U.S.’ Bitcoin Acceptance Could Centralize Cryptocurrency

I was sitting on a plane, recently. On my way to Atlanta.

One row ahead. There was a security, software engineer — or something. We started chatting.

He got into a story about how his friend was mining bitcoins using those specialty machines (which range in price from roughly 3,000 to 15,000 bucks) and how this dude was making a mint.

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Wearable Computing You Can Buy Now

Image

Google isn’t alone in its quest for a wearable piece of computing. One option, that consumers can purchase online today (instead of waiting for the search engine giant to release Glass), is the Recon Jet.

From Engadget:

Want to embrace Recon Instruments’ sunglasses-based vision of the future before it officially reaches store shelves? You can: the company has just started pre-orders for its Jet heads-up display in a $499 Pilot Edition. The inaugural eyewear will come with apps for both cyclists and triathletes, and it should beat the production model to market by several months. There’s even a financial incentive for that impatience, as the pricing goes up to $599 on July 21st. If you don’t mind a potentially rough experience while tracking your mid-race performance, the Pilot Edition is waiting at the source link.

The gadget, which boasts an API for third-party developers, is being targeted at cyclists and sportsmen. It’s unclear if there is any application for financial services.

Still, the launch of the Recon Jet shows that the technology isn’t difficult to produce — leaving me to think that there will be a variety of options for those that want to combine digital hardware with eyeglasses or watches.

A Reason To Forget Branchless Banks… Long Holds on Personal Checks

The purpose of a branchless bank is convenience; The aim of a mobile remote deposit capture, the ability to deposit a check with the snap of a smartphone, is supposed to double the ease of financial services.

Yet, many of these up-and-coming services that tout their advantages over traditional players are actually more inconvenient when it comes to personal checks.

PayPal, six business days to move funds using mobile RDC. American Express’ fee-less Bluebird account, the same. Green Dot’s recently launched, GoBank… 10 business days.

The immaturity of these alternative players is partly to blame. These companies simply don’t have enough transaction data to make smart decisions about who is, and isn’t, a trustworthy customer.

A Green Dot executive defended the policy of holding personal checks deposited via smartphones for up to 10 days as a necessary anti-fraud measure. The company added that it believes the policy represents only a minor inconvenience to most customers.

Of course, government and business checks, which carry near zero risk for the bank, are instantly deposited.

And, to be fair, most people seldom deposit personal checks. ACH transfers, direct deposit and payroll checks make up a majority of the deposits.

Still, the holds these companies are placing on personal checks cut against their biggest promise: ease of use.

For me, the only time I would say, ‘It’s About Time,’ as a GoBank customer is when the check my mother wrote me for my birthday clears.

Read my original draft of this story after the jump…

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Prologue: Doug Bergeron’s VeriFone Departure

Doug Bergeron, VeriFone CEO

I recently received an email from a source who claims he works at a hedge fund that shorted $PAY based on what he found strange and difficult to explain about the former CEO’s behavior.

Here’s the conversation:

Sean,

Here’s the article. FYI I work at a hedge fund and we were short PAY. Part of the qualitative aspect of my research involved a newsrun of Doug Bergeron and it stood out as particularly bad, this being the biggest example. Other quotes throughout the years didn’t seem based in reality either, esp some things in their presentations not squaring with sec filings either. No smoking gun, just a lot of things that were odd at best.

Doug has a long history of badmouthing competitors that goes way past the Hypercom acquisition, and his personal battle with Square.

Indeed, he has a reputation for being cutthroat.

When I profiled him last year, he boasted of how he ruthlessly cut the headcount at VeriFone just as soon as he got in the door.

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Technology Alone Doesn’t Deter Cybercrime Against Banks

Note: This story got combined into a broader American Banker piece about recent DDoS attacks at banks that ran today (3/13/13)

For bankers, the cyber security conversation has shifted over the past decade — going from how best to keep criminals out of sensitive information, to how to detect thieves once there has been a breach.

That debate has intensified around recent reports that malicious programmers with ties to the Chinese military have stolen data from hundreds of American enterprises, including financial services companies, over the past several years.

Just this week, JPMorgan Chase admitted that its online banking suffered an outage on Tuesday afternoon as a result of a denial of service attack. On the same day, the U.S. Director of National Intelligence James Clapper told the Senate Intelligence Committee that soon unsophisticated online attacks could have “significant outcomes” potentially affecting a wide range of companies and networks.
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Social Media — Still A Marketing Tool, Not Yet A Channel

Listening to Bob Meara at Celent’s Innovation and Insight  Day last week gave me the distinct impression that social media is quickly maturing as a way for bank’s to talk directly to customers.

I even recently wrote two stories about the dangers financial services companies face when they get in too deep with third-party platforms.

Not so fast, though, Meara tells me.

In an email, he says:

When customer contact mechanisms become “channels”, most banks keep rigorous track of interactions, have [key performance indicators] and are able to access that information later on. To a very large extent, that hasn’t occurred with social media (below). Instead, most banks are merely listening on social and gathering sentiment. Others are using for outbound marketing just as they do with e-mail and direct mail.

That leaves social media in the marketer’s domain — here’s a graph, from Celent, that Meara sent me that seeks to explain the concept:

meara1

So, we see social media viewed as a marketing domain by most banks… As long as marketing owns a mechanism, it isn’t a channel in our view.

Beyond that, “channel” is mostly semantics.

meara2Bob told me it was important to mention this stuff, too:

Source: Celent survey of North American financial institutions, August 2012 (the sample size was 132 banks)

Is Twitter Bad For Bank Brands?

On President’s Day, Burger King marketers woke up to a nightmare.

Burger King Twitter

The company’s branded-Twitter account had been hacked. BK’s reputation was, well, a joke. And by the time the company regained control, most of the internet was laughing.

If they had been bankers, it would have been worse.

Potential regulatory issues; Bank customer losses as a result of social engineering attacks (tricking customers to hand over their passwords and usernames over Direct Message); Perhaps, even, an overall drop in what community bankers count on the most, loyalty.

From an inspired analysis from Reuters ( by Joseph Menn, you should really read it):

Those on the front lines say it isn’t all about protecting U.S. government and corporate networks from a single sudden attack. They report fending off many intrusions at once from perhaps dozens of countries, plus well-funded electronic guerrillas and skilled criminals.

Security officers and their consultants say they are overwhelmed. The attacks are not only from China, which Washington has long accused of spying on U.S. companies, many emanate from Russia, Eastern Europe, the Middle East, and Western countries. Perpetrators range from elite military units to organized criminal rings to activist teenagers.

The fact that Twitter has acknowledged that it needs to beef up its security, alone, should scare executives. It’s a signal that perhaps financial services outfits shouldn’t have been so quick to jump into bed with the social networks — trusting their reputations with third-parties.

Yet, they undeniably have.

Bank of America. Chase. BBVA. [Insert your bank’s name here]. Most of all American Express, which is trusting its customer’s transactions with Twitter through its recently rolled-out Sync service (albeit securely with extra authentication built-in, an executive assured me this week).

Still, Chirpify chief executive Chris Teso makes a good point, when he says:

In the upcoming week, I’m curious about:

What are the real risks with trusting your brand to Twitter?

What are the worst outcomes of a hijacked account?

And what are banker’s plans to hedge against such attacks, if they should happen?