Baroness Tyler of Enfield appointed new Money Advice Trust President and Otto Thoresen as an Ambassador

The Money Advice Trust, the charity that runs National Debtline and Business Debtline, has today announced Baroness Tyler of Enfield as its new President. Baroness Tyler takes over the role from Baroness Coussins who will remain involved with the charity as an Ambassador. Otto Thoresen, author of the ‘Thoresen Review’ into financial advice that led to the establishment of the Money Advice Service (now the Money and Pensions Service), joins as an Ambassador.

Baroness Tyler is a life peer in the House of Lords and chaired the Lords Financial Exclusion Select Committee. A former chief executive of the charity Relate and chair of CAFCASS, she is currently Liberal Democrat spokesperson for mental health in the House of Lords, serves on the Lords Select Committee on Public Services, co-chairs the All Party Parliamentary Group (APPG) on Social Mobility and the All Party Group on Children, is Vice Chair of the APPGs on Mental Health and on Wellbeing Economics and is a Board Member of Social Work England.

Otto Thoresen joins the Trust as one of its ambassadors, bringing with him a wealth of experience from across the public and private sectors. In 2008 he authored the ‘Thoresen Review’ of generic financial advice that helped lead to the creation of the Money Advice Service. He is a former Chair of the Personal Finance Education Group and a former Trustee of StepChange Debt Charity. He now has a portfolio career including as Chair of NEST, Aviva International Insurance, Aberdeen Standard Investments Life and Pensions and the BT Pension Scheme.

The impact of the charity’s work helping people in debt was recognised earlier this month with the Money Advice Trust named ‘Debt advice provider of the year’ at the Credit Awards.

Adam Sharples CB, Chair of the Money Advice Trust, said: “I am delighted to welcome Baroness Tyler and Otto Thoresen to the Money Advice Trust. With our services needed more than ever as a result of the Coronavirus outbreak, I am pleased to welcome two individuals who bring with them such a wealth of knowledge and expertise. Their experience will be of great benefit to our work helping people to tackle their debts and manage their money with confidence.

“I would also like to thank Baroness Coussins for her invaluable work in support of the Trust during the nine years she has served as President. We are grateful for her enormous contribution, which we know will continue in her new role as an Ambassador for the charity.”

Lowell third quarter results 2020 – Continued resilience, efficiency, and delivery

Lowell, a European leader in credit management services, today announced its results for the quarter ending 30 September 2020.

Financial highlights

  • Resilient collections at 93% YTD vs Dec-19 static pool and 102% vs
    Jun-20 static pool
  • LTM Cash EBITDA margin expansion of +610bps supported by strong cost control, efficiency initiatives and reduced litigation spend
  • Leverage improved to 4.6x
  • £180m capital deployed YTD with the FY20 vintage continuing to track ~19% IRR
  • Substantial available liquidity of £306 million

Operational highlights

  • Cost initiatives enacted to support margin expansion of ~300bps across the next 24 months from Q2-20
  • Digital channels continue to perform well, supporting customer engagement and collections
  • Positive consumer response to customer care outreach (Trustpilot score 4.4/5)

Post period end highlights

  • Successfully delivered new capital structure in November through £2.2bn refinancing; £600m equity contribution from parent and issuance of £1.6bn Senior Secured notes maturing 2025/2026
  • Extended maturity of Euro 455m revolving credit facility to 2025
  • Improved leverage to 3.6x and liquidity to ~£405m

Colin Storrar, Group CEO, said: “Once again, in a period of change and uncertainty, we have delivered. Not only have we delivered robust performance during the quarter but also following period end with the significant and highly successful bond offering. It is a major achievement and sign of great confidence in this business.

“Our performance in Q3 was strong, we continued to build efficiency into the business, and we showed ongoing resilience. Combined with the new and improved platform for growth we now have, this places us well for the next phase of our long-term strategy as we take advantage of growth in the NPL market.

“Throughout, as always, we will continue our focus on high customer standards, ensuring fair customer outcomes and helping consumers return to financial health.”

