Page 1

DECEMBER 2017 ISSUE

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

CEO, Business Banking, Barclays

RFi GROUP INSIGHT

LENDING

CARDS & PAYMENTS

08 How will consumers pay this Christmas?

20 Student loan repayment changes expected

24 London Heathrow launch Alipay


CONTENTS

08 11 14

17 RFi GROUP INSIGHT 08 How will consumers pay this Christmas?

INTERVIEW 11 Ian Rand, CEO, Barclays 02 RFi MEDIA

SAVINGS & CURRENT ACCOUNTS

SME & COMMERCIAL

14 Virgin Money set to launch a mobile-only current account

17 MarketInvoice launches business loans, coinciding with its rebrand

15 Coventry Building Society launches annual Poppy Bond

19 £500m business growth fund introduced by Lloyds Bank


CONTENTS

20 24

27 LENDING

CARDS & PAYMENTS

FINTECH

20 Student loan repayment changes expected

24 London Heathrow launch Alipay

27 Start-up company Flux signs deal with Barclays

21 New lifetime mortgage launched by Nationwide

26 Nationwide and Bank of Scotland first to introduce facial recognition technology

28 London Block Exchange to launch cryptocurrency debit card

UK RETAIL BANKER 03


RFi December Sta

The “Pays” – Changing consumer payment

2017 has seen usage of mobile wallets such as the “Pays” – Alipay, Andr 2018 will see consumer payment behavior continue to be reshaped, imp

Consumer payments behavior is changing at pace. More than 1 in 4 banked customers have chosen to pay with a non-bank “Pay”

WEEKLY USERS

The bar will be raised. Two-thirds of consumers who use one of the Pays say they are highly satisfied with the experience

Consumers are using the “Pays” frequently. 42% of users are now doing so at least on a weekly basis

When shop consumers is the mean most often

* Insights on the “Pays” are based on interviews with more than 10,000 consumers in 10 markets conducted in 201

04 RFi MEDIA


atistics

t behavior and expectation

roid Pay, Apple Pay, Samsung Pay, PayTM and WeChat Pay – increase. pacting usage and expectation of more traditional payment forms. Usage of mobile wallet is set to increase further still.

43%

of consumers expect their usage to increase over the next 12 months

pping online, 9% of in France say a mobile wallet ns of payment they use n

29%

of non-users are likely to start within the next 12 months

50% of consumers in Hong Kong strongly agree (4+/5) that they would use mobile wallets more frequently if there were rewards for doing so

17

UK RETAIL BANKER 05


Welcome to the December 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. As Christmas fast approaches, in this edition we ponder how consumers will be paying for their gifts and goods. Will online payment tools be the winner? Will credit surge? Will cash be used at all? And in preparation for the UK Business Banking Forum 2017, one of the keynote speakers shares his view on how to provide the best offering in this space, and how to win in an open banking world. A brilliant and strategic overview by Ian Rand, CEO of Business Banking at Barclays – enjoy! Banking executive tickets are just £295 for the UK Business Banking Forum, on 1st February 2018, a discount of £200! If you are

interested in attending, or would like to find out more, please feel free to get in touch, or visit the website: www.businessbankinguk.com It has been fantastic year for the UK Retail Banker, I hope you have enjoyed all of the content and the wonderful thought leaders we have had involved. Wishing you a very happy and safe festive season from everyone at RFi Group, and as always, thank you for your support throughout the year. Look forward to seeing you in 2018!

