W&F Q1 2023

www.wealthandfinance-news.com Q1 2023&wealth finance i n t e r n a t i o n a l RDI Solutions Best Tax Incentive & Innovation Management Advisers - UK

Editor’s Comment Welcome to the Q1 edition of Wealth & Finance International Magazine. As always, with every issue we endeavour to provide fund managers, alongside institutional and private investors with the very latest industry news in the traditional and alternative investment spheres. Two months into 2023 and finance companies have welcomed the new year with open arms as they continue to embrace new technologies to transform their services and satisfy the ever-changing demands of customers. The businesses that are succeeding in this evolving market are the ones who make the most out of tech, who create new business models, and who put their customers at the centre of everything they do. It’s all about knowing what’s coming and being able to adapt to a changing world. Among these pages, we take a look at some of the exciting ways in which this is being done, whether it’s online tax training and automation, innovative tax incentive management, investment in early stage companies, or being able to make mobile payments with the palm of your hand! These organisations are experts in meeting customers at their point of need, and it is all enhanced by a digital-first focus. We hope you find this issue to be insightful and inspiring, and wish you a brilliant quarter ahead! We look forward to welcoming you back again soon. Rebecca Scotland, Editor AI Global Media, Ltd. (AI) takes reasonable measures to ensure the quality of the information on this web site. However, AI will not assume any legal liability or responsibility for the accuracy, correctness or completeness of any information that is available through this web site. If errors are brought to our attention, we will try to correct them. The information available through the website and our partner publications is for your general information and use and is not intended to address any particular finance or investment requirements. In particular, the information does not constitute any form of advice or recommendation by us or any of our partner publications and is not intended to be relied upon by users in making or refraining from making any investment or financial decisions. Appropriate independent advice should be obtained before making any such decision. Any arrangement made between you and any third party named in the site is at your sole risk and responsibility.

4. News: - New Chief Financial Officer Appointed at Deko to Further Strengthen Executive Leadership Team - The Next Step in Mobile Payments is Here - and it Involves Paying With Your Palm! 6. RDI Solutions: Best Tax Incentive & Innovation Management Advisers - UK 8. Carpus Tax Services Limited: Best Online Tax Training & Automation Company - Mauritius 9. Brick Capital Ventures: International Seed Investor of the Year 2022 10. Volatile Fx Market Hits UK Charity Investment In Sub-Saharan Africa 11. Revealed: These are the Most in Demand Finance Jobs in the World Right Now According to New Research 12. BNPL 14. Iwoca Sme Expert Index: High Street Banks Cut Lending to Smes as Demand for Finance Grows 16. Overwhelm Impacts 90% of Payment Compliance Teams as They Combat Record Levels Of Fraud Contents

New Chief Financial Officer Appointed at Deko to Further Strengthen Executive Leadership Team Joseph Tucker joins from NewDay with a deep market understanding of both the consumer credit sector and Deko specifically. Deko, the multi-lender Buy Now Pay Later (BNPL) platform, has appointed Joseph Tucker to the position of Chief Financial Officer. He brings a wealth of experience having held senior positions at a number of high-profile financial services organisations. Prior to joining Deko, he held several roles at NewDay, one of the UK’s biggest credit card issuers, specialising in investor relations, financial reporting, analytics and corporate strategy. He was also central to the acquisition of Deko by NewDay in early 2020, an experience that has given him invaluable insight and knowledge of the business. Tucker completed an MSc in Pure Mathematics from the University of Manchester and began his career at KPMG, where he qualified as a Chartered Accountant before moving on to Barclays, specialising in treasury, FP&A, and regulatory stress testing. Tucker stated: “I am very excited to join Deko at this point in its journey. We have a unique value proposition and a strong foundation from which to grow and execute our vision of helping consumers access what they want, when they want it, with a finance solution suited to their personal needs. I firmly believe the business not only has a superior product, but that the technology behind it is agile and flexible, allowing Deko to make major inroads into the BNPL market. In so doing we have the power to transform consumer expectations of how they shop for and finance goods and services, as well as being a key strategic partner for merchants facing an increasingly volatile economy. “Central to my vision of the role moving forward will be to ensure that the finance and central functions are at the heart of decision-making and operational efficiency. The beauty of Deko is that the agility of the business allows us to identify and proactively react to changes in consumer behaviours and requirements. I believe that we provide an extraordinary customer experience and that our unparalleled proposition genuinely addresses current market dynamics.” Mike Dawson, CEO, Deko, commented: “We are delighted to welcome Joe to the Deko team. Joe brings a wealth of company knowledge, business experience, and a successful career with multiple companies, not least his deep understanding of not just the consumer credit sector, but Deko itself. Joe will play a key role as Deko transitions to its next stage of corporate development. His diverse background in finance, consumer credit, and technology, will undoubtedly play a key factor in our future growth and add invaluable strength to the Company’s corporate governance initiatives.” NEWS

