Archive for category Banks
The Future Of Banking
Posted by Tetyana Matychak in Banks, Favourites on September 2nd, 2010
The banking industry is always in a state of transition. Banks are also coming out with new products to attract customers. Over the past 20 years, we have seen direct deposit, online banking, banking applications, and automated tellers. All of these products were designed to save money and make banking easier for customers. So, what are banks working on now to improve operations?
Here are 3 ways that technology will make your banking life easier over the next few years.
1. Fewer Trips To The Bank
Remote-deposit capture is the new big thing in banking. Remote deposit capture allows customers to make a bank deposit without leaving their house. Customers can take a picture of a check at home. The computer receives the image and verifies the amount, check number, account number, and the bank’s routing number. A photo of the back of the check verifies that it’s been signed by the recipient. A clearinghouse then routes the funds from the check writer’s account to that of the recipient. Funds are available for withdrawal without ever setting foot in a bank.
2. Fewer Bank Tellers
Banks will always need tellers to address customers but tellers are being replaced by bank technology. First, there was the invention of Automated Teller Machines (ATM). Now, a few major credit unions are trying branches with very few tellers. The bank lobbies have no physical tellers. The teller transacts all business with the customer via a video camera. The teller can see and hear the customer but the customer never physically sees a bank teller. This cuts down on robberies and reduces the number of tellers needed. Read the rest of this entry »
Nineteen Billion Dollars Is A Big Deal
Posted by Tetyana Matychak in Banks on July 2nd, 2010
The blogosphere is having conniptions over Scott Brown’s announcement that he won’t vote for final passage of FinReg because of the $19 billion tax on banks that was incorporated at the last minute. The recurring theme is that $19 billion is a small amount of money and that anyway it’s going to be levied on the big banks that have benefited from government efforts to keep the financial system afloat.
Here’s what Ryan Avent has to say:
The fee in question was introduced during the conference session and is designed to cover the cost of the bill, that is, to make sure it’s deficit neutral. It’s a modest amount, and it’s levied on entities that have benefitted significantly from the massive government intervention deployed to keep the financial system afloat during the financial crisis.
And Joe Weisenthal jumps on the subject with this:
This whole thing is a bit silly. $19 billion, levies across the financial system, on various players based on their size is tiny. We repeat: tiny. And beyond that, this isn’t some kind of punitive tax; it’s designed to pay for the enforcement of the bill, which presumably Scott Brown is in favor of, if he likes the rest of the bill. Read the rest of this entry »
ECB Governor: Rates On Hold
Posted by Tetyana Matychak in Banks on June 14th, 2010
European Central Bank governor Athanasios Orphanides indicated in an interview with Dow Jones Newswires that interest rates in the euro zone will remain on hold for many months, urging European politicians to tackle yawning inefficiencies in fiscal governance.
If Europe’s leaders fail to get their act together, then another financial crisis or debt crisis may well be around the corner, he warned.
Speaking in an interview following the ECB’s policy-setting meeting on Thursday, Mr. Orphanides said the outlook for consumer price inflation in the euro zone remains benign, despite the recent uptick in prices.
Core inflation, which excludes volatile components such as energy and food, has been trending down, he said, pointing to slack private consumption in the 16 countries that make up the euro zone.
“In light of these developments, I do not view high inflation as a concern,” said Mr. Orphanides, who was born in Cyprus and educated at the Massachusetts Institute of Technology. Read the rest of this entry »
Be Wary the Rush to Gold
Posted by Tetyana Matychak in Banks on May 27th, 2010
Most of us have seen advertisements to buy gold or offering cash for gold. With the economy still unsettled and gold prices steadily rising, you may be tempted. But not all gold investments are safe.
On Tuesday, Representative Anthony D. Weiner, a Democrat from New York, attacked one company that is a gold and precious metals dealer, Goldline International Inc. He accused the company of “shady practices,” alleging that it overcharges for collector coins and provides misleading financial advice to consumers. “They’re exploiting the economy that we’re in,” he said.
Mr. Weiner also spoke of the company’s “unholy alliance” with television and radio personalities like Mike Huckabee, the former governor of Arkansas and Republican presidential candidate; and Fred Thompson, a former Senator from Tennessee and TV actor. But he particularly singled out Glenn Beck, the conservative talk show host.
“It’s debatable whether gold is a good investment,” Mr. Weiner said at a news conference in front of the Mercantile Exchange building in lower Manhattan. “There’s a confluence between a declining economy and the ignorance many consumers have about how the marketplace works.” Read the rest of this entry »
How to Quickly Find Out if Your Identity Is Stolen
Posted by Tetyana Matychak in Banks, Favourites on May 26th, 2010
Here’s a quick and free way to determine whether you’re a victim of identity fraud: check your “My ID score” at www.MyIDScore.com.
Here’s how the year-old tool works. At the site, enter information about yourself including your name, address, date of birth, telephone numbers and, if you choose, your Social Security number. The site then asks you a series of questions to verify who you are and then provides you with a score between 1 and 999 that measures the likelihood that others are misusing your personal information.
