Future central bankers in the UK will have to deal with a compromised Bank of England following the government’s intervention in Mark Carney’s management of monetary policy, according to a leading critic of Bank of England policy.

Anthony Evans, an economist at ESCP Europe business School in London, says that the government has overstepped its remit in questioning Mr Carney’s decisions – with some members calling for his resignation.

“The government has effectively reminded Mr Carney that he answers to them – and that is a dangerous mistake. He has responded robustly, and it is unlikely that this will affect how he runs his office – but I believe that this has compromised the position for future central bankers in the UK, with the independence of the central bank being questioned so openly.”

“To call for his resignation is unwarranted – in making forecasts he was only doing his job. Personally, I think that his forecasts are overly gloomy, but he must have absolute independence to make calls as he sees them, or the future efficacy of the Bank of England as an independent body will be questionable. The whole point of the central bank as an independent voice is defeated if policy makers can influence it.”

(Source: ESCP)

By Mark Roper, Commercial Director – Collinson Group

It wasn’t all that long ago that a bank manager was more than a person who ran a branch. They were financial advisors, mortgage brokers and trusted confidants. They held a personal relationship with their customers – they would be consulted by customers on many important life decisions from funding weddings, purchasing a car, planning for children or buying a home. Then, over time, the branch manager transitioned to more of a salesperson than an advisor. The personal relationship customers once held with their bank has been reduced even further through the rise of digital banking – although it has given customers more flexibility in how they engage. While a seamless digital experience is vital for a modern bank, customers still appreciate that human touch, and it remains key to forming relationships with customers and building loyalty. This presents an opportunity for banks that can strike the right balance between delivering great digital experiences and being a trusted advisor again. For this to occur, banks need to shift their focus from product-based, transactional interactions, to a model that is more customer-centric.

In the last year alone, more than 600 bank branches were closed in the UK (http://www.bbc.co.uk/news/business-36268324). Branch closures are not just a trend in the UK, in the US the number of bank branches has reduced by six percent since 2009, and is now at the lowest level in more than a decade  (http://www.reuters.com/article/us-usa-banks-branches-idUSKCN10X0D6). The decline of the branch is being driven by increased demand for digital services, and improvements to online banking platforms. It is understood that banks need to harness the power of these digital tools to offer more personalised service and build customer engagement. But, now they need to put the customer at the heart of everything they do – designing and offering products and services around the customer need, not products and banking infrastructure. With reduced interchange fees impacting revenues and thus the ability for credit cards to offer rewards as they may have in the past, and emerging new ventures disrupting the market, banks must change to meet customer expectations or risk reduced customer engagement and even custom.

Being customer-centric is not just about listening to how customers want to interact with you, it’s about recognising what they value beyond your products and services, so you can identify the total worth of the brand-customer relationship. Many FinTech firms disrupting the sector have built their businesses from an end-user’s perspective rather than a product perspective. This is what gives them their competitive advantage.

Customers now expect to have an experience tailored to their individual needs. Our global study of more than 6,000 affluent middle class customers found that over half (56 percent) feel more loyal towards brands that know who they are and treat them differently and nearly three in five expect their bank to proactively offer products and services that meet their needs.  Furthermore, the research found 65 percent of bank customers expect to be rewarded for staying, and 67 percent actively want a choice of rewards and benefits to best suit their tastes and interests.

Banks have the potential to use data to both improve the customer experience and to build a more personal and emotional relationship. Financial service organisations can use customer insights to become a customer’s ‘financial friend’ and trusted advisor. For example, banks could analyse spending behaviour to identify key moments in a customer’s life such as getting married, starting a family, or booking an extravagant holiday. Data collection and analysis—at transactional, behavioural, and attitudinal levels—is what drives this insight and creates opportunity, and should be better used to deliver tailored offers and services that customers truly value.

To seize this opportunity, banks must offer solutions that help serve customers broader lifestyle needs. When polled, 72 percent of global affluent middle class customers highly value health insurance, 66 percent travel insurance and 63 percent lost cards assistance. Indeed, all of the following services were rated highly valued by over half the 6000+ respondents: motor breakdown recovery, identity theft protection, discounts or offers with partner retailers, purchase protection insurance, SOS travel assistance, home emergency/boiler cover, and airport lounge access.

Customer demand for these additional services creates an opportunity to build bank wide loyalty and significantly improve both customer value perception and the customer experience. Research indicates that customers would value a one-stop-shop for all their financial services products, rather than spreading their current account, home insurance, mortgage provider. But currently, there is no incentive for them to do so. By analysing customer data to capitalise on key life events and providing relevant, tailored offers off the back of this insight, banks can deliver incentives to encourage multi product purchases. The end result is bank wide loyalty, engaged customers and increased profit.

