Finance professional role to become analyst instead of relationship manager

It is not relationship management or service orientation, but the analytical ability of a finance professional that is the most important skill to develop. The FinTech Barometer from fintech company Onguard shows that these new skills must be developed in order to add value in the future.

Almost a third (30%) of CFOs and finance professionals put analytical skills at the top of the list with adaptability (27%) also considered an important skill. Relationship management came in third place (16%), while only 6% cited leadership qualities. In the study, the CFOs surveyed indicated that they consider learning to programme (12%) even more important than the development of service orientation (5%).

The importance of data
Developments in the field of new technologies and the acquisition and storage of data are rapidly advancing, so much so that almost half of finance professionals (43%) expect financial service providers to be transformed into IT companies in ten years’ time. The availability and use of data is important for companies with data playing a role in 93% of organisations. It is not surprising, therefore, that 45% of finance professionals think that big data will have the most influence within the industry. These aspects could explain why CFOs and other finance professionals expect the need for skills development in the future, particularly in the field of analysis.

Marieke Saeij, CTO at Onguard, highlights the importance of these skills: “We are seeing that more and more companies are looking to collaborate with partners to continuously deliver increased value to customers. Through these partnerships, platforms are being created that in turn provide a wealth of extra data, which companies can use to make sound decisions. In addition, it is important for finance professionals who are in contact with clients on a daily basis to be able to analyse this data and, in so doing, provide an extra service. For example, through data, finance professionals can find out the customer’s preferred communication channel and payment method for their invoices. Data analysis by a finance professional therefore creates a lot of added value within organisations.”

Rent-to-own price cap welcomed by debt charity

The Financial Conduct Authority (FCA) has today set out a proposed price cap on the rent-to-own market and an update on its work on alternatives to high-cost credit. The proposals are designed to protect people who use rent-to-own credit and outlines ongoing work on availability and awareness of alternatives to high-cost credit.

Joanna Elson OBE, chief executive of the Money Advice Trust, the charity that runs National Debtline, said: “This price cap for rent-to-own-firms is very welcome news, and I am pleased the FCA has listened to the advice sector’s concerns on this form of borrowing. Following its successful intervention in the payday loan market, this is another sign the regulator is taking problems with high-cost-credit seriously.

“While a 100 percent price cap will offer greater protection to people who use this market – who are often vulnerable and usually on low incomes – the FCA should consider going further by also capping late payment fees, which can escalate quickly.

“We also hope to see further action from the FCA in other areas of high-cost credit, including on logbook loans following the government’s disappointing decision to shelve the Goods Mortgages Bill.

“Tackling problems with high-cost-credit is of course only one part of the solution – so it is good to see that the FCA are also looking at affordable credit. Together with the Government’s decision to explore a possible No Interest Loan Scheme, we are beginning to see momentum build on this crucial issue.”

Experian unveils new innovative Open Banking services

Experian has launched a new set of advanced Open Banking services. Affordability Check and Tennant Vetting Service are both innovations which will empower consumers to better understand and take control of their finances, while offering businesses the insight to deliver improved products and services.

Experian is the only one of the UK’s main credit reference agencies to be an FCA accredited Account Information Services Provider (AISP). The services go live over the next month and are already being used by major UK banks, as well as providers of digital mortgage services, gambling organisations, leading automotive financiers and UK credit card providers.

Tom Blacksell, Managing Director of B2B Experian, said: “We’ve spent 18 months developing and testing our Open Banking services to produce class leading applications. The time is right for us to launch our services to market.

“Open Banking APIs are becoming fully operational and many organisations are looking to Experian to help them enhance their products and services, especially where they can be used to increase financial inclusion and help people access more affordable services.

“The insight can be used to increase financial inclusion and help people access more affordable services, while helping organisations to make better informed decisions.”

The Affordability Check allows organisations to confirm an individual’s income and expenditure using the advanced data science of Experian’s categorisation engine, Trusso.
Whereas the Tennant Vetting Service provides an online automated check which validates the consumer’s income as well as their previous rental history from their bank transaction data. It can reduce the time it takes to get a reference from days to hours.

Both services are underpinned by Experian’s leading cloud-based data aggregation platform, Verdus. It was developed by Fintech innovators Runpath, a business which Experian acquired last year.

Verdus sources and aggregates product information for UK financial services on behalf of price comparison sites. Open Banking allows Verdus to provide API connectivity so banks can access transaction data in real-time.

