The battle against money laundering and fraud is being fought on various fronts with various weapons, the most popular of which appears to be biometrics. But will this contactless form of payment eventually lead to a cashless society? Chris Skinner ponders the future.

TowerGroup estimates that total IT spending in the global financial services industry will rise 4% from nearly $334bn in 2003 to just over $347bn in 2004. Continuing this growth pattern, total IT spending will increase to $379.2bn by 2006, at a compound annual rate of 4.5% from 2004. Banking customers, both corporate and individual, demand superior service and are taking note of their institutions’ performance gaps vis-à-vis other service industries. Innovation will shift dramatically from the traditional, vertically focused dimension of banking products to a horizontal integration of new service breakthroughs by virtue of a federation of alliances and partnerships. Bank business strategy will shift from short-term cost cutting mandates to long-term value and revenue growth.

The Moscow Social Card is being used as a pilot to measure the added value of dual interface smart card technology, combining credit/debit and social payments applications on a single card. Wendy Atkins reports on the scheme.

There are signs that volume in exchange-traded derivatives is growing faster than over-the-counter products. Frances Maguire examines the drivers behind this trend and the impact of clearing on trading in capital markets.
Standardised exchange-traded contracts have always represented the tip of the iceberg, dwarfed by the volumes carried out by banks over the counter in the form of complex, structured, customised instruments. While this is still the case and both continue to grow, a study – published by Morgan Stanley and Mercer Oliver Wyman in June 2003 – found that for the preceding 18 months, exchange-traded derivatives had grown faster than off-exchange products for the first time in a decade.

The financial sector is finally catching up with the demand for Islamic banking services. This year hopes to see the ground-breaking establishment of the IBB, which will cater to UK Muslims while also hoping to attract business from further afield.