Issue 3
August 2024
Welcome to the MBA's News Digest!
Dear readers,
How AI are you today?
On 16 August 2024, the President of the Republic of Mauritius, H.E. Prithvirajsing Roopun, highlighted the benefits of Artificial Intelligence (AI) for Mauritius, in his speech the Annual Human Resource Congress; citing AI as a tool, and not a replacement for human ingenuity.
Globally, a recent report by experience management firm Qualtrics has cautioned against the risk of financial institutions overlooking the crucial human element in AI, while the U.S. Treasury has issued a request for information on the use of AI in financial services.
Find out more in this latest issue.
Best wishes,
The MBA team
The 5 Use Cases for Adding Generative AI to Your CX Strategy
8 August 2024
‘In the rush to adopt AI for customer experience, financial institutions risk overlooking the crucial human element. Qualtrics’ new report cuts through the hype, offering a pragmatic four-step approach to AI implementation that balances technological innovation with customer preferences. The playbook emphasizes partnering AI with human expertise, addressing consumer concerns about AI replacing human interactions.’
Proposals in state legislatures target digital assets, CBDCs
7 August 2024
‘One example is Colorado, which repealed its Digital Token Act, a 2019 state law that exempted cryptocurrencies from certain regulations for securities and investment products. Another example is Louisiana, which passed a law prohibiting governmental authorities from blocking digital assets as a form of payment for goods and services, but at the same time prohibited state agencies and local governments from accepting CBDCs as a form of payment…. Georgia prohibited governmental agencies from using CBDC as payment and from participating in testing the use of such currency. Nebraska passed a law to prevent the UCC from being used in the creation of CBDC. South Dakota adopted a resolution opposing the creation of a CBDC.’
Written reply to Parliamentary Question on measures to minimise risks of cross-border scams and fraud
7 August 2024
‘Financial institutions participating in these linkages have implemented anti-scam controls to mitigate the risk of scammers exploiting this channel to move proceeds out of Singapore. These measures, which apply to all users, include a default transaction notification threshold of $100 or lower and a daily transaction limit of not more than $1,000. They will continue to actively monitor changes in scam typologies and will adjust these measures as appropriate. For users, the same precautions apply for domestic and cross-border payments. We urge users to remain vigilant and to adopt good hygiene practices when banking online. These include not disclosing one’s account credentials, actively checking transaction notifications, and verifying that transactions are made to the intended recipient.’
Financial services firms’ express confidence amidst uncertainty
12 August 2024
‘The Bank of England’s decision to cut the base rate should provide them with the stability and confidence to do so, potentially providing financial services firms with the opportunity to invest in their teams, enhance their operations and strengthen client relationships. Employee development, as always, will be key. Without a team that are equipped with the necessary skills to drive growth and successfully incorporate emerging technology, firms risk being left behind. Connected to this is enhancing their ways of operating by leveraging new technology like AI and ML. Not only can this improve efficiency, but it can help to mitigate the impact of technological disruption and improve regulatory compliance as well.’
NIST unveils encryption standards to protect against quantum computer cyberattacks
13 August 2024
‘The National Institute of Standards and Technology today announced that it has finalized a principal set of encryption algorithms designed to withstand cyberattacks from a quantum computer. The standards are the result of an eight-year effort by NIST to strengthen computer encryption capabilities amid advances in technology. Quantum computers theatrically would be far more powerful than today’s computers, and many experts believe a quantum computer capable of breaking current encryption methods is just a decade away, according to NIST. The three standards unveiled by the agency contain the encryption algorithms’ computer code, instructions for how to implement them and their intended uses. NIST also said it will continue to evaluate two other sets of algorithms that could one day serve as backup standards.’
CFPB: Contract-for-deed deals subject to Truth in Lending Act protections
13 August 2024
‘In a contract-for-deed deal, a seller agrees to turn over a home’s deed only after the buyer completes a series of payments. In a statement, the bureau said that such deals “often have little oversight, and investment groups and other sellers can set a series of traps that leave buyers in unlivable homes, on the hook for tax liens and expensive repairs, and at risk of losing their down payments and homes.” The CFPB said that home prices are often inflated under contract-for-deed deals because sellers are not competing against banks or other mainstream mortgage lenders, and the homes come without the benefit of inspections associated with mainstream mortgage financing.’
ABA: Proposed CFPB medical debt rule would reduce credit availability to consumers
12 August 2024
“If lenders are not able to consider medical debts in credit underwriting, consumer delinquencies and defaults will increase, impacting banks’ safety and soundness and consumers’ credit access,” ABA said. “If lenders know that credit scores have increased, but believe that risk has not decreased, they will simply offset the increase by further tightening their lending standards.”
ABA, bankers associations offer recommendations for AI policy, risk management
12 August 2024
‘In June, the Treasury Department issued a request for information on the use of AI in financial services. In their letter, the associations said that banks have employed AI in a responsible manner for decades and are leveraging that mature risk management framework as they begin implementing generative AI technologies. They also offered recommendations for policymakers. One was to encourage international and multijurisdictional cooperation to pass laws pertaining to AI that are risk-based and industry-focused.’
FDIC: Interactive teller machines not considered bank branches
9 August 2024
‘Non-member banks must obtain the FDIC’s permission before establishing a new branch. However, federal law specifically excludes automated teller machines and remote service units from the definition of branch. The agency said it has received several inquiries on whether ITMs would fall under that exemption given the technology allows customers to remotely interact with live tellers.’
Bank Negara fines local banks for e-banking service outages
14 August 2024
‘Bank Negara Malaysia (BNM) has imposed administrative monetary penalties on Malayan Banking Bhd (Maybank) and CIMB Bank Bhd for e-banking service outages that occurred in June and April, respectively. In separate statements, the central bank said Maybank was fined RM4.32mil for the unplanned downtime while CIMB was fined RM760,000, on July 29.’
Mastercard Expands Open Banking to boost Financial Inclusion
14 August 2024
‘Mastercard is expanding its Verification of Income and Employment solution to include credentialed payroll, powered by payroll data aggregator Argyle, enabling financial institutions to digitally and seamlessly verify an applicant’s income and employment. Through a single integration to Mastercard’s Open Banking platform, lenders have the flexibility to verify income and employment data through connected bank accounts or via payroll systems with the applicant’s permission. Mitigating the need to collect income documentation and manually review data, the new solution renders an efficient and convenient process for lenders and applicants.’
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