CSA’s reaction to the Chancellor’s Spending Review

Spending Review statement:

Chris Leslie’s (CEO of the CSA) reaction to the Chancellor’s Spending Review.

“The OBR’s forecast of an economic contraction of over 11% this year and unemployment rising to 2.8million underlines the challenge over the coming years. While debt levels may rise, the ability for some borrowers to sustain repayments may be strained. Collections agencies have shown tremendous forbearance throughout the course of the COVID crisis and will continue to do so. There are many who depend on funds being recovered – including small businesses and the taxpayer – and so if individuals can afford to make repayments it is in everyone’s interests that they do so. We hope that, beyond the period of regulated payment deferrals, payment plans can be based on the assessment of individual affordability.

“We note with interest that the Office for Budget Responsibility forecast a fall of over 14% in consumer spending in this financial year, but predict a recovery of 8.7% in 2021/22 and then over 11% in 2022/23. Consumer confidence will be integral to the health of the economy and credit markets generally.”

While the country looks to recover from the COVID pandemic and worst economic downturn for centuries, interventions from Government supporting consumers, businesses and the wider economy are more important than ever. Chancellor Rishi Sunak placed particular emphasis on learning and development investment in his one-year Spending Review which are of particular relevance to our sector.

On the training and employment support announced by the Chancellor, Chris Leslie said: “The Chancellor’s £2.5bn additional investment in apprenticeship programmes is very welcome. The credit services sector is improving skills and staff capabilities each year and the new flexibility announced on transferring unspent apprenticeship levy funds to SMEs and extending the incentive for employers to hire an apprentice to the end of March 2021 are positive steps.

“The six month subsidy for young employees under the £2bn ‘Kickstart’ scheme is due to deliver 250,000 new posts – and our sector is eager to play its part in this. CSA members have already responded positively to the Kickstart scheme, which can be followed by apprenticeships and supported with other training options for young people as they start careers in credit services. The CSA is offering to act as a ‘gateway organisation’ so that member firms not able to employ above the threshold of thirty placements directly can still access Kickstart at a more manageable level via their trade association. The CSA also offers a strong apprenticeships programme including in Credit Control and Collections, Compliance & Risk and Counter Fraud Investigation.

“Taken together with the new £3billion three year ‘Restart’ scheme overseen by the DWP aimed at supporting a million people back into work, we believe that our member firms will be keen to ensure their training and development plans work in harmony with these government programmes – and there will be more discussion about these opportunities at the CSA’s People Development Conference on 9 February 2021.”

Paylink Solutions integrates HooYu to digitalise the lending onboarding journey

Leading KYC and customer onboarding specialist, HooYu, today announced a partnership with Paylink Solutions to help accelerate digital transformation in the lending originations journey.

Paylink Solutions already provides its Embark solution to major high street banks, law firms, debt management companies and mortgage brokers for collections processes and to power lending affordability assessments.

After integrating providers such as Experian, TransUnion and Credit Kudos, they listened to client feedback that pointed to the need for KYC technology that enhanced the quality of the lending origination journey and enabled faster lending decisions. After a comprehensive review of customer onboarding technology providers, they integrated HooYu so that they could build customised journeys for brokers and lenders.

HooYu has now been integrated into Embark which triggers customisable HooYu UI that’s presented to the borrower with a range of KYC steps such as liveness detection, facial biometrics, ID document validation, proof of address matching, geolocation and identity confidence scoring.

The time taken to get a borrower through KYC will now be reduced from a process that could take place over days down to a smooth digital journey that takes just a few minutes.

Paylink Solutions is a leading financial services technology provider that works with banks and building societies to deliver digital affordability solutions to support customers struggling with their finances.

Richard Healey, Product Development Director at Paylink Solutions said, “After taking time to understand our clients’ needs, we learnt that there was a need to further digitalise the lending journey, especially when it comes to broker driven lending. Now lenders and brokers can deploy the HooYu journey via Embark to speed the customer through to the decision.”

