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London-based fintech unicorn Revolut has started to apply for a bank charter in the US, the firm announced on Monday.

On the first anniversary of its US launch, the company submitted a draft application with the Federal Deposit Insurance Corporation (FDIC) and the California Department of Financial Protection and Innovation, the first step in the banking license application process.

“A US banking license would ultimately enable us to provide US customers with all the essential financial products and services they can expect from their primary bank including loans and deposits,” Nik Storonsky, co-founder and CEO of Revolut, said in a statement.

“We’re on a mission to build the world’s first global financial superapp, and pursuing a US banking licence is an integral part of the journey.”

Revolut was granted an EU banking license in Lithuania in December 2018, allowing it to offer banking services in Central Europe. It applied to the FCA and the Prudential Regulation Authority for a UK banking license in January.

The startup also intends to launch its business accounts in all 50 US states. These accounts allow companies to make free money transfers in 29 currencies at the interbank exchange rate, among other features.

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Since launching in the UK in 2015, Revolut has built a customer base of more than 15 million across nearly 40 different countries. Its flagship products include an app-linked debit card that allows users to spend different currencies at the interbank exchange rate with low fees attached.

Revolut’s fintech peers are also seeking bank charters in the US. In February, Brex announced that it would apply for a bank charter in Utah, while Varo Bank obtained a license last summer.

The UK’s financial watchdog issued a statement on Monday warning prospective investors about the risks of putting their money towards cryptoassets such as Bitcoin.

The Financial Conduct Authority (FCA) encouraged customers to understand the financial risks of cryptoassets and schemes involving them prior to investing, given that they were unlikely to be protected under the financial services compensation scheme or the financial ombudsman service, which help UK investors reclaim their money when a company collapses.

“The FCA is aware that some firms are offering investments in cryptoassets, or lending or investments linked to cryptoassets, that promise high returns,” the regulator said, noting also that some crypto investment firms may be overstating the potential payouts of cryptoassets or understating the risks involved.

“Investing in cryptoassets, or investments and lending linked to them, generally involves taking very high risks with investors’ money,” the organisation continued. “If consumers invest in these types of product, they should be prepared to lose all their money.”

Bitcoin has experienced an unprecedented 300% rally since October 2020, reaching new milestones regularly in the final weeks of 2020 through to the new year. Last week, the cryptocurrency’s total value passed $1 trillion for the first time in history.

Analysts’ warnings of an overdue price correction came to fruition over the weekend as Bitcoin underwent its sharpest two-day fall in nine months, falling as much as 21% down to $32,389 before stabilising around the $35,650 mark on Monday (around 12% down from its $41,000 high).

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In addition to its warning for investors, the FCA issued a reminder to firms that new rules which came into force on Sunday now require crypto companies to register with the organisation and carry out money laundering checks.

Paul Marcantonio, Executive Director for the UK & Western Europe at ECOMMPAY, offers Finance Monthly his predictions for open banking and the fintech sector in 2021.

The UK leads the charge in open banking; 2019 bore witness to a surge of growth in the country’s open banking ecosystem, when UK open banking hit one million users, regulated providers hit 204 and there were 1.25 billion API calls. It is evident that open banking has played a significant role in consolidating London’s place as a global leader in the fintech industry, comparable only to New York. With Brexit looming, there are many unknowns on the road ahead for UK businesses and their ability to deliver open banking services to the wider EU market after 31 December. Will open banking be affected by Brexit? And what is the outlook for the UK fintech sector in the new year?

The Brexit effect

Many companies are worried about maintaining the smooth digital experience that the modern consumer now prioritises post-Brexit. Looking ahead, UK businesses will lose their ‘passporting’ rights to do business across the EU, with organisations in the EU suffering similar barriers when seeking to operate in the UK. To overcome this barrier, many firms have created bases in the EU, while companies are also applying to the FCA for temporary permission to operate in the UK.

In order to minimise the disruption to open banking services post-Brexit, the FCA has said that third-party providers (TPPs) will be able to use an alternative to eIDAS certificates to access customer account information from account providers, or to initiate payments. eIDAS certificates of UK TPPs will be revoked when the transition period ends on 31 December. This means that TPPs have a compliant way to access customer information and ensures any changes as the UK leaves the EU will be smooth.

