Last week, the U.S. Senate Judiciary Committee unanimously voted to approve the "Combating Online Infringements and Counterfeits Act" (COICA). The bill would allow the U.S. Attorney General to obtain a court order disabling web domains deemed to be “dedicated to infringing activities.”
Intellectual property scholars at the Competitive Enterprise Institute praised the bill in principle but warned that the legislation's current provisions threaten free speech and lack crucial safeguards to protect against the unwarranted suspension of Internet domain names.
“Combating piracy and counterfeiting on the Internet should be a priority for Congress, but care should be taken to ensure that legislative attempts to protect intellectual property rights do not harm other vital interests,” said Ryan Radia, CEI Associate Director of Technology Studies. “COICA’s overbroad definition of Internet sites 'dedicated to infringing activities' risks ensnaring legitimate websites. The bill also lacks a provision ensuring that Internet site operators targeted by the Attorney General have an opportunity to defend their site in an adversary judicial proceeding."
Over three dozen law professors recently submitted a letter to the U.S. Senate raising concerns about COICA, arguing that the bill suffers from “egregious Constitutional infirmities.”
“In its current form, elements of COICA raise serious First Amendment concerns,” said Hans Bader, CEI Senior Attorney. “If enacted, the law will not likely survive a constitutional challenge.”
Radia argued that Congress should amend COICA to provide for more robust safeguards, including:
• Providing a meaningful opportunity for Internet site operators to challenge before a federal court an Attorney General’s assertion that their site is “dedicated to infringing activities” prior to the domain name's suspension;
• Requiring that the Attorney General, prior to commencing an in rem action against a domain name, make a reasonable attempt to notify the site’s actual operator;
• Clarifying the definition of an Internet site “dedicated to infringing activities” to ensure that Internet sites with cultural, artistic, political, scientific, or commercial value that facilitate infringing acts by third parties do not face domain name suspension if their operators comply with legitimate takedown requests;
• Instructing the Department of Justice and federal prosecutors not to request that domain name registrars, registries, or service providers suspend domain names that have not been deemed to be “dedicated to infringing activities” by a federal court;
• Requiring the Department of Justice to compensate domain name registrars, registries, and service providers for any reasonable costs they incur in the course of disabling infringing domain names.
What do you think?
Showing posts with label internet. Show all posts
Showing posts with label internet. Show all posts
Monday, November 22, 2010
Wednesday, November 17, 2010
7 Major Projects CIOs Should Consider
Posted by Mark Brousseau
With 2011 predicted to be the year when the IT industry will reach nearly $3.5 trillion in revenue and show long-term growth for the next five years, Gartner analysts say there are seven business and IT issues that warrant the greatest attention and demand the clearest strategies for the future.
“We are increasingly living, playing and working in a digital world where people will have no alternatives but to become ‘more digital’ with the assets they have available,” said Stephen Prentice, vice president and Gartner Fellow. “In 2012, the Internet will be 75 times larger than it was in 2002, and if Facebook was a country, it would be the third largest in the world (after China and India). Device and data proliferation is also a reality that cannot be escaped. Smart devices will rise from 60 billion devices in 2010 to more than 200 billion in 2020.”
“Technology is no longer the preserve of the CIO,” said Ken McGee, vice president and Gartner Fellow. “It has become everyone’s property and everyone’s issue.”
With the IT industry on track to show a compound annual growth rate (CAGR) of 4 percent for the next five years Gartner has identified seven business and IT issues that CIOs should act on during the next three years. “CIOs will need to begin implementing these technologies within three years to meet the six year predictions,” McGee said. The seven issues include:
IT/OT Alignment- Inadequate software management of operational technology (OT) systems will result in a major business failure of a top Global 100 company by 2013.
Executives are realizing there are cost savings and management efficiencies to be gained by integrating the IT and OT groups together. Although efforts to integrate groups are challenging, benefits from streamlined budgets, coordinated planning, consistent technology architectural decisions and maximizing technology purchasing power make for extremely compelling cases for IT and OT group integration.
Business Gets Social -Through 2015, 80 percent of organizations will lack a coherent approach for dealing with information from the collective.
Today, social media is changing the way business is conducted. “Understanding the power of communities, the multiple personas of their members expectations, their aspirations and how to interact with them will become essential skills for business in the 21st century,” said McGee. “However, vast sums of money and enormous amounts of time will be spent during this decade and beyond to discover how IT and business leaders best capitalize on the growing spread, power and influence of social networks.”
Pattern-Based Strategy- Through 2015, pattern-seeking technology will be the fastest-growing intelligence investment among the most successful Global 2000.
A Pattern-Based Strategy provides a framework to proactively seek, model and adapt to leading indicators, often-termed "weak" signals that form patterns in the marketplace. It will allow IT leaders to seek-out patterns amidst the burgeoning information sources and model future possibilities. “We have found that senior business and IT leaders see lack of information shareability as a barrier to growth,” Prentice said.
Cloud Computing- By 2016, all Global 2000 companies will use public cloud services.
Cloud computing represents a shift in the relationship between the providers and consumers of IT-based solutions. It constitutes the basis of a discontinuity that amounts to a new opportunity to shape the relationship between those who use IT services and those who sell them. Gartner said worldwide cloud services revenue (including public and private services) is forecast to reach $148.8 billion in 2014.
Context-Aware Computing- By 2016, one-third of worldwide mobile consumer marketing will be context-awareness-based.
Context-aware computing will foster people to be more digital with the assets they have available. Context-aware computing is taking advantage of location and time and is a new era of augmented reality. More than $150 billion of global telecom spending will shift from services to applications by 2012, and the global market for context-aware services will amount to $215 billion.
“Unlocking this potential will be one of the next major challenges for IT,” said McGee. “For example, we expect 75 percent of new search installations to include a social search element. The world is digital and business leaders can’t ignore it.”
