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JULY 2018 ISSUE

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

George Kelsey

Head of Technology & Innovation, Tesco Bank RFi GROUP INTERVIEW 12

RFi GROUP INSIGHT

SAVINGS & CURRENT ACC

LENDING

08 What’s the point? Driving use of mobile wallets

16 Virgin Money merges with CYBG

20 Mortgage lending drops to lowest level since 2016


CONTENTS

08 10

12 16 18 RFi GROUP INSIGHT

INTERVIEW

SME & COMMERCIAL

08 What’s the point? Driving use of mobile wallets

12

18

PODCAST

SAVINGS & CURRENT ACCOUNTS

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

16

2 RFi MEDIA

George Kelsey, Head of Technology & Innovation, Tesco Bank

Virgin Money merges with CYBG

Starling Bank opens business current account to sole traders


CONTENTS

20 23

25 LENDING

CARDS & PAYMENTS

FINTECH

20 Mortgage lending drops to lowest level since 2016

23 NatWest trials card-less online payments

25 Project Imagine prepares for UK launch

UK RETAIL BANKER 3


04 RFi MEDIA


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. Innovation is a term often thrown around in this industry, however it is difficult to always understand what this really means. I had the privilege of meeting with George Kelsey, Head of Technology & Innovation for Tesco Bank, who shed some light on this dilemma, and likened being innovative to a children’s story book he recently published – it’s an interesting and inspiring read! Our insight piece continues this theme, exploring mobile wallets and whether customers really care about them.

The countdown has officially begun before the Global Digital Banking Conference, taking place in London on 13th September! 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

WHAT’S THE POINT? DRIVING USE OF MOBILE WALLETS WORDS ADAM BOTTLE

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n important milestone was reached this year, as RFi Group data shows that 1 in 4 UK consumers have now used a mobile wallet. While a quarter of consumers trying mobile wallets is impressive, there is still a lot of work to be done to further drive mobile wallet adoption and re-use, with 75% of the market still to be converted, and with many only trying mobile wallets and returning to other payment methods, proven by only 14% of consumers having used a mobile wallet in the last year. To understand how to encourage growth of this payment method, it is important to understand what is stopping consumers adopting and using mobile wallets, and how this can be overcome. RFi Group data has repeatedly shown that a lack of perceived benefit when compared to other payment methods is the leading barrier to mobile wallet use, with 29% of non-mobile wallet users saying that they do not see any benefit to using a mobile wallet. This means the key to driving mobile wallet adoption will be convincing consumers that mobile wallets offer benefits that no other payment method provides. RFi Group data identifies several ways this could be achieved, such as by adding financial management tools to mobile wallets, offering rewards, or promoting the unique security features of mobile wallets. With this in mind, let’s have a look at how these approaches could help drive mobile wallet use.

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RFi GROUP INSIGHT

RFi Group data has repeatedly shown that a lack of perceived benefit when compared to other payment methods is the leading barrier to mobile wallet use, with 29% of non-mobile wallet users saying that they do not see any benefit to using a mobile wallet

One of the key things consumers want when making a payment is control. Cash users, for example, closely associate cash with control as they can easily manage the amount of money they spend by physically limiting the amount of money they have available. Card users, on the other hand, like to use their card statements to help them manage their finances by seeing exactly where their money has gone. Therefore, including financial management features within mobile wallet apps such as real time available balances, daily spending alerts, or transaction history would allow mobile wallets to meet the financial management requirements of a range of consumers, all in a single app, and thus likely reduce the perception that there is no reason to use a mobile wallet. Another way to potentially drive uptake of mobile wallets is by offering rewards. The benefit of rewards has been seen over the last year in the emergence of Tesco Pay+. To increase use of Tesco Pay+, Tesco introduced a limited time offer that sees Tesco Pay+ users earn bonus Clubcard points when they use Tesco Pay+. This offer has driven a large increase in awareness of Tesco Pay+, as well as an increase in satisfaction with the tool. This success story shows that financial institutions will need to consider incentivising consumers to use mobile wallets. Importantly, financial institutions may not need to offer rewards forever. What is key is that consumers develop a habit of using

