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MARCH 2018 ISSUE

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

Niels Turfboer Managing Director, Benelux & UK, Spotcap RFi INTERVIEW 11

RFi GROUP INSIGHT

SAVINGS & CURRENT ACC

LENDING

08 Borrowing with a click: The role of digital in mortgage applications

14 TSB Bank launches friend referral scheme

21 Personal lending increases four times faster than wages


CONTENTS

08 11 14

17 RFi GROUP INSIGHT 08 Borrowing with a click: The role of digital in mortgage applications

INTERVIEW 11 Niels Turfboer, Spotcap 2 RFi MEDIA

SAVINGS & CURRENT ACCOUNTS 14 TSB Bank launches friend referral scheme 15 Starling Bank partners with several FinTechs

SME & COMMERCIAL 17 Banks simplify SME account opening process 18 Equifax begins providing businesses’ credit data to lenders


CONTENTS

21 24

27 LENDING

CARDS & PAYMENTS

FINTECH

21 Personal lending increases four times faster than wages

24 Contactless payments see rapid adoption on Cambridge buses

27 UK Investment Association to launch FinTech accelerator

22 Banks must alert customers of upcoming overdrafts

25 Contactless reaches charity donations

28 Tandem to partner with Personetics


04 RFi MEDIA


UK RETAIL BANKER 05


THE GLOBAL DIGITAL BANKER PODCAST www.globaldigitalbanker.com

Produced weekly, the Global Digital Banker podcast focuses on key trends, market insights, thought leadership and best practice within the fast-growing and dynamic world of digital banking. Each week, we will interview Banking and FinTech leaders from across the world, providing a truly global perspective on some of the biggest trends within the industry. EPISODE 1

Banks vs. FinTechs Has the pendulum swung back? Charles Green, CEO, RFi Group

EPISODE 2

Can value trump trust? How digital-only providers can position themselves as a MFI for consumers Anne Boden, CEO, Starling Bank Eric Wilson, CEO, Xinja

EPISODE 3

Differentiator today, hygiene factor tomorrow? Where consumers stand on chatbots and virtual assistants globally Pete Steel, EGM - Digital, Commonwealth Bank, Alan Shields, Managing Director - Consulting, RFi Group

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 NEVER MISS AN EPISODE - SUBSCRIBE & LISTEN TO THE PODCAST ON ANY OF THE BELOW:

iTunes | Stitcher | Podbean | SoundCloud | globaldigitalbanker.com


Welcome to the March 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 in lending is the hot topic for this month’s edition, spanning across home loans and business loans, all with the perspective of digital as the big influencer of change. Our insight piece examines the role of digital within mortgages, an increasingly important topic as millennials start to dominate the market. We are pleased to feature Niels Turfboer, Managing Director for Spotcap UK, who shares his story of entrepreneurship and how this innovative SME lending offering

intends to grow over the next 12 months. We are pleased to announce the launch of our new podcast, the Global Digital Banker, which features interviews with our own executives, and thought leaders from around the world. Keep a look out for links and announcements via our website and social media accounts! I hope you enjoy the issue. Kind regards,