David Pope, Marketing Director at HooYu said, “Many lenders are struggling to build a consistent KYC process across their direct and their broker channels. The Embark and HooYu integration gives lenders the control of the KYC tools that they want to see used for each application and it also makes sure that the lender or broker branding is consistently applied during the KYC journey.”

Ebury and TrustBills partner for growth and better services

Ebury, the global transaction platform, has signed a new partnership with TrustBills, a rapidly growing German fintech that helps companies finance their international trade.

The two innovators in international trade have agreed to supplement each other’s portfolios, integrate their payment systems, and support their respective sales activities.

The new partnership will mutually enhance both companies’ product offering and aims to make international trade easier for corporates as well as increasing access to cross border receivables finance to more market participants.

By integrating their payments systems, TrustBills and Ebury will be able to provide a better alternative to the EBICS approval process which can be slow. This will enable clients in Germany, Switzerland and Luxembourg to benefit from both companies best-in-class technology when it comes to payments and working capital.

Juan Lobato, Ebury’s co-founder and CEO, commented: “TrustBills Receivables Exchange provides diversified sources of liquidity and continuous access to working capital at the lowest cost. As we focus on providing solutions for international trade, TrustBills is a very good fit. It provides additional liquidity to our clients and helps to free cash tied up in outstanding invoices.”

Joerg Hoerster, Founder and CEO of TrustBills, commented: “Corporates around the globe can open multi-currency accounts with Ebury in no time. Foreign investors who plan to source trade finance risks through TrustBills Receivables Exchange will now find that processes will become much easier, faster and more efficient.”

Euler Hermes launches new solution to support green recovery

Euler Hermes Transactional Cover Unit (TCU) has launched the Green2Green Single Risk credit insurance solution. This pioneering product will contribute to tackling climate change by insuring green transactions and investing the related premium in certified green bonds.

The OECD estimates that EUR 6.35 trillion of new investment will be required each year to meet the Paris Climate Agreement goals by 2030. The participation of the financial sector is crucial, as public sector resources alone will not be sufficient to meet these goals.

Over the last few years, Euler Hermes has developed a strong in-house ESG expertise and a comprehensive approach to start the integration of environmental issues throughout its activities. The Group is now increasing these efforts with the Green2Green Single Risk insurance product’s unique approach in supporting TCU’s clients’ growing needs in the green finance sector.

Supporting the energy transition through insurance for green transactions

The Green2Green Single Risk solution focuses on providing insurance to green transactions, which will be eligible based on a bespoke environmental evaluation. The initial sectors in scope are: renewable energy, energy efficiency, recycling, water treatment, and mass public transportation.

The Green2Green Single Risk solution is available to all TCU clients (being either banks, multilaterals or corporates).

Isabelle Girardet, Global Head of Transactional Cover & Investment Solutions stated: “The opportunity to play a role in reaching our global climate objectives is an achievement for us and for our first two participating partners, Natixis and La Banque Postale. The reinvestment of premiums into green bonds provides our clients with recognition for contributing to the green economy, as well as tangible results for each party involved. We look forward to welcoming more bank partners and TCU clients on board.”

Establishing a virtuous “green cycle”

Green2Green Single Risk insurance is particularly innovative and unique as it implements a virtuous “green cycle” with 100% of the generated investable premium invested back into the green economy. This investment comes in the form of certified green bonds, supporting new green projects and completing a green economic cycle. This approach is fully transparent with a certificate of investment issued by Euler Hermes Asset Management, ensuring the full traceability of the invested premium throughout the transaction tenor.

This product perfectly aligns with Euler Hermes’ ESG philosophy as we believe that creating a green economic ecosystem is a particularly effective way of driving the energy transition, while ensuring that each player can contribute to the fight against climate change.

“Most national governments have made strong commitments to transition to low carbon economies, and companies have a key role to play if we wish to meet the Paris agreements goals. Euler Hermes leads the way with a new pioneering approach thanks to the Green2Green Single Risk solution that establishes a virtuous green cycle. We believe that enabling a green value chain is a particularly effective way of supporting the green economy and accelerating the energy transition”, stated Florence Lecoutre, Member of the Board Management, in charge of Digital Transformation, Human Resources & ESG.

