Tesco Bank target of Cyber fraudsters 20,000 customers accounts hacked

(qlmbusinessnews.com via uk.reuters.com – – Mon, 7 Nov, 2016) London, UK – –

 

The banking arm of Britain's biggest retailer Tesco was scrambling on Monday to deal with an online attack over the weekend on 40,000 customers' accounts, 20,000 of which had money removed.

The hack is the first on a British bank known to have resulted in customers losing money, adding to growing concerns about the British financial sector's vulnerabilities to cyber attacks, which have jumped in frequency over the past two years.

Tesco Bank, which manages 136,000 current accounts, stopped all online transactions while it worked to resume normal service, although customers could still use their bank cards in shops and to withdraw money from cash machines.

“Any financial loss that results from this fraudulent activity will be borne by the bank,” Tesco Bank Chief Executive Benny Higgins told BBC radio. “Customers are not at financial risk.”

“We think it would be relatively small amounts that have come out but we're still working on that,” he said, adding that he expected the cost of refunding customers would be “a big number but not a huge number”.

Shares in supermarket chain Tesco, which wholly owns Tesco Bank, were down 1.2 percent at 200.20 pence by 1030 GMT.

The bank is a minnow in Britain's retail banking market, with about 2 percent of current accounts, and represents only a small part of Tesco's overall business.

It contributed 503 million pounds ($623.4 million) to the group’s revenue of 24.4 billion pounds in the first half of its 2016-17 financial year.

But while the financial hit to the group may be limited, Tesco Bank risks serious reputational damage from an attack that affected 29 percent of its customer current accounts.

Other British banks have been targeted by cyber attacks in recent years, but the Financial Conduct Authority (FCA) which regulates the sector said it was not aware of any previous incident in which customers had lost money.

Reported attacks on financial institutions in Britain have risen from just five in 2014 to over 75 so far this year, according to FCA data, but bank executives and providers of security systems say there are many more unreported attacks.

HSBC issued a series of apologies to customers earlier this year after its UK personal banking websites were shut down by a “denial of service” attack, but no customer funds were at threat during that breach.

Cliff Moyce, global head of financial services at DataArt, a network of technology consulting and software services firms, said reduced staffing levels over the weekend were likely to have been one of the reasons for the impact of the hack.

“The clever part was doing it over the weekend when banks are typically understaffed, and will respond more slowly,” he said in a comment emailed to media.

“Automated fraud detection systems appear to have worked well, but a lack of people at desks will not have helped.”

Other well-known British brands hit by significant cyber attacks over the past year include telecoms firms TalkTalk [TALK.L] and Vodafone [VOD.L], business software provider Sage [SGE.L] and electronic goods retailer Dixons

By Estelle Shirbon | LONDON

(Additional reporting by Michael Holden, James Davey and Huw Jones; Editing by Greg Mahlich)

Chancellor Philip Hammond sets out the government’s Cyber-Security Strategy

(qlmbusinessnews.com via bloomberg.com – – Tue, 1 Nov, 2016) London, Uk – –

Cyber security
UK in Spain/flickr.com

Businesses and homes are increasingly vulnerable to cyber attacks as people install Internet-connected appliances and companies rely on outdated systems, U.K. Chancellor of the Exchequer Philip Hammond warned.

Hammond used a speech in London Tuesday to set out the British government’s Cyber-Security Strategy, pledging to “strike back” against malicious activity. It came as the U.K.’s spy chief warned Russia is using the same online tools to target Britain. In an interview with the Guardian newspaper, MI5 Director General Andrew Parker said Russia is an increasing threat to the U.K. and is employing cyber attacks to threaten its industry, economy and military capability.

Russia “is using its whole range of state organs and powers to push its foreign policy abroad in increasingly aggressive ways — involving propaganda, espionage, subversion and cyber-attacks,” Parker told the Guardian. “Russia is at work across Europe and in the U.K. today. It is MI5’s job to get in the way of that.”

Parker’s claims were dismissed by Kremlin spokesman Dmitry Peskov, who said they had no bearing in reality.
‘Activist’ Approach

Parker said his interview, the first given by the service’s chief in its 107-year history, reflects the need for the public to understand the interventions required to keep them safe. That point was taken up Hammond, who pledged to boost law-enforcement capabilities and encourage universities to conduct research into security as part of a more “activist” approach.

“Britain is already an acknowledged global leader in cyber security,” Hammond said in a statement before the speech. “Our new strategy, underpinned by 1.9 billion pounds ($2.3 billion) of support over five years and excellent partnerships with industry and academia, will allow us to take even greater steps to defend ourselves in cyberspace and to strike back when we are attacked.”