Sarah Hollinshead Editor UK Retail Banker shollinshead@rfigroup.com


RFi GROUP INSIGHT

BORROWING WITH A CLICK: THE ROLE OF DIGITAL IN MORTGAGE APPLICATIONS WORDS ADAM BOTTLE

8 RFi 08 RFiMEDIA MEDIA


RFi GROUP INSIGHT

O

ver the past several years digital banking’s complete takeover of retail banking has seemed inevitable, with more and more consumers choosing digital methods to complete banking tasks. Despite this, a few banking tasks have remained stubborn holdouts against the digital tide, with consumers still preferring non-digital channels, such as branches. Mortgage applications are one such task. According to RFi Group data, only 22% of borrowers who took out a mortgage in the last year completed the application via a digital channel such as internet banking or a mobile app. Although this does suggest some level of reluctance from borrowers towards digital mortgage applications, RFi Group data from the UK Mortgage Council and the UK Digital Banking Council shows that digital is still going to play a key role in mortgage applications tmoving forward, thanks to the emergence of end-to-end digital applications, open banking, and the use of digital channels to direct borrowers through the application process. Firstly, there is evidence that consumers are willing to use digital channels to apply for a mortgage, and that this is likely to increase due to better digital services. RFi Group data shows that 25% of future mortgage borrowers, those who plan to take out a mortgage in the next year, want to apply via a digital channel. This is even higher among movers and remortgagers, with 28% of these borrowers planning to apply digitally. In addition, RFi Group data shows that 30% of those who applied for a mortgage in the last 3 years started the application online,

although almost 1 in 3 of those completed the application in a branch or over the phone. What this data shows is that there is already greater demand for digital channels than is currently being realised, creating an opportunity for banks to push borrowers towards online applications. In order to reach this potential, lenders will need to make end-to-end digital mortgage applications a reality. Thirty five per cent of those who started a mortgage application online but finished offline cited mandatory branch or phone banking steps as a barrier to completing the online application. As such, lenders must be quick to adopt new identity confirmation tools, such as those being used by FinTechs, and then promote these new features heavily so that consumers become familiar with them, and confident enough to use them. These tools could include documents scanning from a smartphone device, or video calls to visually confirm the applicant’s identity. With these tools already entering the market, a key barrier to online mortgage applications will be reduced, meaning the role of digital applications is well positioned to grow. The introduction of open banking also creates many opportunities for digital tools to be used to help improve the mortgage application process. Lenders will now be able to ask for consumer permission to access their financial data, which could potentially save consumers from needing to find and submit the data themselves. One example of this would be a lender collecting a borrower’s current account transaction history, rather than asking the applicant to

UK RETAIL BANKER 09


RFi GROUP INSIGHT

The introduction of open banking also creates many opportunities for digital tools to be used to help improve the mortgage application process.

collect the data. Such steps could reduce the complexity of mortgage applications, a barrier for 22% of those who started an application online but finished offline, and enable more borrowers to get through the entire mortgage application digitally.

Such steps could reduce the complexity of mortgage applications, a barrier for 22% of those who started an application online but finished offline, and enable more borrowers to get through the entire mortgage application digitally.Â

Another role that digital will play is in directing consumers to the advisory services preferred by the lender. Borrowers are frequently apprehensive about applying for a mortgage, with 27% stating that they are very apprehensive (8+/10 on a scale of 0 to 10, where 10 is extremely apprehensive). Borrowers are also very likely to be looking for advice, with 82% seeking information or advice when applying for a mortgage. These

10 RFi MEDIA

factors suggest that eliminating the human element from mortgage applications will be difficult, although there is still a role digital channels can play in directing consumers in their search for advice. This can be done thanks to borrower preference for conducting their mortgage research through digital channels, with 31% going to their lenders’ website, and 28% using comparison websites. With consumers doing their research online, but still needing advice, loan providers have the opportunity to take control of the application process by directing consumers who are researching online towards their mortgage advisors, or to a preferred broker. This will help ensure lenders control borrower movements through the application process, while giving borrowers access to the advice they crave. It also means helping providers stay compliant with Mortgage Conduct of Business regulations around advising clients, without creating undue hassle for consumers. As such, a key role for digital in mortgage applications will be to direct and guide borrowers towards the appropriate help. As can be seen, digital is going to play an ever-increasing role in mortgage applications thanks to new technology allowing for smoother end-to-end processes, new regulation allowing for simplified applications, and lenders using digital tools to take a larger role in guiding consumers through the mortgage application process. Lenders that can take advantage of these developments will put themselves in an excellent position to thrive in the ever-evolving mortgage space.


THOUGHT LEADER INTERVIEW RFi GROUP INSIGHT

WITHOUT CUSTOMERS HAVING A FULLER UNDERSTANDING OF THE NEW TECHNOLOGIES OUT THERE, TRUST IS MUCH MORE IMPORTANT THAN THINGS LIKE SPEED.

