Following the Bank of England’s (BoE) decision not to raise interest rates last week, Finance Monthly has heard from a few sources who have provided expert commentary.

Richard Haymes, Head of Financial Difficulties at TDX Group:

The decision is good news for those living in debt or teetering on the edge of financial difficulty. We expect the level of monthly Individual Voluntary Arrangements (IVAs) and Trust Deeds to grow by around 17% this year; a rise in interest rates would have a significant impact on the ability of these individuals to meet repayments and ultimately stay within the strict requirements of these debt solutions.

Figures from Creditfix, the largest provider of personal insolvencies in the UK show that 20.2% of its customer base holds a mortgage. It’s likely, due to their credit position, that most of these customers will have a variable mortgage that would have left them particularly vulnerable to an interest rate rise. A 0.25% hike would have left holders of £250,000 mortgages with a monthly repayment increase of £31*. This may appear a modest rise but for people trying to manage debts through IVAs or Debt Management Plans it could have a detrimental impact, rendering debt solutions unviable or in need of renegotiation.

While a continuation of the low interest environment is bad news for people holding pensions, investments and living on savings – reducing their earning potential compared to periods of ‘normal’ monetary policy, a static interest rate provides relief and stability for those in financial difficulty or on the brink of difficulties.

Stuart Law, CEO, Assetz Capital:

This change in thinking for the Bank of England following an expected rate rise is hardly surprising given the economic uncertainty and poor GDP growth figures. We expect that any increases that do happen over the next year would simply be a short-term measure ahead of Brexit, in case there is a need to drop rates again next year.

Even if interest rates do rise slightly later this year, it’s likely to only be by a small amount. Despite the predicted drop in inflation, this announcement is likely to receive a less than warm reception from high-street savers, who are seeing the value of their hard-earned money decreasing each day through inflation – and of course, many banks will not pass all or any of this rise on to savers.

Angus Dent, CEO, ArchOver:

With Britain’s GDP growth at just 0.1%, it’s no surprise that the Bank of England has kept interest rates stagnating at 0.5%.

Just last month a rate rise seemed a foregone conclusion. Today’s decision is yet another result of the uncertainty surrounding the UK’s financial health. And keeping rates so low means savers lose out once again.

Savers leaving their cash languishing in savings accounts in the vain hope of a rate rise will be sorely disappointed. With the economy in the doldrums, it’s time for a serious rethink – crossing your fingers and hoping for the best does not equal a productive savings strategy.

The news that the majority of banks didn’t pass November’s rate rise on to their customers adds more fuel to the fire, showing that even an historic rise didn’t have the desired effect on savers’ pockets.

Savings accounts are no longer a safe bet for decent ROI. Consider alternative financing options that can offer higher yield without compromising on security. Optimism is all well and good – but we all need a healthy dose of realism if we’re going to make our money work harder.

A rapid ramp-up of European banks' bail-in buffers is critical because the authorities' ability to support failing banks is now heavily constrained, S&P Global Ratings said in a new report, "The Resolution Story For Europe's Banks: The Clock Is Ticking."

"The UK, Switzerland, and Germany aside, European banking systems today typically lack the sizable buffers of subordinated bail-in instruments that could avoid bailing-in senior unsecured instruments if a systemically important bank fails," said S&P Global Ratings credit analyst Giles Edwards.

Three years since bank resolution regimes were created in most European countries, banks in the region continue their long march from bail-out to bail-in—and many will still be on this road for years to come. After all, making large, complex banks truly resolvable is no mean feat, particularly for those that start with minimal bail-in buffers.

Furthermore, the EU's resolution authorities have a tougher task than most--whereas the U.S. and Swiss authorities are acting on only the most systemic banks, their EU counterparts must set MREL (minimum requirement for own funds and eligible liabilities, which is the regulatory bail-in buffer) for all banks and lay the complex groundwork to enable a bail-in resolution for even midsize banks.

In S&P Global Ratings' view, the EU has achieved much in a short time by strengthening its crisis management framework for the financial sector. And the framework has had a positive impact on our ratings on European banks. Under regulatory requirements, European banks that are not global systemically important banks still have plenty of time to build their buffers, though these may start to look less comfortable as we progress through 2019.

Resolvability cannot be achieved overnight, and we do not underestimate the scale and complexity of the task in the European banking union in particular.