Businesses are having to audit their suppliers, as well as their payment service providers, to ensure they have all the necessary licenses to operate in the EU. Many companies are also building separate EU entities so that they can function in the EU under any Brexit agreement.

Many companies are worried about maintaining the smooth digital experience that the modern consumer now prioritises post-Brexit.

EU regulations

The role of open banking will only increase after Brexit, since the open banking agenda cannot be achieved by existing major banks. Open banking allows banking services to digitise so that consumers gain access to more choice than ever before, and extends the market to new entrants able to offer products and services that banking incumbents do not.

Furthermore, regulatory intervention serves to foster competition in the finance industry and is evidently necessary. The EU Payment Services Directive 2 (PSD2) was brought in during September 2018, and brought open banking requirements in across the EU, going further than the Retail Markets Investigation Order 2017 (CMA Order) in the UK which mandated that the biggest banks provide customers with the ability to share data with authorised APIs. The CMA Order revealed how regulation can motivate banks to modernise their services, but PSD2 gives consumers more choice and protection in opening up payments to third parties so they can access a variety of options when deciding how to pay and with whom to share their data.

Consequently, PSD2 will be a crucial mechanism for the UK financial services industry in order to remain competitive in Europe and across the world. The UK will therefore need to ensure it complies with EU regulations if it is to cement its position as a leader in open banking and continue to let the sector thrive. This means the UK is likely to align with EU regulation where it meets the needs of its own internal market, and is predicted to use regulation as a blueprint for its own but adjusted to meet its separate needs.

The road ahead for UK open banking  

Regardless of the nature of the UK’s relationship with the EU, many experts suggest the UK open banking standard is broader than the EU’s PSD2, and therefore has potential to be utilised as a blueprint for other countries worldwide. Although the route forward for open banking is not clear, what is evident is that open banking technology will carry on driving innovation and competition within the financial services industry, with the consumer able to access more convenience and choice.

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The UK will make routes to economic growth a priority, which means open banking must play a major part in this. After the UK agrees technical standards and governance, open banking can present a competitive advantage via open APIs and enable the fintech sector to benefit from sustained growth into 2021 and onwards.

Learnings for businesses 

The modern consumer wants efficiency, with services and products on demand. As such, open banking must be looked to when seeking to cater to the consumer. For example, cross-border payments, innovation around APIs, and automation, are all enabling companies to simplify complex payment processes, and make the experience quicker and easier, as well as allowing for easy scaling.

Payment solutions such as ECOMMPAY’s utilise open banking technology to enable consumers to initiate payments to merchants without the need for debit or credit card transactions, and are crucial in expediting efficient payments within and across borders, customised according to localised requirements.

Brexit has been on the horizon for several years now, allowing businesses time to establish contingency plans. As long as companies have invested wisely in their payment infrastructure, they will be in a good place to ensure sustainable growth for years to come.

The Financial Conduct Authority (FCA) has announced that it will extend payment holidays on credit cards, personal loans, pawnbroking and motor finance to support borrowers affected by the COVID-19 pandemic.

Consumer credit customers who have not yet had a payment deferral under the FCA’s July guidance may request one that will last for up to six months, the UK regulator said in its release. At the same time, borrowers who have already had one deferral will be allowed to apply for a second.

“We will work with trade bodies and lenders on how to implement these proposals as quickly as possible, and will make another announcement shortly,” the FCA said, adding that lenders would soon provide further information on what this will mean, and that consumer credit customers should not contact their lenders yet.

Mortgage payment holidays, which had been slated to end in the UK on 31 October, will also be extended under much the same conditions. Borrowers who have not yet had a payment deferral will be allowed to request one that will last for up to six months. Borrowers who already have a deferral can extend it to a maximum of six months.

The FCA warned: “It may also be in the interests of mortgage borrowers who expect to have long-term financial difficulties to agree other forms of tailored support with their lender.”

The regulator’s new guidance comes ahead of an England-wide lockdown that will come into effect on Thursday and last for a month, ending on 2 December, in an effort to curtail the second wave of COVID-19 infections. Non-essential retailers and hospitality services will be closed, and travel will be subjected to further restrictions.