Sarah Hollinshead Editor UK Retail Banker shollinshead@rfigroup.com


RFi GROUP INSIGHT

WORDS ADAM BOTTLE

A

s the end of another year fast approaches, one thing will be front and centre in the minds of many consumers - Christmas shopping. As consumers rush to buy gifts for their loved ones and stock their pantries full of Christmas treats, they will face the choice of how to pay for their Christmas cheer. This year they will have more options than ever before, with numerous mobile wallets launching over the course of the year. With this in mind, RFi Group has taken a look at the latest UK Payments and Innovation Council survey to see how consumers will be paying this festive season. As was the case last year, when doing their Christmas shopping, consumers prefer to turn to their debit cards. For example, when shopping for a gift in a department store, 39% of consumers will reach for their debit card, making this the most popular form of payment in a department store, consistent with Christmas 2016. Of course,

08 RFi MEDIA

consumers won’t do all of their shopping in store, with many instead turning to online options including eBay, Amazon, and online department and clothing stores. Although, when shopping online, consumers are still most likely to turn to their debit cards, with 34% and 38% preferring this option, respectively. This is a different story however for eBay consumers, with PayPal the payment method of choice for the largest proportion of consumers, 48%.

As was the case last year, when doing their Christmas shopping, consumers prefer to turn to their debit cards...however for eBay, PayPal is the method of choice for largest proportion.


RFi GROUP INSIGHT

Although the most preferred payment option hasn’t changed since last Christmas, what has changed is the use of contactless... mobile wallets are unlikely to play a huge roll in Christmas spending this year as they have struggled to encourage repeat use.

UK RETAIL BANKER 09


RFi GROUP INSIGHT

Debit cards are again the preferred options for paying for that Christmas turkey, with 41% selecting a debit card as their most preferred option when making purchases at a supermarket. Although debit cards remain the most preferred payment option, there has been some movement in preference towards credit cards. Credit cards are now the most popular payment option in a department store for 34% of consumers, up from 30% in late 2016. At the same time, preference for debit cards online has also declined since the same time last year, with credit cards again picking up the difference. Overall, although debit cards remain the payment method of choice for Christmas spending, there are signs that this is shifting, with consumers increasingly putting those Christmas goodies on credit.

Increased contactless acceptance, or at least increased awareness of contactless acceptance, is a key factor driving the uptick, with 72% agreeing that contactless is accepted by many merchants in 2017, significantly higher than the 67% seen in 2016. Although the most preferred payment option hasn’t changed since last Christmas, what has changed is the use of contactless. At the end of 2016, 53% of UK consumers had made a payment using a contactless card. Since that time, the proportion has shot up to 68%. And with 71% of those who have made a contactless payment having done so on a debit card, contactless debit card shopping is likely to be in vogue this Christmas. Increased contactless acceptance, or at least increased awareness of contactless acceptance, is a key factor driving the uptick, with 72% agreeing that contactless is accepted by many merchants in 2017, significantly higher than the 67% seen in 2016.

10 RFi MEDIA

Last, but certainly not least, is the role of mobile wallets this Christmas. With a number of new mobile wallet services launching during the year, including major players such as Samsung Pay, and the updated Tesco Pay+, it should be of no surprise that mobile wallet usage rose substantially in 2017. Leading into Christmas 2017, 23% of UK consumers have made a payment using a mobile wallet, up from 13% last year. However, mobile wallets are unlikely to play a huge roll in Christmas spending this year as they have struggled to encourage repeat use, with 21% of those who have made a mobile wallet payment saying they are unlikely to use the tool again (0-6 on a scale of 0-10, where 10 is extremely likely). The main barriers to repeat use are a lack of perceived benefits (20%), and satisfaction with contactless cards (23%). A lack of perceived benefits is also a barrier to mobile wallet adoption, with 28% of those who haven’t made a mobile wallet payment citing this as a factor, with security concerns (27%), and confusion about how mobile wallets work (23%), also barriers. One area where these barriers might be overcome is in Tesco stores, with Tesco Pay+ successfully driving strong satisfaction and re-use on the back of its introductory rewards offer. Rewards have helped Tesco Pay+ overcome the lack of benefit barrier, and for this reasons Tesco Pay+ could prove popular for families looking to spend on groceries over Christmas, while other mobile wallets may struggle to hold consumer interest. Despite this, mobile wallets are well placed to play a much bigger role in future Christmas’s, with 28% of UK consumers saying they can envision a cashless future, and over half of those believing mobile wallets will be the tool to replace cash. As can be seen, debit cards look set to maintain their spot as the preferred payment method this Christmas, despite credit cards seeing an increase in popularity across the board and a range of new payment options emerging. Contactless payments, on the other hand, will play a bigger role than they have in previous years, as awareness continues to grow. Mobile wallets, on the other hand, look like they will have to wait until next year to be the star of Christmas payments, as consumers struggle to see the benefit they offer over existing payment methods.


