Elevate Credit appoints new Managing Director

Elevate Credit International, a UK lender offering tech-enabled online credit solutions, has appointed Steve Grice as its new Managing Director. Steve will lead the UK operation of Elevate Credit, which strives to create a fairer financial world for all.

Prior to his appointment as Managing Director, Steve served as Chief Technology Officer where he was responsible for building Elevate’s next generation technology platforms to help customers on their path to better borrowing. Before Elevate, Steve held senior technology roles at RBS, where at different times he led the delivery of technology solutions for the Insurance, International Banking and Global Transaction Services divisions. He has over 20 years’ experience in financial services technology which included positions with Capital One and Barclays Stockbrokers.

Coming into the role, Steve hopes to continue expanding Elevate’s product reach with a long-term view of meeting a broader set of customer needs, with product options more tailored to individuals and their circumstances.

Scott Greever, who previously held the role, will join the US-based management team as Executive Vice President of Rise, Sunny, and Elastic and will continue to work closely with the UK team.

Speaking of his appointment, Steve said: “I worked with Scott for three years as CTO, steering Elevate’s technology adoption, to meet the needs of the company and our customers.

“Having friends and family who have needed short-term credit in the past helped me relate to the needs of our customers and I want to ensure we remain focused on the issues that matter to them. We will continue to call for change where it is needed, for example, in the way credit scores are calculated so that we can help consumers across the UK to access the right products for their needs whilst delivering good customer outcomes.”

“I’m thrilled to be in post as Managing Director and look forward to the next stage of Elevate’s journey.

Record employment rate masks concerns about precarious jobs and low wages

Record high employment is hiding concerns about the increasing number of poor-quality jobs, researchers from the Centre for Economic Performance (CEP) at the LSE said today.

While the UK has experienced record high employment rates since January 2015, wage growth over the past 11 years has been lower than in any other developed country except Greece.

“The UK labour market, at first glance, seems to be playing at Dr Jekyll and Mr Hyde,” the report written by Rui Costa, research economist at CEP, and Stephen Machin, professor of economics and director of CEP, states.

“Employment (in terms of both levels and rates) is at record highs, yet wage growth has been extraordinarily weak. One view is that these are opposite sides of the same coin. Another, more nuanced standpoint is that record employment is hiding a number of serious concerns about the changing composition of work as poor quality jobs, often with little employment protection, have permeated the labour market.”

The report calls for tax reforms and for the “increasingly hazy” distinction between who is an employee and who is self-employed to be clarified and addressed.

CEP’s analysis of the labour market concludes that:

  • UK employment growth has been strong in the last few years, reflecting a jobs boom,with employment and unemployment rates respectively at record highs and lows.
  • But at the same time, wage growth has been extremely weak with real wages stagnating or falling for most workers since the late 2000s. Low wage workers have done better due to mandated minimum wage increases outpacing inflation.
  • The UK’s recent wage growth compares poorly internationally. Out of 34 OECD countries, only Greece experienced lower real wage growth between 2007 and 2018.
  • The low measured unemployment rate masks that labour market slack is higher than it suggests as average hours have fallen and under-employment has risen.
  • Solo self-employment has risen very sharply and is the main source of jobs growth in the UK labour market.
  • Insecure employment is on the rise via more low wage positions, including zero hours contracts and new forms of alternative work arrangements (frequently being experienced by the solo self-employed).
  • Key policy options for discussion include: proposed sizable increases in minimum wages; the tax and social insurance treatment of the solo self-employed; and the need for productivity to increase to get wages up across the board.

Dr Costa said: “The labour market may seem to be at peak fitness, as employment rates continue at record highs – but it is not in as good shape as some assert. Employment growth has been strong, but there are serious concerns about the changing nature of work and low (sometimes very low) wages.

“In real terms, median weekly wages have still not recovered to the 2008 pre-recession level. The consistent real wage growth experienced in the pre-crisis period looks now a distant reality. The extended period of low wage growth is unprecedented in modern times.