The Next Step in Mobile Payments is Here - and it Involves Paying With Your Palm! Ingenico, the global leader in payments acceptance solutions, and Fujitsu Frontech North America (FFNA) have unveiled the future of payment, introducing the world’s most secure, accurate and seamless biometric payment solution based on palm vein identification. Ingenico has created this short video to explain this revolutionary new offering, highlighting the many benefits it can bring to merchants while it transforms the in-store customer experience. Palm vein identification is one of the most accurate biometric identification technologies in the world as every person has a unique pattern of veins in the palm of their hand. The solution is less intrusive and more secure than alternatives such as fingerprints and facial recognition, while also being easier for merchants to implement and operate. This innovation enables contactless payments and grants merchants the ability to speed up check-out, minimize the risks of fraud, and streamline the customer experience. Designed on Ingenico’s AXIUM range, its Android payment terminals, the solution allows consumers to identify themselves and authenticate their payments simply by moving the palm of a hand over a near-infra-red (NIR) sensor. There is no need to take out a credit card or enter a PIN, making your hand the only payment method necessary. The convenient, contactless, and hygienic technology has the potential to accelerate the share of cashless and digital transactions in markets worldwide. It can also offer additional security levels for organisations requesting strong identification solutions. NEWS

Nov22526 Q1 Wealth & Finance Best Tax Incentive & Innovation Management Advisers - UK Research and Development (R&D) Tax Credits are a UK Government incentive designed to boost innovation across various industries. RDI Solutions’ purpose is to determine if a client has an eligible project through an initial consultation, and where applicable, work with them to piece together the relevant information and data in order to prepare a report to be submitted to HMRC for review. This report must meet strict guidelines, and RDI’s team of industry experts and accountants ensure each and every claim meets the published relevant criterion. RDI’s professionals came together to form the company in 2019, drawing upon relevant industry and innovation experiences which go back as far as the year 2000. Kevin Guest tells us, “As a relatively young business, which has grown rapidly, we are lucky to have been able to take the time to assess our “raison d’etre” as well as our culture.” As such, the company has updated its key statements as part of its strategy refresh: Its vision statement is to build the best compliant solution to support the claiming of tax relief so that SMEs and corporates can focus on what they do best: selling their services. Then, the mission statement is to remove the hassle, complications, and uncertainty of managing business tax relief claims. Kevin says, “Our culture has changed from being a friendly “familytype” team, to a professional community of practitioners working together under a common strategy. Indeed, our new strategy encompasses how we will work symbiotically with our people, our clients, our service-providers, and the relevant authorities.” So, how does the R&D Tax Credit application process actually work? To begin, RDI’s specialists will undertake an initial free of charge consultation with the client, which is a rather comprehensive assessment that enables the team to identify eligible projects which often, at first glance, may have not been considered. They will look to understand the client’s business, thus maximising the claim potential by utilising industry sector experts to verify eligible projects. Then, a report will be built by RDI’s expert technical writers which meets the BEIS and CIRD guidelines. In doing this, various internal compliance checks are employed in order to ensure all claims are stress tested against these guidelines. Lastly, the client will be able to approve the report prior to it being submitted to HMRC. During this tried and tested process, the RDI team ensures the client understands the legislation with regard to tax incentives, as Kevin explains, “Our no nonsense, simple consultations guide the client through what is a complex process. Our years of experience, as well as industry awareness, allows us to painlessly extract key information without it feeling overwhelming.” He elaborates, “It is important to do the job right the first time, so our methods are detailed, rightly onerous on us, but further, our internal audit gateways are key to ensuring we continue to build our reputation as one of the best in this industry.” And by ensuring work with clients is done to a high standard, a lot of new business is acquired through word of mouth, recommendations, and a growing network of happy clients, as Kevin says, “Client retention is a key agenda item for RDI. We place a lot of importance on client satisfaction which can be seen through our endless list of testimonials.” So, RDI’s role is simple: maintain the standard, ensure client satisfaction is high. Indeed, one delighted client’s five-star Trustpilot review rates RDI as “one of few agents in the field who deliver everything as promised”. They continue, “Professionalism and service at the top end of the scale. Faultless delivery with exceptional results. Looking forward to working with this team again in future. A huge thank you to my dedicated handler within the team, Mr Naim Mahmud. There’s not a single hurdle that he could not overcome; he is confident in every manner. Highly recommended!” Nov22526 One of the UK’s leading tax incentive and innovation management advisers, RDI Solutions’ (RDI) industry specialists manage over £120 million of tax incentives annually for a broad range of UK-based clients, including some of the world’s biggest brands. In light of the company and its team of more than 100 experts achieving extraordinary success within the Global Tax Awards 2022, we got in touch with Interim Commercial Director, Kevin Guest to learn more. “Its vision statement is to build the best compliant solution to support the claiming of tax relief so that SMEs and corporates can focus on what they do best: selling their services. Then, the mission statement is to remove the hassle, complications, and uncertainty of managing business tax relief claims.

