StepChange Debt Charity reaction to FCA consumer approach

Responding to the publication today of the Financial Conduct Authority’s consumer approach, StepChange Debt Charity is pleased to see that the regulator has listened to respondents’ reservations, and will not be changing its definition of vulnerability. The regulator had previously proposed a new definition of ‘vulnerable consumers’, leading to concerns that this could have narrowed the focus of firms’ efforts to support vulnerable customers.

The charity, which helped over 29,000 people with an additional vulnerability on top of their debt last year, welcomes the FCA’s renewed focus on the importance of firms proactively identifying and supporting vulnerable consumers, and the announcement that the regulator intends to develop and consult on new guidance to help firms do this, as well as on the concept of a duty of care for firms to their customers.

Peter Tutton, head of policy at StepChange Debt Charity, said: “Through our work we see the crucial importance of financial service firms putting the needs of their customers at the heart of everything they do; whether this is giving people in financial difficulty the right help at the right time, or making sure people who need more support get the products and a service that match their circumstances. So clear guidance and direction from the Financial Conduct Authority is both welcome and necessary.

“We know that people with additional vulnerabilities are more likely to be on lower incomes, to be behind on their household bills, and to not have enough money to make ends meet. There is a pressing need for Government to look for ways to improve the financial health and resilience of households and people with additional vulnerabilities.”

Tinubu Square and Gestion Credit Expert: strategic partnership on debt collection services

Tinubu Square, a leading provider of trade credit, bonding & surety and receivables finance solutions, has sealed a strategic partnership with GESTION CREDIT EXPERT, to ensure customers of Recovery Square, a subsidiary of Tinubu Square, receive seamless continuity of its debt collection services.

As a result of the investment of 53M€ made by Long Arc Capital and Bpifrance at the end of 2017, Tinubu Square is pursuing its international expansion and will concentrate its efforts on its core activity, software publishing, and focus its services offering on risk analysis services. In this context, the activities of its subsidiary Recovery Square, dedicated to debt collection services in France and internationally, are taken over by GESTION CREDIT EXPERT, a leading French credit management solutions provider, specialised in trade credit risk management and debt collections services.

It is critical for Tinubu Square to ensure a seamless continuity of services to its long-term customers, both in France and internationally, as well as to offer, in particular to its credit insurance customers, the benefits and the high-quality services of this partnership. GESTION CREDIT EXPERT is a key player in the debt collection services market worldwide and its expertise has been recognized and respected for many years.

“We want to guarantee our customers continue to get robust debt collection services which are critical for them and specific to their activities. We are confident that our customers will benefit from seamless continuation of high-quality service provision from such an internationally-minded and experienced partner as GESTION CREDIT EXPERT which is expanding rapidly worldwide in this market. Moreover, we will work closely with GESTION CREDIT EXPERT to share its expertise with our international customer network”, said Jérôme Pezé, CEO and founder, Tinubu Square.

“We are delighted to engage in this strategic alliance with Jérôme Pezé and his team. We are committed to bringing Recovery Square’s and Tinubu Square’s customers the best possible service. Through this partnership, we reinforce our position in the market and move further forward to contribute to two of the main challenges faced by our economy: increasing corporate cash flow and reducing corporate trade credit risk worldwide”, said Christophe Nobilet, CEO, GESTION CREDIT EXPERT.

Arrow Global Selects Xactium to Transform Risk Management Processes Organisation-Wide

Established in 2005, Arrow Global Group specialises in the purchase, collection and servicing of non-performing loans. It identifies, acquires and manages secured and unsecured defaulted loan portfolios from financial institutions, such as banks and credit card companies, as well as retail chains, student loans, motor credit, telecommunication firms and utility companies.

With almost £48 billion of Assets Under Management and around 10 million customer accounts across multiple European countries, the effective management of its risk profile and associated processes is critical. Having expanded rapidly, Arrow Global identified the need to implement an enterprise risk management system which would make it easier for the whole business to assess and report risk and control information, while moving away from a spreadsheet model which led to risk data being stored across multiple documents and locations.

Arrow Global took advantage of the opportunity to trial the Xactium software, deciding that it was the right system to take the organisation into a new era of risk management. By adopting Xactium, the Group will soon be working with just one central platform to store, track and report on the organisation’s risk information. With offices in countries including the UK, Ireland, Italy, Portugal, Belgium and the Netherlands, Arrow Global will have greater transparency over risk exposures and how they are being managed across the Group, as well as the ability to automate many of the manual processes involved.

