TowerGroup Expands its Global Consulting Practice

TowerGroup has expanded the capabilities of its Global Consulting practice. Sam Radwan, a former PwC, IBM and Accenture senior leader who has spent his entire career serving the financial services industry, has joined TowerGroup as the new head of Global Consulting. Also, Tim Sharman has been named the new head of Banking & Payments for TowerGroup Consulting. TowerGroup’s Banking and Payments team says that next year promises to be the year when banking and payments industry participants will start to realize the objective of creating the flexible, diversified and responsive enterprise that customers demand. Beyond the challenges of regulatory compliance and merger integration, bankers will be completing past investments and introducing early-stage enterprise rollouts that together will drive organic growth and increased efficiency.

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Fraudulent TX Liability Shifts on Jan 1st

U.K. businesses that accept card payments are reminded that a liability shift comes into force on January 1st. After this date, fraudulent transactions on “chip and PIN” cards at the point-of-sale that could have been prevented using “chip and PIN” technology will become the responsibility of the outlet where the fraud took
place. Banks will no longer pick up the loss. There is no change at all
in liability for cardholders.

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Bankruptcy Filings Decline Sharply in Oct

Bankruptcy filings during October declined more than 10% over year ago levels. Overall, bankruptcy filings are down more than 3% this year. During October, 133,404 filings were made compared to 148,044 for October 2003. Year-to-date bankruptcy filings were 1.3 million. During the 12-month period ending September 30th, there were 1,618,987 bankruptcies filed, down from the 1,661,996 bankruptcy cases filed in fiscal year 2003. During the third quarter, there were 396,438 consumer and business bankruptcy filings, a decline of more than 4% over 3Q/03, and down nearly 6% from the previous quarter. The decline for the first nine months of this year is the first drop in consumer bankruptcy filings since 2000.

Monthly Filings Historical
Oct 03: 148,044
Nov 03: 131,921
Dec 03: 113,383
Jan 04: 114,737
Feb 04: 124,719
Mar 04: 152,567
Apr 04: 145,543
May 04: 136,509
Jun 04: 127,742
Jul 04: 133,390
Aug 04: 125,783
Sep 04: 127,664
Oct 04: 133,404
Source: CardData (www.carddata.com)

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OCT 04 DEBT

Credit card outstandings rose GBP600 million during October to bring total outstandings to GBP57.1 billion, a slight gain over last October’s pace. Total net lending to consumers for October hit GBP181.6 billion, an increase of GBP1.5 billion over September. Overall, consumer credit grew 0.9% in October, seasonally adjusted, GBP 100 million weaker than the increase in September. The three-month (annualized) growth rate fell to 11.8% from 12.5% (12.4%) in September while the twelve-month growth rate fell to 11.8% from 12.0% (11.9%) in September. Gross advances were GBP18.7 billion, GBP200 million higher than the average three months to September. The Bank of England has maintained its benchmark interest rate at 4.75%.

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HSBC Retail Hires Market Development Exec

HSBC – North America has hired Molly McCombe, formerly with McKinsey & Company, as managing director of new market development for its retail services business. Before joining HSBC, McCombe was an associate principal at the Chicago office of McKinsey & Company, where she focused on strategy, growth and performance improvement for financial services industry clients. McCombe received a bachelor’s degree in business administration from Boston University. She received her master’s from Northwestern University’s Kellogg Graduate School of Management. HSBC – North America includes all of HSBC’s U. S. and Canadian businesses, including the former Household businesses, and has assets approaching $300 billion.

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Rahaxi and Transaction Network Services Ink a Deal

FreeStar Technology’s Rahaxi Processing Oy has signed a three-year contract with Transaction Network Services. TNS will provide Rahaxi with high-speed cross-border data communications delivering transactions from 5,000 point-of-sale terminals in retail outlets in Finland and Sweden. Rahaxi supports up to 1000 retailers in Northern Europe, and has strategic relationships with Finnish banks including Nordea, Sampo, Oko, and Luottokunta.

