Page 1

AUGUST 2018 ISSUE

UK RETAIL BANKER w www.rfigroup.com t twitter.com/RFiMediaGRB

Pascal Nizri CEO and Co-Founder of Chekk RFi GROUP INTERVIEW 14

RFi GROUP INSIGHT

SAVINGS & CURRENT ACC

LENDING

08 Cash & payment trends – The death of cash?

16 Raisin UK launches cash bonus offer to all new customers

20 Lloyds and Halifax announce new 10-year fixed rate mortgages


CONTENTS

08 12

14 16 18 RFi GROUP INSIGHT

INTERVIEW

SME & COMMERCIAL

08 Cash & payment trends – The death of cash?

14

18

PODCAST

SAVINGS & CURRENT ACCOUNTS

12 Bridging the credit gap for the banked and underbanked population in India

16

2 RFi MEDIA

Pascal Nizri, CEO and Co-Founder of Chekk.

Raisin UK launches cash bonus offer to all new customers

Barclays double maximum limit for unsecured business loans


CONTENTS

20 22

25 LENDING

CARDS & PAYMENTS

FINTECH

20 Lloyds and Halifax announce new 10-year fixed rate mortgages

22 Contactless payments rise in popularity

25 Monzo and Starling Bank connect with Chatbot, Plum

UK RETAIL BANKER 3


RFi GROUP AUGUST TEN SELECTED STATISTICS FROM DAILY STATS ON RFi GROUP WEBSITE (www.rďŹ group.com)

UK

CANADA

40% of UK current

1 in 10

account holders only hold a current accou with their main bank

Consumers in Canada have used some form of biometric identification to access their bank's internet/mobile banking

US

47%

of US merchants accept contactless card payments

MEXICO

29% of of consumers

in Mexico consider a mobile banking app as their most preferred channel for day-to-day banking activities

04 RFi MEDIA

EGYPT

2 in 3 Egyptian

consumers find it very important that their bank has an extensive branch network


STATISTICS

t y unt k

y

e

FRANCE

2 in 5 consumers in

France intend to take out a new banking product in the next 12 months

#RFiGroupDailyStat

CHINA

37% of consumers in China

have used fingerprint biometric technology to access their banks' internet/mobile banking

MALAYSIA

42% of consumers in

Malaysia cite owning their own home as their most important financial goal

TAIWAN

18% of consumers in

Taiwan have banked with their main bank for less than 3 years

AUSTRALIA

1 in 3 Australian card

accepting merchants would most prefer contactless card payments to go through the eftpos network UK RETAIL BANKER 05


GLOBAL DIGITAL BANKING CONFERENCE SERIES 2018 EUROPE EDITION

REGISTER NOW FOR EARLY BIRD RATES

The Grange City Hotel 8-14 COOPER’S ROW | LONDON | EC3N 2BQ

Featuring the following speakers:

Marieke Flament, CMO, Circle

Pascal Nizri, Global Head of Transformation, HSBC and Founder & CEO, Chekk

Leon Muis, COO, Yolt

Neal Cross, Managing Director & CIO, DSB Ban

Maha El Dimachki, Head of Payments, Financial Conduct Authority

David Judic, Head of Customer Innovation, CYBG

Ruchir Rodrigues Managing Director Digital, Barclays


Welcome to the July edition of the UK Retail Banker, a newsletter designed to give you an update on news and trends within the UK retail and commercial banking market, contextualised by RFi Group data. Cash, the payment method of choice for consumers the world over, has been able to maintain its status as the most used payment method for years until now. In this months’ insight piece we deep dive into the drivers behind the decline in cash usage. This month we sat down with Pascal Nizri to discuss how to win the post PSD2 customer, ahead of next months Global Digital Banking Conference on the 13th September in London.

We have early bird pricing still available, and an incredible lineup of speakers. Get in touch to find out more. I hope you enjoy the issue!

Kind regards,

Sarah Hollinshead Editor UK Retail Banker shollinshead@rfigroup.com


RFi GROUP INSIGHT

CASH & PAYMENT TRENDS THE DEATH OF CASH? WORDS ADAM BOTTLE

C

ash, the payment method of choice for consumers the world over, has been able to maintain its status as the most used payment method for years despite the emergence of a range of payment alternatives. However, this is all starting to change. RFi Group data shows that cash use is declining, with consumers across the globe expecting their cash use to fall in the next 12 months. So, what is driving this decline, and is it likely to continue? RFi Group’s examination of UK consumers has led us to believe that this fall is part of a long-term trend away from cash, with consumers being pushed away from cash by their changing HOW DO YOU EXPECT YOUR USAGE OF THE FOLLOWING TO CHANGE OVER THE NEXT 12 MONTHS? Consumers using the following payment methods - Net change (% intending to use more - % intending to use less) Cash