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However, educational facilities such as schools and colleges will be kept open.

“We’re not going back to the full-scale lockdown of March and April. The measures that I’ve outlined are far less primitive and less restrictive,” said prime minister Boris Johnson on Saturday. “Though, I’m afraid, from Thursday, the basic message is the same: Stay at home, protect the NHS, and save lives.”

Goldman Sachs has been ordered to pay $2.9 billion in fees and penalties to settle charges over its involvement in the 1MDB scandal.

The Financial Conduct Authority (FCA) and the Bank of England’s Prudential Regulation Authority (PRA) announced late on Thursday that they would fine Goldman Sachs £97 million for its risk management failures connected to the scheme, forming part of a global settlement with regulators across the US, the UK, Hong Kong and Singapore.

The settlement includes the largest fine ever issued under corporate criminal bribery law.

The Department of Justice claimed that the bank ignored signs of fraud from some of its senior bankers in a scheme that saw the Malaysian economic development fund being defrauded out of around $2.7 billion.

Goldman Sachs had earned $600 million in fees for helping 1Malaysia Development Berhad raise over $6.5 billion to be invested in Malaysian energy development. Much of this money was looted, with over $2.7 billion diverted towards private purchases of luxury real estate, art, yachts, and in one instance to help finance the 2013 film “The Wolf of Wall Street”.

Authorities alleged that senior staff at Goldman Sachs were involved in the embezzlement, with at least one former banker involved in the case having pleaded guilty to charges. Goldman Sachs’ Malaysian branch agreed to a $3.9 billion settlement with Malaysian prosecutors in July, and on Thursday pleaded guilty to conspiring to violate US anti-bribery laws.

UK regulators focused on the bank’s alleged failure to adequately investigate signs of misconduct among its staff when they came to light. “When confronted with allegations of bribery and staff misconduct, the firm’s mishandling allowed severe misconduct to go unaddressed,” said Mark Steward, the FCA’s executive director of enforcement and market oversight, in a statement.

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“There is no amnesty for firms that tackle financial crime poorly, and the size of GSI’s fine reflects that.”

Goldman Sachs CEO David Solomon addressed mismanagement at the bank in a statement on Thursday. “We recognise that we did not adequately address red flags and scrutinize the representations of certain members of the deal team, most notably Tim Leissner, and the outside parties as effectively as we should have,” he said.

To pay the fines levelled against it, the bank is seeking to clawback $76 million in compensation paid to former staff connected with the 1MDB case. In addition, its board is cutting long-term share deals for former executives and cutting current executives’ pay by $31 million.

No matter which area of finance or business that you operate in, knowledge of the regulatory climate that you work in is essential. If you are working in the UK, which has one of the world's largest financial services industries and is home to many of the world's most important financial institutions, then you will need to become acquainted with the Financial Conduct Authority (FCA).

This is the government body that is responsible for the regulation of any and all financial services activities that take place in the UK or involve UK-based companies, individuals, and entities. They create and regularly update the framework and regulations governing areas such as trading, banking, currency, accounting, and dividends, to name just a few.

Falling afoul of the FCA can not only be ruinous for your business and career plans, but it can also land you in prison. Furthermore, you will not be able to legally conduct financial services activities in the United Kingdom without the approval of the FCA. With that in mind, let's summarise what the FCA actually does and how their remit affects you.

Preventing Misconduct

The most important role of the FCA is to prevent misconduct by financial services companies. They will investigate and enforce against classic types of misconduct such as insider trading and shadow-banking, but that's not all. They also work to prevent anti-competitive behaviour such as monopoly building, the mis-selling of financial products, and any attempts at market manipulation.

Regulating Trustworthy Companies

The FCA also helps financial services companies by providing them with a badge of legitimacy. For example, if you are looking for a qualified UK CFD broker service, you will find that the most well-regarded companies proudly advertise that they are regulated by the FCA. If a company is regulated by the FCA, then potential customers and clients can know that they are trustworthy and abide by rigorous ethical standards.

