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Daily briefing - 31 July 2019

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It's getting harder to gauge the seriousness of a cyberattack. Capital One, widely admired for its focus, saw credit details of 100 million customers in the US and Canada stolen. The company estimates the cost of reparations and charges as $100-150 million. "I don't see what the big deal is," said one Lafferty News source, rolling his eyes to heaven. "Everyone's details have been stolen already and are available for sale on the dark web." With the giant processors merging and swelling up to immense proportions and concentrating data in a handful of enormous servers, the future of hacking looks bright, as does the future of anti-fraud companies. (However, the hacker who stole the Capital One data didn't make herself hard to find, having posted the information on Github and boasting openly about the hack on Twitter before Capital One twigged that there was a problem.) Capital One customers took to Twitter this week to complain that they learned about the hack from the Washington Post, and not from Capital One. Slate reports that it took Capital One two weeks to inform customers. Capital One posted a statement saying: "The largest category of information accessed was information on consumers and small businesses as of the time they applied for one of our credit card products from 2005 through early 2019. This information included personal information Capital One routinely collects at the time it receives credit card applications, including names, addresses, zip codes/postal codes, phone numbers, email addresses, dates of birth, and self-reported income. Importantly, no credit card account numbers or log-in credentials were compromised and over 99 percent of Social Security numbers were not compromised."

Atom Bank, one of the first digital-only challengers in the UK, says it has started making money after a battle to stay afloat in the mortgage market. "It has been at the centre of speculation as a possible takeover target by Spain's BBVA, its largest shareholder, but Mr Mullen said Atom was working to prepare for an eventual IPO rather than being swallowed up," writes the FT. "The Spanish bank owns about 39 per cent of Atom but declined to exercise an option to buy out the rest of the shares to hold the equity of the entire company earlier this year. Mr Mullen said: 'Thinking IPO for us forces a discipline on the business, because a number of things have to be true in order for it to be an attractive option.' This includes being able to demonstrate strong growth and profitability." As the FT observes, Atom's business model is based on a traditional "savings and lending business" rather than the marketplace models of most other neobanks. "It doubled the size of its loan book to £2.4bn in the 12 months to March, according to its latest annual report that was sent to shareholders on Tuesday, and plans to expand into unsecured lending in 2020." If Atom survives long enough to get into the unsecured lending market, it may find a winner on its hands.

India's Open Bank is focused on SMEs and has backers in the form of Tiger Global, which is also behind Nubank, the Brazilian credit card business that is making major moves in Latin America. It's putting in place some novel ideas, including a credit card for startups that is based on funding rather than (obviously unavailable) credit history. "Bengaluru-based fintech startup Open has tied up with global card payment network, Visa to launch a suite of innovative products that include a business credit card for SMEs, payment gateway and real-time payments," writes Inc42.com. "The companies said that the business card from Open will be specifically designed to help startups qualify based on funding rather than credit history." Open Bank has announced plans also to offer a programmable bank account, something similar to projects offered by Root in South Africa. One to watch.

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