“In the long run, the key driver of wages is productivity. For all workers to get pay increases, and for all to have decent living standards, productivity needs to improve through investment in skills, innovation and human resources policies.”

Professor Machin said: “The UK labour market is playing at Dr Jekyll and Mr Hyde – there are record high levels of employment and extraordinarily weak wage growth.

“The rise of the gig economy and other alternative work arrangements has led to discussions about the trade-off between additional flexibility they can offer and the emergence of low-wage, dead end jobs that function outside the job legislation offered in conventional employment and promise little in the way of career development and wage progression.

“The distinction between who is an employee and who is self-employed needs to be addressed in terms of tax treatment inequalities, together with whether (and how) social insurance benefits could be extended beyond those in traditional employment to offer a safety net to those in low-wage, precarious work.”

Stonebridge sees record-breaking lending application volumes in October

Stonebridge, the mortgage and insurance network, has today announced it broke its record for lending applications submitted during October this year.

Throughout the course of October, the network submitted £868 million worth of lending applications – a record month for the business and up from £820 million in September, and up 5% on October last year.

The network was also able to announce ongoing growth in both the number of appointed representative (AR) firms joining the business and the number of existing firms who have increased their adviser numbers.

During October, 14 advisers joined the network – taking the overall total number up to 639 across 316 firms, while 10 existing network firms expanded their adviser numbers during the month.

Part of the network’s focus during 2019 and into 2020 is growing the number of new firms joining the network but also helping existing members recruit new advisers in order to expand their businesses to meet growing demand for mortgage advice.

Stonebridge has also announced the recruitment of a number of new additions to its overall team including the appointment of Andrea Chambers as its Business Training Consultant, Billy Perry as a Business Standards Assessor, and Anushree Parthasarathy as a further Developer for Revolution – the trading platform owned by the network.

On top of this, Francesca Sorrell joins the network as a new Sales Support Administrator and Charlotte Hamblin as Helpdesk Support.

Rob Clifford, Chief Executive at Stonebridge, commented: “There is much speculation currently about the performance of the UK mortgage market but our most recent lending figures for applications submitted show a significant month-on-month improvement, to a point where October was a record month for the business.

“That’s very reassuring and is down to the quality of our AR firms and their advisers, and the clear benefits they provide to their clients in terms of the mortgage advice on offer.

“We anticipate that the gross mortgage lending figures for the year for all UK Finance lenders will be marginally ahead of 2018, and it’s clear from our own data that our AR firms are taking a larger share of this.

“Looking ahead, we anticipate that the demand and need for mortgage advice will only grow, and it may also be that those who’ve felt they needed to sit on their hands during 2019 – especially given the political uncertainty – will find they come to a point of action during 2020.

“Our AR firms are making the most of our technology and are planning ahead for an increase in this demand, and it’s incredibly heartening to see these businesses, with our help, growing organically and adding new advisers to their overall propositions.

“We will certainly continue to support them with a raft of opportunities and we believe that all types of advisory firms will find plenty to interest them within the Stonebridge offering.”

Housing should most certainly be on the agenda

Following the UK Finance lending trends figures this morning, Richard Pike, Phoebus Software sales and marketing director, says “When we see figures like those issued by UK Finance today it is hard not to be at least a little encouraged. However, the truth is that as much as the numbers for house purchases, homemovers and remortages are positive, we do have to take heed of the fact that the buy-to-let sector is still suffering. Now that may well be in line with the government’s plans and, with everything that has been thrown at landlords in the last eighteen months, it is hardly surprising that the foot has come off the pedal. But, is this a very short-sighted view when buying a house is out of reach for so many in the UK?

“Of course, things may be all about to change with the election just around the corner. What will we see in the upcoming manifestos and will anyone read much into them when Brexit continues to dominate? There is no doubt that everyone just wants an end to it all, but there really is much more to life than Brexit and housing should be most certainly be on the agenda.”