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IntegraSys to Offer Penley’s ID Verification

eFunds’ Penley subsidiary and Fiserv’s IntegraSys unit have signed a deal through which IntegraSys will privately label and sell Penley’s “ID Verification” solution to credit unions. This agreement helps IntegraSys provide its credit union customers with an extensive, easy-to-use and cost-effective identity fraud prevention program as well as compliance with the USA PATRIOT Act Section 326, 314(a) and Office of Foreign Assets Control (OFAC) regulations. Penley, a wholly owned subsidiary of eFunds Corporation, offers easy-to-use technology solutions that provide financial institutions with comprehensive information that protects against fraud, offers business intelligence and increases operational efficiency. Fiserv, Inc. provides information management systems and services to the financial industry, including transaction processing, outsourcing, business process outsourcing and software and systems solutions.

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Average American Carries $2,627 in Card Debt

A new survey has found that American males have an average of $2,742 of credit card debt spread out over 2.5 cards, and that females average $2,522 of credit card debt on 3.3 cards. The survey of 1,000 consumers concluded that the average American is now carrying $2,627 in credit card debt, up from $2,294 in 2003. According to the annual “Credit Card Survey” conducted by Myvesta, Americans are now carrying an average of 2.9 credit cards, up from 2.3 in 2003. Regionally, individuals in the South are carrying the most credit card debt with an average of $2,977. People in the Northeast are carrying the smallest balances with an average of $1,918 of credit card debt. Individuals in the Midwest have an average of $2,682 on their cards and those in the West carry an average balance of $2,538.

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Cap One Delinquency Dips; Loans Rise $1.8B

After six consecutive monthly increases, Capital One’s delinquency ratio headed south in November, falling 7 basis points. The declined was helped by a $1.8 billion boost in total managed loans in November, compared to a $455 million gain in October. However, charge-offs headed north climbing 25 basis points last month. For November, Cap One reported that managed charge-offs increased to 4.35%, compared to 4.10% in October, and 5.57% one-year ago. In June 2003, Cap One’s managed charge-off ratio stood at 6.20%. Delinquency decreased to 3.87% for November, compared to 3.94% for October, 3.90% for September, 3.80% in August, 3.77% in July, 3.76% in June, 3.73% in May, and 3.69% in April. Delinquency one-year ago stood at 4.46%. At the end of November, Capital One had $77.7 billion in global outstandings. At the end of the third quarter, Cap One had $46.1 billion in U.S. card loans, compared to $45.2 billion in the second quarter. For complete details on Capital One’s monthly metrics and 3Q/04 performance, visit CardData ([www.carddata.com][1]).

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Capital One 2003-2004
Month Charge-offs Delinquency
Nov 03 5.57% 4.46%
Dec 03 5.10% 4.46%
Jan 04 5.00% 4.39%
Feb 04 4.75% 4.14%
Mar 04 4.74% 3.80%
Apr 04 4.70% 3.69%
May 04 4.40% 3.73%
Jun 04 4.17% 3.76%
Jul 04 4.10% 3.77%
Aug 04 3.87% 3.80%
Sep 04 4.18% 3.90%
Oct 04 4.10% 3.94%
Nov 04 4.35% 3.87%
Source: CardData (www.carddata.com).

[1]: http://www.carddata.com
[2]: /images/g/graphs/cofperformance_nov04.jpg

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Euronet Signs a ATM Contract with a Mumbai Bank

Euronet Worldwide announced a multi-year ATM outsourcing agreement with a large multinational bank in Mumbai, for their network of 245 ATMs. Euronet will provide ATM driving services from Euronet’s
operations center in Mumbai and will provide all of the day-to-day
outsourcing services, including transaction processing, network
management and monitoring, security, cash forecasting and replenishment,
help desk, incident management, maintenance and full reconciliation and
settlement services.In addition to ATM outsourcing services Euronet provides shared ATM networking services to the bank through its “Cashnet” shared ATM network. “Cashnet” is the largest nationwide multilateral shared ATM network in India today, comprised of nine member banks with more than 3,400 ATMs across the country.

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FTC Issues its FACTA Report to Congress

The FTC has issued its report to Congress containing studies on credit report accuracy and completeness required by “FACTA.” Among its findings is that the costs of providing “Negative Information Notices” could be significant, and sending unsolicited notices to consumers could open additional avenues for fraud and identity theft. The FTC suggests that an opt-in system in which consumers could choose to receive negative information may achieve the proposed requirement’s goals without significantly elevating costs. The report notes that the market has begun to provide credit monitoring services that offer similar benefits.

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