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Dispensing Advice

The FCA is a massive organisation with thousands of employees and an annual budget of £600 million. Much of these resources are directed towards giving essential legal and compliance advice to the 58,000 companies that the FCA is responsible for regulating. This service is extremely valuable for smaller companies that might not have the resources to fully navigate the regulatory environment on their own. In a business environment where only the top dogs can afford a legal team of their own, the advice provided by the FCA can be a life-saver.

Launching Legal Investigations

The FCA also has powerful enforcement mechanisms and can launch their investigations into companies and individuals, rather than simply referring potential incidents of misconduct to the police. As an arm of the UK government, the FCA reserves the right to investigate any person or entity that they have a reasonable suspicion of being guilty of financial crime. Investigations launched by the FCA can and do lead to the suspension of licenses, multi-million-pound fines, and the arrest and imprisonment of those found guilty of a crime by a British court. That's why compliance is crucial.

If you want to do business in the UK, joining the FCA and paying a membership fee is definitely a worthwhile pursuit. The cost of applying for FCA regulation currently stands at £1500, but this is a worthwhile investment.

Tiba Raja, Director at Market Financial Solutions, offers Finance Monthly her insight into the pandemic's impact on the lending market.

Economists and politicians are currently grappling with the question of how to bring about a post-pandemic economic recovery for the UK. So far, the government has introduced policies to stimulate investment, productivity and economic growth to this end. While these reforms have delivered measured success, more works need to be done. Businesses need to take a step back and understand how the pandemic has affected their respective industries.

This is particularly important when it comes to the lending market. Any attempt to support the economic recovery of the UK must include measures that support property investment. For this reason, I have listed below what I see as the three main ways COVID-19 has affected the lending market.

Speed is of the essence

One key trend is the speed in which borrowers are now needing their loans deployed to ensure they can complete on a property transaction. Recent government intervention, namely the stamp duty land tax (SDLT) holiday, has resulted in increasing competition and rising house prices. The first Nationwide house price index (HPI) following this policy’s introduction showed an annual 1.5% rise in general house prices, in contrast to the 0.1% decline the month prior.

When coupled with the fact that the SDLT holiday ends on 31 March, 2021, borrowers are keen to act quickly to reduce their chances of losing out on potential property opportunities. What’s more, there is likely to be a surge in activity in the final month that the SDLT holiday is in place. This means that lenders have to act quickly and ensure they have access to in-house credit so that loans can be deployed as soon as is viably possible.

When coupled with the fact that the SDLT holiday ends on 31 March, 2021, borrowers are keen to act quickly to reduce their chances of losing out on potential property opportunities.

Consolidation of the specialist finance market

In the months preceding COVID-19, the number of specialist financing firms entering the market was growing. As more and more brokers and borrowers became aware of the benefits bespoke loans could offer, demand for such services grew, and many new firms were keen to meet this demand.

However, as the reality of the pandemic hit, many of these firms found themselves unequipped with the experience needed to properly navigate these choppy waters. Established lenders, on the other hand, were able to rely on the quality of their services and the strength of their client-broker relations, leaving them as the only option for those seeking fast finance during the lockdown.

Specialist lenders that managed to continue through past lockdown are now experiencing a newfound appreciation of their services, a trend unlikely to end anytime soon. After all, borrowers and brokers benefit from specialist lenders due to their ability to deploy loans quickly and also tailor their products and services to the individual needs of each client.

Mortgage application difficulties

Finally, it is being reported that the those who are taking advantage of the mortgage payment holiday scheme are struggling to take on new debt. Given that the Financial Conduct Authority made it especially clear at the time that participation in this scheme wouldn’t affect one’s credit rating, the fact that some applicants have reported traditional lenders denying mortgage applications has left many prospective buyers worried and confused.

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Of course, it is understandable that in these uncertain times, lenders would view a failure to meet previous mortgage payments as a negative mark on an applicant’s application. However, given the completely unprecedented nature of the times we now live in, lenders should not be penalising those that were simply following advice and taking advantage of a government-backed scheme. What is needed is for lenders to properly assess each application on a case by case basis before making a final decision.