THOUGHT LEADER INTERVIEW

SCALABILITY, SPECIALITY AND DIGITAL EXCELLENCE GIVE BARCLAYS THE EDGE IN BUSINESS BANKING

W

ith new regulations opening up the market in 2018, banking is set to experience one of its biggest shake-ups yet. The potential for innovation is bound to benefit business owners, small and large, in their financial needs, but who will lead the force of change is still open to debate. Ahead of his keynote presentation at the UK Business Banking Forum, Ian Rand, CEO of Business Banking at Barclays, sat down with RFi Group’s Sarah Hollinshead to discuss who will win in this space.

Interview continued on page 12

Ian Rand CEO, Business Banking, Barclays

WORDS SARAH HOLLINSHEAD

UK RETAIL BANKER 11


THOUGHT LEADER INTERVIEW

Rand believes that the key to success is in perfecting the balance of digital and relationship management together.

We are leveraging the strength of both relationship management and digital, and that was a big strategy we set at the beginning of last year, and we are really proud of how that has worked out. “We have not gone down the route of just thinking, ‘we are a good old-fashioned bank, we have great relationship management’. Nor are we pretending to be a fintech. We are leveraging the strength of both, and that was a big strategy we set at the beginning of last year, and we are really proud of how that has worked out.” Fintechs may boast some attractive features and digital offerings, but Rand thinks this is not enough for the business customer. “If you just want to borrow £1,000 quickly and easily, then you might not care too much about where that comes from. But, if you are looking to make a really significant investment, you want it to be with a partner who is going to be there for you through thick and thin, and an app doesn’t quite cut it. Barclays has over 3,000 client facing colleagues on the ground, talking to the clients in their communities, and for me, that is our biggest advantage.” Rand brings this to life by highlighted the success rate of the Barclays Business Support team which helps clients in difficult financial circumstances. So far this year, 82% of clients it has helped

12 RFi MEDIA

have achieved a successful turnaround and remained customers of the bank. Open banking regulations are intended to level the playing field, with smaller players having access to data they did not have before. For the big banks, although the changes are burdensome, they also present opportunities, but only for the right team. “A couple of years ago I became frustrated with people coming into the office and talking excitedly about blockchain, bitcoin, or 3D printers, without really having thought on how large the impact of such technologies would actually be on SMEs. So, for example, whilst blockchain is clearly a very important technology with huge potential, it is hard to see how it will significantly impact most SMEs in the short to medium term. “On the other hand, when we sat down and reviewed the horizon for all the emerging technologies, we quickly realised that the ubiquity of APIs, and the emergence of open banking legislation, had far greater potential to lead to new products and services, and competitors, and much more quickly.”

What this is really about is how do we use the information we have about businesses to help them run more efficiently and grow? “Therefore, we focused our strategic investment on open banking and data. The trick is to build the infrastructure first, to take advantage of those services. I am very pleased with how ready we are for open banking next year.” Barclays has already launched products which incorporate the broader concept

of APIs and data sharing, which supports this point. The SmartBusiness Dashboard takes in data from other services that businesses use and integrates it into their online banking. “It is not a huge step from this dashboard to then leverage the open banking initiative to pull in other financial data from other banks.” This preparation for smarter use of data is what will drive a successful business, believes Rand, and although open banking increases access to data, success is not dependant on just this. “What this is really about is how do we use the information we have about businesses to help them run more efficiently and grow?”