Sustainability- By 2016, sustainability will be the fastest-growing enterprise compliance expense worldwide.
As long as the current science surrounding climate change remains credible, organizations should anticipate that the current focus on energy, water and greenhouse gas (GHG) emissions will continue, and this will draw attention to other environmental issues, such as resource depletion, species extinction, bio-diversity and environmental justice. There will remain many hard trade-offs between an organization’s financial and operational performance and that of its environmental performance. Information systems will be critical in the role — from governance, risk and compliance, through corporate social responsibility systems, to enabling new and more-sustainable business models.
New Realities of IT: Balancing Cost and Innovation with Risk and Governance- Innovation accomplishments will be among the top-three selection criteria for new CIOs by 2016.
With the recent global recession, innovative thinkers must find new ways to create growth — in revenue, jobs and industries — in this new business climate. Cost and value optimization must remain a top priority, while the search for growth continues.
Regulatory and corporate demands for greater attention to risk have already begun to emerge. Gartner also foresees a new emphasis on business change governance.
Beyond 2020, Gartner analysts forecast that two emerging trends will become $1 billion markets. First, human augmentation, a technology that focuses on creating cognitive and physical improvements as an integral part of the human body is slowly but steadily becoming a reality and enhancing peoples’ lives.
The second trend is wireless power devices. By 2011, there will be more than 1 billion PCs and 5 billion mobile phones in use in the world, and based on the levels of demand Gartner foresees cumulative sales from wireless power products surpassing $1 billion by 2020.
“We are reaching these observations by exploring future IT growth and future adoption projections upon demand,” McGee said. “We are looking at emerging business and societal trends and based upon our findings, we will indicate likely future IT winners and losers. This methodology will not replace any existing methodologies, but simply complement existing models.”
“Looking forward, we expect to see more deployment of existing technologies in new and innovative ways, and fewer and fewer genuinely new technologies emerging in the mainstream,” said Prentice. “That is not to imply that no new developments will occur, but we are now starting to see the early indications of precursor and trigger technologies for the next wave of technology, which is likely to run from about 2025 through 2080.”
What do you think?
With 2011 predicted to be the year when the IT industry will reach nearly $3.5 trillion in revenue and show long-term growth for the next five years, Gartner analysts say there are seven business and IT issues that warrant the greatest attention and demand the clearest strategies for the future.
“We are increasingly living, playing and working in a digital world where people will have no alternatives but to become ‘more digital’ with the assets they have available,” said Stephen Prentice, vice president and Gartner Fellow. “In 2012, the Internet will be 75 times larger than it was in 2002, and if Facebook was a country, it would be the third largest in the world (after China and India). Device and data proliferation is also a reality that cannot be escaped. Smart devices will rise from 60 billion devices in 2010 to more than 200 billion in 2020.”
“Technology is no longer the preserve of the CIO,” said Ken McGee, vice president and Gartner Fellow. “It has become everyone’s property and everyone’s issue.”
With the IT industry on track to show a compound annual growth rate (CAGR) of 4 percent for the next five years Gartner has identified seven business and IT issues that CIOs should act on during the next three years. “CIOs will need to begin implementing these technologies within three years to meet the six year predictions,” McGee said. The seven issues include:
IT/OT Alignment- Inadequate software management of operational technology (OT) systems will result in a major business failure of a top Global 100 company by 2013.
Executives are realizing there are cost savings and management efficiencies to be gained by integrating the IT and OT groups together. Although efforts to integrate groups are challenging, benefits from streamlined budgets, coordinated planning, consistent technology architectural decisions and maximizing technology purchasing power make for extremely compelling cases for IT and OT group integration.
Business Gets Social -Through 2015, 80 percent of organizations will lack a coherent approach for dealing with information from the collective.
Today, social media is changing the way business is conducted. “Understanding the power of communities, the multiple personas of their members expectations, their aspirations and how to interact with them will become essential skills for business in the 21st century,” said McGee. “However, vast sums of money and enormous amounts of time will be spent during this decade and beyond to discover how IT and business leaders best capitalize on the growing spread, power and influence of social networks.”
Pattern-Based Strategy- Through 2015, pattern-seeking technology will be the fastest-growing intelligence investment among the most successful Global 2000.
A Pattern-Based Strategy provides a framework to proactively seek, model and adapt to leading indicators, often-termed "weak" signals that form patterns in the marketplace. It will allow IT leaders to seek-out patterns amidst the burgeoning information sources and model future possibilities. “We have found that senior business and IT leaders see lack of information shareability as a barrier to growth,” Prentice said.
Cloud Computing- By 2016, all Global 2000 companies will use public cloud services.
Cloud computing represents a shift in the relationship between the providers and consumers of IT-based solutions. It constitutes the basis of a discontinuity that amounts to a new opportunity to shape the relationship between those who use IT services and those who sell them. Gartner said worldwide cloud services revenue (including public and private services) is forecast to reach $148.8 billion in 2014.
Context-Aware Computing- By 2016, one-third of worldwide mobile consumer marketing will be context-awareness-based.
Context-aware computing will foster people to be more digital with the assets they have available. Context-aware computing is taking advantage of location and time and is a new era of augmented reality. More than $150 billion of global telecom spending will shift from services to applications by 2012, and the global market for context-aware services will amount to $215 billion.
“Unlocking this potential will be one of the next major challenges for IT,” said McGee. “For example, we expect 75 percent of new search installations to include a social search element. The world is digital and business leaders can’t ignore it.”
Sustainability- By 2016, sustainability will be the fastest-growing enterprise compliance expense worldwide.
As long as the current science surrounding climate change remains credible, organizations should anticipate that the current focus on energy, water and greenhouse gas (GHG) emissions will continue, and this will draw attention to other environmental issues, such as resource depletion, species extinction, bio-diversity and environmental justice. There will remain many hard trade-offs between an organization’s financial and operational performance and that of its environmental performance. Information systems will be critical in the role — from governance, risk and compliance, through corporate social responsibility systems, to enabling new and more-sustainable business models.