Credit Card

40%

Debit Card 35%

30%

30%

27% 22%

22%

20%

20% 12%

10%

8% 2%

5% 4%

6%

9%

6% 2%

0%

1%

-7%

-10% -20%

11% 12%

12%

11%

-11% -15%

-15%

-13%

-15%

-16%

-22%

-14%

-15%

-22%

-30% Australia

8 RFi MEDIA

Canada

China

France

Hong Kong

India

Mexico

Source: RFi Group Global Digital Banking Council - 2018 H1

Singapore

UK

US

Global Average


RFi GROUP INSIGHT

expectations of payment solutions, evolving requirements for budgeting and spending controls, and the emergence of mobile wallets. One of the key challenges facing cash is that consumer expectations of an in-store payment solution are changing, with consumers increasingly considering speed most important when choosing a payment solution, rather than the security of their payment details. Traditionally, when choosing a payment solution, consumer focus was on the security of their payment details, as seen in the preferences of those aged over 55. This is a requirement that cash is easily able to meet. Now, payment detail security is being overshadowed by other features, as seen by the fact that those under the age of 54 are primarily looking for a payment method that is quick. Speed and convenience are areas where cash struggles, with cash not strongly associated with convenience compared to other payment methods. This is not to say consumers are no longer worried about the security of their payment details, more that consumers expect a payments solution to keep their details safe as standard, meaning they can instead look for a payment method that offers additional features as well.

WHAT IS THE MOST IMPORTANT FOR YOU WHEN CHOOSING A PAYMENT METHOD IN STORE? 18-34

35-54

55+

Most important

How quickly you can make the payment (15%)

How quickly you can make the payment (16%)

The extent to which you believe your payment details are safe (19%)

Second most important

The security features for authenticating the payment (14%)

The ability to use their own funds rather than credit (16%)

The security features for authenticating the payment (17%)

Third most important

The ability to earn rewards (14%)

The ability to earn rewards (16%)

The ability to use their own funds rather than credit (17%)

Source: RFi Group UK Payment & Innovation Council – 2018 H1

UK RETAIL BANKER 9


RFi GROUP INSIGHT

Another factor driving consumers away from cash is the increased use of mobile wallets. Currently, 25% of UK consumers have used a mobile wallet, with mobile wallets the payment method that is starting to replace cash in the payment scenarios where it is most commonly used, low value purchases and taxi fares.

MOBILE WALLET USE

Have used a mobile wallet 25%

Have not used a mobile wallet

Source: RFi Group UK Payment & Innovation Council – 2018 H1

RFi Group data also shows that mobile wallet use is likely to grow, with around 1 in 4 UK consumers able to envision a cashless future, and mobile wallets increasingly viewed as the tool to replace cash. This trend is repeated or exceeded across the globe, with two thirds of consumers in China and India able to envision a cashless future. Mobile wallets have several advantages over cash, including security benefits, financial management capabilities, and the ability to pair them with rewards. In terms of security, mobile wallets offer not only the security features of a credit or debit card, but also the security features of a mobile device. Budgeting features, such as available balance and transaction history,

CAN YOU IMAGINE A SCENARIO WHERE YOU WILL EVER STOP USING CASH ENTIRELY BECAUSE ALL OF YOUR PAYMENT NEEDS WILL BE MET BY OTHER WAYS OF PAYING? % Yes H2 2017

70%

66%

64% 60%

60%

H1 2018

63% 55% 56%

50%

46% 43%

40%

35%

39%

37%

30%

33%

31%

29%

31%

31% 27%

41%

29% 26%

25% 20%

20% 10% 0% China

Mexico

India

Singapore

Hong Kong

US

Australia

France

Source: RFi Group Global Digital Banking Council – 2018 H1

10 RFi MEDIA

Canada

UK

Global Average


RFi GROUP INSIGHT

can also be incorporated with mobile wallets, giving them a clear advantage over other payment methods. Mobile wallets can also be paired with rewards to drive use. This can be seen in the UK, where Tesco Bank has linked its Tesco Pay+ mobile wallet to the Clubcard rewards scheme, helping to drive use of Tesco Pay+. All of these benefits are likely to continue driving consumers towards mobile wallets, and away from cash. Cash has played, and will continue to play, a key role in consumer payments around the world. Despite this, cash is now facing considerable challenges from alternative payment methods, particularly mobile wallets, and this is likely to continue with consumer expectations of payment solutions evolving. How quickly cash declines is likely to vary considerably around the world, but one thing is clear, as alternative payment methods become cheaper and more readily available, the decline of cash is likely to continue. While it is clear that cash is declining as a payment method it is not going to disappear overnight. Cash is still heavily used in a number of markets globally, particularly Canada and Australia, and even in some regions of the UK, with consumers in Scotland, Wales, and the South East much more likely than those in London to still be using cash regularly. Cash also has a role to play as a store of value, with many consumers continuing to horde cash as a way of saving and protecting their wealth. Cash is also protected to an extent by the cost of alternative payment methods, as well as a lack of availability. However, these protections are fast being eroded, as seen in the emergence of merchant services such as Square that are making payment terminal technology cheaper and available to more business in a wider range of situations, as well as regulatory changes such as the card payment surcharging ban in Europe. With forces such as these making cash alternatives cheaper and more widely available, the decline of cash is only going to accelerate. WHICH OF THE FOLLOWING PAYMENT METHODS YOU HAVE USED IN THE LAST 12 MONTHS? Cash 100%