"Yet looking back at 2017, we saw more limited progress in some areas than we had expected, notably in the setting of banks' MREL," Mr. Edwards said.

Bail-in buffers aside, we also note that bank resolution actions could still be undermined if solvent banks cannot access sufficient liquidity in resolution--a topic that has become an imperative to address.

(Source: S&P Global)

Despite a well-developed electronic payment infrastructure, cash remains a dominant payment instrument in Singapore with 58.7% of transaction volume made at POS terminals in 2017, according to leading data and analytics company GlobalData.

In addition, more than 75% of transactions made at hawkers and wet markets are carried out in cash. This can be primarily attributed to the limited acceptance of electronic payments among small-sized merchants such as street vendors, food stalls and hawkers due to the high cost associated with POS terminals.

Singapore has for a long time been at the forefront of the payments innovation. Acceleration of electronic payments in the country has been one of the key objectives of the government’s Smart Nation Vision and in this regard, the country has invested substantially in building long-term infrastructure for cashless payments. Overall, the POS terminal penetration (number of POS terminals per thousand inhabitants) in Singapore stands at 35, compared to its Asian peers: Australia (39), Hong Kong (22), Japan (18), China (21), Indonesia (4) and India (2). In Singapore, card-based payments accounted for 32.8% of total payment transaction volume in 2017, increasing from 24% in 2013.

Singapore has a very high concentration of small and medium-sized enterprises (SMEs). According to the Department of Statistics, Singapore, there were 220,100 business enterprises in the country in 2017, with 99% of them being SMEs. To encourage adoption of electronic payments among SMEs in particular, the government along with other payment participants is increasingly considering QR-based payments as a viable alternative for cash.

Kartik Challa, Payments Analyst at GlobalData, comments: “The economic rationale for QR codes is stemmed from the difficulty banks had in persuading smaller merchants to begin accepting payment cards. The QR-code based payment acceptance eliminates the need for a significant expenditure, as merchants can now either display a printed QR code on their stall or download the merchant app on their mobile phones to accept electronic payments.”

In November 2017, the Singapore Payments Council announced the development of a common standard for Singapore Quick Response Code (SG QR) payments, designed to work across all schemes, e-wallets and banks. Unlike the existing NETS QR system, which focuses on domestic market, the new system will accept electronic payments through both domestic and international payments. The SG QR, developed by an industry taskforce co-led by the Monetary Authority of Singapore (MAS) and Infocomm Media Development Authority, will be deployed throughout 2018. Furthermore, as part of the process, the existing NETS QR will also be integrated into the new system and will be replaced with SG QR at all merchant locations.

Singapore's banks have also agreed to update their mobile payment apps/wallets to support SG QR. To expand the scope for SG QR, the Association of Banks in Singapore agreed to bring in banking P2P service –PayNow under the purview of SG QR. All seven participating banks of PayNow service, Citibank Singapore, DBS Bank, HSBC, Maybank, OCBC Bank, Standard Chartered Bank, and United Overseas Bank – enable their customers to transfer funds via SG QR.

Challa concludes: “The SG QR system is an important milestone, and to win over merchants, payment solution providers need to support the large number of e-wallets, offer quick payment settlement process and pricing benefits. Similarly, incentivizing consumers is a key factor to pique consumers’ interest in the new payment system. With the SG QR making a good headway, cash payments in Singapore are likely to soon become passé. Once again Singapore is at the forefront of innovation in payments, and other markets in Asia and globally are likely to follow the suit.”

(Source: GlobalData)

Brexit is edging closer every day, and equally everyday risk and opportunity float in a volatile sea of decisions for every business. Below Luke Davis, CEO and Founder of IW Capital, talks Finance Monthly through the complexities of alternative finance post-Brexit.

With a new tax year now underway, the first two weeks of April have also brought the revelation that investment spending in the UK grew more than in any G7 country in the lead up to 2018. Following outstandingly favourable conditions for British business in 2017, the first quarter of 2018 has held form for the new tax year. With the first round of Brexit terms agreed, and the passing of the Finance Act earlier last month, investor reactions to the events of 2018 steadily come under a time-sensitive microscope.