7. Another glowing review comments, “Great service. I was so happy with how fast they got the claim sorted, and it really saved me during this pandemic. Never knew what I could achieve with my R&D. Went to a few others before being introduced to RDI; none of the others could get it done as good as RDI has done. Great job. Thanks guys.” Also pleased with their experience, another client shares, “My application was handled very quickly and efficiently. Great customer service and always updated me on a timely manner as guaranteed. I was fully informed at every step of the process and they successfully achieved the goal. Couldn’t recommend these guys more highly enough!” Clearly, RDI is highly successful, although that’s not to say that it doesn’t have its challenges. Operating in this constantly evolving market, it has to work hard to stay ahead of the curve. Kevin notes that the market is evolving in several ways, with more competitors appearing all the time, competitors coming together, competitors folding, as well as changes in government policy regarding R&D incentives. Not only all this, but the industry is trying to digitise – However, there is no solution presently available to interpret the detail that sits behind or within submitted reporting accounts, with Kevin saying, “This needs the human touch to tease out the relevant information and then needs to be verified and assessed for eligibility in accordance with the strict guidelines.” Ultimately, RDI’s focus indeed remains on serving clients to the highest standard. Kevin states, “We continue to invest in our internal capabilities in the back office, increasing the number of technical writers, and personnel operations, audit, and finance. We have also invested in new internal systems that allow us to manage the client in a more structured end-to-end journey.” This includes the areas of an improved website and digital leads creation; an improved internal end-to-end data capture and capabilities; improved payment processing solutions; and data and cybersecurity upgrades in line with ISME standards. In addition, the company is to continuing to practice and strive towards ISO27001 standards. This will all support the bright future that RDI Solutions inevitably has ahead of it, with Q1 already being busy due to end of year submissions and a new tax year. And we are truly rooting for the firm as it continues to deliver a service that is second to none and makes the business dreams of its clients a reality. Company: RDI Solutions Contact: Kevin Guest Email: [email protected] Website: www.rdisolutions.co.uk