The Money Statistics November 2018

Striking Numbers
-5.6%: Change in the average real wage since pre-crash peak in February 2008
98%: First-time buyer deposit as percentage of average salary, in September 2018
41.5%: Increase in first-time-buyer house prices since 2012
34%: Proportion of income including benefits spent on rent by private renters
0.84%: Average interest rate on a cash ISA in September 2018
18.63%: Average credit card interest rate in September 2018
£59,008: Average total debt per UK household in September 2018
£32,220: Average student debt for 2016 cohort in England
-£38 billion: Change in Public Sector Net Debt (excluding RBS and debt to Bank of England) in the year to September 2018

Every Day in the UK
The population of the UK grew by an estimated 1,074 people a day between 2016 and 2017.
On average, a UK household spends £4.00 a day on water, electricity and gas.
The number of people unemployed fell by 118 per day in the year to September 2018.
Borrowers paid £141 million a day in interest in September 2018.
Citizens Advice Bureaux in England and Wales dealt with 2,683 new debt problems every day during October 2018.

Personal Debt in the UK
People in the UK owed £1.605 trillion at the end of September 2018. This is up from £1.560 trillion at the end of September 2017, an extra £870.78 per UK adult and £76.54 higher than the previous month.
The average total debt per household, including mortgages, was £59,008 in September. The revised figure for August was £58,861.
Per adult in the UK that’s an average debt of £30,819 in September, around 113% of average earnings. This is up from a revised £30,742 a month earlier.

Mortgages, Rent and Housing
Outstanding mortgage lending stood at £1.39 trillion at the end of September. This is up from £1.36 trillion a year earlier.
That means that the estimated average outstanding mortgage for the 11.1 million households with mortgage debt was £125,208 in September.
The average mortgage interest rate was 2.53% at the end of September. Based on this, households with mortgages would pay an average of £3,168 in mortgage interest over the year.
For new loans, the average mortgage interest rate was 2.11%. Using the latest figures from UK Finance, this means new mortgages would attract an average of £3,060 in interest over the year.
According to UK Finance, gross mortgage lending in September totalled an estimated £20.6 billion. This is down 3.3% on September 2017.

Savings and Pensions
In Q2 2018, households saved an average of 4.4% of their post-tax income, including benefits. This is down from 5.2% in Q2 2017. From 2000 to 2015, the savings rate fluctuated mostly in the 6-10% range, with a post-crash peak of 12% in Q3 2009.
The average interest rate for an instant access savings account, not including bonus interest payments, was 0.25% in September 2018. For a cash ISA, this was 0.84%.
If someone on the average salary saved 4.4% of their income in an average instant access savings account for a year, they would receive £2.40 in interest after tax. If they saved it in an average cash ISA, they would receive £10.10.

Spending and Loans
In the year to August 2018, consumer credit increased by 8.1% according to UK Finance, while outstanding levels of credit card borrowing grew by 8.9%, a rate that has been fairly constant over the last year.
In Q2 2018, households in the UK spent £108.7 million a day on water, electricity and gas, or £4.00 per household per day. On a seasonally adjusted basis, this was slightly down on Q1 2018.
The average interest rate on credit card lending bearing interest was 18.63% in September 2018. This is 17.88% above the Bank of England Base Rate of 0.75%.

The Bigger Picture
The UK economy grew by 0.6% in the three months to September 2018, an increase from the 0.4% growth in the second quarter of 2018, according to the latest estimates from the Office of National Statistics.
The CPI (Consumer Prices Index) 12 month rate stood at 2.4% in the year to September, down 0.3% on the year to August. The inflation rate has been above the Bank of England’s 2% target since February 2017.
The highest rates of inflation over the 12 months to September were in transport (5.6%), alcohol and tobacco (4.1%), and recreation and culture (3.0%).

About The Money Charity:
The Money Charity is the UK’s financial capability charity. Our vision is that everyone has the ability to be on top of their money as a part of everyday life. We empower people across the UK to build the skills, knowledge, attitudes and behaviours to make the most of their money throughout their lives.

Hanley Economic BS extends Self-Build and Residential offerings into Scotland

Hanley Economic Building Society has extended its Self-Build and Residential mortgage offerings into Scotland with immediate effect.

The Self-Build market will form a primary focal point for Hanley as the Society has highlighted this as a key area of growth on both sides of the border. Back in March it launched a Self-Build Direct to Intermediaries proposition to provide an additional option for intermediaries with Self-Build clients. This will also be made available to Scottish intermediaries alongside an online Self-Build hub.

