Category: Cash Management

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Keeping your Payment options open, by Anderson Zaks

EPOS, MobilePOS, Pin on Glass, Pin on Mobile – there’s a lot to choose from for today’s merchant. Adina Ahmed, Chief Technology Officer at Anderson Zaks explains some of the latest options.

“In many emerging economies, people are by-passing traditional bank and card accounts altogether and adopting mobile payments”

Mobile phones have revolutionalised the way we live today. The way we communicate, watch TV and other online entertainment, and, the way we shop. The next obvious step, is the way that we manage our money and pay for goods and services. But these days, it isn’t just settling the bill in a restaurant, or buying something enticing in the sales, with contactless people are paying for their morning coffee, and with PSD2 and the associated deregulation, they will soon be able to make direct payments to each other. In many emerging economies, people are by-passing traditional bank and card accounts altogether and adopting mobile payments in much the same way that they have missed out broadband landlines – it’s a whole layer of infrastructure that they simply don’t need. 

The payment market in China is a prime example where most people don’t have a credit or debit card, or plastic of any kind. They have leapfrogged straight to mobile apps and user friendly ecosystems that seamlessly blend social media, ecommerce, payment and other finance functions. Consumers in China now rarely carry a wallet or cash, and even buskers display a QR code so that people can leave tips. 

Consumers in the UK, particularly younger people that are now coming into the workplace (millennials) expect to pay for everything contactless, many don’t carry cash. This presents a problem for the smaller retailer or merchant. How do they take payments without a full blown EPOS system? There are a whole range of options now opening up to merchants in the UK, and as evidenced in China, they don’t need a heavy IT implementation with all its associated costs, nor are they tied into long contracts with banks or card providers. 

PIN on Glass (POG) solutions are already available in the UK. As the name suggests, PIN on Glass has evolved from the traditional PIN pad so that merchants can now use a touchscreen device to capture the PIN. There are a range of versatile devices, referred to as SmartPOS, that have been designed for this very purpose. Typically run on Android, they have additional security features baked in, a scanner for bar codes and QR codes, and can print receipts. The beauty of these devices is that they can run with a user-friendly app, enabling smaller merchants to operate using the device as a standalone solution, without the need to have a full blown EPOS solution.

These purpose built POG terminals connect directly to a bank, to accept payment. They are sleek and modern, and the apps that run on them are intuitive and easy to use for both staff and the consumer. The devices run with all current card technologies including swipe and contactless, providing an all in one solution so that the merchant doesn’t need a computer in the shop or at whatever location they need to take payments. 

For independent software vendors (ISV), POG devices enable them to migrate their existing POS solutions to a smaller, portable device, opening up the market to much smaller merchants than they might have otherwise targeted. 

At Anderson Zaks we are already working with several ISVs to incorporate our payment platform into their PIN on Glass solution. 

Decade of Change” for cash Puts Modernisation at top of Agenda
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Decade of Change” for cash Puts Modernisation at top of Agenda

Graham Levinsohn, G4S Regional CEO, commented on a “fundamental transition in the use of cash across Europe” which requires “root and branch reform” of how cash is processed by countries in Europe. His comments follow the publication of a landmark report by the Group examining cash use across 28 European economies.

The report finds that the volume of cash transactions across Europe continues to increase, having previously doubled every ten years. Concurrently the proportion of all payments made by cash has fallen, with 40% of payments across the EU now made by card, electronic and digital payments.

In addition:
• The volume of cash in circulation has increased 11% per annum up to 2015 with cash now making up 60% of all payment transactions;
• ATM withdrawals, which are a good indicator of cash spending, increased 14.6% between 2009- 2014, representing an increase in value of €2.188 bn;
• In eight European countries, non-cash payments now make up a greater proportion of transactions than cash;
• The total volume of non-cash payments has increased to 102.3 billion transactions.

Commenting on the report, Graham Levinsohn called on the cash industry to work together to modernise cash:

“What we are experiencing is a fundamental transition in the use of cash across Europe. European consumers and businesses will continue to use cash as part of a multi-payment economy. But we need to modernise how they can use it.

“The cash supply chain is highly fragmented across Europe which creates chronic inefficiency. In the most extreme cases cash could be counted up to 17 times from till to bank. However even in less extreme examples, the same cash is handled and counted multiple times as it is transferred between parties in the cash cycle. This creates an unnecessary cost burden on businesses and banks alike.

“We must work together to drive root and branch reform by streamlining and simplifying the cash cycles of Europe, creating fewer transfers between actors and consequently less duplication of effort. Significant cost efficiencies can be driven through the cash cycle so that cash remains a cost-effective payment mechanism into the future.”

Leading a call to action Graham Levinsohn urged the industry to work with the banking sector, central banks and policy makers to create this modern lean cash cycle. Challenges outlined include:

• Shortening the cash cycle: reducing participants, processes, resources and funding from till to bank;
• Realising earlier value: ensuring cash value is credited earlier;
• Reducing the cost of cash: minimising handling and processing costs for cash;
• 21st century cash: better interface with electronic and digital payment methods.

Finance Minister Mervyn Storey Announces Regional Rate Freeze
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Finance Minister Mervyn Storey Announces Regional Rate Freeze

The Assembly approved the Regional Rates Order 2016, which fixes the amounts of the regional domestic and non-domestic poundage used for the next financial year. For 2016-17, both the domestic and non-domestic regional rate in Northern Ireland will be frozen in real terms by uplifting it only in line with inflation by 1.7%.