8. Best Online Tax Training & Automation Company - Mauritius Carpus Tax has made a name for itself as a leading independent tax advisory and business structuring firm. The impressive team of tax consultants and professionals have years of expertise ensuring that clients from every background have been able to make the most of tax related opportunities using highly educated insights in their specialist areas. When we caught up with Deven, we were keen to understand a little better precisely what he and his colleagues aim to do for clients. “We have a comprehensive understanding of how the intricacies of taxation work in Africa, the unique tax issues and challenges these markets are facing, and which solutions are best suited to solve them,” Deven explains. “Some of the specialized areas of Africa tax services we offer include; tax advisory in Africa tax structuring, tax automation, transfer pricing, tax reform and international tax training courses for your entire team.” Since opening their doors, this incredible level of support has seen Carpus Tax gaining more and more popularity as the tax advisor of choice for MNCs across Africa. “We are not part of a network like most other tax advisory companies,” Deven tells us. “We have tax specialists all over Africa that we work with, but ultimately, the buck stops with us.” Such a close connection between company and client means that the team are happy to offer a bespoke tax advisory service, one which considers every aspect of what a business requires to thrive. The team, therefore, acts as an integral part of the success of their business. “We gain an in-depth knowledge of their business and processes in order to provide the best possible solutions,” Deven says with a smile. “A high standard of service delivery and timeliness is of the utmost importance to us. We pride ourselves on building personalised customer relationships with our clients and their staff.” Such service has now reached across the African continent, with clients reaching from Ethiopia to Egypt. To keep on top of the rapidly changing changes on the African continent requires an in-house tax research team. The team are then able to provide continuous updates to clients on how these changes might affect their respective businesses. “We keep abreast of what our competitors are doing, to ensure that we are always on track of exactly what is transpiring in the industry,” Deven tells us. When the team at Carpus Tax first started trading, they could never have expected to develop the first ever Global Co-Ordination and Service Management Application, a service offered through the team’s dedicated Tax App. “The features of the app empower you to eliminate hidden tax costs through the integration of taxation across the organisation,” Deven explains. For any business, it’s an invaluable tool to have to hand. Carpus Tax are extremely proud to announce our recent accreditation as a Chartered Tax Advisory Firm accredited by the Chartered Institute of Taxation, UK (“CIOT”). It is internationally respected as a mark of technical excellence and professional integrity. Becoming a Chartered Tax Adviser requires an in-depth knowledge of tax legislation and its application to real-life scenarios. Carpus Tax is one of only two CIOT-accredited companies in Mauritius. Carpus Tax is set apart as the ONLY CIOTaccredited company with a focus on Africa Taxation. Looking ahead, the team are also in the process of opening Carpus Tax offices in Africa,” Deven says. With such exciting growth ahead for the team, we cannot wait to see what fresh frontiers will remain after this. Company: Carpus Tax Services Limited Name: Lizelle Kemp Designation: Africa Business Development Manager Email: [email protected] Web Address: www.carpustax.com Dec22033 When it comes to designing your greater tax ecosystem, it’s worth turning to experts in the field. With a comprehensive understanding the intricacies of Africa’s tax system, and the solutions that allow companies to make the most of it, the team at Carpus Tax have achieved enormous success. In the Global Tax Awards 2022, they were named Best Online Tax Training & Automation Company – Mauritius. We caught up with Deven Marianen, CEO of Carpus Tax to uncover some of the reasons why. 8.

9. Oct22055 International Seed Investor of the Year 2022 Offering seed investment requires a keen eye for potential. The team at Brick Capital Ventures have chosen a model where “every investment counts”, with an accordingly smaller portfolio and more proactive management approach. The team have achieved tremendous success with this mindset, earning recognition in the Global Tax Awards 2022. We take a closer look to see how Brick Capital Ventures will progress in the weeks and months to come. Having just finished off its third year of investing in early stage companies on both sides of the Atlantic Ocean, Brick Capital Ventures has found itself in an incredibly strong position. With sixteen portfolio investments during this period, including healthy progress throughout the Covid period, the team have found progress has far from slowed down. In fact, the team receive in excess of six proposals a day, averaging 200 a month. Not just going strong, it seems like this team is only just getting started! The business is owned by two high net worth families, and aims to service additionally, high net worth families who have an alternative asset allocation for venture capital and using the unique model that has drawn such remarkable success. The team focus on the seed stage of a company’s life, defined by Brick Capital Ventures as pre-revenue through to pre-Series A. This has allowed the team to enter into numerous industries, carefully keeping away from slow regulatory sectors and those industries which are immature in their development and structure. Success is due, in no small part, to the unqiue knowledge of the firm’s principals. Andrew Craissati comes from an operations and finance background, having worked with the Asia Pacific Chairmanship of Sir Richard Branson’s Virgin Group, the design and leadership of David de Rothschild’s family investment structure, Integritas, an M&A role at National Geographic Society and investment banking experience at Asia-based Magna Group. His colleague, Bill Brandt Jr, built built one of the world’s largest kitchen cabinetry companies, American Woodmark. He was also responsible for bringing it to the public markets via NYSE. Such business savvy minds are very appealing to a certain sort of business. While some seed stage companies shun assistance, Brick Capital Ventures is delighted to support those who might need assistance with strategy, corporate finance, cross-border development, recruitment, sales, business development, M&A and fund-raising. Having such expertise at the heart of the company guarantees advice which will be practical and forthright. If the team cannot make a difference to their company beyond funding, they simply will not invest in them at all. Needless to say, this means that the team is driven significantly by the human side of investing, with the strength of the leadership/ founding team playing a core role in any decisions made. As such, the Brick Capital Ventures team has an in-house psychologist to enhance the insight available. The portfolio, too, is designed to care, to nurture and to embrace diversity and inclusivity, with a headcount that is over 60% female. Until recently, the firm has grown through word of mouth and referrals from existing clients. Now, as scaling seems more appealing, the team have taken a stance that includes proactive marketing. Now the firm has found a place within the top 10% of all Seed stage investors, the founders are expanding their fund’s capital base and will be launching a campaign to raise further investment in 2023. For those who want to work with Brick Capital Ventures, there is incredible potential. We cannot wait to see that potential fulfilled. Company: Brick Capital Ventures Name: Andrew Craissati Email: [email protected] Web Address: https://brickcapital.co