This hosts useful resources and information including:

  • Self-Build criteria
  • Submitting an application
  • Assessing your application
  • Releasing funds
  • Completion of the project
  • Service standards
  • Self-Build downloads

The aim of the move is to offer Scottish intermediaries’ access to Hanley’s common-sense approach to lending which includes no credit scoring and taking each case on its own merit.

David Lownds, Head of Marketing & Business Development at Hanley Economic Building Society, commented: “Scotland has a growing property market and extending our reach into Scotland will provide even more choice for a range of borrowers. The Society is one of a small number of lenders who support the Self-Build and renovating market, and we look forward to developing new relationships with mortgage intermediaries in Scotland over the coming months.”

CA issues response to MHCLG Implementing Leasehold Reform Consultation

The Conveyancing Association (CA), the leading trade body for the conveyancing industry, has today issued its response to the Ministry for Housing, Communities & Local Government (MHCLG) consultation on Implementing Reforms to the Leasehold System.

The consultation deals with implementing the Government’s plans for leasehold houses and also includes questions on the timely provision of leasehold sales information and the cost of providing it.

The CA believes that all managing agents and freeholders should be able to provide leasehold information within 10 working days, and that the maximum fee chargeable should be between £150 and £300 to provide the full Leasehold Property Enquiries (LPE1) data, depending on the complexity of the estate.

It is also calling for greater provision of information online, which would be accessible to conveyancers, without imposing any additional administrative burden on the Lease Administrator. This would enable the LPE to be ordered at the point of marketing, and the 12 answers in the form, which could change, to be refreshed when a buyer is found.

The CA has provided its views on the practicalities of ensuring homes, that are not exempt from the rules, are not sold as leasehold and the process by which tenure can be changed to freehold – allowing HM Chief Land Registrar or the First Tier Tribunal to do this – and the redress that should be available to those where a long lease has been incorrectly granted on a property.

The trade body would like to see all legal costs, and any required premium, paid by the seller if they cannot demonstrate a mistake or mutual misunderstanding has been made in selling the house as leasehold, plus it wants the seller to also be required to enter into a deed of variation to correct the error.

It is worth noting that under the Consumer Protection from Unfair Trading Regulations, anyone marketing the property would be subject to criminal action if they had not made the buyer aware of the lease and the fact that the property was not exempt from the rules, at the point of marketing.

The CA has issued the response to all its member firms and is urging both them, and all other industry stakeholders, to file their own individual responses to the Consultation by the deadline date of 26th November.

Responses can be submitted online at: or by e-mailing a response to:

Beth Rudolf, Director of Delivery at the Conveyancing Association, said:“The CA response offers, what we believe, are a number of practical solutions to Government which will ensure the new measures work, and that where – in future – houses are sold as leasehold, without the required exemption, purchasers can get the tenure changed without cost to them.

“Also, we are keen to ensure the necessary criminal action is taken against those who mislead purchasers and do not provide the upfront information required in order for the purchaser to make an informed decision. At the same time, it is absolutely vital that Lease Administrators, for example, provide the information needed in a timely manner and at a fair cost – areas which have both been abused in the past.

“We want all our members, their colleagues and contacts, and all stakeholders and interested parties, to provide feedback to the Ministry because it is through this information – delivered by those who see the impact of the current leasehold situation on a daily basis – that we will get a system that is truly fit for purpose.

“In the past, consultations have only received a handful of responses but this can’t be the case on Leasehold Reform because, by taking five minutes now to inform the process, we will be saving everyone in the leasehold process many hours of frustration and cost in the future.

“This is a pivotal moment for our industry. We, at the CA, our members and many other industry colleagues, plus of course those impacted by the problems associated with leasehold, have all worked very hard to bring this issue to the attention of the policy makers. It is imperative that we make our voice heard again, and we must not lose the chance of positive change by allowing those with a commercial interest to make the loudest representations.”

ONS Retail comment from TransUnion – lending, fraud and spending

Ryan Kemp, director of retail at TransUnion (formerly Callcredit) comments on the ONS Retail Sales Index: “In the three months to October, retail sales increased by 0.4% when compared to the previous three months; slowing down after a strong summer. This should come as no surprise, as this period has historically been a quiet time for consumers, and the current economic and political uncertainty will be further dampening spend.

