Modest fall in asset finance new business in June

New figures released today by the Finance & Leasing Association (FLA) show that asset finance new business (primarily leasing and hire purchase) fell in June by 3% compared with the same month in 2017, but grew by 5% in the second quarter of 2018 as a whole.

The commercial vehicle finance and IT equipment finance sectors reported new business up by 9% and 15% respectively in the second quarter of 2018 compared with the same quarter in 2017. .

Commenting on the figures, Geraldine Kilkelly, Head of Research and Chief Economist at the FLA, said: “The asset finance market reported new business up in the first half of 2018 by 1% compared with the same period a year earlier. This was in line with modest growth in UK business investment over the same period.”

3.8 million UK households to default on personal debt by 2022

The number of households in personal debt default is set to increase to 3.8 million by the end of 2022, up from 3.3 million at the end of 2017 according to the latest econometric forecast from Arrow Global’s ‘Debt Britain 2018’ research.

Arrow Global’s forecast is based upon analysis of the Office of Budget Responsibility (OBR) projections for interest rates, unemployment and consumer debt.

The 0.5 million increase is expected despite a slight dip in the total in 2019 and 2020, due to the lagged effect of the post-Brexit referendum bank base-rate cut and subdued unemployment. It will then resume an upwards trajectory to reach 3.8 million by the end of 2022.

From 2020 onwards Arrow Global expects mortgage possessions to rise more sharply as the recent base-rate increase and future rises push up borrowers’ costs.

The forecast also looks at the impact on default levels if the Bank of England increases the bank base rate at a faster rate than currently projected. If it is 0.5% higher than the OBR forecast, an additional 250,000 households will default by 2021.

Lee Rochford, Group Chief Executive Officer of Arrow Global comments: “While some debt default is to be expected due to changes in personal circumstances and economic factors, it is startling that an increase in the bank base rate by only 0.5% could lead quarter of a million more households to default.

“It is vital that people with debt problems are provided with support and as a responsible credit management services provider, we focus on helping people manage and repay their debt in a sustainable way.”

Most UK Firms Have Cybersecurity Insurance — But Not Full Coverage

The number of UK firms with cybersecurity insurance has risen in the past year — but less than half say their cyber insurance covers all risks. The second annual cybersecurity survey from research and consultancy firm Ovum, for Silicon Valley analytics firm FICO, found that the number of UK firms reporting they have no cybersecurity insurance dropped from 31 percent in 2017 to 10 percent in 2018. While this is substantially better than the 24 percent reported across all 11 countries surveyed, only 38 percent of UK respondents said their cybersecurity insurance covers all risks.

Telecommunications firms were the most likely to have no cybersecurity insurance — 17 percent reported this, compared to just 5 percent of financial services firms.

Furthermore, less than half — just 40 percent — of firms said their insurer based their premiums on an accurate analysis of their risk profile. Most firms said premiums are based on an inaccurate analysis, on industry averages or on unknown factors.

“Cybersecurity insurance has become a must-have for UK firms in a short period of time,” said Steve Hadaway, FICO general manager for Europe, the Middle East and Africa. “But with that growth will come increased pressure on insurers to increase the transparency and fairness around how premiums are set. Businesses will demand that their investments in cybersecurity protection — and the strength of their cybersecurity posture — drive their premiums down.”

“Although UK organisations perform well in terms of the uptake of cyber insurance, the fact that fewer than 40% have comprehensive insurance demonstrates there is still some way to go for these firms to have a broad view of their security posture and how to present it for insurance,” said Maxine Holt, research director at Ovum. “It could also show that these companies have a current security posture that insurers are not prepared to cover comprehensively. We should not detract from the positive news here; 90% of UK organisations have elevated the importance of cybersecurity to a level that requires insuring, even if only partially.”

Ovum conducted the survey for FICO through telephone interviews with 500 senior executives, mostly from the IT function, in businesses from the UK, the US, Canada, Brazil, Mexico, Germany, India, Finland, Norway, Sweden and South Africa. Respondents represented firms in financial services, telecommunications, retail and ecommerce, and power and utilities.

Direct Line launches new insurance solution for financial services professionals

Direct Line for Business has announced the launch of a new end-to-end business insurance solution that enables owners of small and micro sized financial services firms and contractors operating in the sector to buy insurance directly and with confidence. The transformative programme includes an intuitive and responsive online tool that enables customers to create a customised policy that is totally unique to their business. This means policyholders will only pay for the insurance that they need.

The online tool asks some simple questions that are personalised according to the customer’s trade. The tool uses the owner’s knowledge of their particular business to deliver the best set of questions to create the right policy for them.