Britain has identified cyber attacks as a “tier one” national-security risk, alongside terrorism and global instability. To fight the threat, a National Cyber Security Center is due to have a full staff of 700 in its new London headquarters next year. The government is also seeking to push through a bill before Parliament to preserve and extend the powers of security and law-enforcement agencies, allowing them to gain access to communications.

The bill is a proportionate response to the threat to the U.K. and effectively balances privacy and security, Parker told the Guardian.

By Robert Hutton and Thomas Penny

UK technology start-up Improbable seeks backing from both sides of the Atlantic

(qlmbusinessnews.com via uk.finance.yahoo.com via new.sky.com – – Wed, 26 Oct, 2016) London, UK – –

A British technology company which last year attracted money from one of the hottest investors in Silicon Valley is in talks with prospective backers about a new funding round that could value it at more than £400m.

Sky News has learnt that Improbable, which creates virtual worlds used in complex computer games, has approached investors on both sides of the Atlantic (Shanghai: 600558.SS – news) about putting fresh money into the business.

The talks, which have yet to be concluded, come 18 months after Improbable took $20m from Andreessen Horowitz, the California-based tech investor which was an early backer of Facebook (NasdaqGS: FB – news) .

Improbable is widely regarded as one of the most exciting companies to be based in Tech City, the district of London which acts as a hub for digital start-ups.

The company, which says its software has a wide variety of potential applications, such as modelling how a virus might spread through a major city, was founded little more than three years ago by Herman Narula, a Cambridge computer science graduate.

Improbable has also described its Spatial operating system as being applicable in areas such as economics, finance, town planning, transport and military training.

Last year's fundraising was reported to have valued Improbable at $100m, with talks about a new round raised at five times that valuation raising eyebrows among some technology investors.

“It's a fantastic idea, but the revenue model isn't really proven yet,” said one serial backer of London start-ups.

Improbable is understood to have presented at a conference hosted by Allen & Co, the investment bank which focuses on technology and media deals, earlier this year.

Augmented and virtual reality companies are attracting significant investment from global technology investors, further inflating many of their valuations.

Allen & Co is now said to be assisting Improbable with its fundraising discussions. Improbable declined to comment.

AT&T agreed to buy Time Warner for $85 billion

(qlmbusinessnews.com via uk.reuters.com – – Sun, 23 Oct, 2016) London, UK – –

AT&T Inc said on Saturday it agreed to buy Time Warner Inc for $85.4 billion (70 billion pounds), the boldest move yet by a telecommunications company to acquire content to stream over its high-speed network to attract a growing number of online viewers.

The biggest deal in the world this year will, if approved by regulators, give AT&T control of cable TV channels HBO and CNN, film studio Warner Bros and other coveted media assets. The tie-up will likely face intense scrutiny by U.S. antitrust enforcers worried that AT&T might try to limit distribution of Time Warner material.

AT&T will pay $107.50 per Time Warner share, half in cash and half in stock, worth $85.4 billion overall, according to a company statement. AT&T said it expected to close the deal by the end of 2017.

Dallas-based AT&T said the U.S. Department of Justice would review the deal and that it and Time Warner were determining which Federal Communications Commission licenses, if any, would be transferred to AT&T in the deal.

U.S. lawmakers were already worried about cable company Comcast Corp's $30 billion acquisition of NBCUniversal, creating an industry behemoth. Several argued for close regulatory scrutiny of the AT&T deal.

“Such a massive consolidation in this industry requires rigorous evaluation and serious scrutiny,” said U.S. Senator Richard Blumenthal, former attorney general of Connecticut. “I will be looking closely at what this merger means for consumers and their pocketbooks.”

U.S. Republican presidential nominee Donald Trump said at a rally on Saturday he would block any AT&T-Time Warner deal if he wins the Nov. 8 election. Trump has complained about media coverage of his campaign, especially by Time Warner's CNN.

“It's too much concentration of power in the hands of too few,” said Trump.

Representatives of his Democratic rival, Hillary Clinton, did not immediately respond to a request for comment.

CONTENT PLUS DELIVERY

AT&T, whose main wireless phone and broadband service business is showing signs of slowing, has already made moves to turn itself into a media powerhouse. It bought satellite TV provider DirecTV last year for $48.5 billion.

It had about 142 million North American wireless subscribers as of June 30, and about 38 million video subscribers through DirecTV and its U-verse service.

New York-based Time Warner is a major force in movies, TV and video games. Its assets include the HBO, CNN, TBS and TNT networks as well as the Warner Bros film studio, producer of the “Batman” and “Harry Potter” film franchises. The company also owns a 10 percent stake in video streaming site Hulu. The HBO network alone has more than 130 million subscribers.