Niels Turfboer Managing Director, Benelux & UK, Spotcap WORDS SARAH HOLLINSHEAD UK RETAIL BANKER 11


THOUGHT LEADER INTERVIEW

A

t the UK Business Banking Forum earlier this year, one of the key takeaways was that trust is integral to the customer relationship, particularly for the SME sector. The banks are seen as having the advantage in this space, but a fintech with the right mindset that instills trust could arise as a true competitor. Niels Turfboer, Managing Director for Spotcap, has this mindset. With a traditional banking career and entrepreneurial experience, he is driving this innovative lender forward in the UK and other European markets. Turfboer met with RFi Group’s Sarah Hollinshead at the forum to discuss the perfect blend of traditional and innovative lending in order to create the best offering for this much underserved sector. The best of the best is only acceptable for Turfboer, who has worked at some of the top financial institutions across Europe, including ABN AMRO, ING and MarketInvoice, as well gaining an MBA from 2 of the top 10 universities in the world; New York University and Instituto de Empresa. Now driving the launch of lending-as-a-service for Spotcap, the bar has certainly not been lowered, with the service announced through a partnership with Austria’s second largest bank, Bawag P.S.K., in January this year. Turfboer also discusses the launch of this platform and Spotcap’s growth plans for the future. What drew you specifically to Spotcap and their proposition? In the early stages of fintech, there was a lot of talk about disruption and people saying “we are going to change everything”. Having seen a similar hype around 1998, I was not convinced. So, I thought about what was actually possible, and this is what attracted me to Spotcap. From the start, they wanted to add value for the end customer, rather than talk about disruption all the time. The reality is with finance, there is a lot of things that we don’t actually want to do differently. Compliance, regulation and trust, they are essential, and a big focus for Spotcap, which I particularly liked.

12 RFi MEDIA

Similarly, I liked their proposition of targeting small and medium-sized enterprises, who have had trouble accessing finance, in particular since the financial crisis. Having started and run my own business for three years, I knew that finding the right funding can be challenging.

Having started and run my own business for three years, I knew that finding the right funding can be challenging.

What is the big problem that Spotcap are hoping to solve for their small business customers? When we think about breaking down the S-M-Es, we target the mid and larger size businesses within the ‘S’ part. In other words, our sweet spot is a client with between £1 and £20 million turnover. These businesses can often access finance, but don’t receive a tailored offering. Equally, when it comes to managing cash flow, the only options they have available, specifically in the UK, are either very expensive loans, or loans that require assets. We sit in a strong niche and, due to our proprietary technology and experienced underwriters, are able to provide competitively priced short-term loans up to 15 months, without asking for any debentures, or personal or director’s guarantees. So, do you see your pricing as the key unique factor for Spotcap, or is it the speed/customer experience? I would say it is a combination. There are many companies out there who can turn around a decision fairly quickly but don’t offer much more. Here at Spotcap,

we make a real effort to understand our clients’ businesses, their risk profile and affordability. With the help of our innovative technology and well-trained client services team, we are able to make a credit decision within one working day—at a competitive rate. How has your experience been in being purely digital? Whilst we are front-end and back-end digital, we know that sometimes clients prefer to speak to someone in person. Business owners really care about their company; therefore, trust and relationships are really important for them. As a result, we have a dedicated team on hand to support our clients throughout their journey with us. Take Holland for example which is quite a conservative market. We can turn around a lot of cases in 2 hours, however we sometimes hold off for 24 hours, and incorporate a call with the client, just so they feel confident that their loan is being assessed properly. Without customers having a fuller understanding of the new technologies out there, trust is much more important than things like speed.