Ultimately, I am optimistic that the lending market will make the changes needed to properly equip itself for the current climate. The property market is experiencing a mini boom, which is positive news for all those involved in real estate, including lenders. I look forward to seeing a sector primed and ready to play a leading part in the UK’s economic recovery.

So, what does Wirecard’s collapse mean for the future of app-based business banking? Is it all bad news? First, let’s look at a bit of the background on app-based business banking to put the collapse of Wirecard into some kind of perspective.

The Background

During the past five years or so, a host of digital banks have entered the market to challenge the traditional high street players. Indeed, companies have never had so much choice when it comes to choosing a business bank account.

Many of these challenger banks do not have a standard banking licence but instead, operate under the terms of an e-money licence. E-money licences for Payment Services and Electronic Money companies are authorised and regulated by the Financial Conduct Authority (FCA) but represent a more straightforward – and significantly cheaper – form of licensing than a full banking licence.

E-money licences are more restricted than full banking licences – the chief limitation being that challenger banks with only an e-money licence may not hold customer deposits on their own balance sheets but must do so in a separate trust account, typically maintained by a fully authorised and licensed bank.

During the past five years or so, a host of digital banks have entered the market to challenge the traditional high street players.

The Wirecard Scandal

Wirecard was founded in 1999 with headquarters in Munich, Germany, and a subsidiary in the UK, running its business as a digital payment services provider. According to an item in the New York Times on 19 June 2020, it grew quickly, attracting hundreds of thousands of leading merchants expanding their contactless payments businesses – global companies such as Visa, Google Pay and Apple Pay, together with fintech start-ups such as Curve, Pockit, Revolut, and Soldo.

As a payment services provider, Wirecard operations are conducted in Europe under the terms of an e-money licence, rather than full banking licence, holding customer deposits in separate trust accounts.

The Wirecard scandal was sparked by news that the German parent – Wirecard AG – was unable to locate €1.9 billion of customer deposits held in those trust accounts. In response to the scandal, a plummeting share price, and no apparent means of tracing and recovering the missing billions, Wirecard AG filed for insolvency.

Reverberations

In the immediate aftermath of the scandal breaking, the FCA temporarily suspended the UK arm of the company’s operations, Wirecard Card Solutions – also known simply as WCS. Straight away, therefore, scores of those fintechs in this country which have relied on Wirecard’s payments services had to suspend the accounts of millions of individuals and small businesses in the UK.

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Looking to the longer-term – rather than the immediate aftermath – however, it must be remembered that the German Wirecard AG and the UK’s Wirecard Card Solutions are quite separate and independent companies. As the website Sifted noted in its story on 26 June, the UK arm of the group is sufficiently independent to have its own board, regulatory regime, and accounting standards. Neither is it financially dependent on its German-based namesake – but recorded a pre-tax profit of well over £2 million in 2018.

What Next?

While Wirecard accounts were only frozen for a few days and business deposits were safe, the impact on consumer confidence is likely to be longer-lasting. Deposits at institutions that hold a full banking licence are protected by the Financial Services Compensation Scheme (FSCS) up to an amount of £85,000, so expect to see businesses seek the safety of fully licenced banks that provide FSCS protection. In fact, Barclays has revealed that it's already seen an increase in deposits since news of the Wirecard scandal broke.

A number of app-based digital banks, such as Revolut and Cashplus, had already announced that they were applying for full banking licenses before Wirecard's collapse. As the sector matures, expect more to follow.

When searching for your dream home, you will often require a large amount of money to ensure a quick purchase.

If, for example, you intend to move to a new house and have found the home you want at a bargain price, but your current home is not selling as fast as you would have liked and you don't have the deposit for the new purchase until the existing home sells. This can put you in a sticky situation, and you are likely to lose the house to another buyer unless you can find the money quickly.

So, what can you do? If friends and family are not an option, the answer is to get a loan. You can try to go to the bank for the loan, but the process may take weeks due to the red tape. Another solution is getting a bridging loan.

Hanan Shapira, director of Property Finance Partners says "bridging loans in the last few years have begun to be more popular for homeowners looking to purchase a new residential property."

What are they and how do they work?