H2 2017 90%

87%

87%

87%

87%

H1 2018 84%

83%

83%

80%

80%

80%

85%

60% 40% 20% 0% Canada

Australia

China

UK

France

Mexico

Singapore

Hong Kong

US

India

Global Average

Source: RFi Group Global Digital Banking Council – 2018 H1

UK CASH USAGE By Region 100%

H2 2017 89%

88%

88%

87%

87%

H1 2018 86%

85%

84%

80%

83%

77%

73%

60% 40% 20% 0% Scotland

Wales

South East

South West

North East

North West

East Midlands

East of England

UK: RFi Group Payment & Innovation Council – 2018 H1

West Midlands

Yorkshire & The Humber

London

UK RETAIL BANKER 11


GLOBAL DIGITAL BANKER PODCAST

Global Digital Banker Podcast EPISODE 28

The current and future drivers of obtaining main bank relationship 25 MIN Guests: Michael Jordaan, CEO, Bank Zero & Gerald Ferguson, Managing Director Asia Pacific, RFi Group

RFi Group research shows that only 40% of consumers globally will ever switch their main bank. In today’s episode we take a look into the importance of transactional relationships on acquiring main bank status along with the current and future drivers of main bank relationships. Gerald Ferguson shares insights on the shift towards transactional banking relationships, opportunities from life stage switching and the current and future drivers of main bank relationships.

Michael Jordaan explains the catalyst behind launching Bank Zero, the digital banking scene in South Africa and how they differentiate themselves from other competition in the market START LISTENING HERE

EPISODE 27

Ensuring consumer comfortability in an open banking environment 13 MIN Guests: Leon Muis, Chief Operating Officer, Yolt

Research from RFi Group’s latest Global Digital Banking Study shows that over 4 in 5 consumers globally agree that the privacy of their financial data is more important than access to better products and services. With this in mind, it’s important for banks and financial services companies to build trust amongst consumers and create products that have a clear and fairminded value exchange to incentivise consumers to share their personal data. We sat down with Leon Muis, Chief Operating Officer at Yolt who shared his opinions on the drivers behind changes in financial services, the customer needs that are not yet being addressed by banks or fintechs, how to build trust amongst consumers and three exciting new updates that we can expect to see from Yolt over the next 12 months. 12 RFi MEDIA

START LISTENING HERE


GLOBAL DIGITAL BANKER PODCAST

EPISODE 26

Growth continues in Asia’s next FinTech hub 15 MIN Guests: Thorsten Terweiden, Deputy Head of FinTech, InvestHK

As at 2018, Hong Kong’s FinTech scene is absolutely thriving. This continuing development is due to a number of factors, including: government support towards players within the ecosystem, increasing investment within Hong Kong FinTech which has now more than doubled over the past 12 months and consumer awareness continuing to rise with over 1 in 4 Hong Kong consumers aware of FinTech providers within the country, increasing to 1 in 2 of consumers when prompted. We sat down with Thorsten Terweiden, Deputy Head of FinTech at InvestHK who shares the current state of the market, the ways in which FinTech is evolving within Hong Kong, segments that are of growing interest to investors along with some great case studies from the region. START LISTENING HERE

EPISODE 25

Bricks to clicks – addressing evolving customer needs in Canada 22 MIN Guests: Rania Llewellyn, Executive Vice President, Global Business Payments, Scotiabank and Andrew Irvine, Head of Customer Solutions, Canadian Personal & Business Banking at BMO Financial Group

We speak to some of Canada’s biggest banks to see how they are addressing the evolving needs of Canadian consumers, their channel preferences and their perspective on potential regulatory changes in the market. Rania Llewellyn shares the market segment that they will be going after, how they keep across the changing needs of different consumer segments and the changes in Canadian Payments Infrastructure. Andrew Irvine discusses the various technologies impacting the customer experience, how they educate customers on new innovation within the business and his perspective on the potential regulatory changes in Canada. START LISTENING HERE

NEVER MISS AN EPISODE! SUBSCRIBE & LISTEN TO THE PODCAST ON ANY OF THE BELOW PLATFORMS: iTunes

Stitcher

Podbean

SoundCloud

globaldigitalbanker.com

For up to the minute email notifiications, please subscribe here If you are interested in being a part of the show or would like to let us know your feedback, contact us at: gdbpodcast@rfigroup.com

UK RETAIL BANKER 13


THOUGHT LEADER INTERVIEW

Pascal Nizri CEO and Co-founder of Chekk WORDS SARAH HOLLINSHEAD

14 RFi MEDIA


THOUGHT LEADER INTERVIEW

WINNING THE POST-PSD2 CUSTOMER What advice would you offer to other entrepreneurs who are hoping to resonate with the traditional banks.