I think it is one of the roles of the banks to have people on the ground talking to clients about ways in which they can run and grow their business through learning how to use these tools. Currently, the SmartBusiness Dashboard assists in marketing, sales, web analytics, social media presence and the general running of the day-to-day business. “It is interesting because as banks are on a journey with this, so actually are SMEs. Some business owners spend a lot of time analysing their client data and industry data, many do not. I think it is one of the roles of the banks, like Barclays, using our relationship model, to have people on the ground talking to clients about ways in which they can run and grow their business through learning how to use these tools.”


THOUGHT LEADER INTERVIEW

An area of education for small businesses will of course be around data and open banking, again an area in which banks need to be playing a large role. “SMEs and consumers need to understand both advantages and risks around open data. We at Barclays are leading the industry in helping clients be fraud smart, but open banking adds another dimension to that challenge that we need to make sure is understood.”

The key is to identify when you need to specialise and when you need to deliver a common experience across the whole client base. As CEO of Business Banking, Rand deals with small companies and those with turnovers of up to £6.5m, and farming businesses with turnovers up to £25m, meaning his team has to serve a complex and varied customer set. “The key is to identify when you need to specialise and when you need to deliver a common experience across the whole client base. You need to be efficient at times, but equally, you have to make the offering special for individual clients and build propositions that are specific.” An example of excellence is shown with Barclays leading the UK agriculture franchise, with £1 in every £4 lent to farms in the UK, lent by Barclays. They also have a specialist team looking at high growth and entrepreneurs. Specialisation is a focus for many challenger banks in the space, including Santander, CivilisedBank and Oaknorth Bank. Yet, Barclays believes it is just one ingredient of a larger recipe, and other factors are necessary.

“It is important to specialise. But then you need to underpin that with fantastic technology and online banking services. The business will also want a relationship manager available in their community that they can talk to, and a good telephony model. With our scale, digital service as well as having specialisation, that’s where our advantage really comes into play.” That is not to say that Rand does not welcome the competition, in fact it is the opposite. “Competition is really good for the market and helps us up our game. Furthermore, the increased number of providers in the market has clearly increased access to capital.”

Competition is really good for the market and helps us up our game. Furthermore, the increased number of providers in the market has clearly increased access to capital. Having spent 12 years in the military, before his 17 years in banking, Rand seems ready for the open banking battle, confident that he is leading a very dedicated and passionate team. Serving the country in a different way this time, Rand is driven by supporting each and every business, aiding their growth and ultimately helping the British people and their economy.

Ian Rand CEO, Business Banking, Barclays

To read more interviews by RFi Media in all past UK Retail Banker editions, feel free to visit the archive centre on our website or follow @RFiMediaGRB on Twitter.

UK RETAIL BANKER 13


SAVINGS & CURRENT ACCOUNTS

Savings & Current Accounts WORDS MARIA URENA

Virgin Money set to launch a mobile-only current account

V

irgin Money has announced that it will launch a current account as part of a new mobile only-bank in the next 12 months.

The new account is designed to compete against existing mobile only-banks such as Monzo and Atom and will help Virgin expand its retail banking services away from mortgages and credit cards, while also helping to diversify its funding. The account will be launched in collaboration with 10x Future Technologies, a fintech company which specialises in banking platforms. According to RFi Group data, 30% of current account holders would feel very comfortable (8+/10 on a 10-point scale) using a mobile-only provider for their primary current account, with this increasing to 32% for a secondary current account, showing that a large proportion of the market could be interested in Virgin’s new offering.

14 RFi MEDIA

HOW COMFORTABLE WOULD YOU BE USING A MOBILE ONLY PROVIDER FOR YOUR PRIMARY OR SECONDARY CURRENT ACCOUNTS? Uncomfortable (0-4)

Neutral (5-7)

Comfortable (8-10)

100% 80% 60%

30%

32%

30%

30%

40% 20%

40%

38%

Primary current account

Secondary current account

0%

Source: RFi Group UK Priority & Retail Banking Council 2017 H2


SAVINGS & CURRENT ACCOUNTS

Coventry Building Society launches annual Poppy Bond

Coventry Building Society will donate 0.15% of the total balances on Poppy accounts opened by the end of January 2018 to the Royal British Legion.