Bridging loans are specialised short term finance, typically acquired for between 3 months to 12 months. One of their advantages is the speed at which an application is processed. One can go from applying for a loan to money in the bank in as little as a week.

To get a bridging loan, you will have to have a property to be put up as security against the loan. You can borrow up to 80% loan to value (LTV) on the equity within your property.

Bridging loans are specialised short term finance, typically acquired for between 3 months to 12 months.

There are many uses of bridging finance such as developments, buying a property at an auction, buying uninhabitable properties or properties that require refurbishment for businesses and for buying residential homes.

How does it work for buying a home?

When you obtain the loan, you can use the money to put down a deposit for the new home, and then once your existing home is sold, you can then repay the loan. This is known as "bridging the gap." It is a common use of bridging loans and works well in the right scenarios.

Regulated vs unregulated bridging loans

If the security offered is your current residence, the loan is automatically a "regulated" bridging loan. That means the loan is regulated by the FCA (Financial Conduct Authority). Regulated loans carry an extra level of protection; consumers are protected under the MCOB(Mortgage Code of Business) rules.

If the bridging loan is obtained against commercial property, it is likely to be unregulated.

Where can I get a bridging loan?

Your first thought may be from the bank, but the majority of high street lenders don't offer bridging loans. The banks discontinued offering bridging loans after the crash in 2007-08, due to stricter regulations on unregulated home loans.

There are specialist lenders who provide bridging loans in the market, made up of hard money lenders and private funds. You will need to approach one of these lenders and package an application to them.

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Costs of bridging loans.

Something to take into consideration is the costs involved in bridging finance. Relevant fees are broken down below:

The bridging loan market is quite a competitive currently in the UK, which has lowered interest fees considerably. It is advisable to find a few lenders and to check what they have to offer.

One way of saving you time and money is to use a broker. A broker can package your application in the right way as well as find you the best deal in the market, as they will have access to many lenders.

Andrew Megson, Executive Chairman of My Pension Expert, discusses how one can best safeguard their pension in a time of crisis.

Pension panic: it is a common occurrence as people approach retirement. However, the onset of the coronavirus pandemic has created a new surge of it rippling throughout Britain.

As of mid-June, more than one in four UK workers had been furloughed, while over 2.6 million self-employed people had applied for financial support from the Government. Worse still, unemployment is set to reach 3.5 million by the end of 2020, according to British business executives.

These startling statistics illustrate just how many people’s livelihoods have been affected by the pandemic. The crisis has brought about financial hardship for millions, which in turn has resulted in a significant increase in consumer demand for financial advice, credit and support.

For many people, their pension pot has taken on added importance. Whether seeking access to these funds in the short-term or re-evaluating their long-term strategy, pensions have been put under the spotlight.

What is pension panic?

You might have seen or heard the term pension panic over recent weeks, but what does it mean?

Well, firstly, it is important to note that pension panic is not a new phenomenon brought about by COVID-19. It essentially refers to people who get closer to retirement age and realise – or feel – that they are not financially prepared. They worry if they have enough money to retire comfortably, if their pension pot is “working hard enough” for them, and how (and when) can they access their cash.

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Yet there can be no denying that these important questions have become more prominent as a result of the pandemic – sudden changes in people’s financial circumstances has understandably resulted in a palpable sense of pension panic among an increasing number of consumers. This in turn can lead to potentially rash, ill-advised decisions.

Watching out for pension scammers

Sadly, pension scammers have also been seeking to capitalise on this panic.

Most consumers think they are savvy enough to spot a scam; however, if they are swept up in a pension panic, it can be easy to overlook the red flags. Indeed, research carried out by Action Fraud revealed that there were more than 2,100 case of fraud in the first five months of 2020, with losses resulting from fraudulent activity amounting to £5.14 million.

Pension scammers will come in many shapes and sizes. Some claim to offer “free pension reviews”, always concluding that victims’ pension pots could offer higher returns if placed in unusual investments such as biofuels, forestry or storage units. Others promise consumers an instant injection of cash by falsely telling them they can access their funds before the age of 55 (early pension withdrawal could result in a tax bill of 55%). There remain many, too, who simply try their luck by illegally cold-calling potential victims in a bid to get their hands on people’s hard-earned savings.