The Minister commented:

“By freezing the regional rate in real terms for the sixth year in a row, the Executive has aimed to strike a balance between the needs of ratepayers during challenging economic times, and ensuring that public finances are sufficient to cover the priorities we have set ourselves.

“The rating system provides significant revenue for Northern Ireland each year, supplementing expenditure on our hospitals, roads, schools and other essential public services. In the next financial year, the domestic and non-domestic regional rate will raise in the region of £678million, which will go towards these vital services.”

Mervyn Storey continued:

“The real terms freeze in the regional rate alongside other measures taken by the Executive to alleviate some of the burden of rates, represents the best that we can do to balance the interests of both ratepayers and the demands of public expenditure.

“Keeping a lid on rate increases is something we can be proud of. Indeed, household rate bills in Northern Ireland remain the lowest in the UK by some considerable margin and this is testament to the Executive delivering for the people of Northern Ireland.”

From 1 April 2016, the domestic regional rate poundages will be set at 0.4111 pence in the pound on rateable capital value and the non-domestic rate will be set at 32.40 pence in the pound on net annual value

The regional rate represents just over half of the typical bill; the other half being made up of district rates, which are set independently by the district councils.

Following agreement by the Assembly, the Minister also announced the extension to two popular rate relief schemes – exemption for ATMs in rural areas and the empty shops concession.

The ATM exemption scheme was introduced with the objective of encouraging and sustaining the provision of ATMs in rural area.

The Minister said:

“ATMs play an important role in the sustainability of rural economies. In fact, research has shown that for every £10 withdrawn from one of these cash machines, almost two thirds is likely to be spent locally.

“We can all appreciate the difficulties that would be encountered in these communities from any measure that could lead to a reduction in the number of ATMs. By extending the scheme we can help to ensure that ATMs are retained in rural areas, providing greater access and support to these communities.”

The empty shops rates concession provides a one-year subsidy for new ventures occupying property that has been vacant for a year or more.

Mervyn Storey remarked:

“This scheme makes a real difference to new business start-ups and has now helped over 530 new ventures get up and running across Northern Ireland. It has helped bring previously disused properties in our town centres and arterial routes back in to use, helping to regenerate our high streets.

“By extending the scheme, we can help ensure that more empty commercial properties are brought back into use, improving the economic performance of our towns and creating jobs in communities right across Northern Ireland.”

U.S. Bank Introduces ScoreBoard
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U.S. Bank Introduces ScoreBoard

ScoreBoard provides trending and reporting data so customers can monitor their own credit-card spending and compare their spending to general consumer trends.

ScoreBoard is a free application available to U.S. Bank’s cardholders who use credit, debit cards and credit lines through U.S. Bank. Available through U.S. Bank internet banking, ScoreBoard features easy-to-read charts and graphs that provide a monthly snapshot of credit-card purchases and payments, such as travel, home improvement and gas purchases. 

In addition, U.S. Bank cardholders may use ScoreBoard to download reports as HTML, Excel or PDF files for their specific financial needs.

“ScoreBoard is unique because it gives our customers the ability to monitor their own spending and gain insight into how their spending trends compare to previous years,” said Cliff Cook, U.S. Bank Payment Services, senior vice president. “For our customers who have U.S. Bank credit and debit cards, this has the potential to help consumers make the most of their financial decisions and plan for a more secure future.”

Bitcoin Becoming More Mainstream Says New Study
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Bitcoin Becoming More Mainstream Says New Study

Coupofy.com, a leading database of online coupon codes, has observed the trend first-hand while updating the information of their extensive list of internet merchants. From department store Neiman Marcus and clothing outlet Urban Outfitters, to the Expedia travel booking service and computer hardware giant Newegg, everybody is jumping on the Bitcoin bandwagon and there’s no sign of it slowing down.

According to data from 2014, around 100,000 merchants are now accepting Bitcoins alongside more traditional payment options such as credit cards or Paypal. Unsurprisingly it’s the tech savvy and consumerist United States leading the charge, with the UK, Canada, Germany, and The Netherlands not far behind. However as the technology becomes more accessible and the apps and software become easier to use, it has the potential to revolutionize global commerce, particularly in restrictive economies or countries where the financial system is failing at the central level. With no
single entity in control, we could be about to see the birth of a truly global medium of exchange. Emerging countries such as Brazil have seen a staggering 406% signup growth from Q4 2014 to Q1 2015.

Data obtained by Coupofy from BitPay reveals that the leading Bitcoin payment processor dealt with the equivalent value of $158,800,000 in Bitcoin transactions in 2014, an increase from 2013’s figure of $107,575,000. This represents 563,568 in total individual transactions, compared to 209,420 the prior year. Perhaps what’s most interesting about this
data is that not only are the number of transactions going up but the average order value is going down. This suggests that individuals are increasingly using Bitcoin to pay for everyday products, rather than buying the cryptocurrency in bulk as an investment. The number one purchased item from Overstock.com using Bitcoins is bed sheets!

Even more startling is that if these BitPay transactions had been processed via credit card (using a standard 3%
transaction fee) $7,991,250 would have vanished in to the coffers of today’s controlling financial institutions. Unless these dinosaurs can compete with Bitcoin’s level of efficiency, they might just go extinct.

