This TowerGroup Research Note outlines the current state and future prospects for risk management across the global financial services industry. It presents TowerGroup's forecasts of global spending on risk management from three perspectives: the technical side; the traditional credit, market, and operational risk perspective; and the sourcing strategies that financial services institutions will use in advancing their risk management skills. The Note also discusses drivers of spending by global region. The report then looks to the future, beyond 2012, at the sea change that risk management will undergo as a result of market and regulatory forces just now coming into view.

Mobile remote deposit capture (RDC) for consumers has been getting attention from financial services institutions and technology vendors ever since USAA introduced its mobile RDC product in 2009. Vendors have since announced at least a half dozen new consumer-based mobile RDC products, and banks have jumped on the bandwagon. Any bank considering mobile RDC should take into account the feasibility of everyday consumer usage and the simple fact that check volume has long been declining. This TowerGroup Research Note explores the viability and the longevity of the market for consumer mobile RDC and determines whether a real market exists for this new technology.

The perceived slow adoption of banking technology by the small business market segment has been a source of consternation for financial services institutions. However, recent trends in the general population's overall usage of technology and the maturity of banking solutions designed for the small business end-user (primarily by very large banks) have resulted in an emerging picture that is very different from the conventional wisdom on the topic. This TowerGroup Research Note analyzes small business owners' attitudes toward the adoption of alternative delivery channels and offers guidance on what this information means for banks' strategies for growing those channels going forward.

The commercial cards business has been in a steady growth mode in North America for two decades, driven mostly by programs in the United States but also in the past five years in Canada. Since 2000, the business model has been replicated and expanded into all global regions, with the most success being realized in Western Europe and the Asia-Pacific region. This TowerGroup Research Note reviews the impact of the global recession on the most recent large-market results for commercial credit cards in the three major regions mentioned, then projects forward through 2013. Commercial prepaid and debit cards have been or will be covered in other TowerGroup reports.

As the sophistication of cybercriminal organizations has developed, they have begun attacking businesses with phishing and "man in the middle" Trojan horses, techniques previously directed primarily at consumer banking applications. This Research Note analyzes the vulnerabilities of small and medium-sized businesses to fraud attacks, describes the types of attacks occurring, summarizes the legal and regulatory environment creating tension between businesses and their banks, and recommends strategies for preventing and detecting fraud and managing losses. Finally, TowerGroup cautions that banks risk losing online banking business if they don't improve their fraud prevention.

Since two-thirds of all sales transactions at Wal-Mart are by payment card, the retailer incurs an estimated $1.4 billion in interchange fees. After several failed attempts to obtain a US banking license, Wal-Mart withdrew its application for a license in 2007. The retailer maintains four payment models adapted to the 14 countries it serves and holds banking charters in two countries, offers private-label and cobranded cards, and markets financial service products. This TowerGroup ViewPoint discusses how Wal-Mart can lever its global strategy across markets and how the Dodd-Frank financial reform legislation might reduce the retailer's interest in becoming or owning a US bank.

Market demands are pushing banks toward a real-time payments environment in which they must be able to prevent financial crimes (fraud and money laundering) and address control issues (exceptions and reconciliation) that could prevent a payment from being made or settling correctly. Banks are well on their way to an enterprise approach in other areas of the payments industry like payments initiation and processing, where payments hubs transform, enhance, and deliver payment information using a common set of business rules. Adopting an enterprise approach to risk management in payments can leverage the same infrastructure and achieve similar levels of consistency across the business.

Manifest scope creep is turning the European Commission's review of its Markets in Financial Instruments Directive into an extended examination of market structures. MiFID, introduced in 2007 to encourage pan-European competition among exchanges and other trading venues, was earmarked for review at the end of 2009. The EC commissioned the Council of European Securities Regulators to conduct the review and report its recommendations to the European Commission Executive. In this Research Note, TowerGroup examines the likely impact of the review and recommends a course of action for the financial services institutions and the information technology providers affected by it.

Interest in cloud computing is increasing in financial services. Pressure on budgets, coupled with a need to coax aging and often ailing systems to continue operating, has made it imperative to seek solutions that fix the problem yet don't break the bank. The problem is that FSIs must get their "old" technologies to do things they were never designed to do in order to deliver the efficiencies and product enhancements demanded by today's markets. This Research Note examines the obstacles to adoption of cloud computing and the way that cloud fits in with changes occurring in payments infrastructure technologies, in particular with service-oriented architecture and payment hubs.

The new UK coalition government announced that it will introduce legislation to disband the UK financial regulator, the Financial Services Authority (FSA), which was established by the previous government in 1997. Legislation will devolve the FSA's regulatory and supervisory powers to a variety of other financial regulatory supervisory bodies by 2012. This TowerGroup Research Note examines the impact of the prospective changes on financial services institutions (FSIs) and their technology service providers, particularly those providing information technology to meet the FSIs' regulatory and risk management requirements.