Can you explain the forces that are driving the shift in data ownership from businesses to individuals?

There are a lot of buzz words out there, but what is more important as an entrepreneur is to always remember what we’re here for and what the institutions we sell to are here for.

From working in banking for almost 20 years I have had a good first-hand view into the two opposite forces at play. On one side consumers don’t want to share information anymore because of all of the security breaches, data hacks and reselling of data and on the other side the regulators are forcing companies to know more about their customers than ever before.

Financial institutions want to make real and concrete changes for their customers and shareholders alike. If you come into market offering something different, such as ways to improve customer experience, processes, reduce costs or increase profits then it will be a lot easier to facilitate a discussion.

Digital identity and personal data ownership are not necessarily new topics, however, the concrete way in which we are addressing them to solve real life problems for financial institutions and customers is what is really on the mark. Digital identity and personal data ownership are not necessarily new topics, however, the concrete way in which we are addressing them to solve real life problems for financial institutions and customers is what is really on the mark. For the big institutions it’s about finding the right people to talk to, which is never easy in big global corporates. If you have appetite coming from the group strategy or global stakeholders and are able to build something really concrete for them, it often triggers something that is really helpful.

At Chekk, we believe that the only way to reconcile those two opposite forces is when you shift personal data ownership to from businesses to individuals for the benefit of both, and that is exactly what Chekk enables and supports. We are a B2B2C digital identity ecosystem. For consumers, it is a personal mobile data wallet, where they can store, manage and share their data. For businesses, it’s an API connecting to their information system and a business dashboard which can be used even with no integration at all which can manage data request onboarding and a number of other value-added services like messaging, consent and statements. We see identity as an enabler. We have a multi layered ecosystem where we do electronic KYC in a way that an organisation can really access information that is managed by the individual as well as a second layer of value-added services. All of this is done in a way that is quite different in terms of the flexibility we provide, that is easy to deploy, extremely secure and that works across banks, across industries and across borders. How do you overcome challenges around consumers perceptions relating to trust and privacy? For us it comes back to a few important points in that people actually trust what we do and how we do it. From a business

model perspective we are very clear that this is not our data and we don’t use the data, see the data or resell the data. From a technology perspective, the data is fully encrypted with symmetric keys, therefore it’s quite reassuring for end users, for the banks and for the insurance companies. They simply won’t use or recommend us of they’re not comfortable enough with our offering. As a global company, how have you found navigating those different regulatory environments? What are the big differences you are seeing across the globe? Most of the regulators around the world are quite active. There has been a lot of regulation in the past few years around money laundering and tax evasion, this type of regulation generally starts in one market and then permeates around the world. An example of that being the recent Open Banking legislation in Europe which has sparked a lot of discussion around the world. In the end, they are all trying to achieve the same thing, which is understanding the people and the flaws of money to reduce things like money laundering, like people trafficking. Who stands to gain the most from Open Banking? It’s about cooperation over competition and what we can all do better for customers. Everyone has a lot to gain in a mutually beneficial way and the end users through better services and better pricing. Hear more from Pascal Nizri as he presents at the Europe edition of the Global Digital Banking Conference Series being held in London on the 13th September. To view the event agenda or to register for the event, please click here

UK RETAIL BANKER 15


SAVINGS & CURRENT ACCOUNTS

Savings & Current Accounts Raisin UK launches cash bonus offer to all new customers WORDS MARIA URENA

F

ollowing its recent launch, Raisin UK, an online marketplace serving savings account customers, is currently offering a ÂŁ50 bonus for a limited period to every new customer who opens an account with them. With a single login functionality, consumers can compare savings accounts from various partner banks that meet their needs, apply to them, and even manage more than one account through the site. The site offers fixed term accounts

16 RFi MEDIA

from one to five years, with all its products protected through the FSCS or an equivalent European scheme. To receive the bonus, consumers must register with Raisin, apply and deposit a minimum of ÂŁ1,000 into one of its accounts. They will also need to email the provider within 30 days of funding the account and the money will be credited into the account within 60 days of Raisin receiving the email.