Pension savers must remember that if they have any suspicions about the legitimacy of a website or business then they can search the company on the Financial Conduct Authority’s (FCA) Financial Services Register. If they are not on the register, then it is likely a scam.

Combatting pension panic

So, putting scammers to one side, how can one avoid being overcome by pension panic and making ill-fated financial decisions? In short, people must seek advice. Independent, considered, tailored advice from a trained individual or a reputable company.

The FCA strongly recommends seeking financial advice if an individual wants to cash-in a pension worth more than £30,000. But this does not mean those wanting to cash-in a smaller sum should overlook advice.

Why would people be reluctant to seek advice? Some consumers might think advice is unnecessary – that they can devise their own pension strategy without consulting anyone else. Others will simply have been enrolled on their employer’s pension scheme and given it little further thought. And a sizeable proportion of consumers rule out pension advice because they believe it would be too expensive.

The FCA strongly recommends seeking financial advice if an individual wants to cash-in a pension worth more than £30,000.

This is untrue. In fact, this is a dangerous mindset that must be avoided. Pension advice is necessary for all, and it does not come with a prohibitively large price tag. The question really is whether you can afford not to get pension advice.

Everyone needs pension advice

It may seem like an obvious point, but there is no one-size-fits-all model for retirement finance. While some consumers may know the basics, they might not understand how to maximise their pension pots to achieve a more comfortable retirement.

People may assume the most logical option for them is to leave their pension pot as long as possible and watch its value increase over the years. However, this might not be the best route for them and could cause them to lose out financially.

There is a plethora of options available. Annuities, for example, are a retirement income product that is bought with a pension pot; they could offer retirees peace of mind by providing fixed monthly income for the rest of their lives (or for a specified period agreed with the annuities lender). Alternatively, flexible drawdowns could provide over-55s with the freedom to choose an income to withdraw from their pension which suits their exact circumstances.

The right option always comes downs to individual circumstances. And this further underlines the benefit of financial advisors who review all the possible options and explain them to consumers in simple, jargon-free terms. Only then can a well-informed decision be made.

Knowledge is power, or so the old cliché goes. This rings true in the world of pensions – panic often stems from a lack of knowledge about your pension and the options available. Speaking with experts and gaining their advice gives consumers knowledge and, in turn, power. This will help fight off pension panic and ultimately ensure the best possible outcome for one’s retirement.

As the UK continues to ease lockdown restrictions, many industries are wondering what to expect in the post-COVID landscape. In China, early signs reference a u-shaped recovery, which predicts a lingering effect in the coming months before trade returns to normal. During this period, some individuals may remain in, or enter, temporary financial difficulty. This is why it is essential that communication between consumers and the financial services sector are effective. Demi Edmunds, Specialist at TextAnywhere, explores this idea further.

Both the government and the Financial Conduct Authority (FCA) have implemented a number of different schemes and measures to support those experiencing financial difficulty due to the pandemic. To highlight just a few - mortgage payment holidays, interest free overdrafts of up to £500 and a freeze on credit card and loan payments have all been introduced in a bid to help consumers financially struggling as a result of the pandemic. These measures have and will continue to be vital in supporting consumers and the economy through this uncertain time. But to be effective, individuals need to be fully informed of the options available to them and this is why a robust communication strategy is crucial. We’ve collated some considerations for post-COVID communications for the financial services sector.

Inform consumers of available schemes

First and foremost, firms need to make consumers aware of what support is available. Although this may seem obvious, as extensions are confirmed and the potential for individuals to be financially impacted continues, this should remain a priority for communication plans moving forward. Firms need to ensure that consumers are communicated to in a clear and transparent manner, with full details of all relevant schemes. This includes any benefits to continuing to make payments as normal such as, not taking a mortgage payment holiday. As FCA interim chief executive, Christopher Woolard said:  "where consumers can afford to make payments, it is in their best long-term interest to do so, but for those who need help, it will be there."

First and foremost, firms need to make consumers aware of what support is available.

Firms that remain proactive in communicating updates to consumers are ensuring that their customers are kept fully informed and may be able to reduce the number of incoming queries. This may be particularly valuable for those who are operating with reduced employee numbers.

