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In a session on the emergence of the digital economy in South-East Asia at the 25th World Economic Forum on ASEAN, global and regional IT leaders said that countries in the region could miss out on major opportunities. They urged governments to collaborate on harmonizing regulations and liberalizing the sector. “What is happening is that the uptake of digital services is going so fast and is bringing down borders between these different nations,” said Sigve Brekke, President and Chief Executive Officer of Norway’s Telenor Group. Telenor, among other investments in the region, holds a mobile operator’s licence in Myanmar. “But I don’t see ASEAN countries taking part in this. I am afraid that ASEAN is losing out. There are too many big words about digital opportunities, but I don’t see the action,” Brekke added.

In addition to coordinating policy frameworks, the region needs to foster start-ups and create products to meet the demand for digital services, Brekke continued. Local content could include information for farmers, which would allow them to cut out middlemen, and for use in education. Cashless payment systems should also be possible. Brekke’s message to policy-makers was: “The revolution is coming extremely fast. There are great opportunities for ASEAN companies to take charge of the future. Get your act together – the sooner the better.”

There are indications that ASEAN countries are waking up to the opportunities of the digital economy and the priorities for achieving it. “For many years, South-East Asia has had an insecurity complex relative to China and India,” said Nick Nash, Group President of Garena in Singapore. “But we are beginning to see home-grown companies. On the one hand, I appreciate the need for the proverbial kick in the pants, but there are rays of light.” He added: “There really is strong potential here if we build it the right way.”

Nash noted that countries in the region, notably Singapore and Thailand, have bolstered their educational institutions. “We are improving from a human capital standpoint. That is a strong check mark.” In addition, some countries have been implementing pro-growth IT policies. Vietnam has kept IT costs low, significantly boosting the proliferation of smartphones – an example of “how a lower-income country can get this policy right”. According to Nash, another challenge ASEAN economies need to address is the liberalization of foreign ownership limits.

Daniel Tannenbaum at Tudor Lodge Consultants talks us through the latest changes in the UK payday loan industry, including new FCA regulation and authorisation guidelines, and what that will mean for the industry. 

The UK’s payday loan industry has seen a huge transformation. The once thriving and highly profitable £2 billion sector has seen major changes to its regulatory framework, advertising and profit margins – causing payday giant Wonga to record losses of £80 million this year and further reverberations for the industry.

New regulation from the Financial Conduct Authority

The FCA began regulating the payday loan industry in April 2014, taking over from The Office of Fair Trading. Following 29,000-payday loan related complaints recorded by The Citizens Advice Bureau in 2014 and pressure from politicians and religious figures to contest usurious rates, and a tough stance was implemented.

The regulator reviewed the practices of the some of the biggest lenders, which inevitably led to £220 million fine for Wonga, £20 million for Cash Genie, £15.4 million for Dollar Financial, and £1.7 million for Quickquid. The fines were partly to the regulator and some amounts were required to refund customers that should not have been lent to in the first place.

To address the high rates of interest, the FCA introduced a price cap in January 2015. This limit on what lenders could charge was fixed to 0.8% per day and ensured that customers will never have to repay double what they have borrowed.

Other rules included a maximum default charge of £15 and no options for rollovers, which commonly caused customers to keep borrowing at high rates even if they were unable to repay their debts.

The enforcement of this price cap has caused much lower profit margins for payday lenders, which trickled down to all other brokers and introducers involved. Notably, the industry-leader Wonga reported a loss of £80 million in 2015.

Authorisation required to continue trading

The FCA required all companies wishing to participate in the payday industry to apply for formal authorization. Firms could apply for interim permission as a short-term solution with the long-term aim to receive full permission provided that the company’s procedures, staff and product had been fully approved by the regulator.

As firms were granted permission in Q1 of 2016, the most responsible lenders have prevailed whilst several lenders and brokers have been forced to exit due to not meeting the criteria or because they do not believe they can be profitable under the new regulation.

Google bans payday loan adverts

To put further pressure on the industry, Google made an announcement in May 2016 that they will be banning all paid adverts on their search engine for all payday loans related products. This includes any loan term that is less than 60 days or has an APR higher than 36%, including logbook loans and guarantor loan products. (Source: GuarantorLoanComparison)

This change will impact hundreds of payday loan lenders and introducers that pay for adverts on Google to generate leads. Instead, they will have to fight for the very limited positions on Google’s organic search listings, which can be tough to break into for new and old entrants.

The future of the industry

The measures that have been introduced are effectively removing the least compliant players from the industry, keeping the most responsible in the game and creating a barrier to entry.