SAVINGS & CURRENT ACCOUNTS

ClearScore introduces new service: OneScore WORDS MARIA URENA Taking advantage of Open Banking, ClearScore has introduced OneScore, a service which will offer consumers the capability to view analysis of their current account spending, as well as factoring debt, assets, savings and protection, to give them a financial health score. Consumers can access different services depending on their score and needs, as well as follow recommendations to improve their financial wellbeing and achieve specific financial goals. For instance, they have the ability to take a free customised coaching program via ClearScore, or switch to a better home loan, or credit card offer. These types of services are available thanks to Open Banking, which according to RFi Group, 20% of consumers would be interested (score of 4+/5) in sharing their personal financial data to receive tools and banking products through financial focused institutions. Recently released regulation will enable banks and financial services providers to offer a range of new tools and improved services. To receive them, you would need to provide consent for the bank or financial service provider to access all of your financial data, such as your transaction history, that is currently held with financial services providers.

HOW DO YOU FEEL ABOUT CONSENTING TO SHARING YOUR PERSONAL FINANCIAL INFORMATION IN ORDER TO ACCESS THESE BENEFITS?

6%

14%

28%

Very hesitant Hesitant Uncertain

7%

Interested 44%

Very interested

Source: RFi Group UK Savings Council 18Q2

Atom Bank launches competitive fixed rate bond WORDS MARIA URENA National Savings & Investments (NS&I) announced that it will cut the rate on its Direct ISA from 1% to 0.75% as of the 24th of September of this year. According to the institution, around 387,000 consumers held this account during March 2018, proving it to be a very popular product and thus reducing the money aimed towards public spending by HM Treasury. NS&I’s director, Jill Waters, explains that the decision to cut the rate was to deliver positive value for taxpayers, which means the provider is aiming to create a balance between savers, taxpayers and the stability of the financial sector.

The decision to cut the rate was to deliver positive value for taxpayers, which means the provider is aiming to create a balance between savers, taxpayers and the stability of the financial sector. UK RETAIL BANKER 17


SME & COMMERCIAL

SME & Commercial WORDS JOSEPH SHARANGPARNI

Barclays double maximum limit for unsecured business loans

B

arclays recently announced that it has doubled its maximum limit for unsecured loans to SMEs from £50,000 to £100,000.

This move is said by Barclays to particularly help businesses in Scotland receive funding quicker, enabling them to take advantage of opportunities that they would otherwise miss due to time constraints. It also means businesses won’t need to use their home or business premises as security. Barclays’ new limit adds to its unsecured loan offers which include the ability for 250,000 SMEs to have pre-assessed spending limits of up to £25,000 via digital banking, and subsequently apply for, and potentially receive the funds on the same day. RFi Group data demonstrates that the ease and speed of an application is the most important factor after interest rates when it comes to choosing a provider for borrowing products. With 1 in 3 borrowing product holders ranking it as one of their top 3 most important drivers of choice.

18 RFi MEDIA

WHEN CHOOSING A FINANCIAL INSTITUTION FOR BORROWING PRODUCTS, PLEASE STATE WHICH OF THE FOLLOWING ARE IMPORTANT TO THE BUSINESS. Borrowing product holders, top5, % that ranked 1-3

44%

Competitive interest rates

Ease and speed of application experience

Online banking capabilities

Flexibility in repayment methods

Staff knowledge about regulations & practices

36%

32%

31%

26%

Source: RFi Group UK Small and Medium Enterprise Council 18H1


SME & COMMERCIAL

Growth Street to become first P2P SME lender on Starling Bank’s marketplace WORDS JOSEPH SHARANGPARNI SME focused peer-to-peer lender, Growth Street, will become the first of its type to be available to businesses via Starling Bank’s marketplace, joining the other various range of services available such as pensions and insurance. Greg Carter, chief executive at Growth Street, outlines the aim of the collaboration “Growth Street shares a vision with Starling: we both want to help businesses grow and prosper”. Growth Street’s flagship product, GrowthLine, operates in a similar manner to an overdraft, where business customers can acquire funding and repay on their own terms, within reason and providing it does not exceed their limit. Existing Growth Street customers will be able to access GrowthLine via Starling Bank’s marketplace, along with further access to information regarding their available funds and facility limits in real time. The availability of Growth Street’s flagship product via Starling Bank’s marketplace is due to go live later this year.

Barclays launch cashback initiative for SMEs using asset finance WORDS JOSEPH SHARANGPARNI Barclays have introduced a new cashback initiative to encourage SMEs to use asset finance and invest further into areas such as equipment, machinery and vehicles. The move comes as part of the wider ENABLE program launched by the British Business Bank in November last year, which helps banks increase the amount they lend to SMEs by reducing the necessary capital to be held against such lending. Barclays have initially set aside £300m to help SME purchasing and leasing, with businesses receiving 0.25% cashback on finance of over £10,000. Eligible businesses are those with up to 250 employees, and a turnover of up to roughly £44m. Another selling point of the scheme relates to the variety of interest options available to applying SMEs. Businesses can have a fixed or floating interest option, with a range of funding terms and repayment options available. The scheme is currently open to existing Barclays’ customers, and is operated by Barclays specialist Asset Finance team.

