I think an advantage of an established bank is reputation effect (if bad things happen it hurts), FCSC and other protections, more resources. So as a large number of businesses fail with 5 years (so I guess reputation issues less helpful), how do you respond to the following? I really want to use you for budgeting my variable spending but I worry about fintech. I guess it might be something like driverless cars, the early uses might have to take some big/more risks as the established companies may be more cautions due to regulations; though I think that is not quite right hence my questions? Hopefully this comes across ok!
Please could you explain why you are safe? As with a bank with branches I can access it to complain to management, withdraw all my money and close the account. So I feel that online only banks need much higher customer service
Can I go to your registered office and withdraw all my money?
If you are on the Monzo prepaid card, your deposits are held by Wirecard Card Solutions Ltd. in a ring-fenced client-monies account and not used in any other way.
If you are on the Monzo current account, a very small proportion of your money (around 10% of total deposits) will be lent to Monzo customers in the form of unsecured personal overdrafts. The rest sits in cash in our Reserves Account at the Bank of England or be used as collateral for payment schemes.
In the future, we are likely to do more personal lending and invest some of the money in high quality liquid assets like UK government bonds."
Monzo Investment Ethics
How are you safer than a traditional bank who have much more resources to fight against fraud…?
How do you protect our data given out, due to the open banking changes?
What happens when you are hacked? Is most or not all data encrypted?
I don’t know what the major banks do, perhaps it’s easier for you as you can build it from scratch and not have as I have seen windows xp on ATM machines.
"What you find when start working on an existing piece of software can be best described with an image."
Pasted from https://blog.toggl.com/programming-like/
How do you think you will not have similar issues to Natwest when it’s app was broken into?
Henry Bodkin 6 DECEMBER 2017 • 8:30PM
Scientists have discovered a flaw in banking apps used by millions of customers that left them vulnerable to hackers exploiting wifi.
Researchers ran a tool on apps from HSBC, Natwest, Co-op banks and others and found online criminals would have be able to con the software into revealing personal details.
Protecting contactless from card scanners? Is that needed?
"NFC, though, is very short-range, working over distances of 5cm (2in) at most. “I’d be surprised if this is reading cards that are more than 4cm away,” says Dave Birch of Consult Hyperion, which provides consultancy into electronic transactions. "Reading something in your backpack? No. Reading a card that’s in your wallet which you put down on or by the reader while you looked for the card you wanted to pay with? Yes." (His office tested it on Monday with a real M&S reader. Result: doesn’t work beyond about 5cm. (Though this article is from 2013)
Even so, it’s worrying. But never fear – you can buy wallets or purses with metal mesh woven into the fabric that will prevent this happening. (“We’ve tested them – they do work,” Birch concedes.)…
The cheaper alternative is to wrap your contactless card in aluminium foil. (And perhaps a little for your head? Seems a shame to waste the opportunity.) The even simpler alternative, I’ve found, is to have more than one contactless card in your wallet. The card reader then can’t decide which card you want read, and declines the transaction. London-based commuters can put their Oyster card in their wallet alongside a contactless card – and hold up rush-hour tube travellers as the gate’s reader get confused. A great new way to make friends. Well, acquaintances."
Open Banking Security
There is an advantage in a physical bank as you can get your money out, like with northern rock.
(The open banking changes do seem a bit like buyer beware, due to the protection issues.
I think perhaps with online only some issues are: access, trust and customer service, you can always go into a branch and complain, as person as limited options to just ignore you…)
However “Your bank cannot hold you responsible for unauthorised transactions just because you have shared your credentials with regulated AIS and PIS providers.”
Initially, Open Banking should make it easier for consumers to compare current accounts and other banking services, but over time more online applications and tools could become available to help personal finance management, including identifying where money can be saved. It is important to highlight again that no access will be given to your accounts, unless you provide express permission.
For those of you keen to know more, you may see these new services referred to as Account Information Services (AIS) or Payment Initiation Services (PIS). From 13th January, companies who offer AIS and PIS must be authorised or registered by the Financial Services Authority (FCA), although companies that have been providing these services since before 12 January 2016 do not need to be authorised by the FCA until the end of 2019, so may not appear on the FCAs register until a later date. As Open Banking progresses and evolves, this should be revolutionary but as ever its important to make sure you know who you are giving your permission too. The FCA has provided the following words of warning on its website:
Before you use one of these services be alert, and make sure you are confident that any organisations you share your information with are who they say they are. You should make sure that you understand the service and that you are happy with who will be providing it to you.