Property drives marketplace lending to new high, but record losses drag on returns

Marketplace lending hit a record £3.0bn in the first half of the year, despite record loss rates in the sector, according to Link Group’s latest Marketplace Lending Index, powered by Brismo.

The value of gross marketplace lending conducted by tech-enabled platforms (which includes crowdfunded or peer-to-peer loans) rose by more than £500m in the first half of the year, up 21.6%. This followed unexpectedly high lending of £1.5bn in Q2 2019, up 24.3% year on year. Marketplace platforms are collectively lending £16m a day.

The sector’s performance in the first half of 2019 was powered by an exceptional period of growth for property lenders – they accounted for three-fifths of the additional lending in the first half of the year. In spite of the very public collapse of Lendy, and a sluggish housing market, property lending totalled £848m in the first half of the year, up by 54.5%. This contrasts with the performance of the wider mortgage market, suggesting marketplace lenders are increasing their market share among traditional or mainstream lenders. LendInvest and Landbay were key drivers of growth. Both more than doubled their lending in the first half of 2019, collectively originating £335m more than over the same period in 2018.

Business lending, which involves companies borrowing to invest, buy new premises, make acquisitions, or refinance, as well as invoice finance, totalled £1.1bn in the first six months of 2019. This represented a rise of 14.5%, slower than the 17.4% growth seen a year ago. This reflects the wider economic malaise, and the uncertainty Brexit is placing on businesses’ decision-making on investment. Consumer lending, frequently used for large-scale discretionary spending, home improvement or debt consolidation, saw slower growth still. It rose by just 9.4% in the first half of the year, climbing to £990m, reflecting weaker consumer spending.

To build a true picture of the investment performance of marketplace loans for investors, returns must account for fees, costs, term length, and losses. Accounting for these factors, the Link/Brismo Marketplace Lending index shows that the net return on a typical loan now stands at 3.8%, the lowest on record. This has fallen from 5.5% in the second quarter of 2017, and is now a distance from its most recent peak of 6.3% in 2016.

The rising loss rates on loans has driven down net returns. Losses currently reduce the net return by 3.4 percentage points – the highest level on our record. This compares to a year ago, when losses reduced returns by 2.1 percentage points. A weaker economic environment has been a key factor, undermining a growing minority of businesses and consumers’ ability to repay loans. Furthermore, as they grew rapidly, several lenders increased their exposure to riskier borrowers, which has naturally impacted loss rates. The trend of rising losses continues to be exacerbated by the dwindling usage of contingency funds among platforms, exposing more loans to losses.

The second component in net returns is the net yield (which accounts for the initial interest rate and platform fees). This has remained steady at 7.2%. Although risk has increased in the sector, growing competition among lenders has also created a tougher pricing environment. This has limited lenders’ ability to compensate investors for increasing risk.

Despite the impact of rising loss rates, returns remain healthy compared to other fixed income assets of a comparable term, which should underpin demand. While the economic and political uncertainty has the potential to weigh on the sector, Link/Brismo currently forecasts gross lending will total £6.2bn in 2019, representing annual growth of 16.7%.

Mark Davies, Managing Director of Link Mortgages Services, said: “Peer-to-peer and marketplace lending has witnessed a tumultuous year so far. The sector has been beset by controversy, not least by Lendy’s fall into administration. Economic and political uncertainty has provided a more troubling backdrop for consumer and business lending too, and losses have risen. In spite of all this, marketplace lending continues to grow as platforms cover the funding gap left by traditional banks.

“More change is coming. Tighter regulation requires clearer disclosure on performance, more robust risk management, and restricts lending to retail investors. This will reassure the large-scale institutional investors that are vital to platforms building a more diverse funding base, and it should support long-term, sustainable growth.

“However, as losses rise, and the potential for an economic downturn looms on the horizon, it is clear that marketplace lenders are heading into new territory. Should we see the economy slow further, the risk management, loan-servicing and recovery practices they have in place are likely to face significant testing across the board for the first time.”