Without customers having a fuller understanding of the new technologies out there, trust is much more important than things like speed. In what ways is Spotcap working with the banks? We work with banks in a variety of ways. Our first partnership was with New Zealand’s Heartland Bank where we raised €14 million in debt funding. In January this year, we announced our most recent partnership with Austrian’s


THOUGHT LEADER INTERVIEW

Bawag P.S.K., marking the launch of our lending-as-a-service proposition. Bawag P.S.K. is Austria’s second largest bank, with 2.5 million customers; and when they go online, they see the banks services, but we are the white label engine behind Bawag P.S.K.’s “ExpressFinanzierung” SME loan offering.

Bawag P.S.K. is Austria’s second largest bank, with 2.5 million customers; and when they go online, they see the banks services, but we are the white label engine behind Bawag P.S.K.’s “ExpressFinanzierung” SME loan offering. Our own direct lending is an important part of our business and we serve SMEs in the UK, Spain, the Netherlands, Australia and New Zealand. Over the years, we have developed a sophisticated platform and plan to leverage this to launch into new markets. This could be done either directly or by offering our highly customisable lending platform to financial institutions. We are very selective about the banks we partner with, focusing on the top tier banks only.

We are very selective about the banks we partner with, focusing on the top tier banks only.

sector has become more mature, which I believe is a good thing. I see a lot of potential in fintech, as it ultimately encourages innovation in the financial industry, which was overdue. Ultimately, the fintech sector enforces competition, and through partnerships, it will become harder to make the distinctions between fintechs and incumbents. This is already happening. The push for innovation around the back-bone products of banking, such as current accounts and payments, is an interesting trend, as these areas typically generate lower revenues. I am curious how players in those fields will eventually add other services or start collaborating with other fintechs, essentially converting more and more into banks themselves.

To read more interviews by RFi Media in all past UK Retail Banker editions, follow @RFiMediaGRB on Twitter or feel free to visit the archive centre on our website: www.rfigroup.com/rfi-media/magazines

How would you describe the current state of FinTech in Europe? I believe there is less hype around fintech than there was between 2008-2013. The

Niels Turfboer Managing Director, Benelux & UK, Spotcap

UK RETAIL BANKER 13


SAVINGS & CURRENT ACCOUNTS

Savings & Current Accounts WORDS MARIA URENA

TSB Bank launches friend referral scheme

T

SB Bank has announced a new referral scheme for those with the Classic Plus current account. Under the new scheme, Classic Plus current account holders who recommend the account to a friend will be rewarded with ÂŁ75 cashback if their friend opens a Classic Plus account with the bank, with the friend also getting a ÂŁ75 cashback reward. To get the reward, aside from having the Classic Plus current account, customers who refer their friends will have to remain with the bank at least until the bonus gets paid. The person they refer must also be of legal age, a UK resident, be switching an account from another bank, and cannot already have a Classic Plus account. Allegeable customers must request to open the Classic Plus account before the 5th of March and complete their switch by the 23rd of March. Classic Plus account holders can reference up to five people per account. 14 RFi MEDIA


SAVINGS & CURRENT ACCOUNTS

Starling Bank partners with several FinTechs Starling Bank has partnered with several online companies to offer its customers a full banking service that it describes as a “banking experience fit for the 21st Century”. Starling Bank customers now have the ability to access mortgage advice through the platform Habito, access the digital pension provider Pensionbee, manage their investments through Wealthsimple, and apply for travel insurance through Kasko. All these services will be made available through the Starling Bank app. Startling Bank believes the new partnerships will enable it to provide an innovative offer to its customers. It also believes

it will be a safe way for its customers to manage all their financial services as Starling customers will be able to access these services without having to provide their passwords or details more than once, since this is done within the Starling app. According to RFi Group data, the percentage of consumers who would feel comfortable using a digital only provider, such as Starling, to manage their needs in payments is 23%, savings 22%, investment 16%, and borrowing 16%. This indicates that there is a large potential market for digital only providers and that consumers would be interested in using a range of financial products with a digital only bank.