a mobile wallet, so that moving away from other payment methods, such as cards or cash, becomes second nature. Another factor that should be promoted to boost the use of mobile wallets is security. Security in itself is a key barrier to mobile wallet use, with a fear of hacking the second most common barrier to mobile wallet adoption. This is despite the fact mobile wallets have not only the security features of credit or debit cards, but also the security features of smartphone devices, such as passcodes or even biometric security. Promoting the fact consumers can add a layer of security to their spending by using a mobile wallet simply by using their mobile phones existing security features should therefore help consumers identify a unique benefit to mobile wallets. As highlighted, mobile wallet adoption is picking up, and is likely to continue to do so. Despite this, there are clear paths financial institutions can take to speed up mobile wallet adoption and help overcome the remaining barriers, notably the lack of perceived need barrier. Introducing financial management tools, offering rewards, and promoting the security features offered by mobile wallets are just some of these options and should be seriously considered by any brand with a mobile wallet, that is launching a mobile wallet, or that simply wants to encourage consumers to link its cards to mobile wallets.

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GLOBAL DIGITAL BANKER PODCAST

Global Digital Banker Podcast 10 RFi MEDIA 10 RFi MEDIA


GLOBAL DIGITAL BANKER PODCAST

EPISODE 24

Bridging the credit gap for the banked and underbanked population in India 27 MIN Guests: Laurent Le Moel, CEO, PayU

Sarah Hollinshead speaks with Laurent Le Moal, CEO at PayU, to discuss their recent partnership with Kreditech and expansion into consumer credit, their plans to increase the financial freedom for people with limited access to banking services and the specific market segment they'll be targeting in order to achieve this. START LISTENING HERE

EPISODE 23

The Cutting Edge of Competition Staying Relevant 14 MIN Guests: Alan Shields, Chief Product Officer, RFi Group, Kate Cooper, Head of Innovation & Group Methodology, Westpac and George Lawson, Country Manager AU & NZ, Alipa

RFi Group recently held the Australian edition of the Global Digital Banking Conference Series. The series which tours London, Singapore, Sydney, Auckland and Toronto, gathers innovators and thought leaders from around the world to share case studies and engage in panel discussions, focusing on the full range of retail banking products. Alan Shields explains what constitutes consumer trust in banks and the four key areas that organisations should be focusing on to continue to grow this trust.

Kate Cooper explains what Westpac are doing to drive cultural change to support innovation, her predictions on the move to Open Banking within Australia and the importance of partnerships to drive innovation. George Lawson shares Alipay’s plans for achieving scale in the Australian market and the 5 key areas of innovation they will be focusing on for the next 12 months

START LISTENING HERE

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

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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 11


THOUGHT LEADER INTERVIEW

George Kelsey Head of Technology & Innovation, Tesco Bank WORDS SARAH HOLLINSHEAD

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THOUGHT LEADER INTERVIEW

DIGITAL BANKING: BEYOND THE POSSIBLE

T

he word “innovation” is becoming more prevalent in people’s job titles across the financial services, and more central to a bank’s messaging. George Kelsey, Head of Technology & Innovation, Tesco Bank shares his view on what this actually means within a larger organisation and where innovation should be focused. With such a breadth of experiences, Kelsey is well placed to break this down, as a uniquely creative leader and with experience in influencing real change. He has a career spanning over 30 years in technology, with senior positions at RBS and was also an entrepreneur for numerous years. Furthermore, he has just published a fiction book – Filander & Cold: A New Beginning, the stories and characters of which have been imagined by him and his sons across their life, growing up together, and which Kelsey finally put to paper last year. RFi Group is pleased to share some of this insight in this exclusive interview.

Innovation is everyone’s job; make what you do a little better every day. When you focus on innovation, it has to always revolve around solving a problem that customers have.

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THOUGHT LEADER INTERVIEW

and bolts” way; how can, and should, everything fit together and how can you optimise those elements to serve customers better? What are the big focuses for Tesco Bank in terms of innovation? Tesco Bank had a very successful launch, starting as a joint venture and then building its own fully-fledged bank. We have a high NPS score, appropriate profit from a good range of products, so we didn’t really have a problem statement. Except, we always need to be thinking about things a bit differently, and with the changing expectation of consumers and FinTech’s rising, everybody is after this better customer experience. How does Tesco Bank respond to that?