Financial Wellness Group calls for the extension of Help To Save to all debt solution customers

Financial Wellness Group is calling for Help To Save to be extended to enable all those on a debt solution to make use of the scheme, in conjunction with the savings element that they can already include as part of their Standard Financial Statement. At present Help To Save is only available to those on certain means tested benefits.

Encouraging customers who are working to clear serious problem debt to save will improve their financial resilience and help them stay debt free when they complete their debt solution. Three quarters (74%) of debt solution customers who responded to a Financial Wellness Group survey said that having a savings pot would help them avoid falling into problem debt again after their debt solution.

Customers on debt solutions can already, as part of their Standard Financial Statement ‘budget’, set aside up to 10% of their disposable income (to a maximum of £20) per month as savings. At present about 1 in 10 of Financial Wellness Group’s debt solution customers take up the option.

Almost a quarter (23%) of Financial Wellness Group’s customers are managing to save at the moment – with many using savings to help them deal with the extra cost of Christmas, birthdays or small financial shocks. 38% of customers say that they’d like to start saving, but other spending priorities keep coming up and a further 39% of customers say that their current budget is too tight to allow for savings.

Enabling customers on a debt solution to access Help To Save would give them a strong incentive to put money aside and build a savings pot. On completion of their debt solution their savings would help increase their financial resilience and make it less likely that they would need to borrow.

For example, a customer that is able to save £10 a month for four years whilst on a debt solution would save £480 and might typically earn interest of less than £2.50. If they had had access to Help To Save they could earn a bonus of £240, topping their savings up to £720.

Ten million people in the UK have no savings with over half (53%) of those between 22-29 having no money saved at all (source: YouGov). Having no savings leaves people incapable of overcoming even small financial shocks – like needing to replace a fridge or a cooker, or get a problem with their car fixed. As a result, they are more likely to resort to borrowing.

By definition, people with problem debt have exhausted any savings they did have. If they aren’t able to build a savings pot whilst tackling their debt then when they complete their solution they will once again be vulnerable to any financial shocks, at a time when they may find it especially hard to access mainstream credit.

The Money and Pensions Service (MaPS) have identified that, although encouraging regular saving is key to promoting financial wellbeing, just 4% of those eligible to open a Help To Save account have done so. Financial Wellness Group has written to John Glen MP, the Economic Secretary to the Treasury, in support of MaPS’ call for the government to do more to promote take-up of these accounts; and further calling for all debt solution customers to have access to a Help To Save account.

Deborah Ware, Chief Operating Officer of Financial Wellness Group said: “Creating good outcomes for people with serious problem debt isn’t just about helping them get debt free. It is also about supporting customers to learn how to budget, save and live within their means, and giving them the confidence and tools to remain debt free in future. Three quarters of customers who responded to a recent Financial Wellness Group survey said that having a savings pot would help them avoid falling into problem debt again after their debt solution*.”

“Extending Help To Save to people on a debt solution would also enable debt advice providers to support the overall promotion and take up of the scheme.”

Flexys and Bamboo enter multi-year partnership

Flexys is pleased to welcome award-winning lender, Bamboo, as its latest financial services client as the two companies enter into a multi-year agreement.

Flexys CEO, Jon Hickman, commented, ”Flexys is proud to have been selected by Bamboo as its specialist partner. We look forward to working with Edward Lunn and his team, and to building a mutually rewarding relationship that will deliver a superior service to Bamboo’s customers.”

Edward Lunn, COO of Bamboo said, “We are delighted to be partnering with Flexys. We like the team, and we like their solution, and we are confident Flexys will help us develop a market-leading Servicing and Collections operation for the benefit of our customers.”