CURRENTLY, HOW COMFORTABLE WOULD YOU SAY YOU ARE USING A DIGITAL-ONOLY PROVIDER TO MEET YOUR NEEDS IN THE FOLLOWING AREAS?

Starling Bank has

25%

partnered with several online companies to offer its customers a full

22%

20% 16%

16%

Investment

Borrowing

15%

banking service that it

10%

describes as a “banking

5%

experience fit for the 21st

0%

Century”.

23%

Payments

Saving

Source: UK Digital Banking Council - 18Q1

UK RETAIL BANKER 15


CURRENT ACCOUNTS

RateSetter launches Innovative Finance ISA Peer-to-peer lender RateSetter has launched its first Innovative Finance ISA.

Consumers who open this account will be also be protected by RateSetter’s Provision Fund, which works to manages and diversify risk and prevent savers from needing to choose specific loans.

16 RFi MEDIA

The new savings product is currently available to both existing and new RateSetter customers after initially being offered to existing customers only. From April this year, transfers from other ISAs will also be allowed. The product offers interest rates between 3-6% annually, depending on the level of risk the account holders are willing to accept and the access to the

funds they require. Innovative Finance ISA are also flexible, which means users are allowed to withdraw money and replace it later in the same tax year without impacting their yearly tax-free deposit allowance. Consumers who open this account will be also be protected by RateSetter’s Provision Fund, which works to manages and diversify risk and prevent savers from needing to choose specific loans.


SME & COMMERCIAL

SME & Commercial WORDS JOSEPH SHARANGPARNI

Banks simplify SME account opening process

A

group of 18 British banks and trade body, UK Finance, have simplified the process of opening accounts for SMEs by standardising the list of documentation required to open an account. The move was brought about by the desire to increase competition in the SME banking space following a report from the Competition and Markets Authority which found that the account opening process was preventing some SMEs from switching their accounts. Bacs Payment Schemes, the organisation that runs the UK’s

current account switch service, has announced its support for the move, with Bacs’ Director of Product and Strategy Anne Pieckielon saying: “We know that small business owners are busy enough without the need to deal with further layers of timeconsuming admin which, in many cases, could deter some from getting the very best deal from their business account.” RFi Group data demonstrates the average length of time SMEs spend on being verified for a business account is 2.9 days. The new standardised guidelines should help reduce this time by ensuring SMEs submit the right documents the first time, minimising the time taken to collect the right documents.

HOW LONG DID THE VERIFICATION PROCESS TAKE WHEN THE BUSINESS APPLIED FOR A CASH MANAGEMENT/ BUSINESS OPERATING ACCOUNT? By revenue, average days 4.5 4.0

4.0 3.5 3.0

2.9

2.9 2.5

2.5

2.5

2.0 1.5 1.0 0.5 0.0 £0-£500k

£500k-£1 m £1 m-£4m

£4m-£10m

Data: UK SME/ Commercial Business Council – 17H2

Total

UK RETAIL BANKER 17


SME & COMMERCIAL

Equifax begins providing businesses’ credit data to lenders Equifax UK has released a new tool that will provide lenders with credit data on businesses. The move has come about as part of the UK government’s Commercial Credit Data Sharing (CCDS) scheme which requires the UK’s largest banks to share credit information they have on SME customers with revenue up to £25m with all other lenders, provided the customer gives their permission. Under the initiative, business credit information, which includes business cash flow activity, average balances, as well as credit and debit turnover for businesses, is collected by credit reference agencies, such as Equifax. The credit agencies can then share that information reciprocally among lenders. Equifax will provide lenders with the data through its ‘Business Insights’ service which combines commercial and consumer insights to help lenders make better informed lending decisions. The tool will also include provisions for monitoring a business’s financial health, include ongoing alerts regarding potential issues with repayments from businesses, and will make suggestions on the most suitable course of action.

The tool will also include provisions for monitoring a business’s financial health, include ongoing alerts regarding potential issues with repayments from businesses, and will make suggestions on the most suitable course of action.

