’s depressing, but not surprising. I guess there is a grain of truth to this as the independent investment banks fade away or become absorbed by their commercial bank counterparts.

And as if that weren't bad enough, the Associated Press uses the word "decimated" to describe Wall Street once the layoffs pick up steam.

But some analysts believe we haven't seen the end of old Wall Street. One TowerGroup analyst said that this is only a temporary detour to keep themselves afloat and that one day, the investment banks will free themselves of the shackles of their commercial bank overlords--OK, that last part was mine, but that was the basic idea of the Tower expert’s sentiment. Another analyst I spoke to recently from Financial Insights also said not to discount the old freewheeling days. She said no matter how much the government and regulatory agencies tighten their hold over the financial industry, there will always be a few loose cannons on the investment banking side who will somehow find a way to bend the rules so they can develop and sell exotic financial products.

So, will being listed on the NYSE become passé? Will the tough New York stockbrokers become an endangered species? Who knows? But as the author of the Fox News article said, the tourists, at least, continue to flock to the NYSE with their cameras. Somehow, the NASDAQ just doesn’t have that same photo appeal.

New York has been sharing the stage to some degree with the likes of London for years. But as other regions of the world grow in financial prominence, what happens to New York? Is New York through as the world’s financial capital? What do you think?

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A Picture Worth a Thousand Words

Posted on December 05, 2008

With the economy on everyone's mind, the Consumers Union has launched a contest where people can submit and vote on the cartoon that best illustrates the burden of consumer debt in this country.

One cartoon in particular caught BS&T's eye and is probably one many of us college grads can relate to... (It is recommended you not use Safari when viewing this link):

http://www.creditcardreform.org/contest/groups/14

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Fee Income Will Matter More to Banks

Posted on October 29, 2008

Just when consumers thought it was safe to use a foreign ATM, banks decide to raise their ATM fees, according to research by Bankrate.com, the online aggregator of bank rates.

The study found that ATM fees have risen 11 percent this year to an average of $1.97, versus $1.78 last year. And customers should expect to be hit from both sides, says the company. Banks that charge their own customers for using foreign ATMs are also increasing these fees—$1.46 this year compared with $1.25 in 2007. According to Bankrate, 99.2 percent of ATMs have a surcharge.

And ATMs aren’t the only place consumers are being hit. Bankrate also examined checking accounts and discovered that NSF fees have risen yet again. The company says that only twice in 10 years have nonsufficient funds fees not increased. According to the findings, people who bounce a check will pay 2.5 percent more than last year for their negligence, or an average of $28.95.

Bankrate.com surveyed one interest checking account and one noninterest checking account at each of the largest banks and thrifts in 25 large markets to find the latest trends on checking account and ATM fees. There were 247 interest accounts and 226 noninterest accounts surveyed at 249 banks and thrifts in the top 25 metropolitan areas.

This is definitely a sign of the times as banks look to find some means of generating revenue. Falling back on fee-generating services like ATM surcharges and NSF fees are probably the most obvious places for banks to start looking to bring in more cash, so I suppose no one should be surprised by these findings.

On the plus side, with all these bank mergers we’re seeing, unless you bank with a very small or regional institution, the chance of finding an ATM from your particular bank probably will increase. And there’s always that nifty feature of your debit card where you can get cash at the point of sale. Just make sure that pack of gum you buy so you can take out $60 from your account doesn’t cost more than the ATM surcharge!

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Fallout From Fannie/Freddie Continue From Financial Sector

Posted on September 10, 2008

Fallout continues a day after the federal government’s takeover of Fannie Mae and Freddie Mac as the two GSEs face delisting from the S&P 500 and the New York Stock Exchange. Following is a selection of comments from various industry sources on the Fannie/Freddie saga. The long-term viability of the GSEs is a big question mark for many experts. Also, to see more on the technology impact of the government takeover of the GSEs, please read Lessons in Risk Management to be Learned from Fannie/Freddie Takeover.

Financial Insights believes that the take over of Fannie Mae and Freddie Mac by the U.S. government was the right action to take to avert a much larger, longer lasting financial system breakdown for the mortgage industry. These conservatorships are temporary in their impact but what is unknown is the longer term strategy for the industry. Once stabilized, will the GSEs be privatized?... the long term news is how the GSEs will be structured to continue to provide the mortgage funds necessary in a strengthening economy.-- Financial Insights: “Fannie Mae and Freddie Mac Takeover: A Short Term Solution in an Industry With Longer Term Issues”

“Holders of Fannie and Freddie debt are breathing easier. However, no one should assume the take-over is a panacea or without consequences. Hopefully, the take-over will reduce mortgage interest rates and soften the drop in housing prices. However, the mortgage market remains messy.” The question remains as to “whether the government will be called upon to bail out other large ailing entities.” -- Sam Alberts, Financial Restructuring Partner, White Case LLP

“The purchase of additional mortgage-backed securities for the Fannie and Freddie portfolios (up to roughly $150 billion) and for the Treasury (in unspecified amounts) will offset some of the recent fall in demand caused by a pullback of foreign and domestic investors. Thus, the purchases serve a worthy short-term stabilizing role in the mortgage market. However, increasing the size of Fannie and Freddie’s portfolios goes in the opposite direction of the appropriate long-run goal to reduce the scale of these enterprises (however we resolve the public-private problem). Moreover, direct Treasury purchases of mortgage-backed securities are a significant new step toward a larger government role in supplying funds for housing, which may complicate an appropriate long-run resolution of the public-private hybrid problem.” -- Doug Elmendorf, Senior Fellow and Hamilton Project Director, The Brookings Institution

“Because of their implicit government backing, Fannie and Freddie took on excessive risk over the years, becoming two of the largest most complex financial institutions in the world. The Office of Federal Housing Enterprise Oversight simply did not have the tools necessary to control the size and scope of these institutions or to ensure they were adequately capitalized. … Should any taxpayer funding go toward a bailout, I hope my colleagues in Congress and our financial regulators will rethink the current structure of these institutions. The implicit government guarantee created the moral hazard which led to the excessive risk taking. I believe the risk posed by Fannie and Freddie will remain until this problem is addressed.” -- Rep. Ed Royce (R-CA), senior member of the House Financial Services Committee

The housing and mortgage markets are experiencing a challenging period at the present time and all participants in the market are working to ensure mortgage lending is available to Americans seeking financing for a home. To enable the housing market to fully recover, it is very important in the immediate days ahead for the GSEs to continue to work with mortgage lenders to make home loans available to consumers. The Treasury plan will enable the GSEs to meet their obligations and this will help homeowners, the mortgage and housing markets, and the economy. … There should be a serious and thorough debate on the long-term structure and role of Fannie Mae and Freddie Mac in the future. -- The Housing Policy Council, Financial Services Roundtable