Rupert Taylor, Chief Executive of Brismo, comments: “Whilst marketplace lenders are working hard to adopt new FCA requirements there is, in parallel, an increasingly widespread acknowledgment that, investors of all types need to be able to compare performance.

“The Link Marketplace lending index demonstrates how performance can be compared and we will continue to develop our methodologies to provide investors with the insights they need to make commitments to the lending asset class.”

Matt Adey, Director of Economics, British Business Bank, comments: “We know that high-quality information and reporting is important for the effective operation of smaller business finance markets.

“Reports on particular finance types, such as Brismo’s latest Marketplace Lending Index, provide a valuable contribution to the market’s understanding of how these areas of funding are performing, and we welcome its publication today.”

Paul Smee, Chair of the P2PFA comments: “As sectors evolve and expand their influence and impact, and as regulators become more interested in them, there is an almost inevitable interest amongst stakeholders in how standard descriptions and measurements can similarly evolve.”

Just Mortgages self-employed advisers grow their own businesses

Just Mortgages’ self-employed division has seen several of its advisers expand their own businesses and take on new staff, showing the success of the self-employed model, according to director Carl Parker.

October was the best ever month for recruitment into the self-employed division, with twenty new advisers joining the team. There are now 230 brokers in the Just Mortgages self-employed division and Parker expects that to have reached 250 by the end of the year.

Significantly, businesses within the self-employed division are now themselves starting to expand, with fifteen firms taking on new staff in recent months.

Angel & Allsop Financial Services in south-east Kent has recruited two additional brokers into its all-female team, with plans for further expansion in coming years. Co-founder Emma Angel says going self-employed and joining up with Just Mortgages is “the best thing we’ve ever done” and “we wish we’d done it sooner”.

“I really value the support Just Mortgages has given us growing the business,” says Emma. “Having their guidance and the constant communication with the team has made it all possible. They are unparalleled in what they do.”

Joe Childes, co-founder of Right Choice Mortgages in south Yorkshire, agrees: “I can’t see why a broker would go with anybody other than Just Mortgages,” he says. When Joe and his business partner Richard Thompson took the decision to go self-employed, “Just Mortgages backed us every step of the way.” The firm has now taken on an additional new broker and an office manager to support the development of the business.

The Mortgage Branch, based in Cheltenham is set to take on its sixth broker in December, with Just Mortgages providing support in the recruitment process. The business also employs two support staff. Co-founder Miles Wallace says, “With Just Mortgages you get to be part of a team, but you’re still free to develop the business as an individual broker: they provide a very strong template and then give you the freedom to build on that in our own way.”

Parker claims the self-employed division’s success is down to the fact it offers the best of both worlds: “Brokers are self-employed and therefore in control of their own destiny,” he says, “but they have a dedicated sales manager to help and support them. The fact that so many are now taking on new advisers into their business shows that this approach can really pay dividends.

“Brokers get the backup they need, including help with advertising and recruiting for new staff, but can still get the satisfaction and sense of achievement that comes from growing your own business. It’s great to be able to help make this happen.”

Black Friday and Cyber Monday shoppers targeted by fraudsters

One in four (25%) online shoppers have fallen victim to fraud on Black Friday or Cyber Monday, according to new research from secure payments solution Shieldpay.

For those who have been victims of fraud on Black Friday or Cyber Monday it’s emails with lures of fake deals which tempt most people to fraudulent sites when shopping online (29%), followed by shoppers clicking on fake adverts on social media (27%). A quarter (26%) of people received items that were faulty or damaged, 24% ordered items that ended up being fake and 24% had their card details or identity stolen and money taken from their account.

This comes as over three quarters of shoppers (76%) admit they use retail websites or online marketplaces they wouldn’t usually trust to try and secure the best deals on Black Friday or Cyber Monday.