Paul Woods, Enterprise and Operational Risk Director at Arrow Global Group, said: “Establishing a ‘real-time’ and flexible assessment and reporting system which we can use consistently across our expanding Group, became a priority. Xactium’s platform addresses this need and will support us as we further enhance our risk management approach across all of our businesses. We look forward to working with them through this exciting phase of our growth.”

Managing Director, Andy Evans says, “Arrow Global expands Xactium’s rapidly growing portfolio of organisations working in the financial services sector. It’s fantastic to have been selected by such a rapidly growing organisation – Xactium’s flexible, modern, cloud based risk solution will be able to adapt easily to changes in their organisation, whilst ensuring Group-wide risk visibility.”

UK fintech expands its international footprint into the US, converting classifieds sites into transactional marketplaces for the first time

Shieldpay has increased its global footprint by launching in the US by partnering with the car classified site, Shieldpay enabled the site to become fully transactional to its customers for the first time across the UK, EU and US.

Shieldpay’s transparent payment solution mitigates the risk of fraud by verifying the identity of both parties, holding funds securely and only releasing funds when both sides agree they are happy with the transaction. The payment solution is set to transform classified sites to fully transactional marketplaces, bringing transparency and efficiency to the payment while also reducing the risk of fraud. has integrated the Shieldpay API to power payments, listings, bids and offers for its dealers and consumers. Classifieds and marketplaces can leverage Shieldpay’s API to create their own user experience or make use of Shieldpay’s ‘ready to user’ user interface.

Consumers will no longer have to carry large sums of cash when meeting a stranger or wire money blindly when buying a car from someone they’ve met online. Consumers will also benefit from innovative features like Shieldpay’s Driveway Checkout™ where they can negotiate the price of the car on the driveway and simply authorise the payment in-app to complete the sale.

Shieldpay’s Director of Consumer & SMB, Tom Clementson, says that the technology will allow classified sites to ‘fight back’ against disruptors like Facebook Marketplace and start competing for more of the USD$1 trillion1 marketplaces globally.

Clementson also believes that Shieldpay’s trusted payments network will fill the void in the payments industry for life’s big purchases, or when dealing with someone you don’t know.

Tom Clementson, Director of Consumer & SMB of Shieldpay, comments: “While PayPal are great for low value, every day spend, we secure larger payments between users that have been verified by Shieldpay, which addresses a huge gap in the market.

“Taking Shieldpay to the US was the next logical step. The size and scale of online marketplaces, globally, is over UDD $1 trillion – and that figure even excludes classifieds sites, which don’t yet accept payments. This opportunity is huge, yet classifieds and marketplaces are under-served by secure solutions for larger payments. Classified sites have come under increasing pressure from disruptors and we believe our technology will allow them to fight back and transform their business models – taking them from traditional listing sites to transactional marketplaces and building an instant new revenue stream.”

Geoff Love, CEO of AutoClassics, comments: “We’re proud to partner with Shieldpay as an innovative payments solution that has allowed us to become transactional for the first time. Shieldpay gives our users total confidence that they can buy and sell securely on Our users will also benefit from Shieldpay’s verified user badge that signals to the buyer or seller that the other user is part of the trusted payments network.”

As well as protecting life’s big purchases like buying or selling a car, Shieldpay’s instant digital escrow facility can accelerate multi-million-pound M&A deals and real estate transactions, having recently powered the UK’s first fully digital real estate transaction.

Consumers left clueless about banking options

Online research from Equifax, the consumer and business insights expert, reveals a lack of awareness of banking options among Brits. When presented with a list of digital banks 60% hadn’t heard of any of the brands* and only 20% would opt for a challenger bank if opening a new account today.

The survey, conducted with Gorkana, showed 44% of Brits would choose a traditional bank, and when choosing which brand to bank with, they prioritise good customer service (41%), ease of managing money via a good app or online service (34%), and availability of a physical branch (32%). Media influence was least important; only 3% of people factor news stories about a bank into their decision.

Good customer service also topped the list of priorities for people who would choose a challenger bank (31%), followed by incentives such as a joining fee (28%) and a good app or online service (27%). Friends or family using the bank was the least important factor – just 5% of respondents would take this into consideration.

People who would opt for a challenger bank appear to be more value conscious; one fifth (20%) said better rates when using their card or withdrawing cash abroad would appeal to them, compared to 12% of people who would use a traditional bank. Over a quarter (27%) rate more competitive rates, for example on overdraft fees or loans services a contributory factor when choosing a challenger bank, versus 19% for traditional banks.