The main issue being faced by government officials today is whether it is wise or viable to have U.S. taxpayers support the risky business practices of for-profit companies like Fannie Mae and Freddie Mac. Interestingly enough, Fannie and Freddie do not wish to be completely privatized. They have spent over $170mm on government lobbying activities since 1998. Their preferred status and insider ties to the government have resulted in record corporate profits when times were good and a taxpayer-funded safety net when times are bad. Just because the companies engage in a business that benefits the public, doesn’t mean that they deserve to be fully backed by taxpayers and the federal government.” -- Gibran Nicholas, Chairman, CMPS Institute

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Banks’ IT Budgets May Not Necessarily be in Peril

Posted on September 02, 2008

Maybe InformationWeek’s John Soat has a psychic connection with our Art Gillis. Whatever the case, Soat recently ran a brief but informative piece on our sister publication’s website in which he interviewed Wells Fargo CIO Avid Modjtabai about the bank’s upcoming 2009 IT budget.

Although Gillis’ blog indicated there might actually be IT budget increases at banks this coming year, Soat’s blog showed that although Wells may not plan on pumping more cash into its technology department in 2009, so far, it certainly isn’t planning on removing any either.

Things can change, of course. However, after reading both blogs, it is becoming clear that automatically slashing the IT budget isn’t always the first thing a bank does in order to save some cash in cash-strapped times.

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KYV--Know Your Vendors

Posted on August 26, 2008

When it comes to data breaches, it seems the hits just keep on coming. I ran across this somewhat disturbing story in the UK’s Daily Mail in which a computer was sold on eBay containing the personal information on thousands of UK banking customers from NatWest, Royal Bank of Scotland and American Express.

An employee of the banks’ outsourced data storage vendor, Graphic Data, took the computer and sold it on the online auction site. The Mail article doesn’t mention how this employee got his hands on the PC. However, there is no doubt that someone at the firm dropped the ball. I know some companies sometimes sell old computers to employees—with wiped drives, of course. (My own company used to do this, according to my IT go-to guy, but stopped a couple of years ago.)

It was also unclear in the article whether this data was actually used by thieves. Maybe the eBay seller was just a careless employee? It could have been an accident, but don’t tell that to the thousands of people whose personal information (including signatures!) was on that hard drive. Luckily, the buyer turned out to be an honest fellow so there’s a slim chance that none of the data fell into the wrong hands.

This instance certainly drives home the need for banks to vet technology service providers and to perform thorough due diligence on every one of them on an ongoing basis. In a feature on vendor management I wrote for the August issue, the topic of security and vendors came up. Everyone interviewed for the article basically said the same thing: The vendor/outsourcer must meet the same security standards as your bank because it should be considered an extension of the bank.

When there’s a data breach, the customers won’t care if it was the fault of the bank’s outsourced service provider. The only name they’ll see and care about is the bank’s name. And the bank is ultimately the one that takes the hit.

Hopefully the Mail story will have a “happy” ending and investigators will find that the data wasn’t used at all.

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Banks Aren’t the Only Ones with Aging Systems

Posted on August 11, 2008

It looks like the banks aren’t alone in being held captive by defunct programming languages. A recent article in the New York Times discusses a situation in California involving termination and cuts in the pay of state workers. The massive cutbacks involved some 170,000 people—full and part time, as well as temporary. According to the article, the move was in keeping with a 2003 court ruling that such measures should be taken if the California legislature failed to pass a budget.

Aside from the obvious woes facing Gov. Schwarzenegger around such drastic measures, the California controller claims the state’s payroll system is so outdated that it would take months to make all the changes. That’s because it uses common business-oriented language—good old COBOL.

Maybe the State of California should look to the financial services industry for some COBOL programmers to help them out. Then again, FIs are facing similar problems around aging systems and the retirement of those who know how to handle them and will probably try to hang on to them with an iron grip.

My favorite quote from the article was from a computer science professor at Carnegie Mellon University. According to Prof. David Farber, “There are no Cobol programmers around anymore. They retired centuries ago.”

Perhaps Farber exaggerates a little. Just a little.

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Fate of Business Process Patents In Hands of 12 Judges

Posted on May 09, 2008

As discussed in my earlier blog on patents, the courts and Patent & Trademark Office have been struggling with how to define whether something that is a business method is patentable material. Some feel that business methods are intangible and should not be eligible for patents, unlike a traditional hardware-based patent. Many of the patent attorneys I've spoke with say that the U.S. patent system wasn't designed to keep up with new technologies, such as software and business processes, and that is why we are seeing so many problems around these kinds of patents.

This note arrived in my email courtesy of Bradley Wright, an attorney with the firm Banner & Witcoff Ltd.:

On May 8, 2008, the U.S. Court of Appeals for the Federal Circuit held a rare hearing before all 12 judges to determine whether process patents should be limited. The appeal was from the U.S. Patent and Trademark Office (PTO), which had rejected a patent application for a method for managing consumption risk on the basis that it did not involve anything tangible. The patent applicant had urged the court to allow patents on processes as long as the process was useful and had a practical application. Although some of the judges appeared concerned about limiting process patents in a way that would eliminate all software patents, others seemed concerned that patents were being granted for intangible things such as methods of arranging financial transactions. The case may have wide-ranging implications for the financial services, software, and consulting industries, which often seek process patents in a non-manufacturing setting. A decision is expected within the next few months.

So things are moving along in the courts. Not only does the financial services industry have a stake in these proceedings, but so too does the high tech industry. If the judges rule that these so-called intangible processes are ineligible for being patented, what will that mean for innovation going forward? Will inventors arbitrarily add on a piece of hardware to their patent applications to skirt the intangibility issue? I am hopeful that a compromise will be reached. It's hard to imagine the implications if it is decided that business processes are absolutely not patentable.

Risk Professionals Will Continue to Thrive in Risky Markets

Posted on May 02, 2008

If you're a risk professional, you're in luck. According to the fourth annual Professional Compensation Survey by risk management executive search firm Risk Talent Associates (RTA), today's risk professionals are taking home heftier paychecks. The study looked primarily at risk pros in the capital markets space and found that average total compensation increased by 7 percent in 2007 over 2006, with an 8 percent compound average growth rate (CAGR) since 2003. The survey notes that compensation for managers specializing in market risk or credit risk is almost equal, and only slightly less than compensation for those focused on enterprise risk.