Coventry Building Society has launched a new version of its fixed rate Poppy Bond, offering a 2% rate until December 2020. Coventry is also offering the fixed bond as a cash ISA for the first time, with the same rate. The accounts can be opened in branch, online, via the post, or via telephone. Coventry does not allow withdrawals or account closure prior to accounts maturity. Coventry Building Society will donate 0.15% of the total balances on Poppy accounts opened by the end of January 2018 to the Royal British Legion. Coventry Building Society has a longstanding partnership with the Royal British Legion, donating ÂŁ14.5 million to the charity since 2008.

UK RETAIL BANKER 15


CURRENT ACCOUNTS

NS&I gives out the largest number of its Premium Bond National Savings & Investments (NS&I) has increased the number of prizes and the odds of winning prizes for its monthly Premium Bond prize draw, following the Bank of England’s interest rate rise.

NS&I will be giving out the largest number of Premium Bond prizes every month, an estimated 2.9 million, and all money invested is 100% secure. Ian Ackerley, Chief Executive of NS&I

16 RFi MEDIA

Under the updated Premium Bond giveaway structure, bond holder’s chances of winning one of the monthly prizes will increase from 30,000 to one, to 24,500 to one. The interest rate on the prize funds is also set to increase by 0.25% to 1.4%, which will see the value of prizes increase from £68 million to about £83 million. About the changes, Ian Ackerley, Chief Executive of NS&I, said: “For our 25 million customers, including around 21 million Premium Bonds customers, these changes will present a welcome boost. NS&I will be giving out the largest number of Premium Bond prizes every month, an estimated 2.9 million, and all money invested is 100% secure, as NS&I is backed by HM Treasury.”


SME & COMMERCIAL

SME & Commercial WORDS MEERA PANCHASARA

MarketInvoice launches business loans, coinciding with its rebrand

M

arketInvoice, a digital invoice finance platform, has begun offering loans to UK businesses following a three-month trial period that saw £1m being advanced to UK businesses. Businesses can now access unsecured loans ranging from £10,000 to £100,000 over a one-year period. The MarketInvoice loans come with no early repayment fees. Finance will be available to firms with at least £70,000 in turnover that have been in operation for 6 months or more. The funds will be released via the MarketInvoice digital platform, with funding coming from investors and institutional money from banks and asset managers. The launch of the new loan offer coincides with MarketInvoice’s rebrand, which will see the company launch a new logo and advertising campaign to support its evolution into a business finance company.

Co-founders of MarketInvoice

UK RETAIL BANKER 17


SME & COMMERCIAL

Countingup launches banking app, combining banking with accounting tools Countingup, a new start up in the UK, is to launch a banking app that combines banking services with accounting software. The app, founded by Tim Fouracre, former CEO of ClearBooks, is aimed at SMEs, particularly sole traders, and will allow them to open a business current account through their smartphone. On top of this, the app will offer automated accounting services, such as the submission of VAT returns, generation of profit and loss reports, and invoices. The new bank app has been developed in response to the Government’s Making Tax Digital (MTD) scheme, which is set to begin in 2019 and will require businesses to conduct VAT, income tax, and corporation tax filings online on a quarterly basis. Currently, SMEs are able to download the app from Google Play or the App store to get on the waiting list, where the first 100 businesses to sign up will receive a free account following its official launch in 2019.

Mike Moate & Tim Fouracre, Countingup

18 RFi MEDIA


SME & COMMERCIAL

£500m business growth fund introduced by Lloyds Bank Lloyds Bank Commercial Banking has introduced a £500m business growth fund to help boost productivity among UK businesses by investing in technology and equipment. The fund is expected to benefit SMEs in capital intensive industries such as manufacturing, construction, and agriculture. RFi Group research from the first half of 2017 shows that 22% of businesses (annual revenue of up to £500m) are planning to improve efficiency in the next 12 months, while 15% are looking to invest more within the business over the next year, showing that there will be strong demand for Lloyd’s new growth fund.