Investing in Payment Systems Vital for Banks
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Investing in Payment Systems Vital for Banks

75% of respondents to the new Global Payments Insight Study believe consumers want a broader choice of payment tools, prompting firms to consider investment in this area as an influx of new competitors leads larger financial institutions to fear for their market positions.

The research, jointly conducted by ACI Worldwide, a global business providing electronic payments for financial institutions, retailers and processors, and the leading market research and advisory firm Ovum, showed that 55% of participants stated that an enhanced customer experience is their key expected return on investment on any increased investment in their payment system.

The research took the form of an online survey designed to provide an insight into the payment perceptions among numerous firms including: financial institutions, scheduled billing and payment taking organizations such as higher education, consumer finance and insurance, and merchant retailers.

This increased investment was owing to 76% of the financial institutions question in the study believed that their payment services now face growing competition from new, smaller and more nimble players in the industry.

Such investments are clearly justified as 60% of the retailers questioned said that their payments provider does not offer the variety of services required to satisfy their customer demand.

Security ranks as the biggest concern with 53% of respondents believing it is the biggest impediment to payments innovation, whilst 37% cite customer protection requirements, which is a related issue. Cost is also a big factor as a further 41% believe the high cost of maintaining their existing legacy systems is the main factor behind a lack of payments innovation.

£12.8 Billion a Week Set to Be Sent Through Digital Banking by 2020
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£12.8 Billion a Week Set to Be Sent Through Digital Banking by 2020

The number of mobile banking users is set to almost double from 17.8 million to 32.6 million by 2020, whilst the number of U.K. adults using online banking will increase from 27.7 million to over 35 million, according to a report commissioned by Fiserv, Inc, a leading global provider of financial services technology solutions. Future Trends in U.K. Banking, compiled by the Centre for Economics and Business Research, also forecasts that this combined growth will see more money being transferred through digital channels, rising to £3.4 billion a week via mobile banking apps and £9.4 billion a week via online banking, totalling £12.8 billion a week.

Mobile Banking

Currently, just over a third (34 percent) of U.K. adults are estimated to be banking on their mobile. With the increasingly widespread ownership of smartphones and a growing appetite amongst U.K. adults to access their finances on-the-go, this figure is expected to almost double to 60 percent by 2020. This projected increase of 14.8 million more mobile banking users over the next half-decade represents a significant opportunity for challenger banks to bring their innovative business models to the market and for existing banks to add digital services to cater to this future majority.

With the emergence of more high-tech features such as remote cheque capture and apps such as PayM, a wide range of mobile banking functions like checking your balance or conducting transfers are all expected to grow in popularity over the next five years. The total value of transactions being moved through mobile banking apps is expected to double by 2020 to £3.4 billion a week.

“The technological developments allowing for the recent surge in digital banking are also enabling banks and new entrants to reach potential customers more quickly and cost effectively than ever before,” said Travers Clarke-Walker, Chief Marketing Officer, International Group, Fiserv. “Banks must be prepared to meet the 24/7 needs of digital banking customers and may risk their reputation if they are not. Still, the advantages for banks to increase their digital capabilities are clear. There’s more and better engagement with customers, which in the long term can lead to greater customer loyalty and uptake of products. Most banks would recognise that engagement is born out of the quality of the customer experience. So if you give customers great experiences, particularly in their mobile banking services, their engagement tends to be higher.”

Online Banking

U.K. online banking use is projected to rise significantly by the end of the decade, from 53 percent of Brits in 2014 to 66 percent by 2020. While younger age groups, particularly those between the ages of 25 and 34, are currently more likely to bank online, all age groups have seen a rise in the prevalence of online banking over the past two years. These increases have been driven by a consumer need to access information faster and on-the-go. Looking ahead, this upward trend is forecast to continue as younger users who are already doing online banking enter a new age bracket by 2020. The number of U.K. adults using online banking is forecast to increase to over 35 million by 2020, up from 27.7 million in 2014.

This upward trend in online banking usage, combined with inflation and a stronger economy, suggests that by 2020, as much as £9.4 billion could be moved through online banking per week.

Clarke-Walker added, “Bank’s digital offerings have become increasingly important for consumers, and with footfall in branches falling by roughly 10 percent a year, this trend looks set to continue through 2020. There are a number of companies, especially in different sectors such as retail, which use more advanced digital services to differentiate themselves. The banking industry lags behind when it comes to using such customer-centric technology, but it doesn’t need to be this way. Banks have the ability to transform the future financial services experience with online and mobile offerings. Capabilities like mobile alerts, instant payments, and location-based services, coupled with data and analytics used with customers’ permission, offer a significant advantage if used effectively.”

'Advice Gap' Revealed as More Than Half of British Adults Fail to Seek Financial Help
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‘Advice Gap’ Revealed as More Than Half of British Adults Fail to Seek Financial Help

The research also reveals that those who do use advisers are often failing to seek advice about the most important issues. The 2015 Value of Advice research indicates a growing financial awareness among the younger generation, with many actively seeking advice, but also shows that a large proportion of adults are still unadvised for the most crucial stages of life.

MetLife and unbiased.co.uk asked professional financial advisers to rank the most important areas on which consumers should be seeking advice. Retirement decisions (93%) emerged as the number one priority, followed by other later life issues such as long term care and critical illness cover**. However, when Brits were asked what they had sought advice for, mortgages (14%) and life insurance (13%) came out on top, with only 12% having sought advice for their retirement planning*.