New Realities of IT: Balancing Cost and Innovation with Risk and Governance- Innovation accomplishments will be among the top-three selection criteria for new CIOs by 2016.
With the recent global recession, innovative thinkers must find new ways to create growth — in revenue, jobs and industries — in this new business climate. Cost and value optimization must remain a top priority, while the search for growth continues.
Regulatory and corporate demands for greater attention to risk have already begun to emerge. Gartner also foresees a new emphasis on business change governance.
Beyond 2020, Gartner analysts forecast that two emerging trends will become $1 billion markets. First, human augmentation, a technology that focuses on creating cognitive and physical improvements as an integral part of the human body is slowly but steadily becoming a reality and enhancing peoples’ lives.
The second trend is wireless power devices. By 2011, there will be more than 1 billion PCs and 5 billion mobile phones in use in the world, and based on the levels of demand Gartner foresees cumulative sales from wireless power products surpassing $1 billion by 2020.
“We are reaching these observations by exploring future IT growth and future adoption projections upon demand,” McGee said. “We are looking at emerging business and societal trends and based upon our findings, we will indicate likely future IT winners and losers. This methodology will not replace any existing methodologies, but simply complement existing models.”
“Looking forward, we expect to see more deployment of existing technologies in new and innovative ways, and fewer and fewer genuinely new technologies emerging in the mainstream,” said Prentice. “That is not to imply that no new developments will occur, but we are now starting to see the early indications of precursor and trigger technologies for the next wave of technology, which is likely to run from about 2025 through 2080.”
What do you think?
Friday, September 24, 2010
10 Pitfalls to Avoid When Going Social
If you were to make a list of up-and-coming business trends, social media strategies would probably be near the top. Actually, scratch that "up-and-coming" part—social media is already here. However, thousands of companies are rushing headlong into the profile-creating, news-tweeting, blog-posting frenzy...only to find that their valiant efforts are not getting the results they had hoped. If you're looking for fans, followers, and friends to build a Social Nation around your business, don't panic, says Barry Libert. There is simple advice that will help businesses avoid the pitfalls and make a strong online impact.
"It's true: there are countless benefits to joining what I call the Social Nation revolution—but just like any strategy for growth, social media isn't foolproof," points out Libert, author of the new book Social Nation: How to Harness the Power of Social Media to Attract Customers, Motivate Employees, and Grow Your Business. "If you don't want your company's social strategy to fall flat, there are some guidelines you'll need to follow."
Libert knows what he's talking about. After all, he's the Chairman and CEO of Mzinga, a company that provides social software to businesses. Quite literally, it's his job to be social media savvy. And he's adamant that before you start building your own Social Nation, you need to have a well-researched game plan.
"When it comes to building a successful social network for your company, you need to understand that there's a lot of prep work to be done," he explains. "You can't just set up a Facebook profile for your company, tweet once or twice a day, and expect public interest in your company to shoot through the roof. Far from it, actually."
Think about it this way: if you were in charge of your company's booth at a trade show or conference, you wouldn't just slap your company's logo onto a piece of poster board, place your business cards on the table, and hope for the best, would you? Of course not. Yet that's exactly how some companies approach social media—and that's why so many of these initiatives fail.
"If you want to become a meaningful part of social conversations and interactions," explains Libert, "you've got to know who your target 'fan base' is, where they spend their time online, and what sorts of content and programming is valuable and relevant to them, and will foster their continued interest and participation. You also need to make sure you have the wherewithal to commit to growing and sustaining your Social Nation, and you've got to make sure that you have buy-in from within your company. And that's just for starters."
Sure, it may sound intimidating, but don't give up yet. Half the battle is knowing which mistakes not to make, and Libert, in the book Social Nation, is eager to share the top 10 social media pitfalls he's seen organizations fall victim to in the past. Read on to discover what they are:
Pitfall #1: Running a Social Nation like a traditional business. If you want to run a social company, you first need to understand that almost everything you do is a two-way street. That is to say, you're not going to prosper if your products and services are designed solely by folks on the inside. You need to embrace the perspectives and contributions of your employees, as well as those of customers and partners.
Pitfall #2: Underinvesting in social initiatives and abandoning them too soon. Understand that a Social Nation is organic—it won't materialize with a proverbial snap of the fingers. Early on, you'll need to invest a good deal of time, thought, and money in attracting fans and followers—and your efforts will need to be sustained. Only after you've built a firm foundation will your social network begin to sustain itself through participant contribution and recommendation.
Pitfall #3: Neglecting to find ways to encourage and inspire your Social Nation's followers and fans. When you stop to think about it, you'll realize that your fans and followers are essentially volunteering their time and energy to serve as developers, sounding boards, and advertisements for your company. So for goodness' sake, respect what they have to say and take their input to heart!
Pitfall #4: Relying on a "build-it-and-they-will-come" mentality. Ummm...you don't really think that launching a new website and firing off posts at various online networking hotspots will bring fans and followers flocking, do you? Of course not! To some extent—usually a large one—you'll need to purposefully reach out to potential community members and make it worth their while to accept your invitation.
Pitfall #5: Delaying the process of going social. Contrary to what you may wish, your company doesn't have the luxury of waiting until it's "convenient" to go social. Why? Well, you have competitors, right? And if you don't start gathering loyal followers and fans now, there's a good chance that some other company will woo them first.
Pitfall #6: Underestimating the power of a Social Nation. If you believe that social networking is just a window dressing that your company "needs" (but not really), then think again. Social media and community collaboration bring many benefits, including brand-building, customer loyalty and retention, cost reductions, improved productivity, and revenue growth.