The government crack-down on asset-backed EIS opportunities and the significant expansion of new-age sectors such as med-tech, biotech and fintech has also significantly increased the focus on investor portfolio decisions for the 2018/2019 tax year. In a recent report from Mayfair-based private equity firm IW Capital, the high net-worth facing data found that one in five UK investors were turning away from traditional stocks and shares and instead choosing to invest in to new-age tech sectors such as energy tech and med-tech. Equally significant, the doubling of the EIS investment cap for knowledge-intensive companies, and the launch of a government consultation into a knowledge-intensive fund ensures these sentiments are duly supported by the infrastructure that supports the alternative finance arena.

The research further unveils that a post-Brexit climate in the investment arena is far from a bleak one, as over seven million investors say SMEs are more attractive as a result of increased trade prospects on the back of Brexit. Furthermore, over a quarter of investors say that they feel more encouraged to invest in SMEs after the formalization of Brexit has run its course.

This data comes amidst a more cautious outlook from the UK’s SME business leaders who previously predicted that smaller business would suffer a slow-down in the post-Brexit business climate. Seventy-five percent of small business owners said that they faced rising business costs, while the Federation of Small Businesses Quarterly Confidence Index also reported negative figures for the second time in five years.

Investors, on the other hand, have maintained a firm and optimistic perspective on both pre-and post-Brexit investment agendas in relation to the UK private sector. While the disparity between investors’ positive outlook and SME leaders’ scepticism reflects the UK market’s preparation process for Brexit, the discord also presents an opportunity for leaders on both sides of the investment spectrum to develop a symbiotic relationship.

Supported by one in five investors believing that Brexit will lead to higher quality and more frequent deal flow, and almost a third predicting that Brexit will improve SME productivity, the UK’s upcoming exit is an opportunity to drive new trading opportunities that could mean more SMEs seeing beyond Europe and proactively engaging more with the rest of the world. Moreover, many retail investors are keen to allocate funds in high-growth UK companies, and now have a much stronger chance of doing so due to the ongoing disintermediation of the alternative finance industry.

In order to leverage the growth in opportunities investors—particularly those in the alternative investment space—must transfer their optimism to SME business leaders. Government regulations on EIS investments, and other fiscal adjustments made in the Chancellor’s 2017 Autumn Budget, further provide a pre-and post- Brexit roadmap that can bring investors and business owners closer together. With this infrastructure in place, closing the disparity in Brexit perspective hinges on transmitting not only resources, but confidence. While many see Brexit as a challenge to both business leaders and investors, it is much more likely to provide opportunity instead.

Most conversations about doing business in Africa will include words such as “challenges,” “instability” and “risk.” Nat Davison, Partner at foreign exchange and international payments firm, Frontierpay, explains for Finance Monthly the promises and pitfalls behind payments across the African continent.

The same three words are often applied to managing currency risk and making payments throughout Africa. Costly transmission fees, unestablished banking systems, central bank restrictions and market volatility are all obstacles keeping treasury managers and payroll teams up at night.

That said, Africa also has a lot to offer from a payments perspective. The continent is becoming a hub of new payments technology, same-day payments are possible in countries such as Nigeria and there is a booming mobile payments landscape.

In short, while there is some volatility, if payroll teams are aware of the potential pitfalls and how best to avoid them, there are plenty of rewards to be reaped in the continent.

Finding the right supplier

When looking at currency markets, risk is a constant. Before even considering how currency fluctuations could affect your business though, you first need to gain access to any of Africa’s local currencies; a process which isn’t always as straightforward as it might sound.

In an ideal world, a single supplier would be able to meet most, if not all, of a business’ currency requirements. The reality though, is that many high street banks have a limited or restricted offering and are unable to provide a solution that covers multiple African nations. It’s important, therefore, when preparing to do business in the continent, to find a partner who can cover as many currencies as possible. Not only will this help to smooth internal processes, but it will also enable more effective currency hedging.

Companies often try to get around liquidity limitations in Africa by making payments in US dollars instead. The problem in doing so is that unless the beneficiary bank account is denominated in USD, the payment will be converted to the local currency before crediting at an arbitrary and more than likely unfavourable rate of exchange. Furthermore, it’s impossible to pay a supplier or employee a fixed amount using this system.

Currency volatility

Markets can be fickle beasts and to use even a commonly traded currency such as the South African rand can require a thick skin and heightened awareness of risk. Last year, the currency dropped 7.5% in the last four days of March, only to rise by the same amount in a nine-day stretch in April. Shifts of this nature are more than capable of affecting your payment costs and can hit with little warning.