The deal is the latest in the consolidation of the telecom and media sectors, coming on the heels of AT&T's purchase of NBCUniversal. AT&T's wireless rival Verizon Communications Inc is in the process of buying internet company Yahoo Inc for about $4.8 billion.

Time Warner Chief Executive Officer Jeff Bewkes rejected an $80 billion offer from Twenty-First Century Fox Inc in 2014.

FINANCING

AT&T said the cash portion of the purchase price would be financed with new debt and cash on its balance sheet. AT&T said it has an 18-month commitment for an unsecured bridge term facility for $40 billion.

AT&T currently has only $7.2 billion in cash on hand. Further borrowing could put pressure on its credit rating as it already had $120 billion in net debt as of June 30, according to Moody's.

AT&T said the deal would add to earnings per share in the first year after closing. It said it expects $1 billion in annual run-rate cost savings within three years of closing, chiefly driven by lower corporate and procurement spending.

5G IS COMING

Owning more content gives cable and telecom companies bargaining leverage with other content companies as customers demand smaller, hand-picked cable offerings or switch to watching online. New mobile technology including next-generation 5G networks could make a content tie-up especially attractive for wireless providers.

“We think 5G mobile is coming, we think 5G mobile is an epic game-changer,” Rich Tullo, director of research at Albert Fried & Co, said in a research note, adding that mobile providers would be in position to disrupt traditional pay-TV services.

A previous Time Warner blockbuster deal, its 2000 merger with AOL, is now considered one of the most ill-advised corporate marriages on record.

Perella Weinberg Partners LP, Bank of America Corp and JPMorgan Chase & Co were financial advisers to AT&T, with Bank of America and JPMorgan also offering bridge financing, while Sullivan & Cromwell LLP and Arnold & Porter LLP provided legal advice.

Allen & Co LLC, Citigroup Inc and Morgan Stanley acted as financial advisers to Time Warner, while Cravath, Swaine & Moore LLP was its legal adviser.

By Greg Roumeliotis and Jessica Toonkel | NEW YORK

(Additional reporting by David Shepardson, Liana Baker, Malathi Nayak and Diane Bartz; Writing by Bill Rigby; Editing by David Gregorio)

 

London frets over future,Thirty years on from Big Bang

(qlmbusinessnews.com via uk.reuters.com – – Fri, 21st Oct, 2016) London, UK – –

LONDON (IFR) – Bang! It was the explosion in financial markets heard across the world 30 years ago which transformed the City of London from a cosy network of long-established firms into a cut-throat landscape dominated by foreign banks.

This week is the 30th anniversary of Big Bang, a package of reforms across the securities industry that shaped the City that exists today, putting London alongside New York as the world's two dominant financial centres.

This year's anniversary has extra significance. International firms that arrived on the back of Big Bang are considering whether to stick with London or move operations and jobs elsewhere following Britain's vote in June to leave the European Union.

“It [Big Bang] put London on the map in a way it wasn't before. All the international firms came to London or enlarged what they had,” recalled Nicholas Goodison, who was the architect of the reforms as chairman of the London Stock Exchange at the time.

OVERNIGHT JOLT

Although the full impact of Big Bang evolved over years and the reasons for the reforms went back more than a decade, the transformation is associated with an overnight jolt – on October 27 1986.

That was the brainchild of Goodison. He said a number of the necessary changes were inter-related so should all come at the same time, with good warning, to ensure orderly change.

“We could have done it piecemeal but they were all too closely linked to each other,” Goodison, now 82, told IFR in an interview last week.

There were several parts to Big Bang: it abolished minimum fixed commissions on trades; it removed “single capacity”, which since 1911 had separated the role of brokers, who acted as agents for clients, and jobbers, who made the market and provided liquidity by holding stock on their books; and it allowed foreign ownership of UK brokers, to fix capital shortfalls at many firms.

Big Bang also introduced electronic share trading, which did away with the need for face-to-face share deals and made trading far quicker and more efficient.

The changes were brought in to head off an investigation by the competition watchdog, which wanted to take the stock exchange to the Restrictive Practices Court, a move Goodison said would have resulted in chaos.

In 1983 he proposed to Cecil Parkinson, trade and industry secretary at the time, that he would eliminate fixed commissions within three years.

Parkinson agreed and, helped by Chancellor of the Exchequer Nigel Lawson, persuaded Prime Minister Margaret Thatcher to back the reforms. That was not easy because Thatcher “didn't like being friends with the City”, Goodison recalled. He said she subsequently took little interest in Big Bang, despite being credited as its driving force.

“The myth that Big Bang was part of Mrs Thatcher's revolution is just wrong,” Goodison said.

Goodison said the reforms were inevitable after the US abolished fixed commissions in 1974 and Britain scrapped exchange controls in 1979.