Pitfall #7: Neglecting employees, partners, investors, or customers when building your Social Nation. Yes, set up a "focus group" of employees to serve as community leaders who will shepherd your company into the social networking world, but don't put all of the power in their hands. Social Nations are organic organizations, so the more people who are empowered to influence yours, the better.
Pitfall #8: Relying on traditional approaches when designing your Social Nation. A decade ago, you probably would have been horrified at the thought of releasing ideas and products into the hands of your customers before they were as complete as you could get them. With social networking, that monolithic approach is now becoming obsolete.
Pitfall #9: Developing your own social software and analytics solutions. You wouldn't dream of placing "remodeling the office" or "handling legal issues" in the Do It Yourself category, would you? Not too many would. Instead, you'd hire someone skilled in those areas. Do yourself a favor and use the same strategy when it comes to building your own Social Nation.
Pitfall #10: Getting caught without partners to help you succeed. Libert has alluded to this one before, but it bears specific emphasis: make sure that you truly treat your community members as partners, not just as fans or numbers. Yes, integrating into the social web (Facebook, Twitter, and other social networks) is key to your company's future success, but being connected to the social web is only a part of what you need to do. Shifting your business strategically, culturally, and operationally are key components to the equation.
What do you think?
"It's true: there are countless benefits to joining what I call the Social Nation revolution—but just like any strategy for growth, social media isn't foolproof," points out Libert, author of the new book Social Nation: How to Harness the Power of Social Media to Attract Customers, Motivate Employees, and Grow Your Business. "If you don't want your company's social strategy to fall flat, there are some guidelines you'll need to follow."
Libert knows what he's talking about. After all, he's the Chairman and CEO of Mzinga, a company that provides social software to businesses. Quite literally, it's his job to be social media savvy. And he's adamant that before you start building your own Social Nation, you need to have a well-researched game plan.
"When it comes to building a successful social network for your company, you need to understand that there's a lot of prep work to be done," he explains. "You can't just set up a Facebook profile for your company, tweet once or twice a day, and expect public interest in your company to shoot through the roof. Far from it, actually."
Think about it this way: if you were in charge of your company's booth at a trade show or conference, you wouldn't just slap your company's logo onto a piece of poster board, place your business cards on the table, and hope for the best, would you? Of course not. Yet that's exactly how some companies approach social media—and that's why so many of these initiatives fail.
"If you want to become a meaningful part of social conversations and interactions," explains Libert, "you've got to know who your target 'fan base' is, where they spend their time online, and what sorts of content and programming is valuable and relevant to them, and will foster their continued interest and participation. You also need to make sure you have the wherewithal to commit to growing and sustaining your Social Nation, and you've got to make sure that you have buy-in from within your company. And that's just for starters."
Sure, it may sound intimidating, but don't give up yet. Half the battle is knowing which mistakes not to make, and Libert, in the book Social Nation, is eager to share the top 10 social media pitfalls he's seen organizations fall victim to in the past. Read on to discover what they are:
Pitfall #1: Running a Social Nation like a traditional business. If you want to run a social company, you first need to understand that almost everything you do is a two-way street. That is to say, you're not going to prosper if your products and services are designed solely by folks on the inside. You need to embrace the perspectives and contributions of your employees, as well as those of customers and partners.
Pitfall #2: Underinvesting in social initiatives and abandoning them too soon. Understand that a Social Nation is organic—it won't materialize with a proverbial snap of the fingers. Early on, you'll need to invest a good deal of time, thought, and money in attracting fans and followers—and your efforts will need to be sustained. Only after you've built a firm foundation will your social network begin to sustain itself through participant contribution and recommendation.
Pitfall #3: Neglecting to find ways to encourage and inspire your Social Nation's followers and fans. When you stop to think about it, you'll realize that your fans and followers are essentially volunteering their time and energy to serve as developers, sounding boards, and advertisements for your company. So for goodness' sake, respect what they have to say and take their input to heart!
Pitfall #4: Relying on a "build-it-and-they-will-come" mentality. Ummm...you don't really think that launching a new website and firing off posts at various online networking hotspots will bring fans and followers flocking, do you? Of course not! To some extent—usually a large one—you'll need to purposefully reach out to potential community members and make it worth their while to accept your invitation.
Pitfall #5: Delaying the process of going social. Contrary to what you may wish, your company doesn't have the luxury of waiting until it's "convenient" to go social. Why? Well, you have competitors, right? And if you don't start gathering loyal followers and fans now, there's a good chance that some other company will woo them first.
Pitfall #6: Underestimating the power of a Social Nation. If you believe that social networking is just a window dressing that your company "needs" (but not really), then think again. Social media and community collaboration bring many benefits, including brand-building, customer loyalty and retention, cost reductions, improved productivity, and revenue growth.
Pitfall #7: Neglecting employees, partners, investors, or customers when building your Social Nation. Yes, set up a "focus group" of employees to serve as community leaders who will shepherd your company into the social networking world, but don't put all of the power in their hands. Social Nations are organic organizations, so the more people who are empowered to influence yours, the better.
Pitfall #8: Relying on traditional approaches when designing your Social Nation. A decade ago, you probably would have been horrified at the thought of releasing ideas and products into the hands of your customers before they were as complete as you could get them. With social networking, that monolithic approach is now becoming obsolete.
Pitfall #9: Developing your own social software and analytics solutions. You wouldn't dream of placing "remodeling the office" or "handling legal issues" in the Do It Yourself category, would you? Not too many would. Instead, you'd hire someone skilled in those areas. Do yourself a favor and use the same strategy when it comes to building your own Social Nation.
Pitfall #10: Getting caught without partners to help you succeed. Libert has alluded to this one before, but it bears specific emphasis: make sure that you truly treat your community members as partners, not just as fans or numbers. Yes, integrating into the social web (Facebook, Twitter, and other social networks) is key to your company's future success, but being connected to the social web is only a part of what you need to do. Shifting your business strategically, culturally, and operationally are key components to the equation.