On the flip-side, anyone with the nerve to have played the rand over the long term will have seen a downward slide of more than 50% in its value between 2011 and 2015, only for it to rise by 13% in 2016 and outperform every EM currency except Brazil’s real and Russia’s rouble.

To remove a degree of the uncertainty from trading the rand, I would advise anyone who hopes to do business with South Africa to have an understanding of the carry trade; a strategy that involves borrowing a currency with a low interest rate in order to fund the purchase of another with a higher rate.

Payment risk

As a result of the combined political and currency volatility in the region, knowledge and experience of South Africa’s local markets are key to successfully negotiating the pitfalls that could cost you time and money.

Where possible, work with partners who can demonstrate a strong track record and broad network within the region, to speed up the delivery of payments and avoid overblown fees. Some banks and payment partners may be able to deliver funds to Nigeria, for example, but not all will have access to local banking systems. Having this capability would open up the possibility of naira crediting bank accounts within hours rather than days.

Pricing is affected in the same way. A deeper knowledge of local market conditions, parallel markets and FX volatility will allow you access to much more favourable currency rates and the most efficient processes available within the rapidly developing continent.

Banking requirements are also fluid, with differing beneficiary data needed in different countries – in stark contrast with the EU and Single European Payment Area. Specialist experience when it comes to making payments in less-developed regions, such as Mozambique or Lesotho, will help to avoid lengthy delays, payment rejections and administration charges.

Volatility in Chinese economy

Africa’s prosperity increasingly depends on China. Over the past 20 years, China has become its largest trading partner and a significant source of investment and lending, paving the way for deep economic ties between the two countries.

As a result, recent signs of a slowdown in the Chinese economy are likely to be a very bad omen for Africa, which is massively dependent on China to not only purchase its natural resources, but also to upgrade its decaying national infrastructure.

Ultimately, a slowing China will hinder Africa’s ability to grow. However, as a decelerated China is looking ever more like an inevitability than a possibility, any business with exposure to Africa must ensure they are monitoring the landscape in China just as closely.

In conclusion

As a market to do business in, Africa is gathering global interest. Widespread urbanisation is fostering large cities in which to set up shop and readily available workforces to recruit from. New consumer markets, such as a growing middle class, are presenting previously untold opportunities to trade and the region is seeing strong growth, both economically and from a perspective of technological innovation.

However, for any new business, success on the currency and payments front needs to be an immediate concern. Failure to manage currency risk can fundamentally jeopardise your business, while holes in your liquidity provision may even leave you unable to pay suppliers or employees. Familiarise yourself with your required currencies and the local banking infrastructure, and invest time in finding a partner with the knowledge to keep any potential risk under control.

An anticipated rise in UK and European corporate insolvencies over the next two years should be prompting both borrowers and lenders to take early advice where they have concerns about businesses' solvency outlook, says Ogier offshore restructuring specialist Simon Felton.

Simon, a partner in Ogier's Banking & Finance team, was involved in several post-financial crisis restructurings, including the receivables trustee of a £13.5bn portfolio of UK RMBS as well as portfolios of loans in the Irish banking industry and regulatory capital in the Austrian banking sector.

Recent reports have forecast that British insolvencies are set to rise by 8% in 2018 – the second highest rise worldwide, after China – and that the increasing likelihood of rate rises and the end of quantitative easing by the European Central Bank in 2019 threaten a similar increase in Europe.

Already this year, UK firms including Carillion, Toys R Us and Maplin have been declared insolvent.

Simon said that the tightening interest rate and liquidity climate should be prompting both borrowers and lenders to take advice and consider what action may be necessary now, rather than delay when options may be reduced.

He said: "Whether you're a borrower or a lender, you should be analysing each company's solvency position, particularly where those entities are reliant on group support to meet their obligations, and if you think that there are issues, taking advice early as to what your obligations or rights are, and what course of action you should take.

"Early analysis, advice and action is crucial. For directors of debtors, the nature of their obligations changes as the solvency position of the company deteriorates, as does the ability of lenders to protect themselves.

"The regulatory picture may have changed significantly over the last ten years, particularly for financial institutions, but the combination of quantitative easing by the ECB and low interest rates coming to an end may pose a test for some businesses."