We are like most banks, very much still product driven and both technology and product silos are all around. The customer doesn’t care about different products, they just see themselves as a Tesco customer, and we know we must respond to that, so we are selectively re-architecting.

What does innovation mean to you? Innovation is everyone’s job; make what you do a little better every day. When you focus on innovation, it has to always revolve around solving a problem that customers have. At RBS, I kicked off the innovation culture by developing the first fully functional

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mobile banking app. The success of this, was that customers love it and really focussed the attention on what customers wanted. I built the idea of “outside world in” when thinking about building technology systems and products; essentially building a customer centric architecture. I have always thought about change in a “nuts

We are like most banks, very much still product driven and both technology and product silos are all around. The customer doesn’t care about different products, they just see themselves as a Tesco customer, and we know we must respond to that, so we are selectively re-architecting. The focus is around – how do you really walk in customers’ shoes? Really


THOUGHT LEADER INTERVIEW

understand what they need? How do we mediate much of the roots of data to get clues on the customer and use that to help point them on the right path? And unique to us, how do we integrate this into the normal Tesco shopping journey? What technologies specifically are you working with?

One of the things I really like is we are using cognitive technology, so that you don’t just onboard a customer to a current account, but to the entire bank, and not have to ask questions about information we already have when taking out a new product. With better use of fast data, we can be making intelligent decisions in real time that help our customers, and make all these processes faster and simpler.

We are working increasingly with APIs, from an enterprise servicing stance, and within the context of open banking and PSD2. One of the things that I really like is we are using cognitive technology, so that you don’t just onboard a customer to a current account, but to the entire bank, and not have to ask questions about information we already have when taking out a new product. With better

use of fast data, we can be making intelligent decisions in real time that helps our customers, and makes all of these processes faster and simpler. We are doing a lot of work with the cloud as well, taking out the heavy lifting in processes. This allows more time to focus on the what customer wants, as opposed to having to manage infrastructure. Behind all of that, we are already using machine learning, looking at patterns of spending for our customers. How much of an impact is open banking and PSD2 having? I see the regulators purpose behind PSD2 as threefold. One is to open up competition, allowing new players to come in. Number two is to take the cost out of payment infrastructure and help with transparency in that space. Number three is the really interesting one – looking at ensuring adequate protection for customers from fraud. In this context, I believe banks need to understand what their purpose is. Banks have to compete with newcomers, traditional banks and Fintech start-ups with all kinds of financial services offerings, often cheaper and better banks have to think, where do we belong? The challenge is finding both your difference and your purpose and execute against this with focus. For Tesco Bank, I actually think this new environment is great because our purpose is quite clear, being the bank is for people who shop at Tesco, and Tesco obsesses about its customers – looking to help shoppers more every day. Take PayPlus for example, Tesco shoppers can add their cards into the wallet and at the end of their shopping journey, check out and earn loyalty points from their phone. The experience is so much better, customers love it and we are leveraging our purpose here, adding value to the Tesco shoppers.

Having just written a children’s book, what can you take from that experience and bring back to your professional role?

The process behind the development of these stories was imagination and creativity, and believing that nothing is impossible. When you think about that in the application of technology, if you let go of yourself to think more about what we can achieve beyond the current state, then this is how you innovate. Beyond the possible. The process behind the development of these stories was imagination and creativity, and believing that nothing is impossible. When you think about that in the application of technology, if you let go of yourself to think more about what we can achieve beyond the current state, then this is how you innovate. Beyond the possible. Part of our jobs in banks and as a technologist is telling people how things are done, because that is how things have always been done. But this could be changed, and when you have that experience of convincing those “hardcore cynics” to open up to the possibilities of cloud computing, for example, everyone is suddenly super fired up. This is key for the future and is a reward that you cannot beat. If I could bring more of what I did with my boys and the book writing to work, then work would be a better place.