What do you think?
Friday, June 5, 2009
Security Stymies Mobile Banking
By Mark Brousseau
Security fears are the single biggest factor inhibiting mass consumer uptake of mobile banking, Tom Wills, senior analyst, Security, Fraud and Compliance at Javelin Strategy & Research, said yesterday at the Third Annual Mobile Commerce Summit at The M Resort in Las Vegas.
When it comes to mobile banking, 47 percent of consumers surveyed by Javelin Strategy & Research cited security as the thing they are most concerned about, Wills said. “No other category comes close.” Additionally, 73 percent of consumers are concerned that hackers will get access to their mobile phone.
But many consumer fears about mobile banking security are misplaced, Wills said. “There is lots of misinformation and misperception,” he told the audience of 98. “For instance, there is a perception that there is a lot of malware in the mobile banking channel. That’s not true. But it doesn’t matter that a consumer is wrong; if they are concerned, it’s lost revenue for banks.”
Wills added that, “The mobile channel is one of the safest around, if good security is implemented. It has some innate security safeguards.”
Those comments notwithstanding, banks need to be prepared to deal with fraud in mobile banking, Clint Heyworth, attorney, Consumer Finance Group, Chambliss, Bahner & Stophel told attendees.
“Mobile payments are going to happen. That is a given,” Heyworth said. “Fraud is also going to happen. That also is a given. Stealing is not a new concept. Mobile banking is just a new forum for theft and fraud. Companies need to decide how to stop it.”
So, why haven’t we heard more about instances of mobile banking fraud? “Not enough people are using it, and there isn’t enough money going through it,” Eric Kraar, senior architect, Firethorn, told attendees.
Kraar noted that the myriad operating systems in mobile banking strengthens security for the channel because it “makes it harder to get at a lot of people with one attack.” Conversely, it also means that vendors can’t focus their security efforts in any one area. “We can’t come up with one solution that fits everything,” Kraar said.
What do you think? Post your comments below.
Security fears are the single biggest factor inhibiting mass consumer uptake of mobile banking, Tom Wills, senior analyst, Security, Fraud and Compliance at Javelin Strategy & Research, said yesterday at the Third Annual Mobile Commerce Summit at The M Resort in Las Vegas.
When it comes to mobile banking, 47 percent of consumers surveyed by Javelin Strategy & Research cited security as the thing they are most concerned about, Wills said. “No other category comes close.” Additionally, 73 percent of consumers are concerned that hackers will get access to their mobile phone.
But many consumer fears about mobile banking security are misplaced, Wills said. “There is lots of misinformation and misperception,” he told the audience of 98. “For instance, there is a perception that there is a lot of malware in the mobile banking channel. That’s not true. But it doesn’t matter that a consumer is wrong; if they are concerned, it’s lost revenue for banks.”
Wills added that, “The mobile channel is one of the safest around, if good security is implemented. It has some innate security safeguards.”
Those comments notwithstanding, banks need to be prepared to deal with fraud in mobile banking, Clint Heyworth, attorney, Consumer Finance Group, Chambliss, Bahner & Stophel told attendees.
“Mobile payments are going to happen. That is a given,” Heyworth said. “Fraud is also going to happen. That also is a given. Stealing is not a new concept. Mobile banking is just a new forum for theft and fraud. Companies need to decide how to stop it.”
So, why haven’t we heard more about instances of mobile banking fraud? “Not enough people are using it, and there isn’t enough money going through it,” Eric Kraar, senior architect, Firethorn, told attendees.
Kraar noted that the myriad operating systems in mobile banking strengthens security for the channel because it “makes it harder to get at a lot of people with one attack.” Conversely, it also means that vendors can’t focus their security efforts in any one area. “We can’t come up with one solution that fits everything,” Kraar said.
What do you think? Post your comments below.
Thursday, October 23, 2008
China Embraces Credit Cards
Posted by Mark Brousseau
An interesting article from this week's LA Times:
China charges into credit cards
Banks are stepping up their marketing of plastic, but the penalties are harsh on delinquent payers.
By Don Lee
reporting from Shanghai
October 22, 2008
Imagine there was a law that said if you missed two credit card payments in a row, you had to pay the full balance immediately, with heavy penalties. And if you didn't, your bank would take out an ad in your local newspaper, calling you a deadbeat. Or worse, thugs in suits might show up at your office, haul you down to the bank and keep you there for hours until you signed a promise to pay.
Welcome to the world of plastic -- Chinese style.
Chinese banks don't have national credit bureaus and sophisticated scoring models that allow them to churn out approvals in minutes. Instead, armies of young workers pore over paper applications, manually verifying one piece of information at a time.
Yet banks in China have issued tens of millions of credit cards in recent years. Today, more than 100 million are in circulation among China's 1.3 billion people, up from just 3 million in 2003, according to analysts and bankers.
Unlike American credit card firms, which are cutting back because of rising delinquencies, Chinese banks are stepping up their marketing of plastic. In the next five to 10 years, analysts say, China could issue 1 billion new cards, largely to a mass market that has little experience with credit.
Chi Wei Joong, a former American Express Co. executive, runs the credit card operations for China Merchants Bank. He has more than 9,000 workers nationwide. In every major city, Joong's sales force researches office buildings, their occupancy rates, average rents and other statistics. A report is then sent to the bank's credit department, which assigns a credit score for the building before salespeople target folks who work there.
"This is to control risk," Joong said. But if borrowers default, he doesn't hesitate to turn the accounts over to more than 100 collection agencies.
Joong says fewer than 10% of his bad loans end up in court, but some people have gone to jail. Under Chinese law, a credit card user who intentionally defaults on a sum as little as $3,000 can be sentenced to as much as five years in prison.