UK RETAIL BANKER 19


LENDING

Lending WORDS ELLA TAUTZ-DAVIS

Lloyds and Halifax announce new 10-year fixed rate mortgages

F

ixed-rate mortgage deals usually last for either 2 or 5 years, after which customers tend to be switched onto a mortgage with a more expensive variable rate. Many borrowers then take initiative to quickly switch to a better deal. Yet two of the UK’s most prominent lenders, Lloyds Bank and Halifax, have both launched 10-year fixed rate long term mortgages. They target long-term homeowners who won’t have to go through the effort of remortgaging in two or five years’ time, which will also provide them with increased certainty that their future repayments won’t change. RFi Group data does indeed show an increase in home owners

preferring long term fixed rates on their mortgages in the last few months, rising significantly from 23% to 27% across all UK mortgage holders. Both Lloyds Bank and Halifax now offer 10-year fixed rates starting at less than 2.5% with a £995 fee, joining HSBC, Barclays, and several other providers that offer similar deals. To obtain these rates until 2028, customers of Halifax will need a 40% deposit or equity in their property and be a home mover, while Lloyds’ cheapest 10-year deals are only available to remortgagers with a Club Lloyds current account and 40% equity in their property.

WHICH OF THE FOLLOWING IS TRUE OF YOUR CURRENT MORTGAGE RATE? All mortgage holders Q3 2017

Q4 2017

Q1 2018

Q2 2018

27% 21% 15% 10%

Long-term fixed rate (more than 3 years)

Short-term fixed rate (1-3 years)

When my old deal expired, I continued on my lender's Standard Variable Rate (SVR) Source: RFi Group UK Mortgage Council

20 RFi MEDIA

Long-term tracker (more than 3 years)

9%

I have always been on my lender's Standard Variable Rate (SVR)


LENDING

New ‘Airbnb’ mortgage launched by Tipton WORDS ELLA TAUTZ-DAVIS Tipton & Coseley Building Society recently launched a new mortgage for second homes and holiday lets, directed at cases for those intending to let the property out through the lodging reservation website Airbnb.

circumstances means that some tenants require shorter or more flexible rental periods. It therefore makes sense to accommodate landlords who wish to attract shorter term tenancies.”

Despite the increasing popularity of Airbnb, there are few lenders in the market that provide mortgages for short-term lets and non-fixed term agreements.

By taking holiday let income into account where there is a proven track record, the building society has also introduced further flexibility on overall income. Applicants can borrow up to 75% LTV, and the mortgage is available for those purchasing a second home or holiday let, as well as those looking to remortgage.

Cammy Amaira, Tipton & Coseley’s director of sales and marketing, states, “The changing nature of people’s working

Clydesdale Bank launches mortgages for professionals WORDS ELLA TAUTZ-DAVIS Clydesdale Bank has released a range of mortgages specifically for newly qualified professionals, such as accountants, doctors, pilots, solicitors and more. The bank’s existing range of mortgages for professionals have garnered popularity in the past, and Clydesdale are now focusing on newly qualified professionals to further strengthen this range and provide more features that these targeted customers will find particularly valuable. The mortgage allows customers to borrow up to 5.5 times their salary, and between 85% to 95% loan to value (LTV). It

offers terms of two, three and five years, with rates starting at 2.14%. Only offered through mortgage brokers, the products are available to those with an income over £40,000 and who qualified in their profession within the last 5 years. Hannah Maundrell, editor in chief of money.co.uk, suggests, “If this type of mortgage proves successful for Clydesdale we could see more providers start to offer similar products – healthy competition usually means a better deal for consumers, so we'll have to watch this space."

UK RETAIL BANKER 21


CARDS & PAYMENTS

Cards & Payments

22 RFi MEDIA


CARDS & PAYMENTS

Contactless payments rise in popularity WORDS JESS GARRATT

A

ccording to UK Finance, 33% of card payments during May 2018 were contactless, a major increase from May last year where contactless card payments sat at 18%. Travel purchases in particular experienced a rise in contactless payments such as foreign currency exchange and payments at airport terminals. When comparing spending on cards from May 2017 to 2018, credit card spending increased from £15.2bn to 16.6bn and spending on debit cards increased from £37.9bn to £40.6bn. RFi Group data has tracked changes in contactless behaviour overtime and highlights ownership and usage of contactless card payments continuing to increase and currently standing at an alltime high among retail banking customers.