Giving consent for access to account data
When you sign up with a company for account information services, the AIS provider should give you enough information to understand the nature of the service being provided and how it will use your data, including whether it will share your data with anyone else.
Sharing security details
Currently, businesses that provide AIS and PIS often ask you to share your bank security details with them, such as your login and passwords.
Under existing data protection law, these businesses must protect your data and PSD2 will require these businesses to put further measures in place to keep your credentials safe and secure.
Your banking terms and conditions should not prevent you from sharing your credentials with regulated AIS or PIS providers. Your bank cannot hold you responsible for unauthorised transactions just because you have shared your credentials with regulated AIS and PIS providers.
Currently and at a very simple level, Open Banking should allow consumers to view all of their savings and investments in one place, to give them an easy real-time view of their entire financial situation.
We have already seen a number of savings apps launched, that link with customer bank accounts via Open Banking and use algorithms to analyse spending habits in order to work out what you can afford to save and then automatically transfers that amount into a savings account. While this is a really useful tool that will enable savers to determine what they can afford to save and help those that never get around to opening a savings account to actually get started - it is important check the rate of interest being offered on the account that your savings are automatically transferred into.
Our research to date has not found any best buy rates – so while we are always in favour of any resources that help people get saving, it is equally as important to ensure you make your savings work hard for you and that means making sure you have an account that earns the most interest.
Open Banking Negative effects on rates?
How can you avoid companies such as yourselves or 3rd parties that you want to offer users changing their pricing at a negative affect to a user that wouldn’t be the case if they didn’t use open banking?
Comments from: Ask Anna – What is open banking and can I opt out?
"anthony smith • 2 months ago
I don’t know whos brainchild this was but it sounds to me like an open invitation to even more identity theft and financial scams. I for one will not be signing up for any other company’s to access and collate all my financial details into one place, assuming that I am understanding this article right.
Mary Branscombe • 2 months ago
if Savings Champion linked this to the rate tracker it would be an immediate view of your savings portfolio and an accurate list of accounts for rate notifications - could be handy
Tony Conrad Mary Branscombe • 19 hours ago
Could be handy but does one want other banks and Building Societies to know everything about us much less the government. I prefer privacy personally."
…Emma, which is an anagram of the initials of its founders (Marino and Edoardo Moreni, who met at the University of Manchester) should now be able to take advantage of the UK’s new Open Banking initiative.
“Our goal is to build a private wealth manager, an artificial intelligence that sits between our users and their financial services with the aim of helping,” said Moreni.
The business has so far been funded without external help, and according to the founders has attracted “thousands” of users already.
Emma, the “banking app for millennials”, gets FCA approval and announces it will integrate Monzo and Revolut
@ianlyon More info on the following please?
App and Mobile Security
How are you securing mobile phones and the app? Given android fragmentation, given for example lack of updates on older phones, not everyone will upgrade to the latest model?
Data Use Policy
How is the data from the app used?
How is it anonymised?
Can I export it when I close my Monzo accounts?
How will it be secured once someone closes their Monzo account?
I appreciate I think laws state you need to keep records, even with the data protection laws, it is more giving users control over their data, rather than it floating around online.
Could you go into more detail about this, as I think you don’t have a passcode on the app itself?
I appreciate others have explained why this should or shouldn’t be an issue. However I view it like a house, you have a good lock on the front doors/back door (access codes to the phone), but you might keep your valuables (monzo/pictures) in a safe (additional passcodes)?
There is a partial trade off usability vs security
Q: Should you use Monzo, if your security and privacy are more important to you than convenience?
A: Given that Monzo make it very difficult to revoke API access, don’t have pin protection for the app (on Android), show previous security questions and answers visible in the app (which is usually unprotected), and a number of other issues, it seems fair to conclude that Monzo generally prioritise usability and convenience over security and privacy. Thus, if you do not share this view you may consider alternative options instead.
If I was to invest in Monzo, how are you mitigating costs if fraud happens and people make off with mine or others money? I appreciate you have reserves as mentioned here
"…a very small proportion of your money (around 10% of total deposits) will be lent to Monzo customers in the form of unsecured personal overdrafts.
The rest sits in cash in our Reserves Account at the Bank of England or be used as collateral for payment schemes."
Monzo Investment Ethics
(Hopefully this makes sense and comes across like I am trying to make informed decisions)