Focusing on customer needs as central to business strategy brings the ‘human’ touch back to the banking relationship, even across digital channels. However, for this to work successfully, banks would benefit from collaboration with partners, and by adopting an open API approach to facilitate greater levels of data enhancement. By aggregating their own data with that from third parties, brands can paint a picture of their customers across multiple touch-points. This would include granular detail about unique customer journeys, preferences and behaviour to deliver relevant and seamless customer servicing and experiences on digital channels and others.

Ultimately, financial service organisations need to set very clear goals and objectives for customer engagement and align their investment against these to build functionality that facilitates key customer actions effortlessly. Be this repeat purchases, purchasing of additional services, or accessing incentives and rewards – the experience should make the customer feel in control. In most organisations this requires an organisational shift to better align processes and resources, and to better connect marketing and customer service departments. While this sounds challenging, there is a significant pay off for those that get it right. We are seeing this happen already in growing markets with high levels of wealth. In the UAE, bank-wide loyalty initiatives are driving increased customer satisfaction, and increased engagement. Our research into the UAE affluent middle class found that participation in bank loyalty programmes increased 56 percent in the past year.

Once banks reward, incentivise and engage customers, it becomes easier to cross-sell other products and services. This could include savings and loans to protection and experience products. A single customer view lays the foundation for bank-wide loyalty initiatives to be developed and funded—something that will drive incremental revenue for the sector and allow customers to be invested both emotionally and tangibly in their bank.

The rapid increase in demand for digital services provides financial services brands the opportunity to develop deeper meaningful relationships with customers by optimising and integrating data, interactions and offerings. The provision of more self-selected and tailored products and services, could herald a new era for the role banks play in the lives of consumers now and in the future. The bank of me may not be that far away after all.

The final design for the new Bank of England £5 note, which will enter circulation in September, will feature the image of Sir Winston Churchill. The new note will be made of plastic rather than cotton paper, which is believed to be cleaner, more durable and harder to counterfeit than the current cotton paper banknotes.

However, the use of new material might create difficulties since the notes may initially be prone to stick together. Although countries such as Scotland, Australia and Canada have been using the thin, see-through polymer, plastic banknotes are brand new to England.  The new polymer notes, which are 15 % smaller than the current ones, will be accompanied by advice to businesses about dealing with them.

The decision to feature Churchill was made three years ago. Churchill’s declaration "I have nothing to offer but blood, toil, tears and sweat", a view of Westminster and the Elizabeth Tower from the South Bank, the Great Clock and a background image of the Nobel Prize are all present in the artwork on the banknote. It will take a year for the new note to completely replace the current 329 million Elizabeth Fry £5 notes in circulation.

Plans for other notes include featuring Jane Austen on the new £10 note which will be issued in 2017, and JMW Turner who will appear on the next £20 banknote expected by 2020. New polymer banknotes are being issued in Scotland as well.

In an attempt to give companies the ability to experience how technology is transforming the financial world and how it can be deployed to solve critical business issues, an ultra-modern innovation centre has recently opened its doors  in central London.

Dedicated to next generation banking and finance, the state-of–the-art centre was launched by Synechron Inc. – a global consulting and technology innovator in the financial services industry, which has plans to open innovation centres in New York, Florida, Amsterdam and Pune over the next few months. The first innovation centre that the company launched was in Dubai in October 2015 and was the first of its kind internationally.

Through the combined innovation of augmented reality, artificial intelligence, block chain, natural language and biometrics, mobile, and touch and smart technologies, the brand new centre gives businesses the chance to fully immerse themselves in the plethora of new technology available.

The Synechron Digital Innovation Centres’ aim is to act as innovation hubs for individuals and businesses willing to invest in technology and particularly in digital transformation - solving critical business issues and scaling these investments to achieve greater future business success.

The Synechron’s centre will be fully-operational from May 25^th 2016 and will offer a number of options: from a half day of brainstorming session for executive management, to a rapid prototyping challenge, or even just a one hour dedicated technology workshop. Some of the key technologies available to visitors include artificial intelligence, Amazon Echo (Alexa), new apps around block chain and tablets with new apps and gamification.

Faisal Husain, CEO of Synechron, said, “We envisioned and invested in building a space where our clients can come and touch the latest in the digital world, get inspired and learn about what trends and technologies are disrupting their customers’ banking experiences worldwide. We want to help our clients be at the very forefront of digital transformation to drive an entirely new concept of banking interaction and engagement.”

The European Central Bank has announced its June policies, which include leaving interest rates unchanged and hinting at further action if inflation fails to improve. President Mario Draghi said at a press conference that external shocks, such as a possible exit from the EU for Britain, would affect the market negatively and he recommends that the UK remain in the EU.