The tough regulations haven't stopped the steady increase in troubled credit card debts at China Merchants and other lenders. Analysts estimate that banks in China this year were writing off 2% to 3% of their credit card loans, less than half of the July charge-off rate of 6.6% in the U.S., according to Fitch Ratings.
"In the U.S., all the credit card companies are chasing subprime borrowers" because most customers with good credit already have multiple cards, said Darwin Tu, chairman of Sino Credit Corp., an industry research and marketing firm. In China, he says, banks haven't saturated the prime market yet.
On average, a Chinese credit card holder has no more than two cards, compared with five for Americans, said Tu, a Stanford University graduate who cut his teeth at Fair Isaac Corp. in California, which pioneered credit scoring.
At China Merchants Bank, which has about 23 million credit cards outstanding, Joong says his department's loan-loss ratio has climbed from 0.67% in 2005 to at least 1.5% this year. Such numbers are likely to rise as more cards are issued to young adults, who belong to China's one-child generation, seen as more spendthrift than older Chinese.
Among Chinese credit card users, more than 70% pay the entire balance every month, says Nie Junfeng, a manager in the Bank of China's personal finance department. "This may be related with the tradition that Chinese people, as the saying goes, don't like eating next year's food this year," he said.
But the young generation is different, he said. "They're more comfortable spending tomorrow's money today."
Deng Jialing, 27, got his first credit card from China Merchants Bank in 2006 when he was working for a cellphone parts manufacturer in Shenzhen, making a little more than $500 a month. His card's limit started at about $400, and like all Chinese credit cards, his had an 18.25% annual interest rate, set by the government.
Deng bought a cellphone. The card was tapped out, and two months later, Deng got a second credit card, from China Construction Bank, the country's largest issuer of plastic.
Said Sino Credit's Tu: "Once you get a card, you show that one to another bank and they give it to you. [The data's] not linked."
After hitting the ceiling on the second card, Deng easily secured a higher credit limit. He applied for more cards, building up a balance of $17,000 at nine banks. His charges included electronic gadgets, food and a $4,000 hospital bill when he got pneumonia.
For a while, he played a cash-advance game, taking out money from one card to pay the minimum monthly payment on another.
Then, on a June evening, three big men in black turned up at his workplace in Shenzhen. Deng thought about slipping out the back door. But he met the men and followed them into a black sedan.
Sandwiched between two of them in the back seat, Deng was taken to China Minsheng Bank's credit card center across town. There, he said, the grilling began: Where did you spend all the money? Why can't you pay it back?
"I told them that I was at the end of my rope," said Deng, who owed about $2,000 to China Minsheng, which declined to comment. Five hours later, after being fingerprinted and signing an agreement to pay off the balance in three days, Deng stepped out of the bank and into the night. "I walked slowly to my home, thinking how had I come to this situation."
Analysts say cases such as Deng's aren't common in China. To keep it that way, China's central bank is developing a national credit resource system, something like Experian, Equifax and TransUnion in the U.S. As of March, the People's Bank of China said, its database contained information on nearly 600 million individuals. Of those, about 3% are noted for failing to pay bills or defaulting on loans or credit cards, says Joong of China Merchants.
Joong and other bankers use the database to screen out applicants who have been blacklisted, but the central bank's system doesn't contain a complete profile to assess the creditworthiness of the remaining 97%. Some banks don't share or make timely updates on consumer data, so lenders often don't know how much debt cardholders really have.
To discourage defaults, Guangdong Development Bank has taken out ads in newspapers, publicizing the identities of delinquent borrowers. Some banks frown on the tactic, but it isn't illegal.
Other card providers try to reduce risks upfront. State-owned China Construction Bank, for example, markets cards in Shenzhen through a cable TV company. When the cable installers make a service call to a home, they offer credit card applications and at the same time verify where residents live. Joong is considering a similar tie-up with water delivery companies.
But countervailing forces threaten to increase the risk of card abuse and defaults. Cash advances usually aren't supposed to be more than a small share of a card's credit limit, but consumers say merchants and finance firms ring up bogus or inflated purchases on credit, giving the cardholder cash, less a fee. Chinese lenders have started to offer balance transfers and other sweeteners to encourage customers to revolve debt.
Chinese bankers dismiss concerns that they could one day see the kinds of heavy losses that have plagued U.S. lenders during downturns or the sort of plastic debacle that hit South Korea earlier this decade when rules on credit were eased and consumers went wild with charges.
But others aren't so sure. "That depends on how banks control the cards," said Yan Yiming, a Shanghai attorney who specializes in economics and consumer law. "I can see that many are issuing cards very aggressively these days.
"They're also going after bad debts very aggressively, as Deng learned. After that desperate June evening when he was taken to the bank, Deng called his aunt and borrowed $13,000, promising to pay her back, $370 a month. Since then, he has pared his overall credit card debt to $2,900.
An interesting article from this week's LA Times:
China charges into credit cards
Banks are stepping up their marketing of plastic, but the penalties are harsh on delinquent payers.
By Don Lee
reporting from Shanghai
October 22, 2008
Imagine there was a law that said if you missed two credit card payments in a row, you had to pay the full balance immediately, with heavy penalties. And if you didn't, your bank would take out an ad in your local newspaper, calling you a deadbeat. Or worse, thugs in suits might show up at your office, haul you down to the bank and keep you there for hours until you signed a promise to pay.
Welcome to the world of plastic -- Chinese style.
Chinese banks don't have national credit bureaus and sophisticated scoring models that allow them to churn out approvals in minutes. Instead, armies of young workers pore over paper applications, manually verifying one piece of information at a time.
Yet banks in China have issued tens of millions of credit cards in recent years. Today, more than 100 million are in circulation among China's 1.3 billion people, up from just 3 million in 2003, according to analysts and bankers.
Unlike American credit card firms, which are cutting back because of rising delinquencies, Chinese banks are stepping up their marketing of plastic. In the next five to 10 years, analysts say, China could issue 1 billion new cards, largely to a mass market that has little experience with credit.