10. Oct21051 Volatile Fx Market Hits UK Charity Investment In Sub-Saharan Africa Data from Ebury, the global financial services firm, reveals the top 5 most traded currencies traded by Ebury on behalf by UK-based charities and therefore the countries receiving the highest volume of payments. All five currencies are used by countries in SubSaharan Africa: Uganda, South Africa, Kenya and Nigeria. The Central African Franc is used by the following countries: Cameroon, Central African Republic, Chad, Republic of the Congo, Equatorial Guinea and Gabon. Analysis of the currency markets finds that all five currencies have posted improvements against the pound sterling in 2022. This means that UK charities sending money overseas to pay for charitable projects face a major challenge in optimising their fundraisings to achieve their aims. Charities deploying funds in Uganda will have seen a decrease of 6% in what they can buy for that money in nations using that currency, with a 5% drop for the Central African Franc. This has a tangible impact on aid provision – a £100,000 spend in these countries respectively will buy £6,774 and £5,544 less in goods and services than a year ago. Moreover, the currency pairs also experienced significant volatility throughout the year with the Nigerian Naira seeing a swing of 24% between its high and low value against the pound. The South African Rand (16%), Kenyan Shilling (21%) and Uganda Shilling (17%) also all saw double digit differences between their best and worst spot rate. Even though many charities use the US Dollar to avoid significant price swings, 2022 saw volatility across the GBP/USD pair of 29.5%, outstripping all five of the local currencies where charities are deploying most capital. Cornelius Clarke, Head of Desk at Ebury and specialist in the NGO and charity sector, said charities must regularly re-assess their FX strategy regardless of whether they are using USD or local currency with the volatility demonstrating the huge price increases that can be incurred from spot trading. “The sector has long experienced challenges in sending money overseas effectively to maximise the potential of the money they raise from the public, corporates and the government,” he said. “Without specialist knowledge and hedging solutions, charities and NGOs are left exposed to high conversion costs and transaction fees as well as volatility in currency markets. “The whip-sawing value of the pound at times last year has left a tangible impact on what their money can achieve in many nations, potentially leaving them thousands of pounds short of what they originally raised in the first place. Such margins are enough to endanger flagship projects and ambitious regeneration aims. “An effective FX strategy does not only significantly reduce the cost danger of inefficient conversions. It also frees up more time for charities to focus on more important matters while benefiting from protection against negative market moves with a locked-in, forward rate and the opportunity. “With rising energy and running costs as well as difficulties recruiting and retaining staff in a cost-ofliving crisis, taking the stress out of their FX policy will give charities one less headache in 2023.” • Ebury analysis shows in 2022 UK charities allocate most funds in local currencies to countries in Sub-Saharan Africa • All of the most traded currencies see the pound lose purchasing power through the year, weakening investment potential • Volatility of up to 27% emphasises need for charities to put effective hedging strategies in place to lower currency risk, minimise fees and maximise funds