“The writing was on the wall and we knew that,” he said.

“Anybody could forecast that the competitive pressures on fixed commission would increase because the biggest securities houses in the world were in America. It was obvious the thing was creaking.”

Goodison said Big Bang achieved its goal better than a court ruling would have done because it pushed through changes smoothly.

The biggest challenge was setting up the electronic trading platform. “It broke down in the first hour. It was difficult. But the reason it broke down was that it had a huge volume of people trying to access it on the first morning and everybody pressed buttons at once.”

It was sheer curiosity that caused it to break down, he said.

FOREIGN PREDATORS

Big Bang sparked profound changes across the City.

Brokers, jobbers and merchant banks started merging. Some were bought by UK clearing banks, but many more were snapped up by big US, European and Asian banks.

Well-known firms such as James Capel, Schroders and Warburg kept some branding in bigger firms, but other old names such as Pinchin Denny and Scrimgeour Kemp Gee were easily swallowed.

That has led to criticism of the “Wimbledonisation” of the City – that London hosts the activity but most of the top players are foreign. Barclays and HSBC are two of the top 10 investment banks today, but the dominance of the City by overseas firms, especially from the US, is a legacy of Big Bang.

“Under the previous system it was pretty much a closed shop, and suddenly they [foreign firms] were allowed to come in,” said Paul Mumford, a fund manager at Cavendish Asset Management.

“A lot of banks seized the opportunity and London became a global centre for markets. It could never have happened if we hadn't had this change,” Mumford told IFR.

Just as London firms were swallowed or reinvented, many careers changed, including Mumford's. He had been a broker and analyst, but a year after Big Bang he moved into fund management.

“It was a relatively painless process but it took a little while for it to have its repercussions on certain areas,” Mumford said.

There were other less direct but still significant effects of Big Bang, including making it easier for firms to raise capital, contributing to the growth of hedge funds, and helping the rise of Canary Wharf as a new financial district in East London as firms could trade further away from the City using electronic communications.

Culture also changed. Hours became longer, lunches shorter and pay rose. The business became more aggressive and less clubby, according to people who worked in the City on both sides of the changes.

Critics reckon many of the banking industry's misconduct problems of the past decade can be traced to Big Bang, as it gave rise to a bonus culture that undermined the City's long-standing code of conduct and integrity.

Goodison, for his part, was not paid for his work for the stock exchange. He was its last unpaid chairman, from 1976 to 1988, and held the role alongside his position as senior partner at Quilter Goodison, a broker that went the way of many peers – it was bought by an overseas predator, France's Paribas.

Goodison said London was right to welcome international firms and needs to continue to do so to stay in front, aided by the advantages of its time zone, language and legal system.

“If London wants to win it has to be open. You can't run a closed shop and win. The essence of London's financial markets is openness to the world,” he said.

By Steve Slater

Lender Microfinance Ireland tackle low awareness to its loans

(qlmbusinessnews.com via uk.finance.yahoo.com via TheJournal.ie – – Thur, 20 Oct, 2016) London, UK – –

Microfinance ireland (mfi) has rebranded its loan packages for small businesses to make its overall offering clearer to customers.
The government-backed lender, which specialises in loans to firms with fewer than 10 employees, has segmented its loan packages into four categories:

Set-up loans for startups, €5,000-€25,000
Cashflow support for existing businesses, €5,000-€25,000
Business development loans for existing businesses, €5,000-€25,000
Small loans for businesses with low funding requirements, €2,000-€25,000

Until now, the organisation has marketed a blanket offer of loans from €2,000 to €25,000 without explaining what exact options were available.
Chief executive Garrett Stokes said that the MFI largely relied on local enterprise offices to explain and tease out the different loan packages available.

He told Fora that he expects the rebranding exercise will “make our overall offering more user-friendly”.

“What we’ve tried to do with the packaging is be very precise so it becomes much clearer to (customers) as to what we’re offering, the terms of the offer and so that when they come online to us through their local enterprise office, they know exactly what they’re looking for.”
Awareness

In the most recent ‘bank watch survey’ by ISME, which represents small- and medium-sized businesses in Ireland, awareness of the government’s microfinance scheme was down with just over half of respondents saying they knew what it was.

Stokes said the clearer loan packages will boost awareness of the programme, which he described as a “huge advantage” to early-stage businesses.

“The majority of our customers are people who cannot, for whatever reason, get lending from traditional lenders,” he said. “(MFI) enables somebody who has a good idea and wants to set up a businesses but can’t get the money themselves or funding from a bank to have another location to get help.”

He said that MFI’s criteria is “quite different from a bank” because all of its loans are unsecured.

By Conor McMahon