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SAVINGS & CURRENT ACCOUNTS

Savings & Current Accounts

Virgin Money merges with CYBG WORDS MARIA URENA

A

iming to become a major competitive bank, Virgin Money has been sold to CYBG, an institution that currently manages Yorkshire Bank, Clydesdale Bank and digital brand B. This union will make them the sixth largest bank in the UK. CYBG customers will be moved to Virgin Money during the next three years. CYBG’s CEO, David Duffy, mentioned that the takeover means to bring together the strengths of two successful challengers to create the first UK national competitor to the larger banks. There are no details as to what the two bank’s customers are facing in terms of product changes or new regulation, but the deal is expected to be completed by the end of 2018.

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SAVINGS & CURRENT ACCOUNTS

Charter Savings Bank launches new products WORDS MARIA URENA Charter Savings Bank has introduced three new notice accounts, 30-day, 60-day and 95-day notice respectively, as well as a year and a half-fixed rate bond and a 95-day notice cash ISA. The bank has however also improved the rates on existing products: which were previously at 1.65% AER, the one-year fixed rate bond will now offer 1.81% AER. Meanwhile, the one-year fixed rate cash ISA is now paying 1.52% AER, when it previously paid 1.38%, and finally, the two-year fixed rate cash ISA, which used to pay 1.61% AER, will now pay 1.69% AER. To explain all of these new products and changes, the Director of Savings for Charter Savings Bank, Paul Whitlock, stated that “Our aim is to provide straightforward savings products at highly competitive rates and to expand the options for savers, we're committed to improving rates for savers whenever we see an opportunity to do so and are confident our new range will prove popular.”

Atom Bank launches competitive fixed rate bond WORDS MARIA URENA Atom Bank, a digital-only provider, has launched a new savings account, which consists of a one-year fixed rate bond paying 2.05% AER, becoming the first savings account to offer more than 2% AER since 2016. To open this account, which is only available via mobile, consumers must download the bank’s app and make an initial deposit of at least £50 in the first week after opening it. There are no available withdrawals or transfers allowed until account maturity. According to RFi Group data, 16% of savers interact with their primary savings account provider via a mobile banking app, with this proportion increasing further amongst Millennials. Thus, uptake of this account could be largely seen among the younger consumers.

WHEN IT COMES TO INTERACTING WITH YOUR PRIMARY SAVINGS PROVIDER, WHICH OF THE FOLLOWING CHANNELS DO YOU USE? Mobile banking app 26%

16%

16%

7%

Millenials

Gen X

Baby Boomers

Total

Source: RFi Group UK Savings Council 18Q2

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SME & COMMERCIAL

SME & Commercial WORDS JOSEPH SHARANGPARNI

Starling Bank opens business current account to sole traders

S

tarling Bank has announced that its business current account is now open to sole traders in the UK, making it the first instance of a business bank account able to be managed entirely by mobile. This is rolled out to sole traders two months after the launch of its business current account, with businesses using the account to make domestic and international payments and receive real-time balance updates as well as access to spending insights. RFi Group data demonstrates that sole traders are among the more digitally savvy in the market, with preferences to use digital channels for business banking significantly higher compared to the rest of the SME market. This puts Starling Bank in a good position to attract this segment. The accounts will initially only be open to existing Starling customers with no set date for a wider rollout at the time of writing.

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WHICH OF THE BELOW WOULD BE THE BUSINESS MOST PREFERRED METHOD TO CONDUCT ITS BUSINESS’S BANKING ACTIVITIES? Sole traders

Total

78%

Digital

59% 17%

Branch

18% 3%

Phone

5,5% 2% 5,5%

Via the Relationship Manager

0%

20%

40%

60%

80%

RFi Group UK Small and Medium Business Council 18H1


SME & COMMERCIAL

Website launched to boost SME awareness of lenders WORDS JOSEPH SHARANGPARNI The British Business Bank has launched a website aimed at giving small businesses a more holistic understanding of the range of funding options available to them. The website, www.financeyourgrowth.co.uk, provides digitally experienced small businesses with articles, videos, infographics and event listings for accessing finance. There is also a search function to help users find the ideal type of funding for their needs. The Bank also provides information on 17 finance options, including P2P lending by partnering with 12 industry bodies. Chief Executive Officer, of the British Business Bank, Keith Morgan, describes the aim of the site by stating “We want to help businesses understand their finance options through clear, practical tips [to] put them in the best position to successfully access the right finance for their growth potential”. The website is currently operational, and simply requires businesses to enter sector and geographic details, the amount for the funding they need and the reason for the funding.