Assure customers of all safety measures

The coronavirus has caused a lot of uncertainty and during lockdown, many organisations and firms closed physical locations. Selected banks and firms did remain open but with reduced hours and staff to maintain safety protocols. Consequently, even now it is vital to effectively communicate the measures taken to maintain a safe environment for customers and staff. For example, highlighting any additional hygiene procedures.

Moreover, to adhere to new safety guidelines many businesses will require customers to follow new protocols and these must be clearly communicated. Individuals need to be aware of what to expect when visiting their local branch, particularly if they have certain tasks they need to complete in-person. Customers need to feel as comfortable as possible during their visit and communicating details of the above, will go a long way to achieving that.

Consider how you are going to manage payment holidays coming to an end

Though extensions have been confirmed on many schemes, meaning support will be on hand until 31st October 2020, eventually these measures will need to come to an end. Organisations and firms need to start planning now, how are they going to handle these support measures coming to an end, being mindful of the fact that consumers may be more vulnerable than normal. Ensuring that next steps are communicated to individuals with plenty of notice and where possible, with breakdowns on payment figures and schedules, will go some way to helping individuals to financially prepare.

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Reflect on which communication channels you are utilising

When communicating with consumers, we would always recommend a multichannel approach. Different audiences within your customer base will likely have different preferences, it’s important to ensure individuals receive and read any important updates. As it was recently reported that 44% more emails are currently being sent than before the lockdown began, it’s worthwhile reviewing which communication channels you are using to ensure your strategy is as effective as possible.

In recent years, SMS has grown to become a very effective communication channel for customers to interact with businesses, with 74% of consumers reporting an improved impression of brands that communicate with them via text messages. What’s more, SMS benefits from an open rate of 95%, and 90% of messages are read within 3 minutes. This means the reach and speed far surpasses that of other communication channels, which can be particularly useful for time sensitive messages – for example, appointment reminders and account balance notifications.

Sign post suitable debt advice

Even before the pandemic, 9 out of 10 consumers surveyed reported that they suffer from stress and anxiety as a direct result of their debt issues. In a continually uncertain post-COVID landscape, individuals are likely to be feeling more vulnerable than usual. Though the regulator has still not confirmed whether additional resources, for example debt counselling, will be available to consumers over the coming months, the FCA have said -  “Firms should consider signposting customers towards sources of debt advice… debt advice may be helpful for customers coming to the end of payment holidays”. Thus it is important that this has been prioritised in your communication strategy.

Treating customers fairly will always remain a top priority for those in the financial services sector, and a large part of that is ensuring that you and your team sufficiently understand your customers’ circumstances. Arguably, this is now more important than ever before and with effective communication your company can keep the dialogue open.

On Monday, HM Treasury named Nikhil Rathi, former chief executive of the London Stock Exchange, as the new head of the FCA.

Rathi will take over from interim chief executive Christopher Woolard, who entered the position after the last permanent CEO, Andrew Bailey, who led the regulator for over four years before stepping down in March to become governor of the Bank of England.

Chancellor Rishi Sunak said in a statement on the appointment: “Nikhil is the outstanding candidate for the position of chief executive of the Financial Conduct Authority, and I am delighted that he has agreed to take up the role.

We have conducted a thorough, worldwide search for this crucial appointment and, through his wide-ranging experiences across financial services, I am confident that Nikhil will bring the ambitious vision and leadership this organisation demands.”

Rathi, who is ethnically British-Asian, will also be the first BAME head of the watchdog. He will be paid £455,000 a year with a 12% pension, though he will not be entitled to bonuses. His term will last for five years.

Commenting on his new appointment, Rathi said: “I am honoured to be appointed chief executive of the Financial Conduct Authority - I look forward to building on the strong legacy of Andrew Bailey and the exceptional leadership of Christopher Woolard and the FCA executive team during the crisis.

In the years ahead, we will create together an even more diverse organisation, supporting the recovery with a special focus on vulnerable consumers, embracing new technology, playing our part in tackling climate change, enforcing high standards and ensuring the UK is a thought leader in international regulatory discussions.”

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