Jake Ranson, Banking and Financial Institution expert and CMO at Equifax Ltd, says: “Challenger and digital banks have been making their mark in the banking sector bringing attractive, consumer friendly services to market, yet many consumers are still unaware of these brands. The government has taken action to increase competition in the sector but there’s still a lot of work to do to encourage consumers to fully explore the options available to them and make informed decisions on selecting or retaining accounts.

“Open Banking is underway and is a huge advance for consumers. Services are coming to market that will help people get better value from banks, for example identifying sign-up incentives or better rates tailored to their needs. The next step is for the industry to work together to increase consumer awareness of the value Open Banking unlocks.”

Women and seaside towns again see most personal insolvencies – R3 comments on 2017 statistics

A higher percentage of women than men in England and Wales entered insolvency in 2017, continuing the trend of recent years, says insolvency trade body R3, commenting on the annual personal insolvency statistics released this morning by the Insolvency Service.

Looking at the geographical spread in the statistics, the North East and coastal towns such as Plymouth and Scarborough typically had the highest concentrations of personal insolvencies, also following the pattern established in recent years. Stoke-on-Trent is the local authority with the highest rates of personal insolvencies.

The 2017 statistics show that 53.9% of insolvencies involved a woman, up from 30% in 2000 and 53.4% in 2016.

· There were 22.6 insolvencies per 10,000 women in 2017 compared to 20.2 insolvencies per 10,000 men. There were 21.4 insolvencies per 10,000 for all adults.
· Women were involved in 65.4% of Debt Relief Orders, 53% of Individual Voluntary Arrangements, and 38.6% of bankruptcies.

Mark Sands, chair of the Personal Insolvency Committee at R3, comments: “The statistics for 2017 carry on the pattern which we have seen over the last few years, of women being persistently more likely to enter an insolvency procedure than men, with the gap widening to become even greater than in 2016.

“Many factors feed into this gender disparity. For example, women are much more likely than men to work part-time, and in sectors and roles with lower pay; women are often paid less than men for performing comparable work, as the gender pay gap shows; they are more likely to be single parents, which has a high correlation with greater poverty levels; and previous Insolvency Service statistics showed women were more likely than men to enter bankruptcy as a result of relationship breakdown.

“A number of factors have increased women’s insolvency rates over the last few years, not least the introduction of Debt Relief Orders [DROs] in 2009 and their subsequent expansion a couple of years ago. DROs are designed to help people with low incomes, debts, and assets, and have been predominantly used by women. DROs have helped those who might not have been able to access an insolvency procedure otherwise.

“Overall, unemployment levels stayed relatively low across 2017, but in the context of zero hours contracts and the gig economy, just having a job can be less of a bulwark against insecurity and insolvency than it used to be.

“Women have a lower participation rate in the economy, with around 26% counted as economically inactive in 2017 compared with around 17% for men. People on fixed incomes, be they pensioners or benefits claimants, are more vulnerable to rises in inflation, as any increases in their incomes will lag behind real-world conditions; price rises across last year will have increased the pressures on household budgets.

“As R3 has said before, the stereotype that women become insolvent more than men due to profligacy just does not hold up when compared with the evidence. The form of insolvency which is most closely linked to consumer spending, an individual voluntary arrangement (IVA), is relatively equally used by men and women.
“Women’s relatively weaker financial position is underlined by the gender split in DROs, which are used when the debt in question is small, and the indebted individual has assets under £1,000. Two thirds (65.4%) of DROs were taken out by women, compared with 34.6% by men.

“Bankruptcy, meanwhile, is the one form of personal insolvency procedure which is more commonly used by men than women (61.4% of bankruptcies are taken out by men and 38.6% by women in the most recent statistics), and is often associated with business failure and higher debts.”
The number of DROs taken out in 2017 fell by around 5% compared with 2016, while the number of bankruptcies was essentially flat, rising by only 0.4% year on year. IVAs jumped by 20% year on year, and overall, individual insolvency numbers rose by 9% in 2017 compared with 2016.

Mark comments: “As with the gender split, the geographical distribution of individual insolvencies also follows the patterns of recent years. The places which have the highest rate of personal insolvency tend to be seaside towns, in towns affected by the decline of a particular industry, and in the North East – where there is often a combination of both the other two factors. Although it’s not in the North East, Stoke, an area where industry has declined, tops the list of local authority personal insolvency rates.