Countingup sees rapid growth in business current account market WORDS JOSEPH SHARANGPARNI Since launching its business current account in April 2018, digital challenger bank Countingup has seen a rapid growth in its current account market share. Countingup now operates 1,000 business accounts as of mid-June, compared with only 500, three weeks prior, Tim Fouracre, Countingup Founder and CEO, states that ‘The early growth we’ve seen is down to amazing word-ofmouth referrals’. The institution was originally founded to help small business owners connect their accounting and banking systems together seamlessly. It achieves this through categorising transactions as they are completed and then using that information, it populates accounting documentation such as profit and loss reports. Countingup can be downloaded via Google Play or the App store, with the bank intending to roll out additional features such as self-assessment tax filling and invoicing within the coming months.

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LENDING

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LENDING

Lending WORDS ELLA TAUTZ-DAVIS

Mortgage lending drops to lowest level since 2016

T

he Bank of England (BoE) has released its latest data on lending for the first quarter of 2018, which shows the value of new commitments agreed to by lenders dropping significantly to their lowest level in almost 2 years. The value of new commitments in Q1 2018 totalled £61.1 billion, a decrease of 5.9% compared to the last quarter of 2017. Figures from the BoE show that while buy-to-let lending has increased for the first time since 2017, the proportion of lending to first-time buyers has decreased. This suggests that the government’s intention to ‘level the playing field’ between these two groups has not yet taken effect. On the other hand, remortgaging has continued to rise, now accounting for almost a third of all new lending. This is while the proportion of total loans in arrears has continued to fall to the lowest figures since records began, with the outstanding balance in arrears now standing at £14.8 billion.

FCA clamps down on overdraft charges and high-cost lending The Financial Conduct Authority (FCA) steps in to tackle high-cost lending following an extensive review of the sector. Bank overdraft charges, rent-to-own operators, door-step lending and catalogue credit and store cards are all areas likely to see drastic reform from the UK’s financial watchdog, as part of its plans to protect vulnerable consumers. Stating that over 3 million UK consumers use high-cost credit, the FCA intends to release a substantial package of reforms aimed at benefiting these users. Such measures include: introducing online tools to make overdraft costs more clear, mobile alerts warning of potential overdraft charges, new mechanisms to assess eligibility for overdrafts, and a ban on referring to overdrafts as “available funds”. In addition, the FCA is considering imposing a cap on rentto-own merchants, who offer a form of hire purchase for bigticket items such as washing machines and electric cookers, as has been recently implemented on payday loans. These newly proposed measures will undergo consultation before being implemented, in the hope that such measures will be introduced by April 2019.

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LENDING

HSBC cuts interest rates for FTB mortgages WORDS ELLA TAUTZ-DAVIS HSBC has cut interest rates on its larger loan-to-value (LTV) deals and introduced a new 95% LTV range, in an effort to attract more first-time buyers (FTBs). While other lenders in the market such as Halifax attempt to appeal to FTBs by increasingly offering cashback mortgages, HSBC has opted to improve its rates, as well as remove several of its upfront mortgage fees. The bank’s efforts to appeal to FTBs are likely to be on target, as RFi Group data shows that rising interest rates are one of the key areas of concern amongst FTBs when taking up a mortgage, as well as any other costs associated.

HSBC’s 90% LTV now offers a two-year, fee-free fix at 1.99% (a 0.2% rate cut), while its new mortgage range offers two-, three- or five-year fixes at 3.49% at 95% LTV. The removal of its £99 booking fee and its standard valuation fee will apply to all HSBC mortgage customers, and the maximum lending term has been extended to 35 years for customers wanting to spread out and reduce monthly repayments over a longer period.