Online shoppers are defrauded on average by £218, though an unlucky 8% lose over £500. It’s shoppers between the ages of 35 and 44 who experience the greatest financial impact, losing an average of £320. Yet, it’s not this age group which is most frequently targeted. Shoppers aged between 18 and 34 are most likely to fall foul of the fraudsters with 31% of online shoppers becoming victims.

Shieldpay’s patent pending payments process mitigates the risk of online shopping fraud by fully verifying the identity of all parties, holding funds securely and only releasing them once both parties confirm they are happy.

Tom Clementson, Director of Consumer at secure payments solution Shieldpay, said: “It’s not just shoppers that are looking forward to this year’s Black Friday and Cyber Monday sales. Fraudsters will be rubbing their hands together with glee at the prospect of more people shopping online. Deals that look too good to be true are commonplace and people can easily be lured away from trusted websites to bag the best bargain. From websites stocking fraudulent merchandise to more complex phishing scams asking for confirmation of payment or account details, people need to be on the look out this shopping season.

“Banks and retailers have a significant role to pay in protecting their customers, but people must also take their online safety into their own hands. Utilising technology that secures transactions is one way to do this. Alongside that, simple steps like only shopping on trusted websites, checking the website is secure and never clicking on links in unexpected emails go some way to keeping money safe.”

Innovative credit card Tymit secures £4m in funding

Tymit, the new mobile enabled credit card, has secured £4 million in funding, the London headquartered firm announced today.

Tymit offers customers more flexibility and control over their purchases than a traditional credit card through its smart, proprietary technology.

Purchases are either paid for in full at the end of the month – interest free – or they are split into three, six, 12 or 24 equal monthly instalments. The repayments, including capital and interest, are clearly shown in Tymit’s app at the time of purchase.

Importantly, purchases can be also bundled together, so they can be paid off as one – for example costs associated with a weekend trip abroad.

Tymit operates in a fair and transparent way by never charging additional fees and clearly showing the cost of financing a purchase over time. Tymit’s concept has proved exceptionally popular with thousands of people currently on the waiting list. With the upcoming launch of Tymit’s app, those on the list will be invited to apply for the card.

Comprising of a mixture of debt and equity funding, today’s raise will be used develop a world class customer servicing platform and underwriting practice to enable rapid growth.

Martin Magnone, co-founder and CEO of Tymit, said: “It’s exciting to be working with our funding partners as we bring Tymit to the market. Our product is a refreshing take on the traditional credit card, blending convenience with a new flexible and genuinely transparent experience.

“We’re looking forward to welcoming customers to Tymit and are confident that our approach will offer a level of control that will make it easier to make good spending choices.

“The credit card market has remained stagnant for too long, but with app-based banking more popular than ever – now is the time to offer real innovation.”

Money Advice Trust launches new vulnerability guide for car dealerships

The Money Advice Trust, has today published a new guide to support car dealership staff improve support for customers in vulnerable circumstances. The dealership guide ‘Customer vulnerability: decision-making when purchasing a vehicle’ provides practical tools and processes staff can use when engaging with customers.

Written by the Money Advice Trust’s Vulnerability experts, Chris Fitch and Colin Trend, and with the support of Santander Consumer Finance, the guide outlines the role and responsibilities of credit intermediaries, such as car dealerships, when it comes to identifying and supporting customers who may have difficulty with decision-making. The guide covers key topics including:

  • How customers make decisions
  • Identifying decision-making problems
  • Supporting customers with problems
  • Applying key principles
  • Law and regulation

To help inform the content for the guide, the authors carried out discussions and interviews, with dealership staff which were coordinated by Santander Consumer Finance.

The guide is designed for staff who engage with customers or have a responsibility for customer vulnerability strategies and is available for free via the Money Advice Trust’s Vulnerability Resources Hub.

The Money Advice has delivered training and consultancy to over 250 organisations and 21,000 staff who engage with people in financial difficulty.

Chris Fitch, Vulnerability Lead Consultant at the Money Advice Trust, said: “When purchasing a vehicle from a car dealership, customers will make lots of big and small decisions.