“However, we can anticipate an increase in spending in the coming weeks, with Black Friday, Cyber Monday and Christmas just around the corner, driving sales both online and in-store. The festive season will be a cause for celebration for retailers, who have endured a difficult year. However, for credit providers, there needs to be an element of caution.

“Many shoppers may be tempted to splurge beyond their means under the guise of bargains and sales, and this will only add to the already high level of consumer debt. Lenders should be performing robust credit checks and have an awareness of contributing factors to a customer’s financial stability, such as problem debt and income, so that they can carry out accurate affordability assessments, particularly during this busy time when over-spending is rife.

“As spending increases, so too does cyber-crime, with many consumers falling victim to fake vouchers and discount codes in a bid to get the best deals available, unwillingly giving out their personal data to fraudsters. Retailers and lenders need to be vigilant in spotting signs of fraudulent activity, and must take steps to educate consumers in safe shopping practices such as researching stores online to ensure they are legitimate, and not to make purchases on public WiFi.

“2018 has been a trying year in terms of cyber-security and consumer debt, but with better affordability practices and fraud awareness, consumers, lenders, and the retail industry alike can end the holiday season on a high.”

One in five people would prefer branch-based mortgage advice

People looking for mortgage advice in the local area can now get it face-to-face at their Nottingham Building Society (The Nottingham) branch, thanks to tech investment from the UK’s eighth largest building society.

In a study by The Nottingham[1], over one in five (22%) consumers said they would want to use a branch-based mortgage advice service. As part of a large-scale digitisation project, the society’s branches now feature a modern video system, which connects the customer to a qualified Nottingham Mortgage Services (NMS) mortgage advisor who can search and compare products from over 50 lenders.

The new Nottingham On Demand (NOD) service allows for full mortgage application details to be taken – in an average of just 30 minutes.

Director of Member Services Tina Hayton-Banks said: “We understand that going through a mortgage application process or remortgaging your house can be a daunting prospect and with so many products out there, it’s a struggle knowing which to choose. Advice tailored around a person’s individual needs makes a big difference and sometimes it’s more complex than simply filling in a form.

“We already offer the service over the phone and face-to-face via an adviser in some locations but with the help of the technology investment, we can now extend this service to even more branches. Customer feedback so far has been excellent so we’re excited our new ‘NOD Pods’ will allow us reach more customers with whole of market mortgage advice.”

Head of Branch Network Gary Womersley added: “Finding our members the right mortgage, regardless of provider, is something we are passionate about. It’s the reason, back in 2013, we started offering whole of market mortgage advice to our customers through Nottingham Mortgage Services and something we get lots of positive feedback about, so it’s great customers in new locations can now benefit.”

Only 19% of consumers using free debt advice

Research from Arrow Global’s Debt Britain report shows that despite worrying levels of debt, almost half of consumers (46%) said that they didn’t need any advice. 28% said when it comes to money matters they seek advice from friends and family, while only one in five (19%) said they have taken advantage of specialist free advice from debt charities and organisations.

The findings could explain why many people who find themselves in debt can feel out of control with a detrimental impact on their credit ratings.

Illustrating this, 27% of consumers admitted they didn’t know a missed debt repayment can adversely impact their credit rating for up to six years. A further 25% thought that a missed payment could stay on their credit file for less than six years.

The most common source of debt is an outstanding credit card balance reported by 45% of consumers. With an average balance of £5,960, it is concerning that 31% of consumers don’t know the interest rate they are paying on this source of debt. With research showing that by only paying off the minimum balance each month on a credit card loan of £3,000 at 17.9% APR, it can take up to 27 years to clear the debt*, this is a worrying statistic.

This lack of awareness on the interest rate being paid covers other sources of debt too. Student loans score the highest with 47% of consumers not knowing the interest rate they are paying, followed by overdraft at 41% and mail order credit at 39%.

While 56% of consumers have checked their credit rating using a free service, 70% said it was out of general curiosity and the wider findings of the research suggest no further action is taken to seek advice.

Lee Rochford, Group Chief Executive Officer of Arrow Global comments: “Our research reveals there is a worrying lack of awareness amongst consumers when it comes to the interest rates they are paying on their debts. With just 19% using free debt advice and 46% of consumers thinking they don’t need to seek advice, we’re concerned this is potentially storing up debt problems for the future.

“Financial awareness is critically important for all consumers and will help ensure consumers manage their finances in a responsible and affordable way. For those who do fall into debt arrears, we work with a number of debt charities and organisations such as StepChange, Citizens Advice and National Debtline, to ensure that customers who need advice are signposted in the right direction.”

