Tuesday, 23 August 2016

Rebuilding customer relationships

Banks have grown too large and complex and are struggling to deliver added value to final investment relationships in a world of high fees, frequent financial crises, damage of reputation and zero interest rates.

Banking regulation has stepped up the cost of capital. However, market regulation was also strengthened to foster higher customer protection in the aftermath of the global financial crisis, and enforce full transparency about costs and risks negotiated with taxable investors. This has been a perfect storm for retail and private banks: compliance costs sky-rocket while FinTech competition erodes their profitability.

Monday, 22 August 2016

Why it’s time to embrace the big opportunity of Open Banking

Earlier this month, the Competition and Markets Authority (CMA) published the final report on its retail banking market investigation. By requiring banks to implement Open Banking by early 2018, the report claims it is paving the way for a revolution. While debates rage on about the specifics of the report and how far (or not far enough) it goes, it accelerates and supports the UK’s move to a transformed banking landscape based upon a foundation of Open Banking.

Before I go on, let’s be clear – the CMA’s Open Banking programme is not a new concept. It is based on the HM Treasury initiative, powered by the Open Banking Working Group (OBWG), who are determining the open API standards for Open Banking. The timeline has already been set in the Open Banking Standard. Add to this the API mandate of the European Commission’s upcoming revised Payments Services Directive (PSD2), and it’s clear that a tour de force of regulation aimed at bursting open the banking industry is already on its way.

Tuesday, 9 August 2016

I’ll have contactless, please, with a side order of cash

"Why I've cut up my contactless bank card...and you should too," says Ross Clark - they are driving up prices and killing off cash. This Daily Mail article has been stirring up a lot of debate here in the UK. I won’t go through its contents in detail (you can find it here). But in a nutshell, Clark was sent a contactless debit card and he immediately cut it up with a pair of scissors because banks and credit card issuers are evil and cash is great.

A tad OTT, yes, and his argument contains numerous holes (without a debit card, how will you withdraw your beloved cash, Ross?) But I agree with him on one crucial point. The man and the woman in the street still like and trust physical money and distrust those who seek to do away with it. It’s unfair to write them off as luddites for this (as often happens within the tech industry).

Monday, 8 August 2016

What can lenders learn from the motor finance sector?

In April, the Bank of England reported that growth in unsecured borrowing, including personal loans, had returned to rates not seen since the financial crisis. With market confidence renewed, lenders are now looking for best practices that can help them make the most of the rising market. Enhancing the customer experience is a good starting point; removing ‘points of friction’ can significantly reduce application drop outs. It’s also something that the motor finance industry is really starting to nail.

Despite economic doubts and stricter compliance requirements, the sector has continued to demonstrate enviable growth. In October 2015, car sales had been rising consecutively for 43 months and, after a brief pause (for new plates to be issued), sales picked up again, and at a faster rate than before. In March 2016, the new car market surged by 5.3%, making it the highest grossing month since 1999. Given that roughly 80% of all new vehicles are bought with finance it’s little wonder that the Finance & Leasing Association (FLA) reported an 11% increase in motor finance lending in Q1 2016.

Friday, 29 July 2016

PSR announcement ushers in new era for payments innovation

The Payments Systems Regulator (PSR) has this week announced that the UK payments infrastructure will undergo a reform, in order to increase innovation, competition, and ultimately seek to better serve consumers.

This announcement seeks to break down the current payments status quo which has remained stagnant in this country for too long. The best case scenario is that we now see a flood of innovative competitors coming to the fray, where the needs of consumers, and not the needs of the major payment players, will drive the sector forward.

Friday, 22 July 2016

Optimal cash management: seeing the wider business benefits

When optimising cash management, it’s easy to get caught up in treasury-specific goals and advantages, such as improved visibility, accessibility and control. But revamping the way the company manages its cash has many benefits for C-suite decision-makers and the wider business too.

Today’s international business environment is characterised by uncertainty. Europe’s future is being called into question and market volatility is understandably high. As a result, treasurers, CFOs and CEOs alike are looking for ways to better manage turbulence, complexity, and minimise the impact of ‘unknowns’. Naturally they want greater certainty around corporate and financial strategy, and are seeking improved control of financial risks. Moreover, they want to bolster investor confidence, increase profitability, strengthen the balance sheet and ultimately make the right decisions for the company’s future.

One of the most practical ways that treasury can help deliver on these needs is by optimising the company’s cash management. After all, the benefits of improving visibility, accessibility and control over group-wide cash are by no means limited to the treasury function.

Wednesday, 20 July 2016

Gotta Catch ‘em All: Pokémon Go and the Banking Industry

If you had told us that you had never heard of Pokémon Go, especially after the month and a half the new application from Nintendo has had, we at IBS Journal wouldn’t believe you. The alternative reality game has had children and adults alike enraptured, following their phones around outside hoping to catch elusive Pokémon at local landmarks.

Explosive would be the right word to describe just how much of a phenomenon Pokémon Go has become overnight. Not only has it been downloaded in record numbers, but it is being used more often per day than the most popular apps of all time. The app almost has as many daily users as Twitter and the search term “Pokémon Go” and its derivatives have overtaken the most entrenched top Google searches, including those for pornography.