“Importantly, as our new guide explains, we can identify customers who might need extra support or help during their purchase, by carefully watching the way in which they make these decisions.

“Our guide provides staff working in car dealerships with the tools to better identify these vulnerable customers, support them in their decision-making, and to treat them fairly.

“Supported by Santander Consumer Finance, these tools allow sales staff to better know their customers, understand their needs, and allow them to make a purchase that is both fair and affordable.”

Katherine O’Sullivan, Regulatory Policy and Governance Manager at Santander Consumer Finance, said: “It has been an educative and rewarding experience working with the Money Advice Trust, in particular Chris Fitch and Colin Trend, to create this guide for car dealership staff. The industry has been seeking guidance and advice on this complex topic for some time.

“We foresee this valuable toolkit will assist dealership staff to better identify customers having difficulties with decision making and most importantly, help them overcome these.

“Over time, we hope this brings about an enhanced collaborative relationship between dealers and lenders, to ensure the best possible outcome for all of our customers.”

Nuapay and Thyngs partner to combat cashless charity challenge

Nuapay, a pioneer of open banking, announces its partnership with mobile technology platform, Thyngs, to help charities tackle the decline in donations due to reductions in consumer cash use.

The two companies have joined forces to support fundraising for the BBC’s Children in Need campaign. They have created a giant Pudsey Bear with an NFC chip on its ear, enabling passers-by to tap their phones to make a donation to the Children in Need campaign. The Pudsey Bear collection points will be available at a number of offices, bars and restaurants across London.

The move follows a report by the British Retail Consortium in March this year, showing that, at the current rate of decline, cash use will end by 2026. Research published by the Institute of Fundraising last year highlighted that 70% of charities had seen a reduction in cash payments and that over 74% had not yet implemented contactless payments systems. In tandem, the Charities Aid Foundation (CAF) has reported a steady drop in the number of people saying they have donated to charity in the past year, with a reduction of 4% from 2018-2019.

Nuapay and Thyngs will launch their partnership at this year’s Open Banking Expo, which opens tomorrow. Visitors to the Nuapay stand (Stand 18) will be greeted by Pudsey and will receive a demonstration.

For consumers, the Open Banking based payment solution makes it faster, more convenient, and more secure to make donations without the need for cash. Transactions can be made in as little as 20 seconds on a mobile device. All consumers need is to have their mobile banking App already installed on their mobile phone. There is no need to for consumers to share sensitive data or card details, reducing the potential risks of fraud.

For charities, donations via the Thyngs and Nuapay solution have the benefit of not requiring expensive card terminals and hardware, making it fast and easy to accept cashless donations from a large number of collection points. It can also significantly reduce a charity’s cost of processing donations when compared to cards.

“The charity sector is heading for a crisis. Cash remains the most common method for people making donations (53%), so as we become an increasingly cashless society, donations have taken a hit. If charities don’t act, they will soon find themselves divorced from a vital revenue stream,” said Neil Garner, CEO of Thyngs. “Thyngs have created a range of cashless solutions to help charities address this challenge by simply upgrading their existing physical fundraising materials, allowing huge creativity and engagement. Our partnership with Nuapay provides another string to our bow, providing our charity partners with access to cost effective Open Banking payment options.”

“For many years, cards have been the only real option available if merchants wanted to accept cashless payments or donations, and this required expensive card terminals and technology. But with the new European regulations, Open Banking based payments have now become a viable, fast growing payment option” said Nick Raper, Head of Nuapay UK. “Nuapay offers an Open Banking solution that is affordable and, critically, quick and easy to implement. Through our partnership with the innovative technology company Thyngs, we are making Open Banking more widely available, while helping the BBC and other charities to increase their non-cash donations.”

NOTE: Any Android phone and iPhone XS/XR and after supports ‘NFC’ so people just need to tap and hold their phone against the tap-point. For people with older phones they will be able to scan the QR code on the name badge using their Camera or download an App such as Tap & Scan (iTunes store) which allows older iPhones to tap using the App.