Commenting on the report’s findings, Kevin Shaw, Creditor Engagement Manager at Money Advice Service, said: “The Money Advice Service welcomes the Debt Britain report, which helps shine a light on the debate around over-indebtedness.

“No one should suffer alone, so it’s crucial the right support is available for anyone struggling with money. That’s why our Debt Advice Commissioning Strategy sets out a challenging and exciting plan to ensure debt advice services target those most in need.

“We are committed to working with Arrow Global and the wider sector to help over indebted people to access debt advice. Consumers can find out where to access debt advice through our locator tool, whilst creditors should examine our toolkit for best practice collaboration between creditors and debt advice agencies.”

New research reveals realities of providing debt advice to some of the UK’s most vulnerable people

New research published today from the University of Bristol, in partnership with the Money Advice Trust and the Money and Mental Health Policy Institute, outlines the experiences of nearly 1,600 UK debt advisers when supporting people in vulnerable situations.

The report, Vulnerability: the experience of debt advisers – which was grant funded by the Money Advice Service – reveals the scale and nature of the vulnerability among clients that advisers encounter on a regular basis, and highlights that being ‘vulnerable’ is about more than being in financial difficulty. The research shines a spotlight on the day-to-day realities for debt advisers in supporting some of the most vulnerable people in the UK.

The report contains practical guidance and tools to help advisers with challenges such as recognising vulnerability, approaching a conversation about vulnerability and recording information in an appropriate manner.

Findings are based on a UK-wide survey of 1,573 debt advisers from nearly 400 organisations and an online survey of nearly 400 people with mental health problems and their experiences as they sought and navigated the debt advice process.

The scale of vulnerability
Nearly three-quarters (73%) of advisers encountered at least one client in the past 12 months who disclosed suicidal thoughts or feelings. More than half (56%) believed they had spoken to someone at serious risk of taking their own life.

Of the 87 clients that a typical adviser dealt with in a full-time working month, an average of 35 disclosed they lived with a mental health problem, while around seven said they had an addiction to gambling, alcohol or other substances.

Hidden vulnerability
The report also uses survey data from nearly 400 people with lived experience of mental health problems, and their experiences of seeking and receiving debt advice. Out of the more than 260 people with mental health problems who received debt advice, four out of 10 (44%) had not discussed their mental health condition with the advice organisation they dealt with. Reasons for this included not knowing it would make a difference (65%), concern as to what would happen to their information (28%) and feeling they wouldn’t be treated sensitively (23%).

A challenging climate
The range of situations experienced by people in debt represents a real challenge for advisers and their organisations. While most advisers said they felt fairly confident in identifying a client in a potentially vulnerable situation, the research suggests a need for adviser training to turn identification into effective support. More than half (56%), for example, said they had not received training on supporting clients with gambling problems.

Wider factors such as funding, time and a lack of local support services to refer clients to were also identified as challenges to providing people with the best support possible.

Professor Sharon Collard, director of the Personal Finance Research Centre at the University of Bristol, said: “This is the first time we have had sector-wide data on the extent and nature of vulnerable situations faced by debt advice clients, and what this means for debt advisers and their organisations.

“The research makes a strong case for improving support and training for debt advisers on issues such as gambling and suicide. It also highlights the importance of improving access to wider support services if debt advice clients are to get the holistic help they so often need.”

Joanna Elson OBE, chief executive of the Money Advice Trust, the charity that runs National Debtline and Business Debtline said: “We know that people in financial difficulty are often facing a range of different challenges. However, this research shows us for the first time the experiences of front line debt advisers in supporting some of the most vulnerable people in the UK.

“The diverse range of vulnerable situations that people are faced with beyond their financial difficulties, shows the challenging job debt advisers face on a daily basis. We know through the Wiseradviser training we offer the positive impact training can have on advisers and the people they help.

“With demand for debt advice continuing to grow, this report comes at an important time. We look forward to working with partners across the sector to build on the support available and to launching training in the new year in important areas including addictions and suicide prevention.”

Helen Undy, Director of the Money and Mental Health Policy Institute, said: “Around half of people in problem debt also have mental health problems, but many struggle to disclose this to debt advisers. That’s largely because they fear they won’t be treated sensitively, or that it won’t make any difference to their situation.

“We’d like to see debt advisers equipped with more training and tools to help them identify when clients are struggling with their mental health, and to work with clients to find a sustainable solution that works.”