11. Revealed: These are the Most in Demand Finance Jobs in the World Right Now According to New Research A new study from CMC Markets, an online trading platform, analysed monthly Google searches using Ahrefs for jobs within the financial industry to see which career is the most in demand. They also extracted the number of UK-based listings for each finance role from the job site Indeed during the month of December 2022. Rank Job Title Total global Google searches 1 Auditor 222,500 2 Actuary 166,600 3 Corporate banking 96,280 4 Bank teller 43,250 5 Forensic accounting 39,650 6 Compliance officer 35,170 7 Client advisor 29,080 8 Loan officer 22,950 9 Branch manager 18,560 10 Risk manager 17,430 Searches for ‘auditor’ ranked number one on the list with 222,500 monthly Google searches. People are searching 5,000 times on average a month for ‘auditor jobs’ and 500 times for ‘auditor careers.’ There are currently 785 auditor jobs in the finance sector on Indeed. Actuarial careers came closely behind as the second most sought-after job in finance with a combined 166,600 searches per month for ‘actuary careers’ and ‘actuary jobs.’ An actuary was the only career within the insurance sector to make it into the top ten. There are currently 1,030 actuary jobs within the finance sector on Indeed. The third most desirable finance career is corporate banking which amassed a total of 96,280 Google searches per month, 1,200 of which were for the search term ‘corporate banking jobs.’ There are currently 3,748 corporate banking jobs on Indeed. Another banking career took the fourth spot with bank teller totalling 43,250 Google searches every month, 12,000 of these monthly searches were for ‘bank teller jobs.’ At present, there are only 35 bank teller jobs on Indeed. In fifth place came forensic accounting with 39,650 Google searches per month and the sixth most in demand career in finance was a compliance officer with 35,170 monthly Google searches. Despite being one of the ten most desirable finance jobs, forensic accounting only yields 64 job openings in the UK, according to Indeed. On the other hand, there are currently 6,685 compliance officer openings in the UK on Indeed. With 29,080 Google searches a month, a client advisor was the seventh most searched for finance career and there are 811 job openings for client advisor roles on Indeed. Loan officers and branch managers occupied the eighth and ninth place on the list with 22,950 and 18,560 monthly Google searches respectively. There are 1,744 roles on Indeed for both loan officers and branch managers in the UK. The research found that the tenth most in demand job in finance is a risk manager with 17,430 monthly Google searches. There are currently 5,259 job openings on Indeed for risk manager roles in the UK. Michael Hewson, chief market analyst at CMC Markets commented on the findings: “Despite the scarcity of jobs in some industries, it seems that there is a noticeable interest within different sectors of the finance world. “It is interesting to see that a large proportion of this number is made up of searches related to the banking sector. And as a whole, financial careers are being searched for 2,935,840 times per month on Google. “This number is definitely something to keep an eye on as we approach the new year, as people may look to seek new opportunities in 2023.” • Auditing is the most in demand finance career right now • Accounting is the most desirable financial sector to work in

Nov22526 Q1 Wealth & Finance Jun21296 BNPL BNPL is not currently regulated as it falls under the rules for shortterm interest-free credit offered by merchants like newsagents. How do you expect the government to change the rules for BNPL and why? I believe that the new rules will be expected to reflect existing rules that apply to regulated products, with some proportionality built in to avoid excessive regulatory burden on firms or information overload for customers. The government’s recent consultation discussed introducing rules on financial promotions, affordability, credit reporting, provision of information to customers, arrears and default management and forbearance, complaints and other consumer protections such as section 75 of the Consumer Credit Act (“CCA”). It seems that merchants will not be required to obtain FCA authorisation to broker BNPL products to third-party lenders and that the regulation applied to the lenders offering these products is expected to drive improvements in the sector. This is an understandable position, given that many small merchants will not have the resources or skills to meet and maintain the regulatory requirements that come with being authorised. It also makes sense from the FCA’s perspective, considering the huge number of applications for authorisations they could receive if merchants did need to become authorised or the potentially huge number of merchants who would be appointed as Appointed Representatives of authorised firms to continue brokering these products. Overall, I think the proposals strike a fair balance. The fact that these credit products are