The free service is offered by ID Analytics Incorporated and is based on the same technology that the firm has offered companies for nearly a decade. The corporate scoring tool tells companies, from credit card issuers to mortgage lenders, how likely it is that people applying for a card or a loan, among other applications, are who they say they are.
The score is calculated by looking at anomalies in ID Analytic’s database of about 360 billion basic identity elements including names, Social Security numbers, phone numbers, birth dates and addresses, all of which is information from applications and change-of-address forms provided to the database by client companies. Anomalies that may increase an individual’s score would be, for instance, if three people with different names are applying for credit cards using the same Social Security number or from two different addresses on the same day. Read the rest of this entry »
Mortgage Data Leaves Bankers Uncertain of Trend
Posted by Tetyana Matychak in Banks on May 24th, 2010
Any way you look at it, extraordinary numbers of people are having trouble paying their mortgage. What is less clear is the extent to which the problem is getting worse, better or is simply holding its own.
Data released Wednesday by the Mortgage Bankers Association showed the mortgage delinquency rate rose in the first quarter to 9.38 percent of all loans outstanding, from 8.22 percent in same period last year.
When adjusted for seasonal variations, the default rate rose over 10 percent for the first time.
Seasonal adjustments are used to smooth out data in ordinary times, but in these extraordinary times the bankers’ group said it was not sure how much they could be trusted. In the first quarter the seasonal adjustments showed the delinquency rate worsened considerably. The raw data, on the other hand, indicated a marked improvement.
Warning that “fundamental market factors” might be exercising undue influence over the seasonal numbers, the mortgage bankers said they did not know whether the optimistic or pessimistic sequence was more accurate.
“We may be at a point where the market is changing for the better, but we can’t be sure because of the confounding effect of seasonal differences,” said Jay Brinkmann, the group’s chief economist. Read the rest of this entry »
Along with SEC, other investigators and suits may target Goldman Sachs
Posted by Tetyana Matychak in Banks, Favourites on April 23rd, 2010
As investigators in Massachusetts considered charging Wall Street firms for their role in the financial collapse, they focused on Goldman Sachs because it had bundled and sold the shoddiest of subprime mortgage loans, setting up the housing market for a greater fall by continuing to sell shaky securities even as other banks withdrew.
After discussions with the office of state Attorney General Martha Coakley (D), Goldman last year agreed to pay up to $60 million to end that investigation, the first major settlement involving Wall Street’s role in the subprime mortgage crisis.
“Goldman was particularly active with respect to facilitating the lending by two of the more notorious and unsound subprime lenders — Fremont and New Century,” Coakley said Wednesday. “Goldman was especially active with these companies in the latter stages of the subprime lending boom . . . when it should have been increasingly clear to any responsible person that the subprime loan pools underlying securitizations suffered serious problems.”
Even before the Securities and Exchange Commission sued Goldman last week, accusing it of creating a complex financial product designed to fail and selling it to unknowing investors, the firm had become a frequent target of investigators. In courts and in Congress, Goldman has been accused of a range of misdeeds, including manipulating oil prices and using taxpayer money for handsome bonuses. Read the rest of this entry »
Gov’t unveils plan to shrink some home loans
Posted by Tetyana Matychak in Banks, Favourites on March 31st, 2010
Under pressure to stem the foreclosure crisis, the Obama administration launched a plan Friday to reduce the amount some troubled borrowers owe on their home loans and give jobless homeowners a temporary break.
Administration officials cautioned that the plan won’t stop all foreclosures or help all troubled homeowners. Instead, officials said their goal is to meet their original target, announced last year, of helping 3 million to 4 million borrowers avoid foreclosure.
The new effort is designed to help two groups:
- Borrowers who owe more on their loans than their houses are worth. Nearly 15 million homeowners fall into this category, according to Moody’s Analytics. About 10 million of them owe at least 20 percent more than their house’s current value.
These people would be helped in either of two ways: Their mortgage companies can cut the total amount they owe on their mortgage. Or they can refinance into loans backed by the Federal Housing Administration, which insures loans against default. The FHA will get $14 billion in incentive money from the federal bailout fund. Read the rest of this entry »
Bank Lending Still Slow To Recover
Posted by Tetyana Matychak in Banks on March 30th, 2010
The Federal Reserve has started to normalize it’s banking policy by raising the discount rate last week, increasing the rate at which it charges banks for overnight lending. The Fed shrank the spread between the discount rate and federal funds rate early on in the liquidity crisis in 2007 and will probably return to the traditional spread sometime this year as they begin withdrawing their unprecedented stimulus to the banking system.
That being said, banks are still being fairly tight with their lending and while their capital levels have recovered somewhat, they are still in store for more losses with the labor and housing markets in their current states. Foreclosures are still on the rise and with employment opportunities scarce, that trend will likely continue for some time.
While the economy is expected to grow this year by around 3%, the free flow of credit is lagging noticeably behind in the recovery. As long as inflation remains muted the Fed would like to keep the federal funds rate near zero for some time.
Banks have recovered to the point where the Fed would prefer them to borrow from each other rather than using their discount window function as lender of last resort. Another factor that banks are carefully watching is how Congress will revamp banking regulation and how it will impact them in the long run. Read the rest of this entry »
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