Paymentology to help reshape the $5.4 trillion digital payments industry

Global contactless, non-cash, debit card, credit card, mobile and digital transactions are expected to cross more than US$100 trillion in 2019, including US$77 trillion cross-border interbank transactions through SWIFT

News Highlights:

1. The global digital payments market is expected to grow from $3.88 trillion in 2019 to about $5.43 trillion in 2020, according to a report by Research and Markets;

2. In 2019, non-bank online payment platforms in China processed RMB250 trillion, nearly US$35 trillion, according to the People’s Bank of China (PBOC);

3. E-commerce sales revenue in the MENA region is forecast to grow at 16.9 percent CAGR to 2021 to reach US$48.8 billion in 2021, according to Deloitte.

4. Global non-cash transactions surged nearly 14 percent from 2018 to 2019 to reach 708.5 billion transactions, the highest growth rate recorded in the past decade.

Paymentology, the United Kingdom-based innovative payment technology solutions provider, is working closely with banks, financial institutions and help change the way consumers make payments through cards, cash, mobile phones, etc, as real-time digital payment transaction is set to jump faster than other formats due to COVID-19 pandemic.

E-commerce sales revenue in the Middle East and North Africa region is forecast to grow at a compound annual growth rate (CAGR) of 16.9 percent between 2016 to 2021 to reach US$48.8 billion (Dh179 billion) in 2021, according to Deloitte, the global accounting firm.

The UAE is expected to lead the market, followed by Saudi Arabia and Qatar. These countries are expected to jointly account for more than 50 percent of the forecast revenue in 2021.

The region’s current internet penetration rate is 60 percent, well above the global average of 51.7 percent. Currently, only 15 percent of businesses in the Middle East have an online presence and almost 90 percent of the online purchases in the region are shipped from abroad, according to technology research company Gartner.

The e-commerce and digital payments market will see a massive growth as more people start using smart phone, smart payment options and when businesses shift online. The growth of the e-commerce and digital payments could be fast-tracked by technologies embedded in the payments systems by fintech providers such as Paymentology which will soon start installing its next-generation technology to offer the best user experience in processing safe and secure payments.

According to Forbes Middle East and Marmore MENA Intelligence, online sales in the Middle East are estimated to account for only 2 percent of the overall retail sales, much lower than the 15 percent in developed markets: thus confirming the huge untapped potential for e-commerce players.

“The regional retail market is on the verge of a digital disruption, with industry players undergoing a structural shift from traditional in-store concept to online channel through the adoption of digital technologies,” Deloitte said.

The global digital payments market is expected to grow from $3.88 trillion in 2019 to about $5.43 trillion in 2020, according to a report by Research and Markets, a global online market intelligence provider. However, this is only a fraction of the amount of money that changes hands through contactless payment channels, such as credit and debit cards, online payments, mobile payments and other digital channels.

In 2019, non-bank online payment platforms in China processed RMB250 trillion, nearly US$35 trillion, according to the People’s Bank of China (PBOC), showcasing the platforms’ widespread adoption. This perhaps makes China the largest country in the world to process digital payments.

“People are using digital payment options to avoid contact and spread of infection through direct cash handling, and also to adhere to social distancing to curb the spread of Covid-19. Due to closure of local market places and to avoid public gathering, people prefer online purchase of essential supplies, which in turn is increasing the demand for the digital payments market. The market is expected to record a Compound Annual Growth Rate (CAGR) of 20 percent and stabilize at $8.05 trillion by 2023,” Research and Markets, said in a report.

Global non-cash transactions surged nearly 14 percent from 2018–2019 to reach 708.5 billion transactions, the highest growth rate recorded in the past decade, according to the World Payments Report 2020 by Capgemini Research Institute.

Asia-Pacific surpassed Europe and North America to become the 2019 non-cash transactions volume leader, at 243.6 billion. The growth was driven by increasing smartphone use, booming e-commerce, digital wallet adoption, and mobile/QR-code payments innovations. It was led by China, India, and other SE Asian markets (32% growth).

In addition to these, cross-border inter-bank transactions last year doubled to nearly US$77 trillion in 2019, up from US$40 trillion in 2018, through the Society for Worldwide Interbank Financial Telecommunication (SWIFT) – reflecting the changing payments transaction landscape worldwide.