Chi Wei Joong, a former American Express Co. executive, runs the credit card operations for China Merchants Bank. He has more than 9,000 workers nationwide. In every major city, Joong's sales force researches office buildings, their occupancy rates, average rents and other statistics. A report is then sent to the bank's credit department, which assigns a credit score for the building before salespeople target folks who work there.
"This is to control risk," Joong said. But if borrowers default, he doesn't hesitate to turn the accounts over to more than 100 collection agencies.
Joong says fewer than 10% of his bad loans end up in court, but some people have gone to jail. Under Chinese law, a credit card user who intentionally defaults on a sum as little as $3,000 can be sentenced to as much as five years in prison.
The tough regulations haven't stopped the steady increase in troubled credit card debts at China Merchants and other lenders. Analysts estimate that banks in China this year were writing off 2% to 3% of their credit card loans, less than half of the July charge-off rate of 6.6% in the U.S., according to Fitch Ratings.
"In the U.S., all the credit card companies are chasing subprime borrowers" because most customers with good credit already have multiple cards, said Darwin Tu, chairman of Sino Credit Corp., an industry research and marketing firm. In China, he says, banks haven't saturated the prime market yet.
On average, a Chinese credit card holder has no more than two cards, compared with five for Americans, said Tu, a Stanford University graduate who cut his teeth at Fair Isaac Corp. in California, which pioneered credit scoring.
At China Merchants Bank, which has about 23 million credit cards outstanding, Joong says his department's loan-loss ratio has climbed from 0.67% in 2005 to at least 1.5% this year. Such numbers are likely to rise as more cards are issued to young adults, who belong to China's one-child generation, seen as more spendthrift than older Chinese.
Among Chinese credit card users, more than 70% pay the entire balance every month, says Nie Junfeng, a manager in the Bank of China's personal finance department. "This may be related with the tradition that Chinese people, as the saying goes, don't like eating next year's food this year," he said.
But the young generation is different, he said. "They're more comfortable spending tomorrow's money today."
Deng Jialing, 27, got his first credit card from China Merchants Bank in 2006 when he was working for a cellphone parts manufacturer in Shenzhen, making a little more than $500 a month. His card's limit started at about $400, and like all Chinese credit cards, his had an 18.25% annual interest rate, set by the government.
Deng bought a cellphone. The card was tapped out, and two months later, Deng got a second credit card, from China Construction Bank, the country's largest issuer of plastic.
Said Sino Credit's Tu: "Once you get a card, you show that one to another bank and they give it to you. [The data's] not linked."
After hitting the ceiling on the second card, Deng easily secured a higher credit limit. He applied for more cards, building up a balance of $17,000 at nine banks. His charges included electronic gadgets, food and a $4,000 hospital bill when he got pneumonia.
For a while, he played a cash-advance game, taking out money from one card to pay the minimum monthly payment on another.
Then, on a June evening, three big men in black turned up at his workplace in Shenzhen. Deng thought about slipping out the back door. But he met the men and followed them into a black sedan.
Sandwiched between two of them in the back seat, Deng was taken to China Minsheng Bank's credit card center across town. There, he said, the grilling began: Where did you spend all the money? Why can't you pay it back?
"I told them that I was at the end of my rope," said Deng, who owed about $2,000 to China Minsheng, which declined to comment. Five hours later, after being fingerprinted and signing an agreement to pay off the balance in three days, Deng stepped out of the bank and into the night. "I walked slowly to my home, thinking how had I come to this situation."
Analysts say cases such as Deng's aren't common in China. To keep it that way, China's central bank is developing a national credit resource system, something like Experian, Equifax and TransUnion in the U.S. As of March, the People's Bank of China said, its database contained information on nearly 600 million individuals. Of those, about 3% are noted for failing to pay bills or defaulting on loans or credit cards, says Joong of China Merchants.
Joong and other bankers use the database to screen out applicants who have been blacklisted, but the central bank's system doesn't contain a complete profile to assess the creditworthiness of the remaining 97%. Some banks don't share or make timely updates on consumer data, so lenders often don't know how much debt cardholders really have.
To discourage defaults, Guangdong Development Bank has taken out ads in newspapers, publicizing the identities of delinquent borrowers. Some banks frown on the tactic, but it isn't illegal.
Other card providers try to reduce risks upfront. State-owned China Construction Bank, for example, markets cards in Shenzhen through a cable TV company. When the cable installers make a service call to a home, they offer credit card applications and at the same time verify where residents live. Joong is considering a similar tie-up with water delivery companies.
But countervailing forces threaten to increase the risk of card abuse and defaults. Cash advances usually aren't supposed to be more than a small share of a card's credit limit, but consumers say merchants and finance firms ring up bogus or inflated purchases on credit, giving the cardholder cash, less a fee. Chinese lenders have started to offer balance transfers and other sweeteners to encourage customers to revolve debt.
Chinese bankers dismiss concerns that they could one day see the kinds of heavy losses that have plagued U.S. lenders during downturns or the sort of plastic debacle that hit South Korea earlier this decade when rules on credit were eased and consumers went wild with charges.
But others aren't so sure. "That depends on how banks control the cards," said Yan Yiming, a Shanghai attorney who specializes in economics and consumer law. "I can see that many are issuing cards very aggressively these days.
"They're also going after bad debts very aggressively, as Deng learned. After that desperate June evening when he was taken to the bank, Deng called his aunt and borrowed $13,000, promising to pay her back, $370 a month. Since then, he has pared his overall credit card debt to $2,900.
Monday, June 9, 2008
Suit: Comcast Publishes Check
Posted by Mark Brousseau
Pa. woman is doubly furious at Comcast
By JOE MANDAK Associated Press Writer
06/06/2008 01:03:16 PM EDT
PITTSBURGH—A western Pennsylvania woman who sent Comcast Corp. a check made out for "My Right Arm and Zero Dollars" is up in arms because she says someone from the cable TV company published a copy of the check on the Internet.