“The problems facing seaside towns are well-known, and six of the 10 places with the highest rate of personal insolvency are by the sea. Seasonal work dries up over the winter, and when it is available, wages tend to be low. In more heartening news, however, the Government launched a £40 million fund in February to encourage investment and to boost jobs in coastal communities. The vibrant economies of seaside cities like Brighton show that coastal settlements can become prosperous, given the right conditions.

“Areas where industry has receded face significant challenges. High levels of individual insolvencies are often accompanied by other issues, like poorer health and education outcomes. We’re still seeing the impact of industrial decline, decades later. Tackling economic malaise will require significant investment in building skills, resilience, business networks, and better infrastructure. Interestingly, London is the only place where bankruptcies – a procedure associated with higher levels of debts and assets – are more common with DROs – which are associated with low assets and low, but unaffordable debts.

“Regional initiatives, such as the Northern Powerhouse and the Midlands Engine, are one way to bring public and private sectors together to boost investment and to build links, and more of a focus on such projects would be welcome news for people and businesses in post-industrial areas. Projects must also take care to look outside cities and larger towns to places where a spiral of decline has set in – the statistics show that places where levels of personal insolvency are high often exist side by side with much more prosperous areas.

SIA signs financing contract to acquire First Data business

SIA, a European hi-tech firm leader in the payment services and infrastructures sector, has today signed a financing contract to support the acquisition of First Data’s business in a number of countries in Central and Southeastern Europe.

UniCredit, one of the main reference banks and sponsor of SIA Group, acted as Sole Underwriter, guaranteeing the total underwriting of the amount, Global Coordinator, Initial Bookrunner, Initial Mandated Lead Arranger and Facility Agent.

In addition, UniCredit managed, as Active Bookrunner, the entire process of syndication, which led to significant participation by the following major banks as Mandated Lead Arranger and Bookrunner: Banca IMI, Banco BPM, BNP Paribas, Monte dei Paschi di Siena, and UBI Banca.

Confidence edges to two-year high since Brexit vote but fails to lift business investment plans

UK businesses are not increasing their recruitment and investment plans since the start of the year, despite confidence reaching a two-year high since the EU Referendum vote, according to the latest Business in Britain report from Lloyds Bank.

The confidence index – an average of respondents’ expected sales, orders and profits over the next six months – edged slightly higher to 25 per cent compared with 23 per cent in January 2018. It remains above the long term average as businesses are more confident than at any point since the EU Referendum vote in June 2016.

The Business in Britain report, now in its 26th year, gathers the views of over 1,500 UK companies, predominantly small to medium sized businesses, and tracks a range of performance and confidence measures, weighing up the percentage of firms that are positive in outlook against those that are negative.

Investment and recruitment muted but difficulty remains in finding the right skills
The net balance of firms looking to grow investment in the next six months fell marginally by one point to 12 per cent, while a net 8 per cent of firms anticipate an increase in their headcount, compared with 9 per cent in January.

The share of firms who continue to report difficulties in hiring skilled labour increased three points to 49 per cent and remains historically high with London (65 per cent) and the West Midlands (57 per cent) finding it the hardest to recruit.

Brexit uncertainty and weaker UK demand top firms’ concerns
Brexit uncertainty remains the single greatest risk to firms in the next six months, cited by 21 per cent of firms, closely followed by weaker UK demand at 16 per cent.

Over a third (36 per cent) of businesses expect a negative impact on their business if no trade agreement is reached with the EU. A fifth (20 per cent) expect a positive impact while almost half (44 per cent) do not expect any impact or didn’t know.

Sharon Geoghegan, Managing Director, SME Banking, Lloyds Banking Group said: “Despite concerns on the wider economy, businesses are still relatively upbeat as our latest report shows business confidence hitting a two-year high since the Brexit vote. England’s better than expected performance in the World Cup will also boost the nation’s feel-good factor.

“As we look ahead, the external environment remains mixed as Brexit uncertainty and weaker UK demand are businesses’ biggest concerns for the next six months. Despite those risks and rising global trade tensions, business investment and hiring intentions remain at similar levels to the start of the year.”

Export expectations remain positive
The outlook for exports improved. A net 27 per cent of exporters anticipate stronger exports in the next six months, up from 24 per cent in January. Companies expect the strongest demand to come from the US, Europe and the Middle East, while prospects are expected to be the weakest in Russia and South America.