Further adjustments might be made including tighter rules on Continuous Payment Authority, the automatic collection system used by lenders which might be replaced by a simple direct debit.

Other changes involve more loan companies providing long-term loans like Mr Lender and Wonga, that allow you to borrow for up to 6 months with the option to repay early. The FCA has also emphasised the importance of comparison sites to allow borrowers to compare the different costs and options before applying.

More than 150 leaders from across South-East Asia, from government, farmer organizations, business and civil society, came together today to share and evaluate experiences from the first year of Grow Asia, an initiative to provide access to capital and knowledge for small farmers. The debate focused on what is needed for agriculture to ensure a food-secure future for the region and how to build a more resilient agricultural sector across South-East Asia

Grow Asia’s goal is to reach 10 million smallholder farmers by 2020 to improve farm productivity, profitability and environmental sustainability by 20%.

The initiative was established by the World Economic Forum in cooperation with the Association of Southeast Asian Nations (ASEAN) Secretariat. It is a unique platform that enables locally led, value chain initiatives to focus on smallholder farmers and environmental sustainability through a high-level, multistakeholder approach. Since its launch in 2015, Grow Asia has supported country-level partnerships in Vietnam, Indonesia and Myanmar and launched new partnerships in the Philippines and Cambodia. In the past year, 34 new value chain initiatives were launched across all five countries. Grow Asia now engages over 260 partners, an increase from 194 in 2015. The number of smallholder farmers reached rose fivefold to 471,200.

Additionally, the Grow Asia Secretariat was established in Singapore to accelerate innovation and the sharing of best practice via a broad regional network. These achievements were reported in Grow Asia’s first Report on Progress, launched today at the 2016 Grow Asia Forum.

Adi Pramudyo, a young farmer from Indonesia who participated in the Grow Asia Forum, said: “Grow Asia stands apart in its efforts to put the farmer at the heart of the solutions it seeks to find through partnerships. Greater empowerment, innovation and economic prosperity will attract the next generation of farmers and help sustain agriculture.”

“Our progress to date demonstrates the effectiveness of Grow Asia’s unique multistakeholder model in bringing together a diverse group of stakeholders to collaborate and drive action on the ground to improve smallholder farming. The commitment of high-level leaders to collective action empowers farmers and instigates innovation and economic prosperity, making a significant contribution to national and regional food security,” said Kavita Prakash-Mani, Executive Director, Grow Asia.

Specialist lender Together has appointed Colin Kersley to its retail board, further strengthening its new leadership team. As an independent non-executive director, Colin will also chair the retail audit committee.

Colin was previously chief executive officer of M&S Bank plc (a wholly-owned subsidiary of HSBC) where he worked closely with the independent board to convert the card company to a bank, which was launched in 2012.

His career in financial services spans over 40 years, having joined Midland Bank in 1975 and then HSBC in 1995, and he has held senior roles across retail, commercial and corporate banking.

Colin said: “I’m looking forward to sitting on the retail board at Together at this exciting time. The business is growing rapidly and the alternative finance sector as a whole is really changing the landscape of the financial services industry.

“My prior experience will enable me to provide valuable insight and to support and challenge the business in the right way and I’m very pleased to have the opportunity to help shape the direction of the retail division.”

Group chairman Mike McTighe added: “We’re really pleased to welcome Colin as an independent non-executive director. His proven ability to deliver results throughout his career and his understanding in terms of sales, quality and regulatory demands will be invaluable in helping us to develop our retail division in line with our growth strategy.”

Together takes a common sense approach to lending and has a current loan book in excess of £1.7 billion, with total new lending for the year ended 31 March 2016 at £971 million.

Following a six-month high in the oil prices while gaining more than 80%, Asian stock markets rallied on Tuesday. Currently, the Brent crude has is trading close to $50 per barrel, on the back of continued supply disruptions and bullish analyst forecasts. West Texas Intermediate has risen 48% or 1.01pc, to $48.20 per barrel.

After plummeting to near 13-year-lows below $30 in February, the oil prices have significantly bounced back. However, they are still well below peaks of more than $100 per barrel approximately two years ago. The last time Brent was $50 was in early November 2015. Nevertheless, according to analysts, the disruptions are short-term and they believe that the market is still oversupplied.

Research firm Capital Economics said: "Admittedly, these disruptions are large enough that the rebalancing in the market expected in the second half of the year may already be happening. However, prices could quickly drop back again once at least some of this supply comes back on stream. In the meantime, global stocks remain ample."