The RTA says the main driver for the pay hikes tend to be increased bonuses, with 11 percent growth in cash bonuses and 6 percent growth in noncash bonuses for 2007 over 2006. New risk managers showed the highest growth rates in total compensation (professionals with less than six years of experience) and less senior titles (Analyst, Associate, Senior Associate and Manager).

So despite all the turmoil in today's credit markets, risk managers are being held in high regard by firms. Michael Woodrow, president of RTA, said in a statement, "It does not appear that risk managers took the fall for issues in the markets and related losses at large companies. Firms recognize that a strong risk management team will sound the warning. Many of the firms hit hard by the sub-prime fallout could have averted major issues had the most senior business managers followed the advice of the risk managers."

I recently spoke with David Rogers, global product marketing manager for risk with SAS, for an article I wrote for the June issue in risk tech spending among banks. He, too, believes that risk professionals will be in high demand going forward. Banks continue to embed risk into their cultures, he said, partly because of initiatives surrounding their Basel preparedness efforts. "Banks are also building in an education element to help staff understand their roles in organizational risk. They're showing staff that certain actions have an impact on the bottom line."

But even beyond this, Rogers says the universities are getting in on the risk education act. "Colleges are bringing risk into their curriculum as a specific topic," he says, adding that SAS software is being used in a number of universities for courses that deal with risk, such as North-West University and North Carolina State University. "If you have this education, you'll be in demand. Salaries are very high," says Rogers.

He does, however, say that one doesn't necessarily have to be strictly a risk professional. Rather, financial institutions and others will seek well-rounded individuals with enough business savvy so that when they are dropped onto a business unit, they can better understand the business aspects of a given situation.

David Howard-Jones, a partner with Oliver Wyman who was interviewed for the same story as SAS' Rogers, says that banks will look to spend more money on improving their risk management talent pool. "Partly because of Basel, risk management teams have gotten bigger. Now is the time to consolidate those teams and become more expert," he says.

In light of these developments, perhaps there is a silver lining to the credit crisis and the risk managers can redeem themselves and their profession.

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NCR In Row with Former Exec Over Trade Secrets

Posted on March 25, 2008

In my usual morning perusal of news items, I ran across this post from The Bellwether Daily, a blog that proclaims itself the source of "Midwest news they seem to lose," "they" being the mainstream news media. In it, blogger Bill Sloat describes a lawsuit Dayton, Ohio-based NCR has filed against a former employee, now at Hewlett-Packard, around trade secrets. NCR maintains that the ex-vice president of the company who left NCR for HP intends to leak information pertaining to the ATM giant's financial services practice and other key areas.

In some cases, this data was related to projects in which HP was directly competing with NCR. Now NCR is seeking a preliminary injunction in Dayton federal court to bar the former executive from revealing these trade secrets to her new employer.

NCR claims the former exec downloaded sensitive documents off her NCR computer to multiple removable storage devices as she was set to change jobs. According to the article, earlier this month, U.S. District Judge Thomas M. Rose granted a temporary restraining order that restricts some business-related activities by Diane Warner, the executive at the heart of the controversy.

This situation speaks directly to a piece I wrote that will run in our April issue on patents and intellectual property. In it, I speak to a variety of sources, including patent lawyers from some top firms, about the issues that financial institutions face when it comes to not only applying for and defending patents, but also in protecting their intellectual property/trade secrets.

It turns out there are actually a variety of technology measures that companies can implement to monitor the flow of sensitive information in and out of their system. In this case, "sensitive information" refers not necessarily to customers' data (Social Security numbers, etc.), but to things like banks' business strategies and proprietary technologies. However, all the experts I spoke to seemed to agree that the No. 1 measure that banks and others need to take to protect their secrets are non-compete/confidentiality agreements. These should be applied not only to the developers who are usually responsible for "inventing" the banks' in-house applications, but also to the executives who are involved in business strategizing and product development. This, say the attorneys I spoke with, should be done during the on-boarding process so that the new employee has a clear understanding of what belongs to the company.

This is simply a best practice for any business. However, one attorney indicated that companies have to also remember to periodically update these non-compete agreements in order to have a more solid defense against information leakage.

Of course, nothing ever protects 100 percent, and this is especially true of that knowledge we contain in our minds. Contrary to what the spy movies tell us, there's no erasing what's in the brain.

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Paper Statements Still Offer Marketing Opportunities for Financial Institutions

Posted on March 20, 2008

With all the talk of "green" this and "green" that, it's interesting when a figures from a survey such as the one by InfoPrint Solutions Company, a joint venture between IBM and Ricoh, show that paper is still "in" with consumers. Granted, the report might be a little self-serving. InfoPrint is, after all, a printer and software solutions company. However, I still think the numbers are worth a look.

Zoomerang polled 1,000 North American consumers on InfoPrint's behalf. It found that 57 percent of those surveyed actually preferred to receive a paper statement from their financial institution and other companies every month. Card companies were the leaders in mailing the statements, at 65 percent, according to respondents.

InfoPrint concludes, aside from the fact that people aren't quite ready to completely jettison paper statements, that banks continue to miss the boat when it comes to marketing on statements. Statement-based promotions have been discusssed in the industry for years. Do you print directly on the statement or do you place inserts in the envelope in which the statement is mailed? Personally, I dislike statement inserts. They're usually pretty meaningless to me and I just wind up throwing them out. Apparently the people who took the InfoPrint survey agree with me. Eighty-six percent said they have never purchased a product or service after receiving a separate promotional document with their monthly statements. A further 40 percent said the inserts that accompany their monthly communications are always impersonal and irrelevant.

The study suggests, then, that financial institutions should consider including more personalized coupons printed on the statement itself. I know when I get my Lord & Taylor statement that they include a 15 percent coupon that I can use for my next purchase. That tact has certainly been effective with me! And 64 percent of the respondents to this survey said they too would be more likely to use the coupons and felt these personalized marketing materials would encourage more brand loyalty.

So it sounds like this might provide some more food for thought for banks. Of course they'll still want to try to encourage customers to use e-statements to help cut down on costs, if nothing else. But, like checks, there will still be a chunk of customers who continue to use paper statements. And what's to say you can't include coupons on e-statements? In fact, this is probably being done today.

I'm curious to hear your thoughts on the usefulness of promotional material in paper statements versus e-statements. Leave a comment or drop me an e-mail.

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In Case of Emergency, Use Vault Kit

Posted on February 28, 2008

Sometimes I like to share with readers some low-tech solutions to potential problems at banks. Take vaults, for example. What happens if someone—employee or customer—gets locked inside? Sure, there are procedures at banks to ensure something like that doesn't happen. But there is still that possibility. Well, Diebold is now offering "vault survival kits" for financial institutions. The kits are one of those "just in case" things that may come in handy one day.