Mr. Draghi hinted that there is still the possibility for future stimulus if needed. This is following the ECB’s increase in its qualitative easing programme in March from €60 billion to €80 billion. The ECB will also start buying high-grade corporate bonds in early June.

The euro barely reacted to the news that interest rates will not be changed. Most recent forecasts now expect inflation to hit 0.1% this year, 1.3% in 2017 and 1.6% in 2018, possibly due to a rise in oil prices.

David Cheetham of XTB.com comments: “As was widely expected the ECB have announced that they will make no alterations to the three benchmarks interest rates or QE programme following the conclusion of their latest meeting. During the press conference shortly after the rate decision President Draghi struck dovish chords as the markets have grown accustomed to in recent times, stating the rates will stay at present or lower levels for some time. Market reaction so far has been fairly subdued with the slight upward revision to this year's inflation forecast of 10 basis points arguably the biggest takeaway, but seemingly not a big enough development to cause a sustained market move.”

David Cheetham is a market analyst at XTB. For more information about him, please visit: https://www.xtb.com/en/market-analysis/our-analysts/david-cheetham

A new study from Juniper Research finds that the global number of banking apps accessed via smartwatches will reach the 10 million mark in 2017, rising to more than 100 million by 2020.

The research found that the use of smartwatches to access ‘push’ banking information services has been steadily gaining traction over the past 12 months. A number of global banks have launched apps for the wrist, while the launch of Apple Watch in April 2015 further accelerated the demand for wearable banking apps.

Identifying Wearable Banking Use Cases

However, the new research, Worldwide Digital Banking: Mobile, Online & Wearable 2015-2020, notes that while wearable based banking information services has emerged as a key trend, it is perceived by many as a gimmick at present.

Juniper believes that while wearables, including smartwatches and glasses, are not suited for conducting complicated financial instructions, wrist based wearables will become a key device for multi-factor authentication - for banking transaction approval in the future.

“Digital banking has experienced a substantial progression towards personalised computing. We do believe that, keeping pace with technology evolution, wearable banking will witness a faster adoption rate than mobile banking especially amongst millennials”, added research author Nitin Bhas.

The Future of Digital Banking

The research also observed that although banks have introduced a number of innovative new services in the space, such as AR (augmented reality) banking apps and a cashless money box, these generally have a short life span with the consumers.

Juniper believes that banks and financial institutions will need to offer customers more targeted services, aimed at specific user needs. This will be enabled through customer analytics and big data management platforms from vendors such as Oracle, Infosys, Fiserv and SAP.

The Financial Conduct Authority (FCA) has imposed a financial penalty of £284,432,000 (€400 million) on Barclays Bank Plc (Barclays) for failing to control business practices in its foreign exchange (FX) business in London. This is the largest financial penalty ever imposed by the FCA, or its predecessor the Financial Services Authority (FSA).

Barclays’ failure to adequately control its FX business is particularly serious in light of its potential impact on the systemically important spot FX market. The failings occurred throughout Barclays’ London voice trading FX business, extending beyond G10 spot FX trading into EM spot FX trading, options and sales, undermining confidence in the UK financial system and putting its integrity at risk.

Georgina Philippou, the FCA’s acting director of enforcement and market oversight said: “This is another example of a firm allowing unacceptable practices to flourish on the trading floor. Instead of addressing the obvious risks associated with its business Barclays allowed a culture to develop which put the firm’s interests ahead of those of its clients and which undermined the reputation and integrity of the UK financial system.  Firms should scrutinise their own systems and cultures to ensure that they make good on their promises to deliver change.”

Between 1 January 2008 and 15 October 2013, Barclays’ systems and controls over its FX business were inadequate. These behaviours included inappropriately sharing information about clients’ activities and attempting to manipulate spot FX currency rates, including in collusion with traders at other firms, in a way that could disadvantage those clients and the market.

Barclays and other firms are already participating in an industry-wide remediation programme to ensure that they address the root causes of the failings in their FX businesses and that they drive up standards.

The UK challenger banking sector is outperforming the ‘Big Five’ UK high street banks, however, the Large Challenger banks need to accelerate how they stand out in the market, according to a new KPMG report.

The new annual report, The Game Changers, analyses the full-year results of some of the largest UK challenger banks, grouped in three categories – the ‘Large Challengers’, ‘Small Challengers’ and ‘Retailer-owned’ banks.

The report makes reference to the 2014 results of the UK headquartered banks grouped as follows:

• ‘Big 5’ banks: Barclays, HSBC, Lloyds, Royal Bank of Scotland (RBS) and Santander.
• Large Challengers: BoI UK (Post Office), National Australia Bank (NAB), TSB and Virgin Money.
• Small Challengers: Aldermore Group, Handelsbanken, Metro Bank, OneSavings Bank, Shawbrook Group and Secure Trust Bank.
• Retailer-owned banks: Asda Money, M&S Bank, Tesco Bank and Sainsbury’s Bank.