The largest mismatch in priorities is on inheritance tax (IHT). Only one in 20 Brits (5%) has sought advice on IHT, yet advisers say it is second only to retirement as the most crucial area in which to seek professional advice.
The Value of Advice research has revealed that the younger generation is becoming increasingly engaged with their financial future. Those in their 30s (52%) are the most likely to have sought advice, while more than one in four (27%) of people in their 20s who have not already sought advice plan to do so in the future. By contrast the over-60s, despite being the closest to retirement, are the least likely age group to have taken financial advice in their lifetimes, with only 36% having done so.

This is particularly significant given the view from advisers listed on unbiased.co.uk, who say the best time to seek retirement planning advice is actually 40 years before retirement, in terms of the potential increase in income.
Karen Barrett, Chief Executive of unbiased.co.uk, comments: “Here we are actually seeing two advice gaps – the number of people who never consult a financial adviser, but also the perception in people’s minds about which financial issues are the most important in the longer term.

Most who seek advice do so when buying a property, because they recognise that it’s a massive undertaking that affects them today, as well as for a long time to come. What consumers aren’t seeing so clearly are the even longer term issues, most notably retirement and inheritance, which could have an even greater impact. It’s great to see younger people becoming more engaged with their finances, but many could still benefit from seeking help with their finances. Some may still suffer from a narrow outlook. A fuller understanding of the value of advice could make a huge difference both in the future and right now.”

Simon Massey, Wealth Management Director at MetLife, comments: “It might sound strange to plan for retirement not long after you’ve started your career, but by doing so younger people can put themselves at an enormous advantage later on. So it’s great to see that younger people are becoming more engaged, although there’s clearly still a long way to go. The advice gap remains a concern for people of all ages, and I’d encourage everyone to review their financial goals and think seriously about how to achieve them.

Women still behind with financial planning

The research also revealed that women are less likely than men to seek professional financial advice across all areas of finances, with only 7% of women having already taken professional advice to help them plan for retirement, compared to 16% of men. Furthermore, 34% of women who have not already sought financial advice say they would never seek professional financial advice, and only 12% say they do plan to seek advice in the future.

Karen Barrett added: “There’s no reason why women should be less focused on their finances. Yes, there is still wage and employment inequality, but if anything this makes a stronger case for women to seek professional advice on their finances, and in particular their retirement planning. It’s not the case that only those with large pension pots can benefit from advice, and over a third of advisers on unbiased.co.uk say they advise on pension pots of less than £25,000. The other point to remember is that it’s never too late – at-retirement advice is consider by advisers to be the most crucial of all, so there’s no such thing as having missed the advice boat!”

US MasterCard and Visa Purchase Volume Up 9.4% in 2014
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US MasterCard and Visa Purchase Volume Up 9.4% in 2014

This spending included all consumer and commercial card products. Visa products grew 9.6%. MasterCard products grew 8.8%. These statistics are published in the current issue of The Nilson Report newsletter, a leading publication covering the card and mobile payment industries.

“For the first time in the history of the U.S. bank card industry, Visa credit card spending was twice that of MasterCard”

Credit card purchase volume for MasterCard and Visa combined was $1.820 trillion in 2014, an increase of 11.1%. “For the first time in the history of the U.S. bank card industry, Visa credit card spending was twice that of MasterCard,” said David Robertson, publisher of The Nilson Report.

Debit and prepaid card purchase volume for Visa and MasterCard combined was $1.809 trillion, an increase of 7.8%. Debit and prepaid card purchase volume generated 49.85% of Visa and MasterCard spending at merchants, down from 50.60% in 2013. The last time debit/prepaid accounted for less than half of U.S. MasterCard and Visa card spending was in 2009. Debit and prepaid were highest in 2011 at 52.52%.

Visa and MasterCard credit card outstandings combined grew by $28.57 billion in 2014. Visa outstandings grew $11.02 billion or 3.3%. MasterCard outstandings grew $17.55 billion or 7.3%. Visa card outstandings accounted for 57.34% of the combined Visa and MasterCard outstandings at the end of 2014, down from 58.27% in 2013.

MasterCard and Visa purchase transactions on credit cards grew by 1.98 billion or 10.4% in 2014, compared to an increase of 3.18 billion or 7.2% on MasterCard and Visa signature and PIN-based debit and prepaid cards. As a percentage of combined Visa and MasterCard purchase transactions at merchants on credit, debit, and prepaid cards, Visa’s share was 70.37%, up from 70.27%.

Visa and MasterCard credit, debit, and prepaid cards in circulation totaled 1.12 billion by the end of last year, up 10.0%. Of these cards, 57.79% were debit and prepaid, down from 57.82% in 2013. Debit and prepaid cards grew by 58.6 million, while credit cards grew by 44.3 million. MasterCard added 40.0 million cards and Visa added 61.9 million cards versus the prior year.

Money Transfer/Remittance Market Growth Driven by Globally Escalating Migrant Population
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Money Transfer/Remittance Market Growth Driven by Globally Escalating Migrant Population

MarketReportsOnline.com adds Global Remittance Report: 2014 Edition research report of 72 pages to the banking and financial services industry intelligence collection of its online market research library.

The growth of the remittance market is strongly driven by growing international migration as the people migrate chiefly with the focus of sending their earnings to their families back home. In 2013, international migrants comprised about 3.2% of the world population, compared to 2.9% in 1990. International migrants signify a huge customer base for the worldwide remittance industry. Over US$160 billion have reached rural families in developing countries. Driven to various socio-political and economic factors, the same is expected to steadily grow in the near future. This is further anticipated to prove instrumental in the growth of the global remittance market. Complete report is available at http://www.marketreportsonline.com/380104.html .