18 RFi MEDIA


SME & COMMERCIAL

MarketInvoice customers will also gain access to a tool that monitors a company’s financials which can be used as a means of risk prevention and improving future trade decisions.

MarketInvoice to provide credit insurance to its clients Invoice finance provider MarketInvoice has partnered with trade credit insurance specialist Euler Hermes to provide credit insurance to its business clients. As a result of the partnership, clients of MarketInvoice will be able to take out credit insurance policies to protect themselves against any potential losses should their customers fail to pay or become insolvent. MarketInvoice customers will also gain access to a tool that monitors a company’s financials which can be used as a means of risk prevention and improving future trade decisions. Speaking of the drivers behind the partnership, Ilya Kondrashov, COO and Co-Founder of MarketInvoice said: “The underlying aim of this partnership is to enable companies of all sizes to trade with confidence at home and abroad”. Whilst CEO of Euler Hermes, Milo Boagaerts, added that in the current uncertain economic times, business need to take steps to protect themselves from the risk of late or non-payment of goods, making the partnership is a win for helping businesses trade with confidence.

UK RETAIL BANKER 19


LENDING

Rising living costs and stagnant salaries have been highlighted by UK Finance as factors behind the rapid rise in outstanding personal loans.

20 RFi MEDIA


LENDING

Lending WORDS SACHIN VISAVADIA

Personal lending increases four times faster than wages

D

ata published by British banking representative UK Finance shows that outstanding balances on personal loans have grown four times faster than wages since 2013-14. A report from UK Finance, which collects loans data from the top 10 biggest banks and building societies in the UK, shows that outstanding loans have risen by 25% since 2013-2014. In comparison, data from the Office for National Statistics (ONS) shows that during the same period, UK residents have seen an average pay increase of only 6.5%. Rising living costs and stagnant salaries have been highlighted by UK Finance as factors behind the rapid rise in outstanding personal loans.

The data produced by UK Finance excludes student loans, credit cards, and payday lending, focusing purely on the 60% of personal loans made up by banks and building societies in the UK.

The data produced by UK Finance excludes student loans, credit cards, and payday lending, focusing purely on the 60% of personal loans made up by banks and building societies in the UK.

UK RETAIL BANKER 21


LENDING

Banks must alert customers of upcoming overdrafts As of mid-February 2018, new rules introduced by the Competition and Markets Authority (CMA) mean UK banks must alert new customers when they are at risk of slipping into their overdraft, with the rules also coming into effect for existing customer later this year. The new rules are designed to help consumers avoid paying overdraft charges and will impact all banks with more than 150,000 active current accounts. Banks are required to send consumers a text message or message alert via a mobile banking app when they are close to going overdrawn. They also need to introduce “grace periods�

CMA, who have implemented this regulation, have stated that several banks have already started sending alerts for both new and existing customers. 22 RFi MEDIA

which will allow consumers to transfer money into an account they have overdrawn before they face fees. CMA, who have implemented this regulation, have stated that several banks have already started sending alerts for both new and existing customers. The new rule has been implemented in response to a CMA investigation which found banks received close to ÂŁ1.2 billion annually from unarranged overdraft fees and builds on an earlier CMA policy that requires banks to announce their maximum monthly charges publicly.


LENDING

The Mortgage Works have also lowered rates on various other products within the fixed-rate mortgage range by nearly 0.15% and have launched a fee free two-year fixed rate loan offering a rate of 2.14%.

The Mortgage Works revamps fixed rate range The Mortgage Works, the specialist buy-to-let (BTL) mortgage arm of Nationwide, have launched their lowest ever five-year fixed rate mortgage for BTL borrowers. The new product will be the first five-year fixed product by The Mortgage Works with a rate below 2%, offering a rate of 1.99% on loans with a loan to value ratio of up to 50%. The rate will rise to 2.39% for those who are borrowing more than 50% of the value of the property. The new mortgage comes with a ÂŁ1,995 product fee.