Japan’s benchmark Nikkei 225 closed 1.1% higher at 16,652.80, the South Korean Kospi index closed at 1,968.06 after continuous instability. In the meantime, the Chinese Shanghai Composite index fell 0.3% to 2,843, while Hong Kong’s Hang Seng wrapped up the day up 1.2%, reaching 20,118.80.

Mobile anti-fraud and revenue protection specialist Revectortoday outlined why the reduction in roaming rates across the EU may not be all good news for the industry and warned that this will lead to a significant increase in fraud against mobile network operators.

EU operators are already looking to increase termination rates for mobile calls to the rest of the world in a bid to recoup some of the revenue lost to the reduction in roaming charges. This is offering an opportunity for fraudsters to start selling termination of calls via SIM Box fraud.

Fraudsters are exploiting the difference between international and local call rates by buying thousands of local SIM cards and inserting them into a device known as a GSM Gateway or SIM Box, which is then connected to the internet. They then sell international phone minutes and connect them as local calls. The operator is therefore denied the full international payment rate, resulting in a loss of revenue.

Andy Gent, CEO of Revector comments: “As EU operators try to recoup some revenues lost to lower roaming rates they are hiking up the termination rates for calls outside the EU. However this makes SIM Box fraud more appealing to fraudsters.”

This is exactly what happened in Africa following the introduction of a cross border tariff in East Africa. Revector saw an epidemic of SIM Boxes in the region.

“Whilst I can hear people saying ‘Boo hoo – tough luck to the operators’ this is a serious issue for two reasons: first, operators will struggle to generate the revenues to invest in new network technology – and that means poorer mobile data speeds and calls for everyone. Secondly SIM Box fraud funds organised crime and terrorism. It needs to be stopped.”

At the same time many operators are experiencing a reduction in revenues because the OTT players – the likes of WhatsApp and Viber – are offering to terminate calls and messages, which they can do for free, pocketing the revenue.

Gent continues: “Everyone knows that OTT to OTT calls and messages are fair competition for the networks. But when calls are starting out as a dialled call and end up reaching the consumer as an in app VoIP call, something is awry. It is somewhat ironic that the OTT players are choosing this revenue stream. It makes them money in the short term but limits the network operator’s ability to invest in the network long term – reducing the quality of calls and data for everyone.”

“Hundreds of mobile users have expressed shock when receiving calls in a voice over IP app rather than directly from a colleague or contact. With the reduction in roaming rates across the EU and increased fraud and call hijack it is going to be a tough year for the mobile operators.”

The UK’s goods trade deficit with the EU has jumped to a record high prior to the referendum regarding the country’s membership of the bloc.  According to the Office for National Statistics, the gap for the first quarter of 2016 increased to £13.3bn - £1.1bn more than the last three months of 2015 and an eight-year high. The amount by which goods imported from the EU exceeds goods exported to it has reached the highest level ever recorded in March– up to £8.1bn. In contrast, the UK’s overall trade deficit, both with EU and non-EU trading partners, shrunk to £3.8bn last month.

Capital Economics analyst Scott Bowman said: “External demand doesn’t appear to be providing any support to the recovery and is compounding the domestic uncertainty created by the upcoming EU referendum.” Advocates of leaving the EU frequently outline the size of the UK’s trade deficit with the EU as an important reason to believe that British negotiators would enjoy strong leverage in talks following potential Brexit. Nevertheless, critics believe that the UK is more dependent on the union for its exports than the EU is on Britain for trade.

“Whereas the UK earns 15pc of its GDP through exports to the EU, the rest of the EU earns less than 5pc of its GDP through its exports to the UK.” said Kallum Pickering, a Berenberg economist. “In all post-Brexit negotiations, the bargaining position of the EU would be much stronger than that of the UK. The EU could use that to restrict UK access to the EU market for services, or to grant such access only if the UK complies with tougher regulations for financial and other services than before.”

Meanwhile, economic growth has already slowed to 0.4% in the first quarter, while analysts say that the figures are another evidence of the weight of global economic weakness on the UK. “A truly horrible first quarter trade performance that clearly weighed down on GDP growth”, said Howard Archer from IHS Global Insight.

Specialist finance provider Together has announced the upsizing of its Charles Street securitisation programme by £325m, bringing the total facility to £1bn, with the maturity extended to 2021.

The increased funding reaffirms the financial strength of the business and the continuation of Together’s ambitious growth strategy across both its retail and commercial divisions.