According to Pamela Barron, director of DieboldDirect, "The vault survival kit includes comfort items as well as tools to gain access to vault locking mechanisms from the inside with guidance provided by someone outside of the vault."

The kit can be hung or placed inside a vault and includes:
• Shake flashlight
• Small claw hammer with a variety of screwdrivers in the handle
• #2 Phillips screwdriver
• Pliers
• Bottle of water
• Granola bar
• Packet of tissues
• Mini first aid kit
• Vault kit bag with emergency contact card
• Thermal blanket

Things happen, whether a robbery where people are forced into a vault or a the locking mechanism malfunctions on the door. It seems like something such as the vault kit could very well earn its keep in a bank. But hopefully, it will never have to be used!

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ING to Shutter Its Presence in Second Life

Posted on February 13, 2008

It looks like Dutch banking giant ING will be joining the legions of smaller (and in some cases, somewhat shady) financial institutions in leaving the virtual world of Second Life. However, unlike some of its counterparts in the virtual world, the move is not the result of financial insolvency. Rather, ING says the decision was driven by its desire to better concentrate on its acquisition of Postbank.

The bank will shutter its cyber doors by March 1 after being in operation for one year. According to a post on its Second Life site—Our Virtual Holland—developing a virtual world isn’t quite conducive to ING’s acquisition plans. It does, however, seem to hint that it might return one day.

ING’s departure from Second Life may be an indication that banks are still trying to figure out just how to grasp onto Web 2.0 services. It’s a tricky concept to master and is still a relatively new area for financial institutions. There are efforts other than those involving Second Life around Web 2.0 that have seen mixed results, such as blogs or pages on social networking sites like MySpace or Facebook. Banks still are learning.

Personally, I’ve always been skeptical of FIs’ Web 2.0 initiatives. Where’s the need? Are they trying to attract the next generation of customers? I certainly don’t think older generations (30 years-old, plus) will flock to a bank’s blog (unless it’s to complain about something). And really, unless you’re a marketing genius, how can you make a bank’s Facebook page “cool” enough for it to become a destination for Gen Y?

Feel free to share your views. Is Web 2.0 worth banks’ time?

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Security at the Branch Level Often Relies on Old Fashioned Measures

Posted on February 11, 2008

I recently ran into this interesting item while perusing my usual news sites. In short, the Florida Bankers Association wants to encourage its members to institute a policy where customers cannot wear sunglasses, hats or hoods when entering a branch for service. This is the FBA's latest effort in helping member banks ramp up security at the "store" level after a spike in bank robberies in the state.

The "No Hats, No Hoods, No Sunglasses" program is not mandatory. Those banks that do participate would posts signs in the lobbies of their branches asking customers to remove this kind of apparel before transacting business. If they refuse, they would be directed to an area with more security or a more experienced teller.

The FBA points to statistics that illustrate the majority of bank robberies involve criminals donning one of the three offending items. A similar program in Missouri may have helped spur a decline in bank robberies there, according to the article.

I just find this interesting because in spite of all the technology we have at our disposal today, sometimes the simplest, non-tech measures are still called upon to keep banking and banks safe for customers and employees alike. Could more technology help foil branch robberies? Are "commonsense" measures such as the "No Hats, No Hoods, No Sunglasses" program the answer to some missing link in branch security? Or will this initiative be akin to what happens with online banking security where banks have to weigh convenience over security in many cases?

I would be curious to hear your thoughts on such programs. Feel free to leave a response in our "comments" area or email me.

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Pulling the Plug On Banking In Second Life

Posted on January 11, 2008

A little while back, I blogged about the financial services community in the virtual world of Second Life, the brainchild of Linden Lab. These banks and brokers deal in Linden Dollars, which is the money of Second Life. According to wikipedia, although the exchange rate between real dollars and Lindens does fluctuate, there are approximately 270 Lindens to one U.S. dollar.

Many questioned the viability (and legality) of the financial services providers operating there. Second Life has come under fire for allowing firms with somewhat questionable business practices to set up shop in the cyber world. There was talk about regulators stepping and now it looks like things have finally come to a head. According to an article on Techcrunch, "Linden Lab has announced that virtual banking within Second Life is to be banned effective January 22 after receiving multiple complaints by Second Life residents scammed by bank operators." (I especially enjoyed the comments left at the bottom of the article by some of the readers of the Techcrunch piece.)

In light of these developments, there has been a run on the remaining banks in Second Life as customers rush to get their money back.

Although this news doesn't directly relate to bank technology, it does deal with banks in a technology-based virtual world. It brings to mind the Web 2.0 issue and how financial institutions can exploit this new concept. There are some "real" banks with branches on Second Life. However, they took the more cautious (and probably smarter) route and have just stuck to creating a community/affinity destination in the virtual world. However, if they did decide to offer real transaction services in Second Life, I imagine the result wouldn't been quite as disastrous. Accountability is so important in financial services. I think the Second Life example just drives home this notion. These so-called banks might have thought they were immune to acceptable banking practices just because they existed outside the real world. Obviously, cyberspace is a poor shield for shady business. There will always be scammers online, but it's good to know that at least some of them are getting their just desserts.

But don't blame the banks entirely. You'd think people would be a bit more sensible about where they put their money, virtual or not.

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Banks Take Steps to Cut Their Environmental Impact

Posted on December 17, 2007

Two new reports, both issued within the last week, detail methods that financial institutions could employ to lessen their environmental impact. While many banks are starting to take steps to become greener, lack of regulatory guidance leave many institutions unsure of what paths to pursue and where to start. TowerGroup and Gartner offer some advice for those looking for some direction.

A new report from TowerGroup says, sustainability initiatives — environmentally friendly and socially responsible actions — are growing as a market force among financial services institutions in the United States.

Emerging demand from customers and employees is helping push financial institutions to forge a strategy around incorporating products and services that are environmentally friendly. But, since there are no clear regulatory mandates, banks are still unclear about which methods they should pursue.

A number of leading financial institutions have already adopted some sustainability measures, according to TowerGroup. These initiatives range from sourcing power from "green" suppliers or affiliating themselves with associations such as the U.S. Green Build Council, to offering "green-friendly" products to the marketplace (which includes a growing push to reduce paper statements and increase online account access by customers).