OVER THE NEXT 12 MONTHS, IS THE BUSINESS PLANNING TO DO ANY OF THE FOLLOWING? SME & Commercial businesses 40% 30%

28% 22%

20%

18%

16%

15%

Increase business savings

Invest more within your business

10% 0% Increase annual revenue

Improve efficiency

Reduce debt

Source: RFi Group UK SME & Commercial Banking Council 2017 H1

UK RETAIL BANKER 19


LENDING

Lending WORDS SACHIN VISAVADIA

Student loan repayment changes expected

C

hancellor Phillip Hammond has announced changes to the way student loans are repaid that will make it easier for graduates to repay their debt faster.

Currently, graduates who pay off their full student loan balance mid financial year still have monthly payments deducted from their salaries until the end of the year, as The Student Loan Company, which administers the repayment process, does not have access to the payment data, due to Her Majesty’s Revenue and Custom (HMRC) actually collecting the payments. At the end of each financial year, graduates then need to go through a rigorous process to claim back their overpayments. Figures from 2015-2016 show that the average amount of overpayment was £592, with 86,000 graduates affected. It is expected that a new system will be in place by early 2019 which will see The Student Loan Company and HMRC work together so that they both have access to the required data to stop these overpayments once graduates have fully paid their loan.

20 RFi MEDIA


LENDING

UK RETAIL BANKER 21


LENDING

New lifetime mortgage launched by Nationwide Nationwide have become the first high street lender in the UK to offer a lifetime mortgage, with the new product to be sold through Age Solutions. A lifetime mortgage is a long-term loan through which consumers borrow against the value of their home to access the capital they have locked away in their property. Lifetime mortgages differ from normal mortgages as the holder does not need to make any repayments during the life of the loan. Instead, when the customer either passes away or enters long term care the initial amount along with the added interest will be repaid at once, most likely from the sale of the secured property.\ The new product is available to both new and existing Nationwide customers aged between 55 to 84 and will have rates starting from 3.8%, with consumers able to borrow up to 46% of the value of their property. Lifetime mortgage holders will be allowed to borrow additional money on their loan after the initial drawdown, assuming they meet lending criteria. They will also be allowed to make partial payments of up to 10% of the initial loan a year, although they will incur early repayment charges to do so. These early repayment charges will reduce over the first 15 years of the mortgage span.

22 RFi MEDIA


LENDING

New Buy-to-let range being launched by LendInvest LendInvest, the specialist lender who traditionally focused on development and bridging loans, is launching a variety of buyto-let (BTL) loans targeting professional landlords and investors.

THINKING ABOUT YOUR MOST RECENT BTL MORTGAGE, HOW DID YOU ARRANGE YOUR MORTGAGE? Direct with the lender

Through an estate agent advisor

LendInvest states that these loans will be “competitively priced”, with rates starting from 3.69% for a two-year fixed loan at 60% LTV. The mortgages will come in three different fixed lengths; two, three and five years. Loan amounts will range from £50,000 and £5million, and will offer a maximum LVR of 80%. Brokers will have access to these loans via the LendInvest online platform, and will be assigned a case manager who will be available to provide additional support. LendInvest hopes that this new process will: “help alleviate many of the pain points in the typical BTL process that will be familiar to brokers.” With 39% of BTL mortgage holders organising their most recent BTL through a IFA or broker, according to RFi Group research, ensuring the broker onboarding process is smooth could prove a valuable differentiator for LendInvest.

Through an IFA/broker

4%

39%

56%

Source: RFi UK Mortgage Council 2017 Q3

UK RETAIL BANKER 23


CARDS & PAYMENTS

Cards & Payments

London Heathrow launch Alipay WORDS SACHIN VISAVADIA

P

laza Premium Lounges at Heathrow airport in London have begun accepting Alipay, one of the first places within Heathrow airport to make the change.

