A Blockchain Use Case for Cheque Fraud is here

Just when we thought chequebooks and cheque processing was on its way out , we see a unique use case where the traditional banking instrument uses  new age disruptive technology such as blockchain to combat cheque fraud.

Cheque fraud accounted for nearly 77% percentage payments fraud in the US alone in a survey conducted in 2015 by AFP . Almost globally the largest revenues impacted in payments fraud are via cheque fraud.

Emirates Islamic, one of the leading Islamic financial institutions in the UAE, announced that it will introduce blockchain technology into its cheques as a fraud prevention measure.

Earlier this year , Emirates NBD had announced the ‘ Cheque Chain’ initiative . There will be a Quick Response (QR) Code on each leaf which enables validation at the source through self service or at the presenting bank . The QR code will be registered on the blockchain so that once the cheque leaf has been presented and cleared under the bank’s ICCS technology , the record will be maintained on the blockchain for auhenticity .

With ‘Cheque Chain’ , Emirates Islamic becomes the first Islamic bank in UAE to undertake this initiative to enhance security in the popular payment method.

Emirates Islamic announced its plan to issue new cheque books carrying a unique QR (Quick Response) code on every leaf, along with a string of 20 random characters to make new cheques being issued compatible on the new platform.

This is an extremely smart move to combat the ever increasing costs of image based clearing and instrument handling coupled with archival and storage of the information . It will be interesting to see how cancelled cheques are handled on the platform and in the long run how the total cost of ownership for institutions span out with blockchain .

References :

http://emirates-business.ae/emirates-islamic-to-integrate-blockchain-tech-into-cheques/

http://www.khaleejtimes.com/emirates-nbd-unveils-cheque-chain-to-curb-potential-fraud

https://www.finextra.com/newsarticle/30500/emirates-nbd-integrates-blockchain-tech-into-cheques

 

Union Bank’s $171 million Wire Fraud – A Wake Up Call 

The Union Bank of India had reported a case of cyber attack on one of its nostro accounts last year on the 21st of July. At that point , the amount remained undisclosed and the breach was said to have happened from an email attachment opened  by one of its employees.It was a phishing attack. An email with the handle @rbi.org.in had an attachment -a zip file with a .xer file.While one employee fell pray, some were smart to report it as suspicious. However, it was too late.The malware had entered the bank.

A sum of $171 million had been debited from its nostro account with Citibank  New York .Since Swift recon happens only the next day once the nostro statement comes in , the bank’s treasury department realised only the next day.

The money by then had been moved to accounts in two banks in Cambodia—the Canadia Bank Plc and RHB IndoChina Bank Ltd, besides the Siam Commercial Bank in Thailand, Bank Sinopac in Taiwan, and a bank in Australia. These funds were routed by Citibank New York and JP Morgan Chase New York, which hold UBI’s foreign exchange accounts.

Source Hindu : UBI Cyber Attack

SWIFT maintains a neutral stand in the investigation primarily initiated by UBI and insists no breach at its end.However , it is high time that SWIFT looks at its loopholes -recon delays , lack of built in fraud early warning mechanism and an AI powered neural network enabled clustering system that can track such suspicious activity. 

With blockchain heralding a new age of cryptographic security and unit level transparency the bank’s must also look for alternatives to the wire transfer monopoly and it’s inherent loopholes.

For details visit the coverage at LiveMint or Hindu

Is India ready to be the AI Capital ?

In a country of 1.32 billion people where 48.26 million are unemployed , any kind of automation till recently , was unwelcome .With the government , taking a strong stance on digital technologies , a floodgate of investments seem to have opened up.  AI is the latest muse for investors , large corporates and fintechs alike. A few weeks ago a list of the top 100  AI Startups was compiled and published by the very credible CB Insights and to our utmost dismay  , not a single Indian startup figured in the list.

In a very recent research by Quartz ,  the talent crunch in India’s AI circuit was revealed as extreme. Only 4% of the talent pool has actually worked on deep learning or neural networks. Belong Research quotes that only 17 % of AI talent works around Financial Services and the demand to supply ratio for AI talent has a severe shortfall as seen below. 

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This week spelled some good news for a lot of companies toying with a roadmap around AI , startups as well as the developer community  as two very big corporates announced investments to boost AI in India.

Intel bets on India for AI 

Intel announced heavy investment to groom local AI talent and Intel South Asia Managing Director Praksh Mallya said  “Our developer education program will educate 15,000 scientists, developers, analysts and engineers on AI technologies, including Deep Learning and Machine Learning in India.Our collaboration with the industry and the academia will help democratize AI, by reducing entry barriers for developers, data scientists and students,”

Through 60 programs in a year, the initiatives will empower the community with the know-how for AI adoption with ready-to-deploy platforms and tools for solution development. “As India undergoes digital transformation, the data centre and the intelligence behind the data collected will enable the government and industry to make quick decisions based on algorithms,” said Mallya on the margins of Intel’s ‘AI Day 2017′. The company’s Indian subsidiary is collaborating with Hewlett Packard Enterprise, Wipro, Julia Computing and Calligo Technologies for using AI in the country.

EY announces its first AI Center in India

Ernst and Young announced its plans to enhance its suite of automation and artificial intelligence offerings with the opening of its first Artificial Intelligence (AI) Center in India. Artificial intelligence is already being deployed across industries such as automotive, telecom and technology . EY’s AI Center will bring together teams of multi-disciplinary practitioners, combining expertise in AI, Robotics etc. along with domain experience in sectors.

“The launch of the AI Center,aims to lead the next step of this transformation journey by helping enterprises combine AI’s autonomous reasoning with systemized learning opportunities.” said Milan Sheth, Partner – Advisory Services and Technology Sector Leader, EY India.

Intel’s  developer education program will educate 15,000 scientists, developers, analysts and engineers on AI technologies, including Deep Learning and Machine Learning in India.

RBI says all payment systems to remain closed on 1 April 2017

The Reserve Bank of India (RBI) has said all payment systems will remain closed on 1 April. It is a change from its earlier directive asking banks to remain open on the first day of the next fiscal beginning 1 April.

However, there is no change with regard to the payment channels, including RTGS and NEFT, being operative on a normal working day during 25 March to 1 April (including Saturday, Sunday and all holidays).

“On reconsideration, it has been decided that all payment systems will remain closed on 1 April, 2017,” it said.

The RBI said it will issue a separate broadcast message in this regard through respective system to member banks. It also clarified that the special clearing operation on 30 and 31 March remains unchanged. On 23 March, the RBI had instructed banks about conducting special clearing exclusively for government transactions on 30-31 March.

1 April is an annual closing day of accounts for banks and they remain shut.

Source : MINT

Mobile payment platform Chillr to launch UPI

India’s first multi-bank mobile payment platform Chillr is all set to launch its Unified
Payments Interface (UPI) facility by March-end, which  will enable customers of nearly
45 banks to make payments on a single platform.Sony Joy, CEO and Co-Founder, Chillr, estimates around 1.50 crore customers to be on-board this platform by the end of 2017-18. “Our annual run-rate (transaction) is also expected to go up from $1 billion (around Rs. 6,600 crore) now to $12 billion (nearly Rs. 80,000 crore) per annum.” said Joy

For more details read on