(Source: Ogier)

The Cambridge Analytica revelations have put the issue of data privacy front and centre in the minds of consumers, policy-makers and businesses. Facebook has taken up much of the media’s attention but with other recent and notable data breaches involving many millions of customer credentials, companies are being scrutinised for their data-handling practices like never before. Below Finance Monthly gains expert insight from Nick Caley, VP of Financial Services and Regulatory at ForgeRock, who delves deep into the implications of the data scandal on open banking.

In this era of heightened privacy awareness, it’s clear that there will be implications for businesses across all sectors.

This all raises significant questions for the financial sector. At a time when the banking industry is seeking to open up and encourage data sharing as part of the Open Banking initiative how should banks react to growing concerns from consumers about the risks and realities of online data sharing?

Firstly, UK banks need to prepare for their data management capabilities to be put under extra scrutiny. Banks are already well underway with their preparations for the EU General Data Protection Regulation, which comes into effect in May, and this provides them a solid foundation to work from.

However, the flurry of headlines around data protection and privacy will certainly make consumers more nervous about how and where their data is being used and, as a result, banks must be extra vigilant in order to maintain and grow customers’ trust.

For those already familiar with these issues, the reaction to the Cambridge Analytica story will not have come as a surprise. In a survey commissioned by ForgeRock before the Facebook revelations, only a third (36%) of UK consumers said they would be happy to share data in order to get a more personalised service. Yet over half (53%) said they would not be comfortable for their personal information to be shared with a third party under any circumstances at all. At the same time,

57% of UK consumers said they were worried about how much personal data they have shared online and 63% admitted that they know little or nothing about their rights regarding their own data.

Although this presents a challenge, incumbent banks do hold a considerable advantage over fintech companies and challenger banks when it comes to asking customers to share data: they are already trusted entities with a long track record of safely storing and managing customer data. As such, the demands of securing API access to high value customer data has been the focus of most Bank’s security teams for years. Investment in security expertise, well defined security operations and the latest technologies being tested ‘under fire’ and ‘at scale’ on a continuous basis lead to much greater levels of assurance. Standards such as OAuth 2, Open ID Connect and User Managed Access, which authenticate and authorize only trusted third parties, reinforce this access control model.

Our research shows that consumers do tend to trust banks and financial services companies to handle their personal data responsibly, especially when compared to more digitally native companies. ForgeRock’s survey found that banks and credit card companies were amongst the most trusted holders of personal data, with over 80% of UK consumers saying they trusted banks and credit card companies to store and use their data responsibly. In comparison, just 63% said they would trust social networks with the same data. This is very positive news for the UK banking sector particularly at a time when Open Banking is set to unleash a new wave of competition from digital-first competitors.

Why are banks considered trustworthy? Our research revealed a clear correlation between how in control of their data consumers feel, and how much they trust companies. Banks and credit card companies were ranked among the organisations that gave users most control over their data. This suggests that, particularly at a time when attention is being paid to data policies and privacy controls, banks must continue to invest in systems and processes that put control over data firmly in the hands of users.

The management of customer consent must be central to this strategy as it will only be possible to maintain and build trust if customers know they can turn data sharing on and off at their convenience. Putting consumers more in control of their data through consent and giving users transparency and control over how and under what circumstances their information can be used will allow banks to not only ensure compliance with Open Banking and GDPR, but also establish a basis on which they can build trusted relationships with their customers. They will then be well-placed to offer additional, more personalised services to their existing customers, allowing them to add valuable real time, context-based insights and offers for users, that in turn will create new revenue opportunities.

The Cambridge Analytica scandal combined with the regulatory changes that GDPR and Open Banking will bring appears to mark a turning point in how businesses approach issues around data sharing. The good news for banks is that they are already starting from a strong position as trusted holder of personal data. They now have a real opportunity to build on this and become true leaders in the next era of digital finance - by giving customers greater visibility, choice and control over their own data.

Kristo Kaarmann, TransferWise Ltd. chief executive officer, discusses the company's new multicurrency online account and the growing demand for its services. He speaks with Bloomberg's Selina Wang on "Bloomberg Technology."

Finance Monthly hears from Linda Moneymaker, Branch Manager and Loan Officer at Anderson Brothers Bank’s Summerville office, who introduces us to the bank’s history and tells us what makes it the preferred choice among clients in South Carolina.