The new solution also offers clear, transparent and modular cover that will give business owners the confidence that they have the right level of insurance. Customers can see the cost of each product section and have the ability to add or remove options as they choose. New cover options are now available so that customers can choose multiple locations, such as working in an office, renting a desk or a space in places such as WeWork and Regus, a pop-up location or working from home. This reflects the changing landscape of how businesses work and the places in which they work.

Critically, with no mid-term amendment fees, policyholders can also change their cover levels as their business flexes, such as expanding or contracting their workforce, or working from multiple locations or opening new premises.

Jazz Gakhal, Managing Director at Direct Line for Business, said: “Small businesses are the lifeblood of the UK economy. We understand that no two financial services businesses are the same we need to ensure we have an insurance solution that can keep up with the evolving landscape of the business sector.

“Our research shows that companies are constantly changing, whether it’s recruiting staff or expanding into new premises, so they need peace of mind that they have an insurance policy that is adaptable and flexible enough to keep up with their ever changing world.”

The launch is supported by a major new marketing campaign entitled “Keeping up with your world”. The advertisement features a dynamic female business owner in her 30s, starting off self-employed and then growing and running her own business. The fast-paced scene changes and cuts show how much a small business owner must consider, such as hiring staff, chasing down clients and moving from working at a kitchen table to a busy office.

The ad lays down a bold challenge by asking, “Can your business insurance do that?” emphasising how Direct Line continues to disrupt the insurance marketplace, making it ever easier for small companies to buy direct with confidence.

Comment: Unemployment drops to its lowest reading since 1975

“Recent labour market figures from the Office for National Statistics show that the unemployment rate dropped to 4.0% in the three months to June, the lowest reading since 1975. At the same time, the number of vacancies rose to a new all-time high and the number of people on so called zero hours contracts fell to 780,000, down from 884,000 one year earlier.

‘Today’s data release is certainly good news for the British economy and highlights the healthy state of the labour market. Unfortunately, ultra-low unemployment rates do not translate into buoyant consumer spending at the moment, also because of real wage growth having slowed down in the second quarter, leaving households with no pay increases once inflation is taken into consideration. Given the elevated levels of uncertainty caused by Brexit, lower corporate investment is holding back productivity growth (which has been the Achilles’ heel of the British economy since the financial crisis) and despite the low unemployment rate, we continue to remain generally pessimistic about the UK’s economic outlook for the rest of the year.”

By Markus Kuger, Senior Economist at Dun & Bradstreet

Record entry levels for industry technology awards at UKCCC

A record number of entries have been reported for the Credit and Collections Technology Awards, devised by Credit Connect and hosted this year by The Credit Services Association (CSA) as part of the CSA Gala Dinner.

A shortlist of some 110 finalists from nearly 80 companies across 18 categories which include recognising best-in-class solutions across such complex issues as affordability, customer engagement, and compliance. As well as recognising businesses, the awards also recognise teams and individuals, with three industry executives shortlisted for ‘Innovator of the Year’, arguably the evening’s most anticipated award.

“Familiar names are joined by relative ‘newcomers’ to the industry, making the awards particularly diverse, fresh and exciting,” says Peter Wallwork, CSA CEO.

Now in its second year, the awards have been judged by an independent panel of industry experts who have examined excellence solutions in four different categories sections: credit, collections, credit & collections and innovation.

A full shortlist can be found here – http://awards.credit-connect.co.uk/enter-the-credit-collections-technology-awards

Virgin Money renews AVM partnership with Hometrack

Virgin Money has renewed its licence with property analytics business Hometrack, securing delivery of Automated Valuation Model (AVM) services for the next three years.

The challenger bank first partnered with Hometrack in 2015 and has been using its automated and risk services to help enhance the service offered to customers and intermediaries.

Hometrack was founded in the UK in 1999 and is trusted by major mortgage lenders, housing authorities and property developers in both the UK and Australia. Hometrack launched its AVM in 2002 and uses proprietary data and algorithms to provide the UK’s market leading automated valuation tool.

Virgin Money’s Director of Mortgages, Andrew Asaam said: “Hometrack’s AVM underpins our loan decision process for selected remortgage applications, helping to ensure we provide an efficient and high-quality service to our customers and intermediary partners.

“We look forward to continuing our relationship with Hometrack over the next three years.”

Piero Bassu, Director of Financial Services and Capital Markets at Hometrack, said: “We are delighted to continue working with Virgin Money and look forward to building on our partnership. By integrating our AVM into their existing processes Virgin Money has been able to drive efficiency through its credit valuation strategy which complements their overall award-winning proposition.”

