Banking, Fraud

Banking Briefing: A new year, but fraud is still here

  • Where do banks stand with fraud?
  • Meanwhile, we take a quick look at Greenwood’s new subscription offering.

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Banking Briefing: A new year, but fraud is still here

In the numbers: Bank customers continue to face fraud

Banks are continuing to see incidences of fraud, with almost 60% of customers reporting experiencing first-hand fraud or knowing a family member who has, according to a recent survey from J.D. Power. 

This is a wakeup call, said Jennifer White, senior director of banking and payments intelligence at J.D Power, who authored the research.

“This magnitude serves as an indicator of the spread of fraud concern as this is not something that simply ‘happens to other people,’” said White.

Source: J.D. Power

Fraudulent use of credit cards is the top reported category, but White is also concerned about the rise of P2P fraud cases.

“We have seen the media reports about the incidence of peer to peer payment fraud with companies like Zelle or Paypal. Seeing the incidence reported of 12% personal experience and another 11% seeing it through a close relative with, total net experience 22%. is alarming,” said White. “Particularly given the high levels of usage of these tools among younger populations.”

Is the rise of fraud a risk to banks’ reputation as trusted establishments?

When fintechs started challenging banks to a dance-off, incumbents’ key move wasn’t the robo or the digital transformation tango, but rather the trust twist.

As in, customers still saw them as the place to go when the real problems took place.

But a rise in fraud may change the narrative. To keep trust on their side, these institutions will have to make sure they are keeping their reputation reputable. 

Spotlight article: On Greenwood’s subscription product 

Greenwood is a neobank focused on serving Black and Latino communities. Banking Dive recently published an article diving into Greenwood’s new subscription offering. The subscription offering, called Elevate, gives customers access to entertainment, private clubs, and professional networking sites.

The offering comes following the neobank’s acquisition of The Gathering Spot, a networking hub and workspace, and Valence, a networking platform for the Black community.

The subscription costs $200 a month. 

Thinking back to Greenwood’s session at TBBT 2021

At Tearsheet’s Big Bank Theory 2021, Greenwood’s Chidiebere Kalu joined Zack on stage (or in the little Zoom box thingy if you want to get all technical about it), to talk about what it means to build products for culture.

While Greenwood’s banking products are pretty standard as far as digital banking apps go, it’s the stuff surrounding its banking products that really make it stand out, especially in the content space.

“It starts with being able to educate the masses. So Greenwood is a makeup of our application, but also the content that we’re serving on a daily basis. And the beautiful thing is we’ve learned where that sweet spot is, where it’s a mix of entertainment with finance.” Chidiebere Kalu, Greenwood’s director of product management, at Tearsheet’s Big Bank Theory Conference 2021.

This subscription offering continues to speak to this approach, in helping Black professionals secure worthwhile connections. 

 “I built multiple businesses over my personal career in media, entertainment and music, and never had any banking capital to build any of my businesses like my non-minority friends and counterparts or other executives of my ilk. Greenwood is here to change that narrative and provide individuals with personal and professional capital to build their goals and dreams,” – Ryan Glover, co-founder of Greenwood, to Banking Dive. 

What we’re producing

5 questions about managing everyday Americans’ finances with Achieve’s Andrew Housser

Data Snack: Banks may have a ways to go to get more tech talent (Member exclusive)

Where challenger banks are headed, in 4 charts

The Green Finance Podcast Ep. 16: What’s the environmental impact of payments?
The Big Bank Theory Conference 2022: All session videos

What we’re consuming

Save the planet! (because that’s where your money lives)

Secretary general of the FSB  Dietrich Domanski has warned that without financial incentives, banks' dedication to tackling climate change will remain minimal. 

Even with all the glitzy announcements big banks have made regarding fighting climate change, the amount they’ve actually cut in fossil-fuel funding isn’t all that much. Things like a global carbon tax, says Domanski, could get lenders to rethink their actions. (FT

The cannabis industry continues to face banking bumps

The SAFE Banking Act, which would prohibit scrutiny of banks working with state-regulated cannabis companies, was left out of the $1.7 trillion spending bill unveiled by congressional budget negotiators. (Route Fifty)

Not exactly a fun world record…

Wells Fargo will pay a $1.7 billion fine, plus another $2 billion in damages, over the banking violations it engaged in within the last decade, including charging customers overdraft fees, even when they had enough money on their bank cards or wrongfully repossessing customers’ cars and homes. 

This is the biggest fine ever imposed by the CFPB. So…there’s that. (NY Times)

‘No’ to private crypto, but ‘Go’ to digital rupee

A couple of weeks ago, Shaktikanta Das, governor of the Reserve Bank of India, voiced his concern about allowing private crypto currency trade to grow, calling it ‘a hundred percent speculative activity’. This comment comes as the central bank looks to release a digital version of the Indian rupee. (CNBC)

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