As per the report Global Remittance Report: 2014 Edition, apart from unceasing increasing migrant population, other factors which are providing the immense growth opportunities for global remittance market include rising employed and urban population and ameliorating global economic development. Some of the noteworthy developments of this industry include unstable remittance cost, the impact of remittance on health, education and poverty, wide portfolio of remittance services and correlation between remittance and foreign exchange rates. Also, the number of electronic payment service providers that offer over-the-counter-payments, mobile money payment and payment cards have increased rapidly.

Remittance is defined as transfer of money by a person who resides in a foreign country to his or her home country. Remittance industry contributes to economic growth and livelihoods of people across the world. In most of the developing countries, money sent by foreign migrants to their home countries constitutes the second largest financial inflow to the respective nations. Furthermore, in the money receiving countries, remittance industry promotes further economic dependence on the global economy instead of building sustainable local economies. Remittance channel is collectively comprised of a sender, a recipient, intermediaries in both countries and the payment interface used by the intermediaries. The remittance system encompasses the following components: Remittance Service Providers (RSP), Remittance Corridors, Remittance Network and Money Transfer System. Remittance services are divided primarily on the basis of ways a network of access points is created and linked. There are broadly four categories: unilateral services, franchised services, negotiated services and open services.

 

Royal London Asset Management Expands Marketing Team
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Royal London Asset Management Expands Marketing Team

Royal London Asset Management announces the appointments of Caroline Henty and Joanna Wells as Marketing Managers for its Asset Management business (RLAM).

Caroline Henty joined RLAM from Schroder Investment Management and will focus on the further development of RLAM’s institutional segments, following her most recent role as Marketing Specialist in the UK Institutional and Property areas.

Joanna Wells, due to start in October, will continue to build on the wholesale success RLAM has experienced this year. She brings a strong understanding of intermediary markets from her previous role as Marketing Manager at Jupiter.

Commenting on the appointments, Tracy Fennell, Head of Marketing for RLAM, said: “I am delighted that we have attracted talent such as Caroline and Joanna who are joining during such an exciting time for RLAM. RLAM’s recent performance has been particularly strong and the further expansion of the marketing team shows our ongoing commitment to supporting the growth of both our wholesale and institutional client bases.”

Scottish Referendum Vote Heats Up
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Scottish Referendum Vote Heats Up

On 18 September people residing in Scotland, or those who are registered to vote in the country but are living overseas, go to the polls to decide whether to leave the Rest of the UK (RUK). With the latest opinion polls split on the outcome of the vote, businesses, leaders and newspapers are all starting to ramp up their campaigning.

Heartbroken

Yesterday, the three leaders of the UK’s major parties and around 100 other Parliamentary staff descended on Scotland to make a passionate please for a ‘No’ vote. With the clear message that Scotland will be better if stays as part of the Union, Prime Minister David Cameron said that a ‘Yes’ vote would leave him:

“heartbroken”

The PM’s sentiments were echoed by Labour leader Ed Miliband who said that staying as part of the RUK was a case for the:

“head, heart and soul”.

Meanwhile, Liberal Democrats leader Nick Clegg was on a visit to his party’s traditional Scottish heartland of Selkirk. Heckled at length by many in the crowd, with shouts of ‘You’re a liar”, Mr Clegg said:

“This is a momentous event which will affect everybody north and south of the border forever.”

All three leaders and other key figures in the ‘Better Together’ campaign also insisted that party politics was not the issue, urging voters not to throw away centuries of successful union.

Leaders ‘cannot be trusted’

However, the Scottish First Minister, Alex Salmond, urged Scottish voters not to be swayed, saying that the leaders could not be trusted. Also taking to the campaign in response to the Westminster descent on Scotland, Mr Salmond said that they were more worried about losing their jobs.

Clearly wanting to politicise the vote despite the protestations of Cameron, Clegg, Miliband et al, Mr Salmond said:

“Today what we have got is an example of Team Scotland against Team Westminster.”

Split Decision

The Referendum atmosphere has been further ramped up by the showings in the polls.

Over the last few months, most polls have been showing a relatively comfortable victory of the ‘No’ campaign. However, at the weekend, two significant polls showed the ‘Yes’ campaign moving ahead.

Meanwhile, a new opinion poll commissioned by Scottish Newspaper The Daily Record, showed that:

  • 47.6% of voters back a ‘No’ vote, meaning that Scotland will stay as part of the union
  • 42.4% backed a ‘Yes’ vote for independence
  • 10% were still undecided

 

It is that key 10% of indecisive voters that the campaign will now be targeting, with less than seven dates before votes are cast.

Newspapers Take Their Stance

Thursday also saw a number of newspapers in Britain pin their colours to the mast.

The influential newspaper The Scotsman came down on the side of the ‘No’ vote. Under its headline, ‘Scotland’s Decision’ the newspaper declared:

“With exactly a week to go before our historic referendum

The Scotsman gives its verdict on the choice before us: we are better together.”

It then laid out its reasons in a 2,000-word editorial article.

The FT meanwhile took much the same stance. With its editorial claiming:

“the case for union is overwhelming”

Meanwhile rumours are rife that News Corp’s executive chairman Rupert Murdoch is getting ready to declare his backing for a ‘Yes’ vote. Tweeting at the weekend, The Australian media magnate said that it would be a ‘black eye’ for British politics.