Towergroup says, inside the financial institution, sustainability initiatives must be shaped around key internal dynamics, such as corporate culture; operational processes, such as recycling and telecommuting; and image/marketing, such as the "branding" of sustainable initiatives. As these efforts broaden and deepen, the sustainable financial services enterprise must also address and engage three external constituencies: suppliers; regulators; and customers.

In another recent report, Gartner has outlined three steps that can help organizations reduce their network environmental footprint:

1. Don't overbuy
Gartner advises organizations not to let themselves be influenced by vendors into buying networking technologies they don't require 'just in case' or just to protect 'use it or loose it' budget cycles. However, adding additional network functionality can sometimes reduce environmental impact elsewhere in IT.

2. Minimize the number of layers and devices
The blind application of 'established design practices' in networking can result in the over layering of devices and subsequent performance bottlenecks. Technological advances in many areas mean that the mountains of networking boxes in most networks today can be collapsed and replaced with a far smaller number of devices.

3. Consider power consumption of networking devices during product selection
In addition to making power efficiency one of the new product selection criteria, power efficiency can become a factor in decisions regarding the replacement of aging network equipment. In the longer term Gartner expects to see the evolution of new more energy efficient networking technologies such as 'Energy Efficient Ethernet.'

Comments

The Greening of Financial Services

Posted on November 07, 2007

Lately we've been hearing more news about "green" banking initiatives than you can shake a stick at. Most of what has come across my desk have been either panicked warnings and dire predictions about what will happen with corporations don't become more environmentally friendly, or more concrete news, such as Sovereign Bank's efforts to move customers to e-statements or NACHA's announcement that it is forming a "green coalition."

Finally, I saw something from Gartner's Richard DeLotto, principal research analyst in the financial services group. He maintains that pressure from stakeholders will drive financial services institutions to adopt green practices, especially on the IT side.

"Environmental issues will rise up on political, media, enterprise, investor and consumer agendas worldwide through 2012. The financial services industries (FSIs) will not escape this shift in stakeholder focus, and their IT departments will bear the brunt of the impact. Many consume half or more of their firms' total energy purchases, and few have been given the resources to replace older technology that, while operating adequately, operates very expensively," said DeLotto.

DeLotto does bring up some valid points that have implications beyond "good corporate citizenship." Being energy efficient saves money and ultimately has an impact on the bottom line. Just what it will take in terms of investment to reach that point, however, is up for debate. I suppose in the very long-term the upgrade would be worth it.

For now, DeLotto notes, being green is voluntary and sometimes gets shunted aside since banks have other high-priority items on their to-do lists, like compliance efforts, core system upgrades (this could actually tie into being more energy efficient) and dealing with the lending crisis. But will this change? Will there be a mandate some day? The way things are going politically and seeing how the environment is the zeitgeist of the day, I wouldn't be surprised if regulators did pass some kind of edict to make FIs greener. Look at Australia, for example. They're outlawing the use of incandescent light bulbs, even in private homes, in favor of more efficient fluorescents bulbs (We haven't heard much about how they're going to dispose of all the mercury when those fluorescents do finally burn out.).

By way of summary, DeLotto's key findings and recommendations for FIs thinking of going the green route include:

Key Findings
• Green IT consists of optimizing processes to reduce total resource consumption and waste output. This makes sound business sense in itself, and should ideally form part of the core of any IT manager's activity.
• Greening the IT department is only part of the pressure a bank will face to support environmentally sustainable operations. As prices rise, every aspect of the organization will be "simplified, streamlined and rationalized" to reduce its resource consumption.
• The areas where the greatest overall effect can be made the fastest are at the desktop and with client devices.
• Regardless of the soundness of the underlying science or economics, "greenism," environmental sustainability and skyrocketing resource costs are firmly emplaced trends that must be addressed by strategic planners.

Recommendations
• Understand that the single most important resource for financial services firms to conserve is their reputation. Build public relations functions into your greening programs from the start.
• Do not buy from IT equipment vendors without audited take-back and disposal programs.
• Start cutting costs at the desktop; however, serious rethinking about data center design and operations, as well as core processing system design based on cooling and energy use reduction issues, should begin no later than midyear 2008.

Comments

Cybercrime Enforcement Needs More Teeth

Posted on August 03, 2007

By Maria Bruno-Britz, Bank Systems & Technology

Some people just don’t give up. Everyone knows just how dangerous things are these days in terms of cybercrime. If you’re a bank, you’re target numero uno for determined hackers.

For instance, security services provider SecureWorks reported that hacker attacks on its bank clients rose a whopping 81 percent from last year. If you’re a credit union, you’re only slightly safer. SecureWorks said these clients faced a 62 percent rise in hacks in 2007. In terms of raw numbers, the average number of hackers launching attacks at each of the company’s bank clients is 1,462 up from 808 last year. For credit unions, the firm now blocks 1,799 hackers per credit union per month, compared with 1,110 in 2006. On second thought, maybe the credit unions don't have it so good. SecureWorks has 733 bank clients.

Granted, these are figures from only one source, but on a macro level, they show the dogged determination of criminals today. It’s almost quaint to think of the days when a bank heist consisted of a bunch of guys dressed in black dynamiting a safe open. We still hear about these attempts once in a while. But like everything else these days, the world of bank robberies has become far more convenient—thanks to the Internet. Perps can make millions from the comfort of their own desks. Plus, they stand less of a chance of being caught (never mind being prosecuted) since many of these attacks come from overseas.

If only law enforcement officials had the tenacity of these cybercriminals to make cybercrime an offense with real consequences. Perhaps I shouldn’t say that since the authorities can only work with what they have. The directive for tougher cybercrime laws needs to come from the government level and they need to be agreed upon internationally. For too long, cases involving hacking and the like end up with the criminal receiving a virtual slap on the wrist. And that’s if they can track the person down to begin with! Some of these people are funded not only by organized crime, but by hostile governments with deep pockets and a vested interested in allowing chaos to invade our financial system. It might start with individual bank hit here, another there. The numbers add up though. If tougher laws aren’t enacted on a global basis, we’ll only see the numbers increase and as the number of hacking attempts increase, so too do those hacks that are actually successful.

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Friday feature on HSAs...

Posted on January 30, 2006

"Bank of America, J. P. Morgan Chase, Fidelity Investments and hundreds of others are hoping to capitalize on the latest wrinkle in medical care paid by consumers: health savings accounts ..."

Health Savings Accounts Attract Wall St.
New York Times (registration required)
January 27, 2006

HSAs are slated to be one of the key themes in the State of the Union speech.

Gee, I wonder if it will become a partisan issue.

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Sad Sunday story...

