Category Archives: France

Are Swiss Banks Private like in the Movies?

Swiss bank have for a long time been iconic for big wealth and pseudonymous for privacy. Popular movies have long depicted Swiss numbered bank accounts as being no questions asked lock boxes to store your ill gotten gains but Swiss banking has changed.

Remember the days of those James Bond villains carrying the steel briefcase with a telephone in it ready to receive the wire for that big extortion? At one point in history, Switzerland had one the most developed and secretive banking sectors of the world. It’s wasn’t by any means unsupervised but was infamously secretive. During World War 2 Swiss banks were known to carry accounts for both sides of the conflict, to everyone from victims of war to high ranking official and pillagers alike. Parts of high French society were exposed to have made large deposits to evade French taxes when Swiss banks were actively financing the Germans. In 1934 the Swiss government restructured regulation on banking through the Federal Act on Banks and Savings Banks granting account holders privacy from all non-Swiss third parties. Individual accounts were, and still are identified by number and every number corresponds with another number to identify the client. It’s a form of natural encryption which is the basis of many important digital currencies today (encrypted digitally of course). This form of encryption, is only as private as its intermediary settling the transaction which until the 1990s was the bank itself.

Banking in Switzerland today is supervised by the Swiss Financial Market Supervisory Authority (FINMA). Over the last decade due to overwhelming political pressure from many G20 nations, repeals to an important law that was granting much of the privacy were discussed. In 2009, Swiss authorities indicated that changes were to be made to a certain portion of the act, where banks would only reveal private information in cases of serious crimes, tax evasion not being one of them. In 2013, authorities further indicated that they were going to align with standard G20 banking practices but no material change has been made since.

The loophole mentioned by many G20 economic pundits relies on the fact that in Switzerland the act of not reporting earned income is considered tax evasion and not tax fraud. Authorities simply don’t view tax evasion as a serious enough offence to breech privacy. From a Swiss stand point, its makes economic sense because they are earning domestic deposits while reducing a foreign countries tax base. Switzerland is definitely the rich guy on the block.

Since 2009, there have been many lawsuits directed toward Swiss banks (such as UBS for $780M) but an increase of political pressure has been applied on Swiss banking authorities and privacy has been breached. Foreign governments have been successful in lobbying Swiss banking authorities to reveal information making other banking jurisdictions more attractive. With the current global climate, these havens will move around. Switzerland has comparatively vast political clout.

You’re better off going to Switzerland to ski because now a days, if you are looking to hide ill gotten gain, Switzerland is not at the top of your list.

This nostalgic subject brings up an interesting topic in economics and it’s the role of privacy within our transaction system and our world. What amount of privacy is acceptable and in what circumstances? What is money laundering if not hiding wealth accumulated from what would be considered shady activities. I think that with evolution of our financial system and communication, these subjects are going to become increasingly important as mining your data is progressing in use and effectiveness. How private should your money be?

Using Social Media to get the Best Online Payment System

With the advancement in technology and innovation, the process of payments has evolved significantly. Different fields have adopted the new payment solutions with enthusiasm. The banking sector is not an exception. Various banks and social media companies have embraced this new payments trends and have collaborated to offer new services. This is because of the growing use of the smartphones and internet among many people around the world. An increasing number of people are using the social media to make payments as well as performing other banking and transaction operations. The following are examples of banks which have integrated within social media platforms such as Facebook and Twitter in order to provide the best online payment system and respond to the needs of the people.

ICICI Bank – India
ICICI bank launched ICICIBankPay which would allow clients with a Twitter account to transfer money in the country. It can also allow individuals to recharge prepaid mobile, view the last three transactions, and check the account balance. Moreover, the rolling out of the mobile payment service via Twitter was also aimed to tapping the market of potential clients who did not have an account with the bank but still wanted to use its services.

Banque Populaire d’Ḗpargne (BPCE) – France
BPCE signalled a move to revenue streams by collaborating with Twitter in announcing that it would allow its clients to transfer money through tweets. All one needs to do is to link the Twitter username to the S-money account and install the app. Both the sender and the recipient of the money must have the S-money account and app linked.

Kotak Mahindra – India
Kotak launched a social savings bank account known as Jifi Saver. The management of the account is done through Twitter and Facebook. It caters for the tech savvy clients more so eCommerce partners. It also caters for the needs of online shoppers. The service is available in 27 cities across India.

Baclays Bank – UK
On 10th March, 2015, Baclays launched a Twitter service becoming the first bank in the UK to allow payments through Twitter. It aimed at exploiting social and digital opportunities in order to offer an optimal customer experience. The payment is swift and does not require that the user provides the bank details or the phone number. The service was successfully launched despite the security concerns associated with the use of the mobile phones and the social media.

Rakuten Bank – Japan
Rakuten has a well established reputation in global eCommerce business. It was therefore not surprising when the company utilized the use of Facebook in its service to clients. Customers are supposed to log in to the bank iOS and Android apps, connect their Rakuten and Facebook accounts, and choose from their Facebook friends who they want to pay. If the recipient bank account is not linked to a Facebook account there is a small charge of 165 yen, if it is, it is a free service.

RBC Royal Bank of Canada – Canada
RBC expanded its mobile bank solutions by enabling its clients to make electronic transfers through Facebook. This is in line with the bank’s mission to become “Canada’s most innovative bank.” In this regard, one can send money to his or her Facebook friends through Android, iPhone, or iPad.

ASB Bank – New Zealand
In July, 2012, ASB Bank sought to exploit the social media phenomenon by announcing that it would use the Facebook platform to send notifications to customers. Similarly, it allowed customers to make payments to other banks through Facebook. The bank emphasized that one does not have to provide a bank account. From the time the service was launched, 10 % of the bank’s mobile payments have been effected through the platform.

FNB – South Africa
FNB South Africa has drastically changed the South African banking landscape with its advertising strategies and progressive marketing. It is against this backdrop that it adopted Facebook as one of the banking tools. It uses Facebook to do the following business operations: crowd-sourcing, sponsorship, and communication with clients and fans. Its smartphone app can make payments and one can link it easily to a bank account.

Commonwealth Bank – Australia
The commonwealth, Australia, connects with the clients via the Facebook and Twitter. It released a social media app, CommBank Katching for Facebook , that will give clients payment options via Facebook. The app has put into consideration the security and privacy issues that surround the use of Facebook. For example, the bank was concerned about the online scams and cyber crime and promised to lay concrete measures that would protect its clients.

There is a paradigm shift in payments methods. Banks are realizing the immense benefits that come with the use of social media in their business operations. In this light, banking institutions are giving payments via the social media great attention. The greatest advantage with this is that the use of the social media is growing. There is all the likelihood that it will continue to grow. Despite providing little value for international remittance, social media will play a major role in online payments and transactions.