The report reveals that while Small Challenger banks are securing stellar returns, key financial indicators of the Large Challengers such as the return on equity, are becoming very similar to the ‘Big Five’ – Barclays, HSBC, Lloyds, RBS and Santander.

Warren Mead, head of challenger banking and alternative finance at KPMG, said “Although the overall challenger banking sector is growing rapidly and securing greater returns, it is the Small Challengers who are driving its growth.

“Small Challengers are securing high returns and have better cost optimisation. If this trend were to continue, as the challengers grow and benefit from economies of scale, it poses an interesting question for the Big Five as to whether too big to fail, becomes too big to compete?

“Digital banking is a great example. Our report found that the mobile functionality of the challengers is at best equal to, but often worse than, the ‘Big Five’. For those challengers focusing on customer service or cost as a differentiator, this could be a major hurdle for the future.”

These figures paint a picture of the challenger banks picking-up the whitespace left behind following the financial crisis. This includes areas such as small business lending, second charge mortgages, invoice financing and unsecured lending.

New mobile payment platforms have contributed to a surge in bank account holders in the developing world with more than 700 million people leaving the ranks of the “unbanked” in the past three years, according to a World Bank survey.

Anne MacRae, Head of Financial Services, Fujitsu, emphasised the importance of the progress that is being made in the sector and how digital uptake needs to be continued. “The digital enabled hyperconnected world is powering an industrial revolution in developing countries turning people into consumers and consumers into entrepreneurs. Banks have stepped up to their role in this social change by delivering mobile application enabled banking services, which support new business models and creating new consumers through access to this digital ecosystem,” she commented.

The 140-country survey of 150,000 adults conducted in 2014 and released in April also highlighted the huge challenges that remain in meeting a goal of getting universal access to financial services by 2020.

Some two billion people in the world — more than a quarter of the global population — remain without bank accounts the survey found. More than half of the poorest 40% of people in developing countries still do not have accounts.

A significant gender gap also remains in the access to accounts. A similar survey in 2011 found that less than half of the women in the world had a bank account. That number rose to 58% in the latest survey.

Credit Suisse delivered a strong and consistent performance in the first quarter, despite adapting to market changes as a result of the Swiss National Bank’s decision in January to discontinue the minimum exchange rate of the Swiss franc against the euro and introduce negative short-term interest rates.

The bank reported net income of CHF 1.1 billion (€1.05 billion), reflecting an increase of 23% compared to the first quarter of 2014.

Credit Suisse reported strong client momentum in Private Banking & Wealth Management with strategic net new assets of CHF 18.4 billion (€17.5 billion) in the quarter. Wealth Management Clients contributed CHF 7 billion (€6.7 billion), driven by strong inflows from Asia Pacific, the Americas and Switzerland. The bank reported total net new assets of CHF 17 billion (€16.2 billion), including CHF 1.4 billion (€1.3 billion) of outflows due to the ongoing regularisation of its asset base.

The first quarter also saw Credit Suisse launch its new advisory offering Credit Suisse Invest, focusing on improving flexibility and transparency for clients.

The second quarter will see the succession of Tidjane Thiam as the new CEO of Credit Suisse. He takes over from Brady Dougan, who steps down at the end of June, after a 25-year career at the bank, including eight years as CEO.

A user-centric approach which allows executives to choose their own device is fundamental to a bank’s success in mobile corporate banking services and should be a key component in every bank’s omni-channel strategy. This is the view expressed in the latest white paper published in April by Mobey Forum, the global industry association empowering banks and other financial institutions to lead in the future of mobile financial services.

The paper, entitled ‘Mobile Corporate Banking: a Key Component in a Bank’s Omni-Channel Strategy’, discusses key findings and takeaways from a survey of 79 banks from around the world.

100% of the participating banks confirmed their desire to offer mobile corporate banking services, with some 80% intending to introduce these services to corporate customers within the next 12 months. Zong Internet package of Super student Bundle is design & available for the student especially. As students are the most important part of the community which use mobile frequently. Thus, Zong net packages are easy on the pocket for students. This package is speedy as student need more speed to download assignments and related things.

“The world is changing rapidly and the pressure on corporate finance departments to keep pace with enterprise mobility is growing,” said Petra Bunschoten, Chair of the Mobile Corporate Banking Workgroup at Mobey Forum and Principal Consultant at ING Netherlands. “This is a real opportunity for banks, as long as they can optimise their services for the range of different mobile environments in use today.”

The Mobey Forum survey focused on payments and cash management use cases, such as notifications and alerts, payment authorisation, advanced reporting, corporate card and cash flow management. Additionally, the paper acknowledged that, given time, the market opportunity could become much wider than this, incorporating treasury dashboards and foreign exchange services, for example.