The Mortgage Works have also lowered rates on various other products within the fixed-rate mortgage range by nearly 0.15% and have launched a fee free two-year fixed rate loan offering a rate of 2.14%. According to RFi Group data, BTL mortgage holders are very rate sensitive, with 32% saying they chose their current BTL provider because of the competitive interest rate, making interest rates the most important driver of BTL choice. The Mortgage Works could therefore be well placed to capture market share with its new product offering.

WHY DID YOU CHOOSE YOUR BUY-TO-LET PROVIDER FOR YOUR MOST RECENT BUY-TO-LET LOAN

32%

They had the most competitive interest rates They were recommended by my IFA/ broker

30% 20%

They had the cheapest fees I was able to negotiate with them

12%

They had a suitable loan-to-value ratio

12%

0%

10%

20%

30%

40%

Source: UK Mortgage Council - 17Q1

UK RETAIL BANKER 23


CARDS & PAYMENTS

Cards & Payments WORDS MARIA URENA

Contactless payments see rapid adoption on Cambridge buses

E

ast Anglia bus company Stagecoach East, which operates throughout Cambridgeshire and Bedfordshire, has hailed the launch of contactless payments on its bus fleet as a success. Since launching the service in August 2017, Stagecoach East has recorded 2,101,217 contactless sales on its fleet, and contactless payments now make up almost 19% of all on-bus sales. RFi Group Data shows that the use of contactless on public transport has had a huge impact on contactless adoption across the country, with contactless use in the East of England, which includes Cambridgeshire, increasing from 44% in the second half of 2016, to 69% at the end of 2017. This brings contactless use in the East of England in line with London, which currently has 70% contactless adoption, with contactless adoption in the capital driven by the introduction of contactless payments on the Transport for London (TfL) network in 2012.

convenient way for consumers to make use of public transport services. He also drew attention to the ability of contactless to help improve the customer experience, saying: “Not only does contactless make buying a ticket quicker and easier for our passengers, but it also allows us to increase the quality of our service by cutting queues and speeding up journey times.� The company allows payments via contactless credit cards, debit cards, Apple Pay, and Android Pay.

CONTACTLESS CARD USAGE 16H2

80% 69%

Andy Campbell, Managing Director at Stagecoach East, believes that contactless payments have proven to be a quick and

17H2

70%

66%

60% 44%

Since launching the service in August 2017, Stagecoach East has recorded 2,101,217 contactless sales on its fleet, and contactless payments now make up almost 19% of all on-bus sales.

40% 20% 0% East of England

London

Source: UK Digital Banking Council 16H2 and 17H2

24 RFi MEDIA


CARDS & PAYMENTS

Contactless reaches charity donations (not sure what earnest marketing means?) charity payments company LibertyPay has launched Tap for Change, a service designed to help charities accept contactless payments. Tap to Change leases contactless payment terminals to charities for a fixed monthly fee, with the cost including the set-up of the contactless donation boxes, financial processing services, and data on the performance of each donation box. Tap for Change also offers additional services, including payment box branding, and designing marketing campaigns to help drive donations.

Tap to Change leases contactless payment terminals to charities for a fixed monthly fee, with the cost including the set-up of the contactless donation boxes, financial processing services, and data on the performance of each donation box.

Charities can set the default donation size, which all donors will pay when they tap their card or device, although consumers can also choose the value they wish to donate on the device. Tap to Change has introduced this service in response to a decline in cash use across the UK, which has created challenges for charities attempting to collect cash donations.