Alipay is a Chinese mobile wallet app that allows consumers to pay with their mobile phone or tablet. Users simply go to the Alipay website and complete a transaction by searching the retailers name or by scanning a QR code. Visa, Mastercard, and American Express are all supported by Alipay. The General Manager of Plaza Premium Group in the UK said: “Alipay is already a successful and well-known brand across East Asia and we’re proud to be able to bring the concept to Europe and the UK, but more importantly be the first brand to bring it to London Heathrow Airport through our lounges, proving that once again Plaza Premium Group has a strong desire to do be one step ahead of our competitors which in turn gives a better customer experience.”

24 RFi MEDIA


CARDS & PAYMENTS

New Face-based ID and payment scheme in two supermarkets WORDS SACHIN VISAVADIA Digital identity start-up Yoti has successfully held talks with self-service till maker National Cash Register Company (NCR) to trial a new facial recognition payment app in two supermarkets. For the new tool to work, consumers download the Yoti app and upload their photo ID documents, such as a driver’s licence or passport. They then link their documents to a selfie in the app. When purchasing items at the supermarket through the app, a QR code will appear on the self-service till screen, where customers can then scan the selfie on the app to prove their identity. The tool will allow consumers to buy age restricted items, such as alcohol and knives, without having a human verify their age. During the account set-up phase, Yoti staff will verify the documents and ensure that the selfie taken matches the picture on the given ID. Yoti have stated that they have no access to the data and that all data is encrypted to reassure customers that the app is safe from fraud. The new system will be available to trial in 2018.

Yoti have stated that they have no access to the data and that all data is encrypted to reassure customers that the app is safe from fraud.

UK RETAIL BANKER 25


CARDS & PAYMENTS

Nationwide and Bank of Scotland first to introduce facial recognition technology WORDS MARIA URENA Following the release of the iPhone X, which features facial recognition software Face ID, a number of UK banks have added facial recognition access to their banking apps and for authenticating payments. Nationwide and Bank of Scotland were the first UK banks to enable this tool, with TSB Bank, Tesco Bank, First Direct, and Halifax close behind. Carlos Abaraca, TSB’s Chief Information Officer, saying “Providing customers with biometrics logon to their mobile banking, such as Face ID, means all of those passwords and memorable information become a thing of the past.”

The tool is currently only available to iPhone X users. All of these banks will maintain existing login options, allowing consumers to choose their most preferred security settings. RFi Group data shows that in relation to making payments in store, only 3% of UK customers would prefer to use facial recognition to verify their identity. Customers prefer using a PIN or a fingerprint scan to verify their identity. As consumers become more comfortable with the technology however, with Apple leading the charge, this figure could see significant change in the future.

WHICH OF THE BELOW WOULD YOU PREFER TO VERIFY YOUR IDENTITY WHEN AUTHENTICATING A PAYMENT IN STORE?

60% 50%

49%

40% 30% 20%

18%

10%

6%

5%

5%

5%

4%

3%

3%

2%

Date of birth

Voice recognition

Other

0% PIN

Fingerprint scan

Signature

Security code sent via text message

Eye scan

Security Being visited code sent at home/work via mobile banking app

Source: RFi Group UK Digital Banking Council 2017 Q4

26 RFi MEDIA


FINTECH

Fintech WORDS JOSEPH SHARANGPARNI

Start-up company Flux signs deal with Barclays

F

intech company Flux, who provide digital receipts, have signed a deal with Barclays to bring their service to the Barclays customer base. A trial of Flux’s digital receipt service will take place through the Barclays’ launchpad app, an invitation only app that allows Barclays to test new digital features. If the trial is successful, the service will be rolled out for all customers using Barclays Mobile Banking App. Flux have also partnered with Barclaycard to explore the possibility of major retailers, such as EAT, delivering digital receipts to all customers who have signed up with Flux. To achieve this, Barclaycard will integrate with the retailers point of sale terminal to issues digital receipts. At the time of writing there is no set date for the trial to begin.