In 1933, Mr. Ernest Anderson and his brother, Mr. Bishop Bonar Anderson, responded to the needs of several tobacco warehousemen from Mullins, South Carolina who requested financial assistance. The two brothers established Anderson Brothers Bank in the back of the Anderson Warehouse in Mullins. This small office was used to loan money to warehousemen so they could issue checks to farmers immediately following the sale of tobacco. Loans were paid off as tobacco companies such as Reynolds, American and Imperial paid the warehouses several weeks later for the tobacco purchased. The small office quickly evolved into a depository and eventually moved to Main Street, across from the Bank’s present main office in Mullins. Today, under the leadership of Mr. Ernest Anderson’s grandsons, Anderson Brothers Bank remains family-owned and operated. David E. Anderson serves as President and CEO, joined by his brothers Neal, Chairman of the Board, and Tommy, Vice President.

Anderson Brothers Bank has grown from a small operation in the back of a tobacco warehouse to 22 branches throughout the Pee Dee, Coastal and Lowcountry regions in South Carolina with over $650 million in assets. Despite our continuous growth, we have remained committed to our customers by providing innovative financial products and services that meet their needs, while also being heavily involved in our communities through outreach programmes, sponsorships and donations to civic organizations.

Before joining the Anderson Brothers Bank team in March 2017, I spent 20 years in Banking and 13 years in Consumer Finance, holding positions from entry-level customer service to management. When Anderson Brothers Bank decided to expand into the Summerville area with a brick-and-mortar location, they asked me to consider joining their ‘family’ as Branch Manager. I knew it would be a welcoming change to be empowered to help my customers. Over the course of a year, we have hired great talent and we continue to integrate successfully in the competitive Lowcountry banking market. Our customers even tell us that we are ‘the friendliest bank in town’ in which we take great pride.

Through my years of experience, I have found that listening to my customers so I can fully understand their needs is the key to my success. As a matter of fact, I am blessed to have customers refer their friends and family to me based on how I treat them from the moment they enter our lobby. This is also part of Anderson Brothers Bank’s motto of ‘treating you like family’.  Above all else, I realise my achievements as a Branch Manager and Loan Officer is a result of a team effort at ABB.

Our Summerville branch’s strip mall location is the first of its kind with Anderson Brothers Bank and is related to cultural influences by this generation of consumers who require less face-to-face interaction and increased mobile and online banking. While we provide a wonderful, friendly lobby atmosphere in which to bank, we also offer innovative mobile and online banking, online mortgage application and will soon offer online account opening and a deposit-taking ATM in place of the standard ATM in our branch parking lot. Anderson Brothers Bank has built its reputation on helping individuals, families and businesses as they journey along life’s path and, here at the Summerville branch, we strive to maintain that status. While larger, corporate banks continue to acquire smaller, hometown banks, we remain family-owned, a place where employees know our customers by name and business is often conducted on the strength of a handshake.

Website: https://www.abbank.com

Banks are increasingly using your data intelligently and effectively. Let’s find out how far they can go. Julius Abensur, Head of Industry and Financial Services at Relay42, explains.

Technology has advanced at a rapid pace in banking and our demands have changed, making our data – and banks using it properly to benefit us – more important than ever.

Through various utilities, facilities, transactions and experiences, banks have more opportunities to break down traditional barriers to offer us a more seamless experience across channels and outcomes, rather than products and functions. By using our data effectively, they can deliver us a unique journey, based around our personal interests and most frequently-used channels. The benefits to banks are clear; customers who are fully engaged bring an average of 37% more annual revenue to their primary bank than customers who are disengaged.

To achieve the levels of engagement and loyalty we now expect, banks need to ensure they are using our data wisely and responsibly in order to nurture our trust. If banks aren’t using our data to provide us with a better and more valuable user experience, it won’t be long before we stop sharing it altogether. This will only be made easier in light of regulations such as GDPR and PSD2, which are placing stricter rules on how banks use our information.

So how can banks use our data more effectively, while maintaining our trust?

Merging the real and digital worlds

Impending regulation changes are slowly pushing banks and disruptive fintech start-ups to collaborate, rather than compete, and this is opening up a whole new world of opportunities for us as customers. Banks possess a stronghold of customer data ripe for delivering personalised and useful experiences, and by partnering with fintechs who specialise in innovative, agile technologies, they can deliver true value.