WHAT CONCERNS YOU ABOUT APPLYING FOR A MORTGAGE? Future FTBs – Top 5 concerns

60% 50% 40%

41%

39%

36%

34% 29%

30% 20% 10% 0%

It is a huge financial commitment

I am worried about rising interest rates

The other costs associated with the mortgage

Source: RFi Group UK Mortgage Council 18H1

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I am worried I won't be approved

The mortgage application process is complex


CARDS CARDS&&PAYMENTS PAYMENTS

Cards & Payments NatWest trials card-less online payments WORDS MARIA URENA

N

atWest teamed up with retailer, Carphone Warehouse to trial a new way of paying for shopping online, removing the need to use cards and is carried out mainly through the bank’s mobile app. The bank wants to provide its customers with an alternative way to pay which will allow speedier transactions as well as offer secure purchases online. When making a purchase through the Carphone Warehouse website, the checkout service shows a NatWest button which takes the customer through to their mobile app. The consumer then logs into the app using their fingerprint or PIN to complete the process, making the overall payment transaction a matter of seconds. NatWest also states that by paying in this way, consumers can immediately see their bank balance when they make a purchase, helping tackle the consumer struggle to keep up to date with expenses. According to RFi Group data, adoption of this payment method could be taken up by 1 in 3 consumers, who show an interest in new ways to make purchases. If this trial proves to be successful, NatWest plans to roll out further trials with other retailers in the coming months. NatWest also mentioned that this trial has been made possible due to Faster Payments and Open Banking. SHOWN BELOW ARE STATEMENTS PEOPLE HAVE MADE ABOUT MOBILE WALLETS. THINKING ABOUT WHAT YOU KNOW OR HEARD ABOUT, PLEASE INDICATE HOW MUCH YOU AGREE OR DISAGREE WITH EACH STATMENT Strongly agree (4-5)

Neutral (3)

Strongly disagree (1-2)

33%

31%

37%

I am interested in trying new ways of making purchases Source: RFi Group UK Payments & Innovation Council 18H1

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CARDS & PAYMENTS

Starling Bank launches Google Pay in own mobile app WORDS MARIA URENA Starling Bank has taken another step of what it provides to its consumers by partnering with Google and making Google Pay available on the Starling app. New customers can add their Starling debit card onto their Google Pay digital wallet, without having to wait for their physical card to arrive. Existing customers, who already have their debit cards, can activate Google Pay directly from the Starling app with just one click.

Starling Bank’s COO Julian Sawyer mentioned “Being the first UK bank to allow users to set up Google Pay within the bank’s own app demonstrates Starling’s continuing promise to deliver great customer experience and fast, easy, secure ways to pay. Our Android customers can now benefit from being able to instantly use their account even before their card arrives.”

Credit card reward schemes disappearing from banks WORDS ELLA TAUTZ-DAVIS The level of reward and cashback credit cards on the market has slumped since 2015. This decline has been attributed to the introduction of EU rules in December 2015 that put a cap on card-processing fees, which were often used to fund such benefits. As a result, several credit card providers have gradually either reduced their cashback rates or pulled these schemes altogether.

the balance before interest applies and doesn’t pay a card fee. RFi Group data supports this, as it shows that almost half of all consumers that hold their main credit card with supermarket banks such as Sainsbury’s or Tesco chose to do so for the provider’s rewards program. Cashback is not the only rewards feature to see a decline, as supermarket points and air miles have also been waning. Providers have been taking a more cautious attitude to lending overall following warnings from the Bank of England over excessive consumer spending.