"On the afternoon my mother died, she left work early. Her day as a computer programmer at Chase Manhattan Bank had skidded to an abrupt stop courtesy of a systemwide computer failure, and all employees got the afternoon off."

...

Two Decembers: Loss and Redemption
New York Times (registration required)
January 29, 2006

Comments

Taking A Stand...On What?

Posted on January 26, 2006

True, some bankers are willing to take a stand on social issues such as the potential abuse of eminent domain. But there's a real leadership gap when it comes to looking at the big picture — social and environmental sustainability in lending.

Watchdog group BANKTrack rated 39 banks on the basis of 13 categories: human rights; labour rights; indigenous people; climate and energy; dams; biodiversity; forests; fisheries; extractive industries; sustainable agriculture; chemicals; transparency and reporting by the clients; and environmental and social management systems.

The results:

The highest overall average score, achieved by ABN AMRO and HSBC Group, was a 1.31, which if translated to a letter grade is a D+.

Robert Napier, WWF-UK Chief Executive, said:

“This report shows that whilst there has been some good work done by a few of the banks to develop policies the whole sector still has a long way to go. The lack of transparent policies can not only result in over-exploitation of environmental goods such as fisheries and forests but also in increased financial risk to the banks, resulting in transactions being jeopardised.”

Search engine Google makes concessions to the Chinese government, and it makes the front pages of every business newspaper. But banks? A different (and lower) standard seems to apply.

BANKTrack press release
Banks failing environment and social standards

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BS&T Classic

From the McKinsey Quarterly, a "Web exclusive, January 2006" titled:
Rethinking wholesale-banking operations (registration required)

The main ideas:
Since "no more than 10 to 15 percent of all back-office activities" support specific product lines, banks should create shared services organizations and "centers of excellence." They should also move support staff away from "high cost metropolitan locations such as New York and London." At the same time, McK also advises that "the front and back offices work together earlier in the product-development cycle — even during the initial design phase."

The footnote:

This article was adapted from the original version, published in McKinsey on IT, Number 2, Spring 2004.

If the fabled McKinsey & Co. can repurpose content from Spring '04, then so can Bank Systems & Technology! Here's the cover story and related features on outsourcing from the two-year-old-but-still-relevant March '04 issue:

Pump Up The Volume ICICI Bank achieves exponential growth at fractional cost.

Patriots: Will the Winning Streak Continue?
The JPMorgan Chase-Bank One merger has become a bellwether for IT outsourcing.

TransAtlantic Farms Out Check Images
Miami bank's courier costs melt like a snowball in South Beach

United States' Secret Weapon Revealed!
Offshore outsourcing can help banks in global competition, if they dare to use it.

CMM for Everyone
Banks should scale the CMM curve, especially when outsourcing IT.

I hope you find something of value for you in our "BS&T Classic" collection. Enjoy!

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BB&T Takes Stand on Eminent Domain

Posted on January 25, 2006

Taking a stand on last year's controversial Supreme Court ruling, Winston-Salem, N.C.-based BB&T won't lend to developers building on land taken from private citizens through the power of eminent domain.

“The idea that a citizen’s property can be taken by the government solely for private use is extremely misguided, in fact it’s just plain wrong,” said BB&T Chairman and Chief Executive Officer John Allison.

Read the AP article. (via NYTimes)

Read the release.

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Arizona Dreamin'

According to the FTC:

The major metropolitan areas with the highest per capita rates of reported identity theft were Phoenix/Mesa/Scottsdale, AZ; Las Vegas/Paradise, NV; and Riverside/San Bernardino/Ontario, CA.

The mythical conception of the American West is a place where you go to reinvent yourself, to craft a new identity. I guess some people are taking that literally.

FTC Releases Top 10 Consumer Fraud Complaint Categories: Identity Theft Again Leads the List
Read the release.

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Banks not only ones who don't trust Wal-Mart

Posted on January 20, 2006

Reuters says that the FDIC intends to do a bit more investigating before hearing Wal-Mart's bid to open a bank, at the behest of a bipartisan group of pols.

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Model Risk

Posted on December 14, 2005

Does your bank rely too much on financial modeling in risk management?
If so, you may be vulnerable to "model risk." And no, that's not the risk of being hounded by paparazzi.

For more, read the FDIC's article.

Tip of the hat to Goodwin Proctor LLP's "Financial Services Alert" newsletter.

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MasterCard-Powered Banks?

Posted on December 02, 2005

There has been some speculation MasterCard might expand into information technology services — taking it farther away from its financial services roots.
MasterCard IPO Strategy Seen Priceless in Bailing Credit-Card Brand Out of Legal Trouble (AP)

My bet is that they start offering full-service bank operations outsourcing. With their warchest from the IPO, they could buy one or more of the major core systems vendors and lock up some real business.

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What, Me Worry?

Posted on November 29, 2005

One of these days I'd like to pick up the paper and read an article about how there was a crisis averted due to superior long-range planning by a government agency.

In the meantime, we get the GAO describing the inability of various government agencies to come to a consensus on who should be in charge of delivering expertise in anti-terrorist-financing to countries that need our help.

I truly hope they figure it out before FEMA gets involved.

The NY Times story:
U.S. Lacks Plan to Curb Terror Funds, Agency Says
http://nytimes.com/2005/11/29/national/nationalspecial3/29terror.html

The GAO study:
Better Strategic Planning Needed to Coordinate U.S. Efforts to Deliver Counter-Terrorism Financing Training and Technical Assistance Abroad
http://www.gao.gov/new.items/d0619.pdf

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Two-Factor Authentication? Only on paper...

Posted on November 04, 2005

Security firm F-Secure has the details of the phishing attack on Swedish bank Nordea, as well as several other informative entries in their security blog.

But in the debate about whether two-factor authentication, as mandated by the FFIEC in its recent guidance, will prove at all effective in actually stopping phishing, I believe that the Nordea example is a weak example of the vulnerability of the approach. Yes, there are ways to defeat two-factor authentication. But one of the least secure approaches to two-factor authentication is with a paper scratch-off ticket.

Compared with a token device that generates a changing code every 30 seconds, the Nordea solution was not particularly hard to beat, as it's just another password (albeit one that's hidden until use). To defeat the VASCO approach, for example, the hacker has to ride shotgun on the transaction through a Trojan horse or some kind of man-in-the-middle attack.

Just wanted to point that out for those of you evaluating which security vendors to use in order to comply with the FFIEC deadline.

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Fraudsters foiled!

Posted on October 31, 2005

Hey, chalk one up for the good guys.

http://www.finextra.com/fullstory.asp?id=14451

A small victory in the fight against credit card fraud is better than none.
Of course, this will probably only slow down the crooks, not stop them completely.
Any thoughts?