interest-free, does not mean that they are riskfree. The regulations will enable customers to make more informed decisions at checkout about the finance options available, enforcing lenders to take steps to assess the sustainability of repayments and giving customers equal protections regardless of the finance option they choose. As an added benefit, the affordability assessments that regulated lenders are performing will be enhanced by the inclusion of BNPL products in credit reference data.” From a regulatory point of view, I expect the regulations to take the form of FCA rules, rather than significant revisions to old legislation. This should coincide well with the planned reforms of the CCA and secondary legislation and will also allow for read-across with the incoming Consumer Duty, which will further enhance expectations on firms to deliver good outcomes for their customers. More background The BNPL market has huge potential to benefit consumers in the UK and beyond and Deko has an active interest in helping to shape its future regulation. BNPL is a term which has become widely used to describe a broad array of consumer credit offerings. The government, in their earlier consultations for regulating BNPL, focused on two particular types of credit products, which are currently exempt from regulation. Firstly: short-term, interest-free credit. In this case, the short term is defined as 12 months or less. The government has stated that this product is usually offered in-store, with consumers taking out a single, higher-value discreet agreement with the credit provider, who may be a third-party lender or the merchant. Secondly: BNPL. The government describes BNPL as usually taken out online, with consumers having an overarching relationship with a thirdparty lender, under which multiple low-value agreements are made, with little transactional friction. The key difference between the two is that the definition of BNPL encompasses repeat lending, whereas shortterm interest free is a single loan. The FCA has looked into repeat lending in the regulated credit sector through supervisory work in recent years, and some evidence of potential harm was observed. In the BNPL space, these risks of harm are amplified by virtue of the lack of credit reference reporting, individual affordability checks for each separate agreement taken out under the BNPL relationship and post-sale protections. Does being an ‘instant’, embedded, online credit product have any bearing on the likely regulations for BNPL? We expect a further consultation on the legislative changes from the government around mid-2023 and then for the FCA to consult on its approach to the new BNPL regulatory regime once the law has been finalised. It is because of our position in the market that I am sure we will continue to engage with these future consultations. BNPL products are designed to meet a specific consumer need and when used responsibly can be a beneficial solution to help customers spread the cost of purchases. We can see first-hand the difference this makes to consumers and merchants, small and large. For instance, Dekos’ BNPL product is designed to present all options, from short-term interest-free to longer-term interest-bearing loans, in a clear and simplified way that customers can understand sufficiently to make an informed choice. This presents a solid foundation in preparation for the incoming Consumer Duty and the future regulation of BNPL The government is consulting on open banking, which has seen low consumer take-up. Is there any connection between the thinking on how best to support open banking and how best to regulate BNPL? eg could the government require the use of open banking by anyone who wants to use BNPL? There is no doubt that the use of open banking could enhance the data available to lenders when undertaking their creditworthiness and affordability assessments. Considering that BNPL products are driven by innovative technology, it seems that the two would go hand-in-hand. However, I think this is a broader question and should not be limited just to BNPL. Open Banking could play a part in enhancing affordability assessments across the consumer lending market, giving lenders access to real-time information to verify income and expenditure without requiring customers to submit copies of payslips or bank statements, thus improving the customer experience. We are already seeing some fintech businesses offering open banking services specifically for affordability assessments. There are some barriers preventing this from happening in practice, and these barriers will need to be addressed if we are to see a high level of take-up. Partnering with open banking partners, or setting up and becoming licenced as a Payment Service Provider (PSP) will cost money, so firms will need to be comfortable accepting the costs involved to achieve the potential benefits. There are licensing considerations for firms. To access bank account data they may need to obtain a licence as an Account Information Service Provider (“AISP”), or partner with a company that is a licenced AISP.