The cap on interchange fees suggests that only retailers, who use the cards to increase shopping in their stores, can afford to provide such products. It may prove difficult for credit card providers to maintain reward schemes if a customer pays off

WHY DO YOU USE THIS CREDIT CARD FREQUENTLY? BY MAIN CREDIT CARD CUSTOMERS – TOP 5 REWARD DRIVERS

50%

45%

40% 30%

26%

20% 10%

17% 11%

13%

10%

13%

10% 6%

5%

5%

5%

3%

3%

3%

0% Has the best rewards programme

Has the best cash back programme

Makes it easy to redeem rewards

Has the best shopping/ retail discounts

Source: RFi Group UK Priority & Retail Banking Council 18H1

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Provides complementary travel insurance


FINTECH

FinTech Project Imagine prepares for UK launch WORDS JOSEPH SHARANGPARNI

L

ondon based challenger bank, Project Imagine, is currently preparing for its UK launch later this year with an e-money license and the intent to acquire a full UK banking license in 2020. Project Imagine aims to become both a digital bank and a wealth management system from the beginning, enabling consumers to have a digital current and/or savings account, investment products, as well as Personal Financial Management (PFM) tools. CEO of Project Imagine, Aritra Chakravatry, states that Project Imagine want to “encourage savings and money management, and help people get out of the overdraft/over-spending loop – hence we will offer 3.14% in deposits from the start”. Consumers may be particularly interested in using Project Imagine for their savings or investments, as RFi Group data shows that approximately one in four consumers are extremely likely (a score of 8-10) to consider a digital-only provider for these areas, with this proportion increasing for Millennials and decreasing for Baby Boomers. CURRENTLY, HOW COMFORTABLE WOULD YOU SAY YOU ARE USING A DIGITAL-ONLY PROVIDER TO MEET YOUR NEEDS IN THE FOLLOWING AREAS? BY GENERATION, % EXTREMELY COMFORTABLE (8+/10) Savings

31%

Investment

30%

28%

27% 21%

22%

22% 17%

Millenials

Gen X

Baby Boomers

Total

Source: RFi Group UK Digital Banking Council 18Q2

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FINTECH

Monzo partners with IFTTT to allow users to create ‘applets’ WORDS JOSEPH SHARANGPARNI Monzo have partnered with the automation platform, If This Then That (IFTTT), to allow users to create applets, which are personalised conditions based on activities that consumers do regularly. IFTTT allows users to create and link a series of different applets that could connect to their Monzo account. For example, if an individual uses a health tracking app to log calories, they can enable the pre-made applet so that it’ll automatically log in calories onto the app when making purchases at Starbucks. Another example is that a user could set up an applet so that they could say to their google assistant ‘Save £10’, which would then move the amount into their Monzo savings pot.

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Customers will first have to create an account on IFTTT and connect this to Monzo. Once Monzo applets are added to the IFTTT account, the automation platform will send real-time details of transactions. Monzo will also move any money on the customer’s behalf should they ask to transfer money into or out of pots. Customers can create personalised applets but can also view the collection of pre-made applets from Monzo and add them onto their accounts. Further integration and functionality is also intended to be added to the Monzo-IFTTT service, for instance when making P2P or direct debit payments.


FINTECH

Tech Nation to launch FinTech talent competition WORDS JOSEPH SHARANGPARNI Tech Nation, the organisation whose goal is to accelerate tech growth within the UK, will be launching a new competition specifically aimed at helping early-stage FinTech companies grow and expand.

The competition will be judged by leaders of some of the FinTech industry’s most prolific providers, such as Starling Bank Chief Executive Officer Anne Boden and Co-founder of MarketInvoice, Anil Stocker.

The competition will help early-stage FinTechs to sell to, partner with, or work with small and large businesses in any other capacity. On top of this, winning applicants will receive insights from FinTech entrepreneurs on areas such as sales, regulation and international expansion.

The competition will begin in September with applications open from the 13th of June until the 27th of July.

The competition will help early-stage FinTechs to sell to, partner with, or work with small and large businesses in any other capacity.

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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

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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

COMING SOON

UK Savings Council – 2018 Q2

UK Mortgage Council – 2018 H2

UK Priority & Retail Banking Council – 2018 H2

UK Merchant Acquiring Council – 2018 H2

UK SME Banking Council – 2018 H2 UK Commercial Banking Council – 2018 H2 UK Travel Council – 2018 H2 UK Payment Council – 2018 H2 UK Digital Banking Council – 2018 Q2

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

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UK Retail Banker - July 2018 Edition  

An RFi Group Publication

UK Retail Banker - July 2018 Edition  

An RFi Group Publication