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Podcasts for Bankers

IBM's banking industry leaders Mark Greene and Rusty Wiley have been on the road talking about their vision for the industry. Now, you can take their viewpoints on the road using your portable digital audio player with their latest podcast.

I sense the emergence of a media trend...

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Today on the News Show

Posted on October 19, 2005

My colleague Chris Murphy reports on the move to two-factor authentication in today's episode of the News Show.

Comments

Translated from the Greenspanese...

Posted on October 12, 2005

From Greenspan's speech to the National Italian American Foundation:

Conceptual advances in pricing options and other complex financial products, along with improvements in computer and telecommunications technologies, have significantly lowered the costs of, and expanded the opportunities for, hedging risks that were not readily deflected in earlier decades. The new instruments of risk dispersal have enabled the largest and most sophisticated banks, in their credit-granting role, to divest themselves of much credit risk by passing it to institutions with far less leverage. Insurance companies, especially those in reinsurance, pension funds, and hedge funds continue to be willing, at a price, to supply credit protection.

These increasingly complex financial instruments have contributed to the development of a far more flexible, efficient, and hence resilient financial system than the one that existed just a quarter-century ago (right before Greenspan took office in 1987). After the bursting of the stock market bubble in 2000, unlike previous periods following large financial shocks, no major financial institution defaulted, and the economy held up far better than many had anticipated.

If we have attained a degree of flexibility that can mitigate most significant shocks--a proposition as yet not fully tested--the performance of the economy will be improved and the job of macroeconomic policymakers will be made much simpler.

Translation:
Chances are, the banking system has everything under control, so don't worry about my successor even if you've never heard of the person before.

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Rising Financial Peril

Posted on October 06, 2005

Wall Street Journal article about the "rising financial peril" faced by storm victims.

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The Toughest Job in Banking

Posted on October 05, 2005

Here's a New York Times story about Liberty Bank and Trust, which is trying to recover from Katrina, as well as the steady depletion of its assets as customers withdraw their savings.

Comments

Stop Making Cents

Bank of America Offers Round-Up Savings Account

Source: Reuters.com

If you sign up for Bank of America's new service, every time you charge something on a debit card, they'll round up to the nearest dollar and put the loose change in a savings account. Now if they only rounded up to the nearest $100, we would have a fighting chance of increasing our savings rate to the point where we wouldn't have to borrow money from abroad to finance our profligate lifestyles.

Now if you'll excuse me, I have to book my next European vacation, make dinner reservations for tonight, and show those online punks who's the REAL king of Texas Hold' Em.

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Yikes -- Wall Street Under Water?

... an 1821 hurricane lifted the tide 13 feet in an hour, with the East and Hudson rivers converging over lower Manhattan as far north as Canal Street.
Hurricane in NYC Could Happen, With Subways and Wall Street Flooding and Millions Evacuating

Between terrorism and storms, I'm not sure whether to buy a bunker or build an ark.

Comments

It's for you....

Posted on October 03, 2005

"I had this woman on the phone telling me that I was not only a deadbeat, but a pimp, too."
- Paul Fairchild, identity theft victim

New York Times, Oct. 1, 2005
For Victims, Repairing ID Theft Can Be Grueling

Yeah, I hear that all the time.

Comments

Treasury Says, "Go Direct!"

Posted on September 30, 2005

The U.S. Department of the Treasury and the Federal Reserve Banks, as part of the Go Direct campaign, will begin a national television advertising campaign on Oct. 4 to motivate Social Security and Supplemental Security Income (SSI) recipients to switch to direct deposit. The ads will air for three to four days a week around the beginning of each month - the time when many people get their federal benefit checks in the mail. The ads will be on a variety of cable networks including CNN, Fox News, Lifetime, Game Show and several others.
http://godirect.org/

Instead of spending taxpayer dollars on an ad campaign, why not simply pay people to switch? Or if that's unfair to people who already accept direct deposit, start assessing a fee for receiving a paper check.

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Deep in the Heart of Gandhinagar

"Now I know Texas like I know Gandhinagar"
- Madhavi Patel, call center employee

Hot Line for Hurricane Rita Victims Rang at India Call Center

Thanks, pardners!

Comments

Coming Soon to an Informercial Near You!

Posted on September 29, 2005

Do you have a lot of loose change lying around the house?
Don't want to spend time putting it into those pesky coin sleeves?
No "Coinstar" machine at your local grocery store?

Then this service is for you. Just pack up your coins and mail them to Fayetteville, Arkansas, where they'll count the coins for you and send you a check within 7 to 10 days!

You can then use the money to buy comic books, so that you can assess the relative riskiness of underwriting life insurance policies for various superheroes.

Online Coin Counter Launches Today

Cashforchange.com, a New Web-Based Coin Counter, Makes it Easy for Users to Gather Their Extra Money and Exchange it for Cash

FAYETTEVILLE, Ark., Sept. 26 /PRNewswire/ -- An online coin counter has been created to make it easier for consumers to exchange their extra money for cash.

Starting September 22, 2005, Venture Publishing, a Fayetteville-based Internet company, rolled out its latest launch, www.cashforchange.com, in a testing phase. The website provides directions to customers who want to get rid of their pennies, nickels, dimes, and quarters. Customers can then ship their coins via UPS, FedEx, or the USPS to a central processing facility, where the change will be counted and sorted. In return, the customer will receive a check within 7 to 10 days for the full amount of the change, minus 8.5 percent in processing fees. Cashforchange.com will roll out a full-scale launch of its coin counter in October, advertising nationwide. The company also has plans to make shipping easier, providing discount shipping rates and prepaid shipping labels.

Cashforchange.com is the first website of its kind, creating an easy, simplified means with which to avoid the hassle of sorting change and locating a bank with which to exchange the coins for extra money.

Approximately 85% of all Americans have large stores of change lying idle in piggy banks and coin jars. The vast majority of these Americans would like easy access to this untapped resource, but they lack to time to sort, count, wrap, and roll their change as required my most banks.

The amount of extra money lying idle is not insignificant. It's estimated that several billion dollars sits gathering dust in American homes.

"We estimate that the average American has between $100 and $500 in idle loose change," says Paul Davidson, COO of CashforChange.com. "Harnessing the power of the Internet, we have made a process that used to take hours into a simple 5 minute task."

Source: PR Newswire

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Life Insurance for Comic-Book Characters

Asked to assess the life insurance needs of five fictional characters, Americans believe superheroes Batman and Spiderman have much greater needs than cartoon parents Fred Flintstone and Marge Simpson.