Long-time friends, it is not the first time Mr Murdoch has shown his support for Mr Salmond however. Back in 2012 he also took to Twitter to claim his opinion that Alex Salmond was the best politician in UK.

Businesses Take Their Stance

British businesses too are starting to get louder with their opinions.

Already there have been open letters from businesses and business groups coming down on either side of the argument. Today though, the battleground was further widened.

The Royal Bank of Scotland this morning confirmed that, in the event of a Scottish vote for independence, it would be necessary to re-domicile the firm to London. However, in a letter to employees, the bank insisted that this would not mean a closure of Scottish operations or job losses.

Conversely, the manager of Scotland’s largest fund said that independence would be a good venture for Scotland. Martin Gilbert, the boss of Aberdeen Asset Management said:

“I think an independent Scotland would be a big success,

but it is a secret ballot and I will abide by that.”

Meanwhile, major retail chain the John Lewis Partnership said that it may be forced to increase profits in its John Lewis department stores and its Waitrose grocery outlets.

The Institute for Fiscal Studies also issued a warning to voters, claiming that the NHS in Scotland would get less cash overall should it go independent.

With differing opinions across the board, a growing recognition of the debate across the world, the next week will be one of major upheaval for UK politics.

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CBI to Launch Campaign to Restore Trust in UK Businesses

The Confederation of British Industry (CBI) is launching a new campaign in an attempt to restore confidence levels in British businesses.

It is the first time that the CBI, Britain’s largest lobbying group for business, has launched such a campaign, and comes as scandals from major firms and banks have generated much traction in the traditional press and online.

The Great Business Debate will see a number of events take place throughout the country to try and reverse the trend of unfavourable perceptions that such scandals have left many in Britain feeling.

The campaign’s main focus will be to showcase just how business is a force for good in the country. Surveys completed by the lobby group have revealed that only a fraction of people living in the UK believe this the case.

The debate will attempt to extol the virtue of firms in regards to contributing to the country with tax, creating employment and bettering people through training and skill development.

As well as taking the campaign on the road, a major battle field for the initiative will be online. The social sphere will certainly be well-exploited by the |CBI, as it tries to tap into the work already being done to create personal relationships by many leading firms.

Many of the biggest names in business will take part in the drive. Already announced by the CBI are Barclays boss Antony Jenkins, E.ON CEO Tony Cocker and Ruby McGregor-Smith, the head of group Mitie Group.

The CBI is also eager to not just broadcast how business is good for the country. It has stated that it will also listen to and take action on any concerns which are raised.

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Bank of Cyprus Confirms Placing of Retail Offer

The move is part of the national bank’s €1 billion share capital increase drive, while it is understood that the new ordinary shares will be offered as subscription to Existing Shareholders.

In an announcement released by the bank, the placing has been filed with the Department of the Registrar of Companies and Official Receiver. The filing follows the approval by the District Court of Nicosia for a reduction in the nominal ordinary share value.

The statement read:

“With the filing and registration of the court order with the Department of the Registrar of Companies and Official Receiver today, all conditions precedent to the closing of the Placing and Open Offer have been satisfied and, accordingly, the Bank is pleased to announce that the Closing Date for the Placing and the Open Offer will be 18 September 2014 and that it is arranging for the despatch of Placing Confirmations and Open Offer Confirmations,”

The bank also noted that, after closing, the retail offer to existing shareholders will be at a subscription price of €0.24 per unit.

Eurozone Growth Slams to a Halt
BankingCash Management

Eurozone Growth Slams to a Halt

 

Eurostat figures have shown a 0.0% growth, with both Germany and France, the biggest economies in the zone, performing far below expectations.

There was worse news for Italy, the third largest economy, as it fell back into recession.

Meanwhile, the annual inflation rate in Europe slumped to just 0.4% for July – the lowest the rate has been for five years.

Combined, the figures are pointing not at an economy in recovery but at an economy in decline.

There are now growing fears as to how far reaching the sanctions imposed on and by Russia will have for the second half of the year.

In particular, there are fears over the future for France and, though the German economy is facing a challenging environment too, it is thought to be much more robust than the French economy.

Many economists are likely to now ramp up the pressure on the European Central Bank to introduce a round of quantitative easing. Many other central banks, including The Bank of England, have taken such action.

There was better news from Portugal and Spain however, with both countries on the Iberian Peninsula seeing a 0.6% growth.

Report Reveals Independent Scots Want to Keep the Pound
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Report Reveals Independent Scots Want to Keep the Pound

According to the Scottish Social Attitudes survey, 68% of Scots would prefer to see an agreement in place with the rest of the UK to keep using sterling. Fourteen percent opted for using a new currency.

The ScotCen Social Research survey also found that the appetite for independence had increased compared to last year’s findings.

A co-director for the survey, Research Consultant John Curtice, said:

“Support for independence has only increased because those who are convinced it would be beneficial for Scotland are more willing to put their cross in the Yes box.”

Financially Worse Off

The report also found that there was more independence uncertainty amongst women living in Scotland.

According to the research, based on opinions captured between May and June of this year, 73% were unsure what it would bring. Sixty-three percent of men were likewise unsure.

The most devastating blow for the ‘Yes’ campaign however came over fears of an independent economy. Last year, 29% thought they would be worse of. This year suggests 39% of people have such worries.

A further 39% did not feel it would affect their personal wealth. Just 10% thought their personal finances would be ‘a little’ or ‘a lot’ better off.