Construction sector sees big rise in confidence
Business confidence was the highest in the transport & communications and construction sectors with the construction sector registering a significant rise compared with January’s survey, rising 12 points to 26 per cent. In contrast, confidence was the lowest in retail & wholesale and hospitality & leisure and fell from January’s report.

Confidence rises in most regions but strongest in the South
Most regions saw a rise in business confidence and was the strongest in London (31 per cent) and the South East (30 per cent). There were significant falls in the East Midlands and the North West, dropping ten and 12 points respectively to 14 and 19 per cent where sentiment levels were the lowest in the UK. Confidence also fell in the North East from the last survey’s highs but remained the same as the UK average.

Business sentiment also improved slightly, but remained below the UK average, in Wales, Northern Ireland and Scotland.

Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking said: “Encouragingly, UK exporters expect to increase their overseas activity in the next six months, with the strongest demand anticipated to be from the US, Europe and the Middle East. External demand is being supported by the past depreciation of the pound and robust global demand, notwithstanding increased trade tensions.

“The share of firms finding it difficult to hire the right skills continues with London and the West Midlands finding it the hardest to recruit. This, along with strong global demand, is encouraging firms to maintain their investment levels. Overall, the resilient survey readings provide reassurance around the case for a further rise in interest rates, potentially as soon as the next meeting in August.”

Divergent insolvency rates point to two-tier debt economy – TDX Group comments

Following the release of the Insolvency Service Individual Insolvencies statistics today, Richard Haymes, Head of Financial Difficulties at TDX Group, an Equifax company, comments why there is an increasing propensity for those under 35 to enter into personal insolvency:

“The figures released by the Insolvency Service today show rapidly increasing insolvency rates for those under 35, with 25-34 year olds seeing the largest annual rate of increase (5.7%) between 2016 and 2017. The main driver of this change is increasing cost of living pressures which disproportionally affect certain age groups. Under 35’s are much more likely to live in private or social rental properties, have an element of income coming from welfare benefits, find themselves limited to higher cost credit products, as well as suffer from limited wage growth and higher unemployment.

“In contrast, there was a drop in the insolvency rate for people over 55 between 2016 and 2017. The lower cost of servicing mortgages has provided people in this age bracket, who are at risk of problem debt, with a much-needed buffer in their finances.

“The low interest environment has created a two-tier debt economy, with those on the right side of this line benefitting from cheap mortgages and reasonably low inflation, while others in rental properties experiencing higher living costs and becoming more likely to see credit transition into problem debt.”

Emerging Asia poised for continued strong growth, while contributing to global expansion of e-commerce

Economic growth in Emerging Asia, the ten member countries of the Association of Southeast Asian Nations (ASEAN), China and India, is expected to remain stable in the near term. Average real gross domestic product (GDP) in the region is expected to grow by 6.6% in 2018 and 6.5% in 2019, because of generally robust consumption and investment according to projections in the OECD Development Centre’s Update to the Economic Outlook for Southeast Asia, China and India 2018. The ten ASEAN economies are expected to see average growth of 5.3% in both 2018 and 2019, with the highest rates in Cambodia, Lao PDR and Myanmar (the CLM countries), Viet Nam and the Philippines.

Overall, the external positions of Emerging Asian economies remain stable; current account balances have improved in most economies in the region and foreign direct investment data flows are strong. Policy rates in the region have been increased, mainly in response to increases in inflationary pressure and weakness in some local currencies, though monetary authorities have also used reserve requirements to maintain liquidity. Overall, the fiscal positions of Emerging Asian economies are relatively sound. The fiscal policy direction, however, is mixed.

According to the Update, risks include the effects of rising interest rates in advanced economies, uncertainty about the implementation of planned infrastructure projects and the consequences of rising protectionist sentiments internationally on regional integration.

“Emerging Asia stands to show continued strong growth in the near term if domestic and external risks are properly managed,” said Mario Pezzini, Director of the OECD Development Centre and Special Advisor to the OECD Secretary-General on Development, while launching the Update at the OECD headquarters in Paris.

A special chapter of the Update addresses the challenges and opportunities facing Emerging Asia in developing cross-border e-commerce. The region is already a major player in e-commerce, and should continue to contribute to the sector’s global growth in the future. The use of information and communications technology (ICT), ICT infrastructure, transportation and logistics, payment systems, and legal and regulatory frameworks will all affect such future growth. To benefit from fair and efficient cross-border e-commerce, governments in the region will need to improve connectivity, develop skills and human capital, implement new policies to address digital security and consumer protection, and foster regional and international co-operation.