Only 18 percent answered "none of the above/don't know," a category combining those who realize that fictional characters do not need life insurance with those who simply can't decide whether Batman or Marge Simpson face greater risks.

I would guess that "crimefighting" would fall outside of the policy coverage anyway, and it would be really hard for Bruce Wayne's estate to collect.

Click the link to read the release for yourself...

Sep 28, 2005 13:07 ET

Holy Cow Batman! Americans Think Superheroes Need Life Insurance More Than Moms and Dads; Insurance Expert Disagrees

National Survey Illustrates Common Misconceptions Contributing to Crisis of Underinsurance

WASHINGTON, Sept. 28 /PRNewswire/ -- Asked to assess the life insurance needs of five fictional characters, Americans believe superheroes Batman and Spiderman have much greater needs than cartoon parents Fred Flintstone and Marge Simpson.

Insurance expert David F. Woods, CLU, ChFC, president of the Life and Health Insurance Foundation for Education (LIFE), which sponsored the survey as part of Life Insurance Awareness Month, says these findings suggest that many Americans harbor misconceptions that prevent them from getting the financial protection their families need.

"It's clear that confusion exists about the basic reason people need life insurance," says Woods. "If your loved ones stand to suffer financially upon your death, you need life insurance. Whether you're a superhero or a super-parent really misses the point because no matter how dangerous your job is, you never know what tomorrow will bring. If someone depends on you, it is imperative to make arrangements now that ensure they will be taken care of if you were no longer there."

Survey Findings

Conducted by KRC Research between August 11 - 14, 2005, the survey asked 1,014 Americans above the age of 18 to consider five fictional characters and select the one they believe has the greatest need for life insurance. Here's how consumers weighed in, along with expert assessment by LIFE president David Woods:

- 28% chose Spiderman, an unmarried freelance photographer with an elderly
aunt he supports.
David F. Woods' Reaction: "Peter Parker probably needs life insurance
to ensure that if his superpowers ever failed him and he died, his aunt
could stay in their home and be cared for."

- 18% chose Batman, a wealthy bachelor.
David F. Woods' Reaction: "Unmarried and quite wealthy, Batman doesn't
have anyone who depends on him financially and therefore probably
doesn't need life insurance."

- 16% chose Fred Flintstone, a married father with a young child.
David F. Woods' Reaction: "Fred, the primary breadwinner of the
Flintstone family, has a pressing need for life insurance to ensure that
Wilma and Pebbles could maintain their standard of living if he were no
longer able to provide for them."

- 15% chose Harry Potter, a teenager and student.
David F. Woods' Reaction: "A full-time student with no siblings or
parents who might be affected financially by his premature death,
Harry Potter doesn't have a need for life insurance."

- 11% chose Marge Simpson, a stay-at-home mom.
David F. Woods' Reaction: "Not all family contributions are monetary:
Stay-at-home parents like Marge perform many household services that
would expensive to replace, and consequently have a significant need for
life insurance."

- None of the Above/Don't Know: 18%

"Though fictional, the life situations of these characters illustrate just how different real people's individual life insurance needs can be," says Woods. "During Life Insurance Awareness Month, we encourage Americans to think seriously about their need for life insurance and to consult a qualified insurance professional for assistance in obtaining the right amount and type of coverage for their particular financial needs and circumstances."

Determining Your Need for Life Insurance

LIFE offers the following tips to help Americans evaluate their individual life insurance needs:

- Think about who depends on you -- This includes anyone who relies on you
financially, including your spouse, children, parents or other loved
ones. It is important to periodically re-evaluate your insurance needs
whenever circumstances in your life change, such as getting married,
having a child, buying a home, or getting a new job or promotion.

- Get a sense of how much life insurance you need -- Determine how much
money your family will need to cover immediate expenses and how much
they will need over the long-term to maintain their standard of living.
An interactive calculator is available at
www.life-line.org/lifecalculator to help you estimate your needs.

- Learn about the different kinds of life insurance -- Life insurance
policies exist for virtually every need and budget. Evaluate the
different types of coverage available, including term and permanent
policies, and figure out what kind of life insurance might be right for
you by using LIFE's interactive decision guide at
www.life-line.org/whatkind.

- Get help -- While it's important to be an educated consumer, life
insurance is one product where an expert's opinion can make all the
difference. One way to find a good insurance agent is through
recommendations from friends and family, and above all, choose someone
you know you can trust. Find a listing of qualified insurance
professionals in your community by using LIFE's agent locator at
www.life-line.org/agentlocator.

About LIFE

The Life and Health Insurance Foundation for Education (LIFE) was founded in 1994 in response to the public's growing need for information and education on life, health, disability and long-term care insurance. LIFE also seeks to remind people of the important role insurance professionals perform in helping families and businesses safeguard their financial futures. To learn more about these topics, please visit www.life-line.org.

About Life Insurance Awareness Month

Life Insurance Awareness Month is an industry-wide educational campaign created to address growing concerns about the large number of Americans who lack adequate life insurance protection.

Source: PR Newswire

Comments

Cleaning Up

After Hurricane Katrina, a Bank Turns to Money Laundering
http://www.nytimes.com/2005/09/29/business/29hancock.html

"It will take up to at least half a year to reconsolidate."

—John Hairston, chief operating officer, Hancock Bank (Gulfport, Miss., $4.7 billion in assets)

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The Brazilian Job

The thieves spent three months tunneling under a busy city avenue in Fortaleza, about 1,500 miles northeast of Sao Paulo, to break into the Central Bank vault and steal the equivalent of $70 million in Brazilian currency, the real.

George Clooney, call your agent. There's another heist picture in the works.

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Swedish Retirement Plan

Posted on September 28, 2005

The chairman of Swedish bank Svenska Handelsbanken AB will step down from his post next year to go sailing around the world, the bank said Tuesday.

Searching for acquisitions, perhaps?

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Where Credit is Due

Party's over, folks.

WASHINGTON, Sept. 28 - Credit card loan delinquencies reached a record high of 4.81 percent of accounts in the second quarter of this year, according to the American Bankers Association's Consumer Credit Delinquency Bulletin.

In calculating these results, ABA incorporated revised information on the first quarter delinquency rates. As a result, the credit card loan delinquency ratio for the first quarter was revised upward to 4.76 percent of accounts from the previously reported 4.03 percent.

"The last two quarters have not been pretty," said James Chessen, ABA's chief economist. "Gas prices are taking huge chunks out of wallets, leaving some individuals with little left to meet their financial obligations," he said. "With gas prices still rising, the third quarter is not likely to be any better."

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