UK RETAIL BANKER 27


FINTECH

London Block Exchange to launch cryptocurrency debit card UK-based start-up, London Block Exchange (LBX), plans to launch a mobile app that will allow investors to buy and sell cryptocurrency, and a debit card that lets consumers use cryptocurrencies such as Bitcoin, Litecoin, Ripple, and Ethereum in stores. The app will be linked to a Visa ‘Dragoncard’, that will enable users to convert their cryptocurrency to sterling instantly when a purchase is made in a retailer, with LBX taking a 0.5% cut of the transaction value. The smartphone app will be secured by the same systems currently underpinning the UK banking system, and has been approved provisionally by the Financial Conduct Authority. The Dragoncard will be provided by Gibraltar based company Wavecrest, and will come with an initial £20 charge as well as a small fee for ATM withdrawals.

28 RFi MEDIA

The app will be linked to a Visa ‘Dragoncard’, that will enable users to convert their cryptocurrency to sterling instantly when a purchase is made in a retailer.


FINTECH

Modulr announces integration with Faster Payments UK-based corporate payments company Modulr has announced that it has successfully integrated with the UK’s Faster Payments system to accelerate business to business (B2B) payments. Businesses can now sign up to Modulr’s interface software, set up an account, and integrate their payments systems to automate outbound payments. Once this has been done, B2B transactions will be completed in 90 seconds or less irrespective of the time of day or day of the week. RFi Group data demonstrates that B2B focused commercial businesses (defined as businesses with annual revenue of £10m-£500m), view the speed of processing transactions as a key driver for their choice of business operating account. 26% of B2B based commercial business owners that are likely to switch their business operating account in the next 12 months view transaction processing speeds as one of the main reasons they are considering switching. This may suggest that accessing Modulr’s rapid payments could act as a driver of switching for many commercial entities.

WHAT IS DRIVING YOUR LIKELIHOOD TO SWITCH YOUR PRIMARY BUSINESS OPERATING ACCOUNT IN THE NEXT 12 MONTHS? Commercial, B2B business owners looking to switch, % that ranked 1-5, top 5 50% 40% 30%

26% 23%

22%

22%

21%

Lower fees and charges

Other banks have more knowledge of regulations and practices

Better customer service

A new person will oversee our account and is looking to make changes to match their preferences

20% 10% 0% Transaction processing speed

Source: RFi Group UK Commercial Banking Council 2017 H1

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ABOUT RFi GROUP

RFi Group is a global intelligence and digital media provider focusing exclusively on financial services. We specialise in data and information gathering, customer based insight generation and business 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, Singapore, Hong Kong and Sydney, RFi Group consistently provides clients with tailored advice and independent intelligence 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 agrisaffe@rfigroup.com For more information, visit: www.rfigroup.com www.globalretailbanker.com

30 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 +1 415 315 1690

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

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RFi Group’s syndicated research RFi Group is a global intelligence and media provider focused exclusively on financial services. We specialise in data and information gathering, customer based insight generation and business 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 & COMING SOON UK Savings Council – 2017 Q3

UK Commercial Banking Council – 2017 H2

UK Mortgage Council – 2017 Q3

UK Merchant Acquiring Council – 2017 H2

UK Payments Council – 2017 H2

UK Priority & Retail Banking Council – 2017 H2

UK Travel Council – 2017 H2 UK Digital Banking Council – 2017 Q4 UK SME Banking Council – 2017 H2

+ UK Savings Council – 2017 Q4 (Coming soon) UK Mortgage Council – 2017 Q4(Coming soon)

Find out how you can access RFi Group’s latest business intelligence! For further information, contact Olivia Cosgrove on ocosgrove@rfigroup.com or +44 (0) 203 862 2166

Profile for Adelle Grisaffe

UK Retail Banker - December 2017 Edition  

An RFi Group Publication

UK Retail Banker - December 2017 Edition  

An RFi Group Publication