In regards to the overall economy 44% thought an independent Scotland would be less wealthy, a ten point increase from last year.

Very Likely to Vote

The timing of the research means that opinions were taken ahead of the live television debate between Scotland’s First Minister Alex Salmond and the Better Together chief Alistair Darling.

However, they were taken after Chancellor George Osborne and other senior politicians ruled out a pound share agreement.

This year’s report also found that 74% of Scots are preparing to go to the polls on September 18. This is an increase of 13% from 2013’s results. The findings also reported:

• 25% would vote Yes (up from 20%
• 43% would vote No
• 29% were undecided
• 68% wanted a currency union
• 14% backed a new currency
• 6% wanted the euro as Scotland’s new currency

The report also suggested that just 8% of people would support continued use of the pound without a union with the rest of the UK. Four percent said they were undecided.

Bank of England Maintains Interest Rates at Record Low
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Bank of England Maintains Interest Rates at Record Low

The interest rates have been at the record level for five years, but, there was some expectation that the rates could start to rise after Bank Governor Mark Carney hinted at such in June.

Recent figures have suggested growth in many UK sectors, with the service sector having a continued and robust recovery. However, there are concerns that the rate of growth in manufacturing has slowed, with data showing a small increase of 0.3% in June, smaller than expected, after it fell by 1.3% May.

The decision was taken by the Bank of England’s Monetary Policy Committee (MPC). The minutes of the meeting outlining their decision will not be presented publically until August 20.

The minutes of the July meeting of the MPC showed that all nine members voted to maintain the status quo. There was concern regards the economic situation overseas and the level of exports accordingly, with the committee also saying:

“(while) employment had continued to increase robustly… wage growth had been surprisingly weak”.

If the minutes of the latest meeting reveal that some members voted for a rise, it will be the first split decision in over three years.

Though Mr Carney had hinted at a rise, most economists had been forecasting that an interest rate increase would not be seen before the first quarter of next year.

The Bank also revealed that its quantitative easing programme would also remain unchanged at £375bn.

Consumer Credit Firms Must Raise Advertising Standards
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Consumer Credit Firms Must Raise Advertising Standards, Says FCA

Credit firms need to do more to ensure their adverts and promotions do not mislead potential customers. The findings come as Financial Conduct Authority (FCA) statistics show that one in five adverts from consumer credit firms, for products including payday loans, fell short of the FCA’s financial promotion expectations – although most firms were quick to make changes once the shortcomings were pointed out.

The rules state that any advert must be clear, fair and not misleading for consumers. The FCA examined over 500 advertisements for a range of consumer credit products after assuming responsibility for the sector on 1st April 2014 and found a number of examples where key information which should have been included in the advertisement was either missing or difficult to find.

Clive Adamson, director of supervision at the FCA, said: “It is particularly important in this sector that advertisements for financial products enable customers to make informed decisions. We think that more can be done to ensure that advertisements are fair, clear and not misleading.

“Firms have responded well when challenged about ads which have not met the standards. We will continue to work with firms and monitor their performance in this area to ensure the high standards we are looking for are met.”
The FCA found examples where consumers were encouraged to hit the “apply” button for a product before having a chance to access important information, a tactic which is against its rules.

Main Catalyst Behind People Switching Banks
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Main Catalyst Behind People Switching Banks

Penney Frohling, Partner in Financial Services at EY, commenting on the Payments Council’s six-month results for the new Current Account Switch Service, says: “EY’s Global Consumer Banking Survey found fees to be the main catalyst behind people switching banks in the UK, followed distantly by the experience they had received. With customers willing to shop around to find the lowest fees and to avoid high charges and interest on their overdraft, banks need to compete on the services they are offering, and make sure that they are not being under-cut by competitors who are providing interest-free overdrafts and better rewards or loyalty packages.

“But banks can’t be complacent about customer service. The survey found a 50% increase in disgruntled customers who intend to close an account in the next 12 months. People who are left unsatisfied with how their banking problems have been dealt with are a serious retention risk.”

Omar Ali, UK banking and capital markets leader, commenting specifically on competition in UK banking, adds: “The number of people switching banks has doubled since the new legislation was introduced. More people than ever are aware they have the option to switch if they are unsatisfied with their current provider, and as awareness grows, it can only be expected that this trend will continue. However, it is not having the material impact on the market share of the top four high street banks that Government hoped for. Rather, the majority of switches are from one of the major incumbents to another.

“In order to compete effectively with existing providers, new entrant banks will either need to innovate; taking a specific area of the market and creating substantial change to the traditional model, or they will need a compelling proposition on fees and better service quality than existing providers.

“The fact that core banking services are ultimately still seen as free in the UK is also a barrier to open and fair competition between the large established players and new entrants. In most consumer markets price is one of the key drivers of effective competition. How can you compete on price when the customer thinks the service they are getting is free? Greater transparency on pricing and charges for core banking services in the UK would help to open the market up and in many cases make banking fairer for the consumer.”

Preston Joins Move Your Money
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Preston Joins Move Your Money

 

The people of Preston in Lancashire are being urged by their council to join Move Your Money in a bid to create a better financial system.

Preston City Council believes that since the financial crisis people are increasingly concerned about where their money goes and how it’s used, and it wants to help. Whilst a number of councils across the UK have committed to move their money, Preston is the first council in the UK to actively encourage individuals and businesses across the city to switch banking providers.