13. If a lender wanted to take this a step further, and use open banking to manage customers’ loan repayments, then a Payment Initiation Service Provider licence could be required. Both of these options would of course require additional systems and controls, and compliance oversight. Automated decisions made on the basis of open banking data will need to be closely monitored and validated regularly. We have seen some examples already where banks have failed to publish accurate information, or not published the required information through Open Data APIs. This demonstrates that despite the technology, there are still data accuracy risks in play. Consumer uptake has been slow, with the latest Open Banking report in June 2022 stating that only 10–11% of digitally enabled consumers are estimated to be active users of at least one open banking service. This may well be because open banking hasn’t been heavily marketed to consumers, or it could be that consumers are put off by the level of intrusion into their personal data that open banking gives to firms. Given these barriers, I don’t think we are in a position where open banking can be enforced on all lenders, BNPL or traditional. However, we have seen regulators encouraging the use of technology solutions to help firms to keep up with innovation and technological advances in areas such as fraud and anti-money laundering, so I do expect that open banking will be accepted as a suitable method for lenders to obtain and verify data in support of their responsible lending practices.

14. iwoca SME Expert Index: High Street Banks Cut Lending to SMEs as Demand for Finance Grows • The SME finance gap is growing; 82% of brokers report a reduced appetite from the major banks to fund SMEs, whilst a similar proportion (79%) predict that demand for small business finance will rise in the next year. • More than eight in ten brokers (84%) report their SME clients are concerned about their businesses surviving increased energy prices; over 50% think a potential recession will be worse for small businesses than the pandemic was. • The findings come after iwoca extends its funding line with long-term partner Pollen Street Capital, from £125m to £170m, to match increasing SME demand for finance. Demand for finance from the UK’s 5.5m small and medium-sized businesses1 is on the rise at the same time as banks are reducing their lending appetite, according to iwoca’s latest SME Expert Index. More than eight in ten SME finance brokers (82%) agree that major banks have reduced their appetite to fund SMEs, while nearly half of brokers (49%) report that more of their clients’ applications for finance were rejected compared to the previous month. The new data of UK brokers who submitted over 2,000 SME finance applications in December also finds that funding experts think current macroeconomic pressures will have a worse impact on SMEs than the pandemic did. SME demand for finance soars as banks retrench The findings suggest demand for lending is set to increase dramatically over the next six months; four in every five brokers (79%) believe that demand for SME finance will rise, with just 6% predicting demand will fall. Four in ten brokers (39%) say they’ve already seen a rise in applications for finance over the last month, with just one in seven brokers (14%) seeing applications fall. Current macroeconomic pressures set to have worse impact on SMEs than the pandemic did, brokers say One of the key drivers of rising demand for SME finance is the soaring cost of doing business. Apr22173 More than eight in ten brokers (84%) report their SME clients are concerned about their businesses surviving increased energy prices. Over half (51%) also expect the potential recession’s impact on SMEs will be worse than that of the pandemic, twice the rate of those who think it will be better. iwoca increases funding line to match demand iwoca recently extended its funding line from £125m to £170m with long-term partner Pollen Street Capital. The company will use the additional £45m to provide loans to meet the growing demand for SME financing, having seen a 50% increase in the number of businesses it funded across the UK and Germany in 2022. Colin Goldstein, Commercial Growth Director at iwoca, said: “With brokers predicting that the impact of current macroeconomic pressures this year will be worse than the pandemic for small businesses, it’s clear that SMEs across the UK are in need of financial support. And – as our data shows – traditional banks just aren’t offering this. “Alternative lenders are once again proving just how crucial they are to protecting small businesses from this financial shock. Our funding extension with Pollen Street Capital has helped us match increased appetite for SME finance, and now our focus will be to secure further financing so we can continue to service this rising demand.”

15. Q1 Wealth & Finance 15.

16. Overwhelm Impacts 90% of Payment Compliance Teams as They Combat Record Levels Of Fraud Payment company compliance teams are being pushed to their limit as new research from regulatory intelligence specialists VIXIO reveals 90 percent are frequently overwhelmed. The impact of Russia’s invasion of Ukraine, paired with poor economic conditions in the wake of the Covid-19 pandemic, has left many payment companies in a precarious position. Half (50 percent) listed fraud as their biggest challenge over the last 12 months. Countries worldwide have implemented restrictive sanctions, which led to the highest number of regulatory events ever recorded by VIXIO, at 243 in March 2022 alone (with the monthly average standing at 165). Rising levels of fraud are now forcing firms to alter their plans. Increased fraud was a particular concern for teams in the UK (20%) and Brazil (21%) – two countries where instant payments and, consequently, authorised push payments (APP) fraud have both become a growing issue. The 2023 Payments Compliance Outlook: Thriving in Uncertain Times surveyed 202 senior and executive compliance and regulatory professionals at global payments companies in the UK, US, Germany, and Brazil across multiple sectors. It found that, despite the threat of recession and the need to cut business expenditure, payment company executives are increasingly willing to commit additional resources to avoid trouble from regulators. To tackle future threats, almost 40 percent of compliance teams are prioritising new market entry in 2023 (44 percent in the US), with 35 percent supporting new product licensing (45 percent in the UK). Andrew Neeson, Managing Editor and Research Director at VIXIO, says: “Payment companies are going through a particularly hard time, but we are seeing great innovation in response to the pressure. Many firms are harnessing new and alternative payment technologies, with 93 percent looking to achieve growth through M&A. This is to increase revenue, resolve compliance and security problems, and protect their core customer base from competitors and risks. Additionally, 49 percent of compliance teams are investing in greater internal regulatory monitoring systems to manage the burden they’re facing.” Whilst tackling fraud remains the biggest priority for almost half (47 percent) of compliance teams going into 2023, 43 percent cite data protection and anti-money laundering as their biggest concerns. Andrew Neeson believes that in these challenging times, firms will have to grow more inventively: “Firms that are willing to take a risk and focus on new payment technologies such as open banking, new payment options, instant payments and cryptocurrency can gain an edge. It will protect and enhance their core customer base and future-proof their business.” As a result, Jan Van Vonno, Head of Industry Strategy at Sweden-based open banking specialist Tink, believes that the next 12 months presents a tipping point for the adoption of opening banking across Europe: “If we look at the UK, Open banking payments have grown 500% year on year, as more institutions have realised the benefits open banking can bring, such as reduced costs, low fraud and a better user experience. In tandem, the regulatory environment is becoming increasingly accommodating of open banking payments – for example, the EU’s latest rules for Eurozone banks to offer instant payments. “Open banking is set to become mainstream faster in some markets such as the UK, Germany, France and the Nordics.” Hopes that open banking, M&A and investment in regulatory expertise set to reduce the burden in 2023.


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