Krista Cooney and her husband Chad filed a lawsuit in U.S. District Court in Pittsburgh alleging Philadelphia-based Comcast invaded their privacy when the check she wrote last summer showed up on the Internet.
Cooney sent the check because she was unhappy with a large bill she received for her cable television, Internet and telephone service, the lawsuit said.
The Allegheny County couple contend an unknown Comcast employee circulated an e-mailed copy of the check—containing their personal banking information, address and phone number—along with a snide comment. A Colorado man saw the image and alerted the Cooneys because he had been a victim of identity theft and realized the couple was at risk.
Comcast declined to address the lawsuit specifically in a statement Friday, but said the company has apologized to Krista Cooney and is working to address her concerns.
"The individuals involved in this incident are no longer with the company," the statement said. "Comcast holds our customers privacy and security in the highest regard."
The lawsuit filed Tuesday comes just weeks after customer satisfaction ratings for Comcast fell to an all-time low. The survey by the University of Michigan's American Customer Satisfaction Index ranked Comcast below other cable and satellite TV providers.
The eight-page suit said the incident began when the Cooneys subscribed last year to Comcast's $99-a-month "Triple Play" package of bundled services. The first bill the couple received was for nearly $297. The lawsuit said Krista Cooney could only afford to send the company about $268, intending to pay the balance and a late fee the following month. A Comcast spokeswoman could not immediately explain its billing policies.
When Comcast sent a letter threatening to cut off the service, Cooney sent two checks: one to cover the balance and next month's bill, and the "My Right Arm" check meant to register her displeasure.
Cooney wrote "Robbing Customers Blind" in the memo section of that check and sent along a short note, saying, "Some people do have a budget ya know," the lawsuit said.
Pa. woman is doubly furious at Comcast
By JOE MANDAK Associated Press Writer
06/06/2008 01:03:16 PM EDT
PITTSBURGH—A western Pennsylvania woman who sent Comcast Corp. a check made out for "My Right Arm and Zero Dollars" is up in arms because she says someone from the cable TV company published a copy of the check on the Internet.
Krista Cooney and her husband Chad filed a lawsuit in U.S. District Court in Pittsburgh alleging Philadelphia-based Comcast invaded their privacy when the check she wrote last summer showed up on the Internet.
Cooney sent the check because she was unhappy with a large bill she received for her cable television, Internet and telephone service, the lawsuit said.
The Allegheny County couple contend an unknown Comcast employee circulated an e-mailed copy of the check—containing their personal banking information, address and phone number—along with a snide comment. A Colorado man saw the image and alerted the Cooneys because he had been a victim of identity theft and realized the couple was at risk.
Comcast declined to address the lawsuit specifically in a statement Friday, but said the company has apologized to Krista Cooney and is working to address her concerns.
"The individuals involved in this incident are no longer with the company," the statement said. "Comcast holds our customers privacy and security in the highest regard."
The lawsuit filed Tuesday comes just weeks after customer satisfaction ratings for Comcast fell to an all-time low. The survey by the University of Michigan's American Customer Satisfaction Index ranked Comcast below other cable and satellite TV providers.
The eight-page suit said the incident began when the Cooneys subscribed last year to Comcast's $99-a-month "Triple Play" package of bundled services. The first bill the couple received was for nearly $297. The lawsuit said Krista Cooney could only afford to send the company about $268, intending to pay the balance and a late fee the following month. A Comcast spokeswoman could not immediately explain its billing policies.
When Comcast sent a letter threatening to cut off the service, Cooney sent two checks: one to cover the balance and next month's bill, and the "My Right Arm" check meant to register her displeasure.
Cooney wrote "Robbing Customers Blind" in the memo section of that check and sent along a short note, saying, "Some people do have a budget ya know," the lawsuit said.
Sunday, November 11, 2007
Shifting Online Behaviors
By Mark Brousseau
In a keynote presentation entitled "Thinking Beyond Tomorrow" at TAWPI's Payments Automation: Beyond Capture & Clearing Conference last week in Florida, Sanjiv Sanghvi, president and CEO of Wells Fargo HSBC Trade Bank, noted that megatrends such as electronic payments are accelerating, and provided several examples of shifting online behaviors and interests:
Against this backdrop, Sanghvi told the audience that in order for financial services providers to survive in the emerging electronic payments environment (where more payment choices are coming), they must listen to their customers, and keep new product offerings simple ("adopt then adapt"). He also advised financial services providers to remember that technology is the enabler, not the end state (just like financial services). What do you think? E-mail me at m_brousseau@msn.com.
In a keynote presentation entitled "Thinking Beyond Tomorrow" at TAWPI's Payments Automation: Beyond Capture & Clearing Conference last week in Florida, Sanjiv Sanghvi, president and CEO of Wells Fargo HSBC Trade Bank, noted that megatrends such as electronic payments are accelerating, and provided several examples of shifting online behaviors and interests:
- 158 billion text messages were sent in 2006
- 8.4 percent of U.S. households are wireless-only
- 74 percent of single Internet users in the U.S. have taken part in at least one online dating-related activity
- More than 100,000 marriages a year result from people meeting on an online dating service
- 10 percent of cell phone users age 18 to 34 have "texted" someone out of their romantic lives
- MySpace is second only to Yahoo! in the U.S. market in terms of page views
Against this backdrop, Sanghvi told the audience that in order for financial services providers to survive in the emerging electronic payments environment (where more payment choices are coming), they must listen to their customers, and keep new product offerings simple ("adopt then adapt"). He also advised financial services providers to remember that technology is the enabler, not the end state (just like financial services). What do you think? E-mail me at m_brousseau@msn.com.
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