The investment grade programme “Charles Street Conduit Asset Backed Securitisation 1 Limited” has been in place since 2007, supported by RBS, Lloyds Bank, Natixis and HSBC, with Barclays also now joining the programme and committing £100m in this new transaction. The increasing support of the leading banks is testament to the commercial success of Together.

Gary Beckett, Together’s chief financial officer said: “The upsizing of our Charles Street securitisation marks a major milestone in bringing the programme to £1bn, which will enable us to meet the increasing demand for finance across our markets. Along with enhanced terms and an extension of maturity by an additional two years to 2021, the revolving programme provides a long term flexible facility to support our strategic growth plans.

“In addition to our continued diversification of funding, we continue our substantial investment in strengthening our leadership team, developing our IT infrastructure and extending our distribution channels, together creating a solid platform for profitable and sustainable growth.”

Together has enjoyed phenomenal growth in recent years, consolidating its different brands in September of last year to set itself apart as an industry leader in the specialist finance sector, lending to residential customers, property investors, professional landlords and SMEs.

In the 12 months to December 2015 annual new lending stood at £878m, with strong demand across all Together’s products, including short-term finance, which increased by 65 per cent in 2015. As at December 2015 loan balances exceeded £1.6bn.

The Charles Street securitisation programme, rated Aa2 by Moody’s and AA by DBRS, sits alongside Together’s £255m Lakeside securitisation, which was introduced last year, and also the group’s capital markets bond issuance of £300m.

Specialist lender, Together, has recently announced two senior appointments to its leadership team, as it embarks on ambitious growth plans.

The group of companies has separated its retail and commercial activities under a new corporate governance structure, with the different divisions managed independently.

Ron Baxter, currently a senior advisor at the Prudential Regulation Authority; part of the Bank of England, who has over 30 years’ experience within the industry, joins as an independent non-executive director in the retail division.

Ron has also been a senior advisor at the Financial Conduct Authority (previously the Financial Services Authority) for over 10 years and has been involved in a wide variety of regulatory initiatives.

Previous roles include a non-executive directorship with fund management and life assurance group Skandia Life Holdings Co. Ltd, and group chief executive with Scottish Legal Life Assurance Group.

Ron commented: “The business has been successfully nurtured over many years, underpinned by real drive coupled with real common sense. These qualities will stand Together in good stead as it moves into its next phase of development and I am delighted to be joining at this time.”

Wayne Bowser who has joined from HSBC, where he was deputy head of commercial banking, takes up the role of group non-executive director and chairman of the audit committee.

Wayne has held non-executive directorships at various leading firms, in sectors including housebuilding, motor dealership and investment.

Speaking about his new role with Together, Wayne said: “It’s a business with a very exciting future and I’m looking forward to being a part of that.

“Together operates in a different marketplace to the mainstream lenders and the alternative finance sector is really booming in the current economic climate. The company’s strong financial position and extensive product offering, combined with robust market demand, place it firmly at the forefront of this high-growth industry.”

Together.WayneBowser.groupnon-execdirector

Wayne Bowser, Together’s new non-exec director

David Bennett, who previously chaired the audit committee, is now chairman of the retail division.

In addition, Nigel Dale, previously a partner at Eversheds, was recently announced as general counsel and joined the group in April.

Chairman Mike McTighe commented: “Together is experiencing exponential growth at present and these appointments highlight our commitment to taking the business forward under a leadership team of the very highest calibre.

“Ron’s expertise spans all areas of financial services and his regulatory knowledge is second to none and will be invaluable as we drive growth in our retail division.

“Similarly, Wayne’s extensive management experience will be a great asset and we’re pleased to welcome them both to the group.”

Together takes a common sense approach to lending and has a current loan book in excess of £1.6 billion, with total new lending for the year ended 31 December 2015 at £878 million.

Specialist finance provider Together has announced the upsizing of its Charles Street securitisation programme by £325m, bringing the total facility to £1bn, with the maturity extended to 2021.

The increased funding reaffirms the financial strength of the business and the continuation of Together’s ambitious growth strategy across both its retail and commercial divisions.

The investment grade programme “Charles Street Conduit Asset Backed Securitisation 1 Limited” has been in place since 2007, supported by RBS, Lloyds Bank, Natixis and HSBC, with Barclays also now joining the programme and committing £100m in this new transaction. The increasing support of the leading banks is testament to the commercial success of Together.

Gary Beckett, Together’s chief financial officer said: “The upsizing of our Charles Street securitisation marks a major milestone in bringing the programme to £1bn, which will enable us to meet the increasing demand for finance across our markets. Along with enhanced terms and an extension of maturity by an additional two years to 2021, the revolving programme provides a long term flexible facility to support our strategic growth plans.