FSB praises jobs figures but calls for action to boost workforce skills

New official statistics published today show unemployment in Scotland fell by 0.1% between April and June to 4.2%. The Office for National Statistics (ONS) figures show employment also increased over the same period.

Andrew McRae, the Federation of Small Businesses’ (FSB) Scotland Policy Chair, said: “Falling unemployment is good news for communities up and down Scotland, no matter how small the decrease. Despite a tricky political backdrop, many Scottish smaller firms are ploughing on – taking on staff and growing their businesses.

“But if we want to turn these historically good unemployment figures into sustained growth, we need to boost the country’s skills. As the Scottish Government looks toward priorities for the year ahead, we’ve made the case for new measures to encourage more people to improve their skills – especially those in work.

“That might mean the development of more vocational skills academies or action to encourage the biggest businesses to support the development of their supply chain. Likely forthcoming immigration changes and rapidly advancing technology underlines the case for a smarter Scottish skills system for those already employed.”

New figures reveal identity fraud falls for the first time since 2014

Today, Wednesday 15 August 2018, Cifas, the UK’s leading fraud prevention service, has released new figures showing that identity fraud has fallen for the first time since 2014. Cifas members recorded 84,463 cases in the first six months of the year, a 5% drop compared to the same period in 2017 (89,199). Despite the reduction, identity fraud still represents over half of all fraud recorded by the UK’s not-for-profit fraud data sharing organisation, with 87% of identity frauds perpetrated online.

The latest figures show there has been a reduction in the volume of bank accounts being targeted by identity fraudsters, with cases falling by 12% (2,882 fewer cases), and a 34% reduction in attempts to obtain mobile phone contracts (3,096 fewer cases). However the figures reveal a sharp rise in identity fraudsters applying for plastic card accounts, with cases increasing by 12% (3,454 more cases). The figures also show identity fraud against online retail accounts has risen by 24% (1,232 more cases).

The vast majority of identity fraud happens when a fraudster pretends to be an innocent individual to buy a product or open an account in their name. Victims may not even realise that they have been targeted until a bill arrives for something they did not buy or they experience problems with their credit rating. To carry out this kind of fraud successfully, fraudsters need access to their victim’s personal information such as name, date of birth, address, their bank and who they hold accounts with. Fraudsters get hold of this in a variety of ways, from stealing mail through to hacking; obtaining data on the dark and surface web, exploiting personal information on social media, or though ‘social engineering’ where innocent parties are persuaded to give up personal information to someone pretending to be from their bank, the police or a trusted retailer.

Sandra Peaston, Director of Strategy, Policy and Insight, Cifas, said: “Identity fraud cases reached record levels in 2017, therefore it is positive that we have seen an overall reduction in the first six months of the year. However, these new figures demonstrate that identity fraudsters adapt quickly to try and circumvent security measures. The re-targeting of plastic cards, following a drop in 2017, is a prime example of this.

“With identity fraud remaining uncomfortably high, more personal information available online, and increasing numbers of data breaches, the protection of personal data must be viewed as a collective responsibility. Everyone should play their part, from individuals and organisations taking steps to protect personal data to businesses ensuring their fraud prevention practices effectively defend against evolving tactics employed by identity fraudsters.”

Finance leaders struggling to manage risk Dun & Bradstreet study finds

A study from Dun & Bradstreet today reveals that while finance leaders remain tasked with business profitability, their remit has expanded to include the sharing of data across the organisation and management of risk.

The Risk Revolution found the top challenge for finance leaders today is monitoring risks within a business’ customer, supplier, or partner base (38%). The second biggest concern for finance leaders was found to be forecasting or predicting risk, while the third was growing profitability.

When it comes to managing risk, data is an invaluable insight for businesses. However, according to the study, 60% of finance leaders said that their data currently exists in organisational silos, with over half reporting difficulty sharing, linking and using data to drive their risk management strategies and are unable therefore to effectively harness the data to mitigate and manage business risk.

Commenting on the report, Tim Vine, Head of European Trade Credit at Dun & Bradstreet said: “A changing business environment, coupled with political and economic uncertainty, is making it increasingly challenging for finance leaders to manage risk effectively. Data-driven tools can uncover valuable insights to inform strategic decisions and drive business performance, but our report shows that adoption of these tools is still relatively low. Finance leaders who are able to leverage data can help their organisation navigate uncertainties in the market, manage risks and grow profitability.”

 

  • Monitoring risks ranked as the top challenge facing finance leaders today according to recent survey of finance and credit leaders
  • Over 60% say that their data is siloed, with over half reporting difficulty sharing, linking and using data to drive their risk management strategies
  • Less than 20% believe their company is using modern risk management tools effectively