“Amid disruption, the payments industry is coming to grips with the digital shift of retail and B2B customers. The holy grail for payments firms lies in providing differentiated offerings that feature speed, convenience and end-to-end customer experience,” says the World Payments Report 2020 by Capgemini Research Institute.

“As the payments horizon broadens, players move digital capabilities to the front burner to cook up engagement-led services and tasty ecosystem propositions, leaving undifferentiated incumbents with a bland diet.”

In the coming years, instead of going out for shopping, most consumers will order essentials – food, beverage, grocery supplies, household shopping, and making payments for almost everything else sitting at home, be it ordering a plumber to fix a pipe leak to fetching a mason to repair a wall plaster that fell off – as all of these services will be made available through mobile applications and the services could be availed through the apps.

Customer convenience and Payment experience will be the deciding factor for consumers to choose the best vendors or banks for making payments. This explains why the digital payment transactions are going up while payments through mobile wallets and apps are catching up.

Financial technology companies such as Paymentology is bringing those conveniences and Customer experiences to the consumers across the world and in the Middle East where it made its foray this year.

Paymentology’s entry in the Middle East market comes at a time when demand for contactless and non-cash transactions soared after the COVID-19, prompting businesses and financial institutions to shift towards the digital and smart payment solutions. Middle East and Africa were among the fastest growing digital payments markets last year – booking an 18 percent jump from 2018, World Payments Report 2020 said.

“The consumers are fast moving into the contactless, digital and mobile payment environment and we are helping financial institutions and vendors to upgrade the payment technologies to the next level of sophistication and excellence to offer the best customer experience with air-tight security,” Shane O’Hara, CEO of Paymentology, said.

“Consumers will switch to payment technology that offers them the best customer experience, safety, security and a peace of mind. Our cloud-native propriety technology is ahead of its time. As the Middle Eastern banks seek more advanced technology for their customers, we are more than ready to offer them the best.”

Lockdowns, virtual working arrangements and widespread fear of infection have caused most commercial activity to move online – be it a Zoom call for business, or a look at the online grocery catalogue. The foundation for this entire transition is a quick, reliable and secure online payments infrastructure.

A Boston Consulting Group report from July revealed that Covid-19 and all its repercussions present a tremendous opportunity for the FinTech sector. Capgemini’s report notes the devastating effect that Covid-19 has had on the financial sector, but also presents it as an accelerating force for digital payments – highlighting the sheer pervasiveness of the crisis.

Launched in 2015 and with accreditations to operate globally, Paymentology is firmly positioned as a leader in the payment processing world. It has been chosen by banks such as Revolut and Standard Chartered’s Mox Bank to support their ground-breaking and highly customer centric payment programmes.

The technical expertise of its people and understanding of the banking space, mean that Paymentology can continuously innovate its services to enable our customers to deliver competitive payment products to the market.

Transactions hit pre-pandemic levels as market shows further signs of a return to health

Following the latest transaction data from HMRC, the latest data shows that transactions have returned to pre-pandemic levels for the first time.

Director of Benham and Reeves, Marc von Grundherr, commented: “There’s no doubt that the reopening of the property market and the stamp duty holiday caused a huge influx on buyer demand.

“However, it’s only really now that this demand is starting to translate into a full return to health where actual transactions are concerned.

“This is, of course, due to the lagged nature of the property selling process and so this positive health report is really just the start of what should be a steep increase in transaction volumes over the coming months.”

Managing Director of Enness Global Mortgages, Hugh Wade-Jones commented: “The property market is continuing to build momentum at a rapid pace and this is despite efforts by some lenders to stifle this market activity by reducing their range of products for first-time buyers, in particular, over the last few months.

“There has been such an overwhelming demand in recent months that the industry has struggled to keep pace and as a result, backlogs have formed with many left in limbo as they wait for their sale to complete.

“However, as the industry works to shift this backlog it does mean a consistently high level of transactions will be seen over the coming months.

“It’s taken just six months for the market to recover from pandemic induced paralysis and we expect to see transactions continue to climb for many months to come.”