For example, let’s say that a customer (we’ll call him Bill) has just paid for dinner at a restaurant with his friends, and they all want to split the cost and pay Bill back. By partnering with the right fintech and sharing customer data across platforms with a smart data platform, the bank can make this repayment process easier by enabling Bill to distribute payment requests through an online chat service via a single link. By using this link, Bill’s friends can then repay him instantly regardless of who they bank with.

By using data management technology to responsibly share data across different platforms, banks can launch intelligent customer experiences and solutions relatively quickly across both the real and the digital world. This offers clear advantages for customers, who can now use more intelligent services to increase convenience. And this is just the beginning.

Connecting with other industries

When it comes to delivering truly beneficial experiences, banks need to be looking beyond the industry they serve. We all have a vast range of interests that can be capitalised upon through the sophisticated use of data, and this can be achieved by connecting with other industries.

Take the travel industry, for instance. As seamless partnerships between payment providers, booking interfaces and airlines become ubiquitous, travel and financial services leaders need to take a sideways glance to carefully choose trusted partners, value propositions and technology.

To translate this into a practical example: Let’s revisit Bill. Bill has a Global Travel Plus credit card, which is issued by his bank and connected to a global airline, granting him rewards and discounts when he travels. The bank has also created a service called the Travel Plus app, which offers relevant recommendations related to Bill’s journeys and behaviours, and is orchestrated by the bank’s customer journey technology.

Through intelligent cross-pollination of insights and data, the bank can deliver a suite of offers based on Bill’s loyalty and customer value, including frequent flyer points and hotel discounts. Then, through contextual retargeting, Bill’s bank can send financially-related recommendations for his next trip to Barcelona, from the best insurance rates to lock-in forward Euro rates. This kind of data-driven personalisation is what we now crave, and simply would not be possible without banks connecting with other platforms and industries.

Stitching data intelligently

Data is undoubtedly the key to delivering the innovative, highly personalised banking experience that we are all seeking. For banks, the benefits are clear - customer retention is around 14% higher for companies that effectively apply big data and analytics to deal with velocity.

However, if banks are to achieve this then they need to make sure they use our data intelligently. As we have explored, using data management technology can go a long way to effectively stick data together to create a single customer view — the foundations for orchestrating right customer experiences — for the right people. Additionally, partnering with companies both inside and outside of the financial sector can open up new opportunities for next-generation loyalty and engagement.

HSBC has today confirmed that it will no longer provide project finance for new tar sands projects including the construction of any tar sands pipelines. This policy would exclude HSBC from providing project financing for the Keystone XL and Line 3 Expansion pipelines. HSBC also stated that its overall exposure to tar sands will reduce over time.

HSBC’s move, disclosed in its new Energy Policy, is the most recent in a series of decisions by international financiers to distance themselves from the controversial pipelines in North America. French banks BNP Paribas and Natixis, and insurance and investment giant Axa, as well as Dutch bank ING, and Sweden’s largest pension fund, AP7, all made similar announcements in 2017. [1]

Greenpeace is now calling on Barclays, the only other major UK-based bank providing loans for tar sands pipelines, to rule out financing new tar sands pipelines in North America.

Oil from tar sands is one of the most carbon-intensive fuels on the planet because of the large amount of energy needed to extract it. The proposed pipelines are key to the expansion of the tar sands fields in Alberta, Canada. Estimates show Keystone XL alone could potentially add nearly a million barrels of oil per day to current capacity, as well as an estimated 175 million additional tonnes of CO2 per year. [2]

Commenting on the announcement, John Sauven, Executive Director of Greenpeace UK said: "This latest vote of no-confidence from a major financial institution shows that tar sands are becoming an increasingly toxic business proposition. It makes no sense to expand production of one of the most polluting fossil fuels if we are serious about dealing with climate change in a post-Paris world. HSBC has got the message. Now Barclays need to decide if it wants to be the only UK bank offering project finance to tar sands pipelines.”

Annie Leonard, Executive Director of Greenpeace US, said: “The world has changed dramatically since these controversial tar sands projects were first proposed. In the US, we’ve seen record floods, hurricanes and wildfires super-charged by climate change. We’ve also seen a powerful, diverse, and growing movement step up to stop new fossil fuel infrastructure like the Keystone XL pipeline. This move by HSBC is the most recent indication that the financial community has begun to see the increasing risk in funding pipelines. We now expect banks like the US giant JPMorgan Chase and Barclays, who have backed tar sands pipelines in the past, to cease their funding of these dirty projects.”