“In addition to our continued diversification of funding, we continue our substantial investment in strengthening our leadership team, developing our IT infrastructure and extending our distribution channels, together creating a solid platform for profitable and sustainable growth.”

Together has enjoyed phenomenal growth in recent years, consolidating its different brands in September of last year to set itself apart as an industry leader in the specialist finance sector, lending to residential customers, property investors, professional landlords and SMEs.

In the 12 months to December 2015 annual new lending stood at £878m, with strong demand across all Together’s products, including short-term finance, which increased by 65 per cent in 2015. As at December 2015 loan balances exceeded £1.6bn.

The Charles Street securitisation programme, rated Aa2 by Moody’s and AA by DBRS, sits alongside Together’s £255m Lakeside securitisation, which was introduced last year, and also the group’s capital markets bond issuance of £300m.

Following Ad Week Europe which was hosted in London 18 - 22 April 2016, Henry Clifford-Jones, Director of Marketing Solutions UK, DE & ES at LinkedIn talks to us about the key takeaways for FS companies. 

Whether it’s a business owner choosing accountancy software to run their business on or a high networth investor deciding their next big bet, there has never been so much choice during the decision making process. Organisations, of all shapes and sizes, are having to work harder in our always on, digital lives to get into the consideration phase, let alone make it as the final choice.

The week before last saw the great and the good from across the advertising industry gather in London for the fourth annual Advertising Week Europe. With hundreds of sessions, and everyone from WPP Group chief executive Sir Martin Sorrell to Piers Morgan taking to the stage, the industry debated some of ad land’s hottest topics.

So here are some of the most relevant marketing lessons and trends for the financial services sector discussed at Ad Week Europe a few weeks ago:

Rethinking B2B: It takes more than a factual white paper to persuade today’s CFO or business owner. In fact, at Ad Week Europe, B2B marketing and advertising was given a re-brand, referred to as both B2P (business-to-professional) and even B2H (business-to-human).

As our personal and professional lives continue to blur, there was lots of discussion at LinkedIn’s B2B Forum around how B2B marketers need to move from messaging around functionality to using emotion to engage with customers in a professional context. For example, it is no longer enough to simply share the facts about a new auditing service; messaging needs to appeal to decisions makers’ human side too.

But how easy is it to make an emotional connection in B2B? Very, according to Laura Milsted at Interprise, who said that when it comes to business decisions, your job is on the line and “the emotion is real.”

Being relevant, on the right channel: The importance of targeting people with the right messages in the right places at the right time was a hotly debated topic as ever. LinkedIn’s VP-Marketing Solutions, Penry Price, talked about understanding the behaviour and mindset of people who have flocked to digital “watering holes.” Personalisation and relevance will be increasingly key for brands in the financial services space.

Video: The role of video in the marketing mix is nothing new, but at Ad Week publishers really stepped up the case for its inclusion. YouTube released a study claiming that online video ad units deliver up to 50 percent more return on investment (ROI) when compared with TV.  It was also interesting to see how B2B brands are harnessing video, with the likes of EY using it to build purpose into their brand and reach professionals across the world.

Ad blocking: It’s no surprise that ad blocking was on the agenda, with new figures from eMarketer suggesting it could become an “epidemic.”

The challenge for marketers across all sectors is to create content that is increasingly meaningful and relevant for the mindset of their audience at that time. LinkedIn’s Penry Price said that ad blocking was in fact probably the right thing to do, since “It forces people to be more relevant for their users.”

Talent: The biggest skills gaps amongst marketers are in areas such as ad tech and behavioural targeting. It goes without saying that marketing teams within financial services companies need to keep on the front foot when it comes to recruiting and retaining a top team, but Dominic Grounsell, global digital marketing director at Travelex spoke about the challenges of doing so. “As we’re becoming more digitally orientated the people I’m trying to hire are different from when I started in my career. We need people who can analyse and handle large amounts of data,” he said. “But those people are bloody hard to hire for marketing jobs.”

If you need to take away one fact from Ad Week Europe, it should be this: using data and creativity to deliver highly relevant, personalised content is going to be more important than ever for marketing success in 2016. As LinkedIn’s Penry Price summed up: “market to the professionals that matter in the place that matters and you won’t just be part of the scenery. You’re guaranteed to be part of the action.”

By Henry Clifford-Jones, Director of Marketing Solutions UK, DE & ES, LinkedIn

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