CONTACTLESS OWNERSHIP AND USAGE IN THE UK H1 2016

H2 2016

H1 2017

H2 2017

H1 2018

86% 72%

Usage

Ownership

Source: RFi Group UK Payments Council

UK RETAIL BANKER 23


CARDS & PAYMENTS

Contactless payments security tightening WORDS JESS GARRATT Currently, consumers are restricted on making payments over £30 with contactless payments, having to enter their PIN on purchases above this amount. However, banks haven’t revealed the number of consecutive payments a consumer can make before having to enter the PIN. This is set to change due to a new European Union legislation taking effect in September 2019, with customers using contactless cards required to either enter their PIN number every five payments, or after £132 being spent. The new measures aim to tackle fraud as this has also increased alongside the rising popularity of contactless card payments. Some institutions are implementing methods to deal with the new EU regulations, such as Mastercard, who are currently involved in discussions with banks to bring biometric fingerprint cards to the UK. The proposed card will avoid the new regulation of identification every five transactions as cardholders will be able to confirm their identity with their fingerprint, speeding up the payments process.

Starling and Monzo allow customers to block payments to gambling sites via app WORDS JESS GARRATT Monzo and Starling Bank both now offer a feature that give its current account holders the option to block all gambling related transactions. Before these apps implemented this function, the action for consumers wanting to block transactions to gambling companies meant having to get in contact with multiple companies, on the phone or potentially in person. Both banks offer a similar feature, where customers are able to log onto the app and turn on the feature that blocks spend on gambling and betting sites, meaning transactions to gambling merchants will be declined. There are differences however, between the features from both banks when looking at disabling the block. Monzo’s feature requires customers speaking with a member of the customer support team over the phon. Starling Bank customers can simply deactivate the block within the app, although a message will appear with the National Gambling Helpline contact details encouraging these consumers to seek help.

24 RFi MEDIA


FINTECH

FinTech Monzo and Starling Bank connect with Chatbot, Plum WORDS SHEHANI JAYAWARDANA

P

lum is the first chatbot to integrate with challenger banks, Monzo and Starling Bank. The platform has taken advantage of Open Banking by partnering up with API specialist, TrueLayer. In doing so, Plum is able to monitor consumer’s current account spending habits and allow savings to be put aside automatically based on an algorithm it has created. Additional features of the service include users’ ability to invest in options around industry such as Technology Stocks as well as evaluate their spending via an insights feature.

financial information, permitting Plum to have access to account information held by the two banks via the API. However, this information will only be available once a customer decides to use a new product and has given permission for data sharing. RFi Group data indicates that around a quarter of Millennials and Generation X are interested in savings tools offered by personal financial management apps in 18Q2. The most valued feature being a tool that shows savings made following cut backs on spending, which is a key feature of Plum’s offering. Thus, the integration is likely to prove popular, particularly among younger consumers.

The integration allows users to log in directly to their Monzo or Starling Bank account and avoid sharing these details with Plum. Users can then authorise TrueLayer to access their

WHICH OF THE FOLLOWING TOOLS/FEATURES WOULD YOU VALUE MOST IF OFFERED BY AN APP DESIGNED TO HELP YOU MANAGE YOUR PERSONAL FINANCES? TOP 3 - BY GENERATION Millennials

25%

23%

Generation X

23% 18%

Baby Boomers

24%

22%

23%

19% 15%

A tool that shows me how me how much money I could save if I cut back on spending certain areas

A tool that shows me how my savings can grow over time

Ability to create budgets for different categories

Source: RFi Group UK Digital Banking Council 18Q2

UK RETAIL BANKER 25


FINTECH

Monzo trials new joint account service WORDS SHEHANI JAYAWARDANA Monzo recently opened a trial for the new joint account service to all its account holders. The joint account has previously been tested by a few members of its staff and a group of account holders, but now all Monzo users are able to try this new service via the ‘Monzo Labs’ section on its mobile app. This is part of its ‘Big List’ campaign, in which the institution has compiled a list of features in response to the feedback they have received from customers. In order to trial this account, both customers must first have a Monzo account. Users can then access ‘Monzo Labs’ in the app to set up the joint account and invite the individual they would like to have a joint account with to create an account. Following the invitation, this individual will be automatically added to the joint account without having to turn on the feature in the app. However, unlike its current account where users can top up the balance with another debit card, consumers must set up 26 RFi MEDIA

a standing order or transfer money in order to deposit money into the account. Monzo shows a promising future for this new service, with plans in place to have the option of depositing funds into the account before cards are received by customers. Furthermore, the provider is currently working on shared pots, Current Account Switching Service and overdrafts for joint account holders.

All Monzo users are able to try this new service via the ‘Monzo Labs’ section on its mobile app.