Tap for to Change has introduced this service in response to a decline in cash use across the UK, which has created challenges for charities attempting to collect cash donations. UK RETAIL BANKER 25


CARDS & PAYMENTS

Mobile card payments system myPOS launches in UK Mobile point of sales terminal provider myPOS has launched its range of products in the UK. myPOS provides retailers with a sales terminal, an online account, and a pre-paid Visa business card, with these tools allowing businesses to accept card payments and instantly access the funds. As myPOS is not linked to the banking system, when a customer makes a payment, the funds are stored in a myPOS e-money account from which the businesses can instantly access the funds and either spend them or transfer them to another account. The tool can therefore help businesses by reducing cash flow concerns that can emerge as a result of accepting card payments. myPOS offers its services for no monthly subscription fees, which the company believes makes it a very competitive service for entrepreneurs and new business owners. To support the UK launch, the company is also launching a physical store in London where businesses can access myPOS products.

The banking app, which will be operated by Ferratum and called ‘Sumo, will include a fee-free multicurrency account that will allow users to store up to seven different currencies simultaneously.

26 RFi MEDIA


FINTECH

FinTech WORDS JOSEPH SHARANGPARNI

UK Investment Association to launch FinTech accelerator

T

he UK Investment Association (UKIA) has announced plans to launch an incubator service named ‘VeloCity’ for UK FinTechs. The new incubator will provide FinTechs with funding assistance to transform their technology and ideas into real-world applications. The UKIA is particularly interested in helping FinTechs involved in asset management, developing technology using artificial intelligence, machine learning, blockchain, and cloud-based infrastructure for data. Another area the UKIA is interested in exploring through VeloCity is distributed ledger technology which enables asset management firms to view and manage their data across multiple sites, without a centralised data storage facility. Following a six-month program, participating FinTechs will demonstrate the end results of their project to key industry representatives.

Another area the UKIA is interested in exploring through VeloCity is distributed ledger technology which enables asset management firms to view and manage their data across multiple sites, without a centralised data storage facility.

Between four to eight FinTech startups will be selected for the service every six months, with the first group beginning in Q2 of 2018.

UK RETAIL BANKER 27


FINTECH

Tandem to partner with Personetics Tandem Bank have partnered with Personetics, a personal financial management app developer, to introduce an artificial intelligence (AI) service that will help users manage their spending. Personetics’ AI will provide personalised insights on customers’ spending habits to help them reach their financial goals, such as tips on how to avoid fees. The tool will also have features that help users manage their finances, such as upcoming bill warning, alerts about potential balance deficits, and notifications about any unusual transactions. The partnership was driven by Tandem Bank’s desire to improve the customers banking experience, with Tandem CEO Ricky Knox saying: “Personetics enables us to leverage innovative intelligence to know our customers better, predict their needs, and help them make better decisions about their money with as little effort as possible on their part.” At the time of writing, the full launch date of the integrated system has not been announced.

Personetics enables us to leverage innovative intelligence to know our customers better, predict their needs, and help them make better decisions about their money with as little effort as possible on their part. Ricky Knox, CEO, Tandem

28 RFi MEDIA


FINTECH

Nudgg prepares for consumer launch Personal financial management app Nudgg has announced that it is preparing for a full consumer launch in the UK. Nudgg is an aggregator service that allows customers to view all their accounts in one place. It also provides customers with education and insights around their spending and saving habits and includes a tool that helps consumers save by rounding up the amount spent when consumers make a purchase and transferring the difference between the actual costs and the rounded-up amount to a special savings account.

RFi Group data shows that the personal financial management tool market that Nudgg is about to enter is an exciting space, with high interest in such tools. According to RFi Group data, 38% of consumers find personal finance management tools appealing (a score of 6+/10, where 10 is extremely appealing), with this increasing to 58% among Millennials. Nudgg, which will be available online and via the app, is yet to complete beta testing, but consumers can sign up via their website ahead of the full consumer launch.

HOW APPEALING ARE PERSONAL FINANCIAL MANAGEMENT TOOLS? % appealing (6+/10) 60%

58%

50% 40%

38%

36%

30% 19%

20% 10% 0% Millenials

Gen X

Baby Boomers

Total

Source: UK Digital Banking Council - 18Q1

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UK Retail Banker - March 2018 Edition  

An RFi Group Publication

UK Retail Banker - March 2018 Edition  

An RFi Group Publication