Banks train their guns on start-up 22seven - TechCentral

Banks train their guns on start-up 22seven

Absa's Christo Vrey

Financial management website 22seven has been live for just a day and already it’s facing its first serious challenge.

Some of SA’s big banks have begun warning their customers not to provide their banking login details to the service, which aggregates users’ financial information to give them a graphics-rich picture of their income and spending.

This raises the question of whether 22seven, which is led by the former CEO of online bank 20twenty, Christo Davel, should have engaged with the big banks before launching its service.

Some banks are warning their customers they may not be reimbursed if fraud happens on their accounts if they have provided their login details to any third party. Banks go to great lengths to warn customers about the dangers of disclosing Internet banking details or card Pins to anyone.

Christo Vrey, head of digital banking services at Absa, says it is “absolutely imperative” that Absa customers and customers of all banks never divulge their sensitive personal information, including login passwords and one-time passwords, whether that’s on the Web or anywhere else.

“Disclosing one’s sensitive information renders the customer completely liable for any losses that may occur due to phishing or other online fraud, as per Absa’s online banking terms and conditions, disallowing customers from divulging their sensitive information to any third party.”

Vrey says sites like 22seven “conflict with the clear fraud awareness messaging sent out by all major banks, as well as the SA Banking Risk Association and the SA Police Force”.

Michael Jordaan

Absa isn’t the only bank worried about 22seven. In a message on Twitter, First National Bank CEO Michael Jordaan described 22seven as a “cool concept” but added: “Have to advise against disclosing [your]password to any third party. [The] risk [is]all yours.”

22seven chief operating officer Chris Tisdall insists banks shouldn’t have objections to the service logging in and reading their customers’ bank accounts because customers have “a right to their information to help them manage their money better”.

The company insists it adheres to world-class security systems through its US partner Yodlee.

Tisdall concedes that 22seven had not spoken to any of the local banks about the offering ahead of the launch but reiterates that the platform is secure. “The technology platform we use is a read-only platform. It’s a permission-based, opt-in system. We do not store security credentials. Only Yodlee is allowed to do that and their system is leaps and bounds ahead of a lot of the SA service providers.”

Meanwhile, in a related twist, Absa says it is planning to offer its own financial management tools to its customers later this year.

“These tools will enable our customers to consolidate information from various institutions, budget more effectively, create a visual dashboard view of their personal finances, and much more,” says Vrey.

“This rich array of personal financial management services will be available within the secure environment of Absa’s online banking interface, removing any of the security concerns present in sharing one’s personal information with a third party.”

He adds that this service will be provided to Absa customers at no additional charge to their regular monthly fees. “22seven [will]charge R70/month, on top of one’s existing online banking monthly subscription or bundled product fees.”  — Craig Wilson, TechCentral

  • TechCentral is seeking comment from Standard Bank and Nedbank and will update this article later on Friday

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