FINTECH

Moneysupermarket set to launch new FinTech ‘Podium’ WORDS SHEHANI JAYAWARDANA UK based comparison site, Moneysupermarket, has recently announced its plans to create a new FinTech called Podium, which will help customers find the best mortgage for them and allow for online mortgage applications, aiming to digitalise the entire experience. Moneysupermarket is keen to expand its services in mortgages by creating an interface for customers and mortgage providers to connect directly with one another, while also allowing customers to take out a mortgage completely online. This eliminates the need to deal with a broker, where the comparison site will earn a small fee from the lender once the application goes through.

Podium has been developed as a partnership with the founders of HD Decisions who provide the technology behind matching profiled consumers with credit products they can be accepted for. The FinTech aims to adapt the same technology for mortgages, meaning prospective borrowers can quickly learn which lenders would accept them and how much they can borrow.

This eliminates the need to deal with a broker, where the comparison site will earn a small fee from the lender once the application goes through.

Andy Hancock, managing director at Moneysupermarket Group states, “The goal is an easy-to-use comparison service which at the touch of a button on a mobile phone will empower consumers with the information and knowledge they need to do a fairer comparison of mortgages.”

UK RETAIL BANKER 27


ABOUT RFi GROUP

RFi Group is a global financial services strategic insights partner. We specialize in evidence-based insight generation and strategic decision support for the world’s leading financial service providers. Our aim is to combine global intelligence and local knowledge to provide insightful, valuable and actionable recommendations, with a core focus on the provision of exceptional client service.

OUR BRANDS

Covering 44 key global markets, with regional offices in San Francisco, Toronto, London, Hong Kong, Singapore and Sydney, RFi Group consistently provides clients with tailored advice and independent insights relevant to their specific markets and business needs EXCLUSIVE FOCUS ON BANKING AND FINANCE RFi Group’s expertise and deep understanding of the banking and finance sector delivers high-value outcomes. Our areas of expertise include: Retail Banking Mortgages Transaction Accounts Savings Accounts Consumer Lending Cards and Payments

For any advertisement enquiries, please contact your regional RFi office or email your enquiry to Sarah Hollinshead at: shollinshead@rfigroup.com For more information, visit: www.rfigroup.com www.globalretailbanker.com

28 RFi MEDIA

Mobility and Banking Technology SME and Business Banking Private Banking Wealth Management Banking Regulation

RFi AUSTRALIA & NZ

RFi NORTH & LATIN AMERICA

Level 12 70 Phillip Street Sydney NSW 2000 Australia

One Embarcadero Center Suite 500 San Francisco, CA 94111, USA

P +61 2 9126 2600

P +1 416 644 8524

RFi NORTH ASIA

RFi ASIA

Unit 740, 2 Exchange Square 8 Connaught Place Central Hong Kong

Level 12, 9 Battery Road MYP Centre Singapore 049910

P +852 2297 2427

P +65 6597 7028

RFi EMEA

RFi CANADA

2nd Floor, Saxon House 48 Southwark Street London SE1 1UN United Kingdom

100 King Street West Suite 5600 Toronto, Ontario M5X 1C9

P +44 203 862 2166

P +1 416 644 8524


ABOUT RFi GROUP

RFi GROUP ACTIVE IN 44 INTERNATIONAL MARKETS

Our markets include Australia, Argentina, Belgium, Brazil, Canada, Chile, China, Colombia, Egypt, France, Germany, Hong Kong, India, Indonesia, Ireland, Israel, Italy, Japan, Korea, Kuwait, Lebanon, Malaysia, Mexico, Netherlands, New Zealand, Nigeria, Peru, Philippines, Poland, Qatar, Saudi Arabia, Singapore, South Africa, Spain, Sri Lanka, Switzerland, Taiwan, Thailand, Turkey, UAE, UK, Uruguay, USA and Vietnam.

SOME OF OUR CLIENTS AROUND THE WORLD

GLOBAL

AU / NZ

ASIA

EMEA

AMERICAS

UK RETAIL BANKER 29


RFi Group’s syndicated research RFi Group is a global financial services strategic insights partner. We specialize in evidencebased insight generation and strategic decision support for the world’s leading financial service providers. Our syndicated research is delivered via our Financial Councils model. Upcoming UK Financial Council research includes:

RESULTS OUT NOW UK Digital Banking Council – 2018 Q3

COMING SOON UK Savings Council – 2018 Q3

UK Merchant Acquiring Council – 2018 H1 UK Mortgage Council – 2018 Q2 UK Travel Council – 2018 H1 UK SME Banking Council – 2018 H1 UK Commercial Banking Council – 2018 H1 UK Payments & Innovations Council – 2018 H1 UK Priority & Retail Banking Council

Find out how you can access RFi Group’s latest business intelligence! For further information, contact Matthew Swainson on mswainson@rfigroup.com or +44 (0) 7500 747 343

Profile for Adelle Grisaffe

UK Retail Banker - August 2018 Edition  

An RFi Group Publication

UK Retail Banker - August 2018 Edition  

An RFi Group Publication