Preston City Councillor Martyn Rawlinson Cabinet Member for Resources said: “Now, more than ever people want to know what’s happening to their money. Is it safe? Is it invested properly and in investments that not only guarantee a financial return but are ethically sound too? Is the money being used in a way that it doesn’t harm the environment or even contribute to making people ill? By taking a greater interest in what happens to our money we can make a difference, not only to our community but across the world as a whole.”

He added: “As a Council we are investing £100,000 in establishing the Guild Money Credit Union that will help people in Preston with both savings and loans. This is a great way for the Council to use its money as a positive resource to help local people. However, we recognise that the Council could do more. That’s why we are supporting this national Move Your Money campaign and also looking at our own investments. We want to see if as a Council, we can invest in a more ethical way.”

“Obviously we have to invest wisely and protect taxpayer’s money but we need to get balance right. We have to ensure we invest in the right institutions and in the right financial products that help people, not damage people or communities wherever in the world they may be.”

“It’s much easier now for people to swap banks, in fact 2.4 million people did just that last year alone. The Move Your Money campaign makes it even easier by listing the best banks for you given your financial circumstances. And, it can all be done from the comfort of your own home from the Move Your Money website. Please have a look, sign up to the campaign and let your money work for you in the way that you want it to.”

Charlotte Webster, Campaign Director, Move Your Money added: “We’re thrilled that Preston City Council is on board with the Move Your Money Campaign. It’s vital people know where their money is and what it’s being used for. As we’ve seen over the last few years many banks and financial institutions have invested our money in a way that’s more in their interests than ours. Fundamentally, this led to greater risk taking, followed by a financial crisis that has affected each and every one of us.”

She continued: “Money can be used in so many positive ways to help local people and communities across the world. The more that people take an interest the more that banks will listen and invest in a way that benefits everyone, not just the few. Our Scorecard ranks over 70 British banking options across a number of criteria including ethics and customer service, so you can see just which bank is right for you.”

Other councils across the UK that have committed to moving their money to better banks, or setting up their own, include the Greater London Authority; Lambeth; Liverpool and Brighton.

Pay-Day Loans Masking  UK’s Credit Crisis
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Pay-Day Loans Masking UK’s Credit Crisis

Pay-day loan and ‘debt management’ industries could be masking the full extent of the personal debt crisis in the UK, according to top 25 accountancy firm, Wilkins Kennedy LLP.

The latest figures published today show that there were 101,049 individual insolvencies in England and Wales last year, down by 7% on 2012. This included 24,536 bankruptcies (down 22.8% on 2012), 27,546 Debt Relief Orders (DROs) (down 11.7% on 2012) and 48,967 Individual Voluntary Arrangements (IVAs) (up 4.9% on 2012).

There were 109,477 individual insolvencies in England and Wales in 2012. This included 31,756 bankruptcies, 46,694 Individual Voluntary Arrangements (IVAs), and 31,027 Debt Relief Orders (DROs).

However, Wilkins Kennedy note that the growth of the payday loans and debt management industry means that many individuals that are effectively bankrupt are not caught by these figures.

Louise Brittain, Insolvency Partner at Wilkins Kennedy says: “we know that massive and highly targeted marketing campaigns are attracting more and more individuals into using Debt Management Plans and Pay Day loans as ways to manage their debts.”

“In many cases the arrangements are rolled over from one month to the next, and because of the punitive interest or high, front-loaded fees, very little capital is repaid and the individual’s financial difficulties get worse, not better.”

“However, because these companies are not required to register their schemes, it is difficult to know exactly how big the scale of the problem really is. I am concerned that many people using Debt Management Plans and Pay Day loans will at best eventually end up formally insolvent or at worst taking desperate measures to repay their creditors.”

Wilkins Kennedy adds that this year’s bankruptcy figures are likely to be swollen by recent difficulties in the legal sector. The profession has been suffered as a result of legal aid cuts, and over 130 firms were unable to secure Professional Indemnity Insurance, without which they are unable to practice and must be dissolved.

Louise Brittain comments: “This has been a bruising year for the legal profession – with even major names like Cobbetts and Manches experiencing financial difficulty, and some smaller firms faring far worse. Problems with obtaining Professional Indemnity Insurance also put the nail in the coffin of over a hundred firms that were already struggling financially, forcing the individual partners to liquidate.”

Nick Hamilton to Join Oakley
BankingCash Management

Nick Hamilton to Join Oakley

Oakley Capital Management Limited appointed Nick Hamilton, Head of Institutional Business at Colonial First State in Sydney to work in its retail asset management business.

Prior to joining Colonial First State, Nick spent nine years as Head of Global Equity Products at Invesco Perpetual.

The appointment follows the news that Craig Newman, former Head of Sales at Invesco Perpetual has joined Oakley Capital Management as Head of Retail Asset Management.

Craig Newman said: “Nick brings a wealth of experience in growing assets, building businesses and leading teams. Nick shares our vision of building a market leading asset management business of the future.”

Oakley Capital Management is providing the infrastructure which will allow the team to manage retail and institutional clients’ money from the beginning of May 2014. This transitional arrangement will provide an environment in which the team can have the autonomy and flexibility to best serve the interests of clients’ money immediately after Neil Woodford’s employment with Invesco terminates on 29th April 2014.

Exact details about the firm and its offerings will follow in due course, but Neil Woodford’s unconstrained, fundamental and disciplined approach to investing will remain the same.