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Any other business

Can anything make online banking truly hacker-proof?

Also in Any Other Business: a triumph for Sirius Minerals, and another potential populist election shock

12 November 2016

9:00 AM

12 November 2016

9:00 AM

There’s an electronic device on my desk that looks — through its bubble- wrap — like a cheap miniature calculator. It’s still in the packaging a month after it arrived because I’m irritated by the idea that I have to master a new gadget specifically designed to complicate a familiar action. The thing is a debit-card reader, and I gather I must activate it whenever I want to send money from my bank account via the internet to a new payee. At first that was done simply by typing the payee’s details into boxes on my laptop screen; then it involved waiting for a security code to pop up on my phone, sometimes requiring a walk round the garden waving the phone to find a signal; now I must have my card and reader to hand each time, and it will probably be quicker to write a cheque and walk down to the postbox.

But then again, I’m lucky I’m not with Tesco Bank, 9,000 of whose 136,000 current account holders have just suffered a collective £17 million theft by online hackers. The customers, whether or not cheesed off like me by changing security procedures, were in no sense to blame: the money was simply drained from their accounts, and much of it seems to have been sent to Brazil, which is these days the hottest of many emerging markets for banking fraud.

Even so, some might cry caveat emptor: it serves you right if you’re foolish enough to park your cash with a supermarket that famously has black holes in its own profit–and-loss account, rather than a proper bank. But the bigger the bank, the more it may be prone to computer cock-ups too — as NatWest and RBS recently demonstrated when they had a spot of trouble with withdrawals — while major online retailers and mobile phone networks are subject to multiple daily attempts at mass theft of data.

In this respect, no trusted brand can be trusted any more: after buying a birthday bouquet from Marks & Spencer’s website a couple of months ago, I must have received a hundred fraudulent emails inviting me to claim ‘cash prizes’ from M&S, Morrisons and other temptingly reputable retail names. ‘We’re in thrall to a phenomenon we cannot control or escape,’ I wrote about internet commerce a while ago, ‘and it’s only ever going to be three clicks from anarchy.’ So what can be done?


External policing of cyber-crime is minimal in relation to the explosive scale of the problem. Governments, however sophisticated their own communications systems, can do little or nothing against cross-border attacks or even teenage hacker nerds. Internal corporate controls are obsessively discussed in every boardroom and consultants get rich as a result, but customers only find out how ineffectual they really are when breaches occur.

All we can say is that if regulators find Tesco Bank to have been exceptionally slack in its internal controls — or even, as some experts suggest, to have fallen to ‘an inside job’ — then it deserves to be shut down to encourage the others. Meanwhile, if you’re thinking of changing, a Which? survey last month gave First Direct and HSBC the best security ratings, followed by Barclays, M&S Bank (despite the phishing attempts after my floral purchase) and Nationwide.

End of the tunnel?

One day last summer a reader arrived on my doorstep with a bottle of champagne. He was convinced (largely because I had claimed here ‘it was The Spectator wot won it’) that my positive comments on Sirius Minerals, in which he is a shareholder, had swung the eight-to-seven local planning committee vote in favour of opening a huge new polyhalite potash mine near Whitby in North Yorkshire.

The share price doubled as a result, but even so there were concerns about the project’s viability: that it would struggle to raise sufficient capital to dig the hole and the 23-mile tunnel by which the product will be conveyed to a processing plant on Teesside; and that the world already has ample reserves of potash fertiliser, many of them a lot cheaper to exploit than this one. Now the first of those headaches has been cured with a £240 million injection from Hancock Prospecting (master company of Australia’s richest woman, the formidable mining heiress Gina Rinehart) plus up to £760 million from City institutions in equity and bonds — making a billion in total and one of the largest fundraisings ever achieved for an Aim-listed company.

So I doff my flat cap across the moors to Sirius chief executive Chris Fraser, who has defied the doubters to complete the first and toughest of the several financing rounds that will be needed before the mine becomes operational. He can now send in the diggers in the hope that potash will be flowing through the tunnel by 2021 — and that by then the global balance of supply and demand will justify the whole venture.

The shares, meanwhile, have been fodder for speculators, many of whom got their comeuppance when the price halved from a 48 pence peak — as a result of dilution by the new capital-raising — back to where they were after the planners’ vote. My champagne–bearer got in early and low, so he’s OK; but if you bought later, having read about Sirius here, all I can say is hang on for the long haul. At 24 pence, if you feel lucky, you might even buy a few more.

The wild card

‘I have a horrible feeling he has enough gimmicks to be the wild card… I mean, he could go on to win it.’ We’re just beginning to come to turns with the dangerous tendency of today’s voters to reject the conventional and competent in favour of unqualified, undignified, unlovable candidates who conduct themselves like showmen and clowns. I speak of course of former Labour shadow chancellor Ed Balls on Strictly, and I quote from waspish judge Craig Revel Horwood. But by the time you read this I shall be on a flight to Houston, whence I shall report as to how that tendency has played out with the electorate of Texas.

 


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