HSBC has previously participated in revolving credit facilities for TransCanada (the company building KXL) and Enbridge the company building the Line 3 expansion.

HSBC has also ruled out funding new coal fired power stations all around the world with the exception of three countries - Bangladesh, Indonesia and Vietnam where funding may continue until 2023.

Hindun Mulaika of Greenpeace South East Asia said: "By ruling out new coal funding by the end of 2019 in many countries, HSBC has taken a step in the right direction. However, by singling out Indonesia, Vietnam and Bangladesh as exceptions to their coal policy, they are creating a loophole in the countries that are most aggressive in their coal power planning and condemning their citizens to a lifetime of air pollution impacts. HSBC must close this loophole as soon as possible and turn their financial support to accelerating a transition to clean energy.”

1. BNP Paribas In October 2017 announced a decision to no longer finance “pipelines that primarily carry oil and gas from shale and/or oil from tar sands,” and will sever “business relations with companies that derive the majority of their revenue from these activities.” Dutch bank ING confirmed in June that its oil sands policy excludes financing tar sands pipelines. Sweden’s largest pension fund, AP7, announced that it will divest from TransCanada on the grounds that its proposed pipelines in Canada and the US were incompatible with the Paris Agreement. In December 2017 Natixis pledged to no longer fund “exploration and production projects concerning oil extracted from tar sands; infrastructure projects (pipelines, terminals and others) primarily devoted to transporting or exporting oil extracted from tar sands or companies whose business primarily relies on exploiting oil extracted from tar sands”, and insurance and investment giant Axa announced the “divestment of over Euro 700 million from the main oil sands producers and associated pipelines, and the discontinuation of further investments in these businesses” and no longer providing insurance to tar sands or associated pipeline businesses.

2. Greenpeace has published a report for banks and their shareholders outlining the financial and reputation risks that banks could face in arranging and providing finance for companies intending to build tar sands pipelines. See Figure 1 on page 3 for estimated additional greenhouse gas emissions per year resulting from proposed tar sands pipelines.

3. On Wednesday, the controversy over Justin Trudeau’s support for tar sands pipelines followed him to the Commonwealth Heads of Government meeting in London, where the Canadian High Commission was rebranded ‘Crudeau Oil HQ’ and blockaded with a 30m pipeline. Since March, weeks of ongoing peaceful direct actions in British Columbia against the Trans Mountain Expansion tar sands pipeline have resulted in the arrests of about 200 people.

(Source: Greenpeace)

Women in banking face a ‘double glass ceiling’; one when being promoted to management and another when being promoted to executive roles, according to new research from the SKEMA Business School Observatory on the Feminisation of Companies.

Although women make up 52% of banking sector employees globally, they average only 38% of middle managers and 16% of executive committees.

These are the findings of Professor Michel Ferrary’s ‘Gender Diversity in the Banking Industry’ report, which examined the female representation of 71 banks in 20 countries.

He said: “Women have long faced discrimination at work, yet what we are witnessing in the global banking sector is a ‘double glass ceiling’ effect, where of the 38% of women reaching middle management, far fewer are able to ascend again to executive roles.

“There are a number of possible reasons for this trend. Firstly, unconscious bias can be at work when men choose not to promote women. However, this seems like a lazy generalisation. One other industry theory that is arising is that women are more reluctant to put themselves up for executive positions, and so are losing out. Whichever is true, it is clear that women face discrimination throughout the entirety of their careers in banking.”

Boards of directors are more feminised than executive committees globally, usually due to government-imposed diversity quotas.

Ferrary said: “Scholars know that employing women on boards is beneficial to banks as it helps to mitigate risk. Studies unanimously show that women are less likely to gamble with assets and were noticeably absent from the worst offending firms during the 2008 financial crash. This is one of the reasons why many countries impose gender quotas on the boards of their prominent banks.

“Yet there are cultural disparities at a global level. For example, although banks in countries like Canada, France and Sweden, where the level of women on boards is 45%, score highly in this category, it is worth noting that Japan only boasts 12% of women on its boards of directors. This can often be explained by the cultural expectations of women and their distribution in the country’s workforce as a whole.”

(Source: Bluesky PR)