Interest Rates: 74% decrease in tracker mortgage interest following August rate rise

There was a sharp fall in the number of consumers shopping for tracker mortgages in August following the rise in interest rates, new analysis from Experian has revealed. On August 2, the Bank of England (BoE) made the cost of borrowing more expensive when it raised the Base rate to 0.75%, its highest level since March 2009.

Data from Experian shows that just 10% of those shopping for mortgages throughout August were looking at tracker deals, down from more than a third (38%) in July. Interest in fixed-term deals remains high, with 38% looking at those products, up from 36% in July.The figures suggest that the rise in Base Rate put-off potential home buyers from viewing a tracker deal as an attractive option for their home loan.

Research from Experian revealed that the latest rise will add around £400 a year in mortgage payments to those with on tracker and standard variable rate (SVR) deals, based on a 20-year, £250,000 loan.
In August, the company announced it would be offering mortgage eligibility to customers, giving potential home owners the opportunity to find out which mortgages they are likely to be accepted for and how much they could borrow, based on lenders’ criteria.

Meanwhile, further analysis of data from Experian found that consumers looking to get away for the summer have been looking to borrow more than £4,000 to fund their holiday.

Consumers shopping in May, June and July have been looking to borrow £4,305 on average in order to pay for their summer break.

Amir Goshtai, managing director of Experian Marketplace & Affinity, said: “The fall in searches for tracker mortgages suggests people are nervous about further rate rises, so are instead looking at fixed deals to given themselves more certainty. “We hope that our mortgage eligibility feature will help people more quickly decide more quickly what the right mortgage is for them, particularly when so many people are still on standard variable rate mortgages and could be paying significantly less.”

Regulation, innovation and emigration: LinkedIn data shows how the recession and Brexit have changed financial services

Ten years on from the onset of the global financial crisis, LinkedIn has analysed data from its 25million UK members to build a comprehensive picture of the evolution of financial services roles.

The data reveals how regulation, developments in technology and the EU Referendum vote have been key drivers impacting where and how people work in the sector.

Above all, there’s good news for jobs: since a low in hiring activity in the summer of 2016, coinciding with the Brexit vote, hiring in financial services has been slowly but steadily increasing. LinkedIn’s data shows that the hiring rate in July 2018 was up 8% compared to July 2017.

The latest LinkedIn UK Workforce Report includes LinkedIn’s data as well as findings from a ‘Recruiter Sentiment’ survey of over 600 HR professionals across the UK. It identifies three trends:

Financial services hiring more workers from other sectors, responding to regulation and technical change.

Automation and regulation have led to changes to job roles in financial services. Looking at the top five job roles being hired for, sales and customer facing roles have experienced the biggest decline in new hires during the past five years. Meanwhile, demand for new hires in legal and software roles has increased.

British financial services firms are also becoming more diverse in terms of career background and finding new sources of talent. The percentage of new hires from other finance companies has dropped by 7.1% since 2013. Hires from professional services firms are up 25.3% over the same period and, coinciding with the increase in demand for more technical skills, the percentage of new hires from Software and IT services is up 18.1%.

Emerging technologies are driving demand for new skills, but supply is lacking.

Beyond the immediate consequences of 2008, other forces have been at work, notably the growth of the UK as a fintech hub. The Recruiter Sentiment survey showed that over half (51%) of UK recruiters have seen an increase in demand from financial services businesses to hire candidates with Artificial Intelligence (AI) skills over the past five years, a 49% increase in demand for cryptocurrency skills and 46% for blockchain.

However, when it comes to hiring candidates with these emerging tech skills in financial services, 55% of UK recruiters and hiring managers are struggling to fill roles according to the Recruiter Sentiment survey, saying there are a greater number of jobs than available candidates with the right skills. This is most acute in the Midlands, where 63% say they can’t find the right employees.

With the rise of fintech, traditional first choice employers have lost some of their appeal: with 32% of UK recruiters and hiring managers saying that traditional banks are now less attractive to candidates.

Less migration into the UK is seeing a greater share of finance jobs filled by UK educated workers.

The third key factor in the changing face of UK finance has been migration. As LinkedIn data and official statistics have shown, migration from the EU and the rest of the world has declined, and finance has seen an impact.

UK educated workers have taken a larger share of new financial services hires in recent years, but it’s not a straightforward case of fewer professionals arriving from abroad.

The number of new hires in the financial services sector educated in the UK is rising, from 76.4% in 2013, compared to 78.6% in 2017. At the same time, the share of UK-based financial services workers receiving their first university degree in the EU has fallen (from 14.4% in 2013-14 to 12.4% in 2017-18).

Josh Graff, UK Country Manager at LinkedIn, comments: “The financial services sector has reinvented itself since the crash. The pace and scale of change has been tremendous and is reflected in the huge demand for emerging tech skills and increasing competition for talent from disruptors. It’s good to see that the industry is adapting by looking for new sources of talent outside of itself, but business leaders also need to think about how the current workforce can be retained and upskilled in order to keep up with the pace of change.”

Graff continues: “Over the last five years, the UK financial services industry has become a less attractive proposition for international professionals, and this accelerated after the Brexit vote. With an ever-growing skills gap, this should be a warning sign for the UK’s financial services industry and its ability to continue serving as a growth engine for the UK economy. It’s crucial that we attract and retain talent from elsewhere in the world in order to bring new skills and knowledge to such a vital part of the UK workforce.”

The LinkedIn Workforce Report is designed to provide members, businesses and policymakers with evidence-based insights into the changing shape of the UK workforce. This month the report includes the results of an independent ‘Recruiter Sentiment’ survey that gauges UK-based in-house and agency recruiters’ confidence in their ability to fill available roles.

Cybereason Announces its Newest Customer V12 Retail Finance

Cybereason, creators of the leading cybersecurity AI Hunting Platform, today announced that V12 Retail Finance, one of the leading retail finance providers, is now a customer.

V12 Retail Finance provides retail point of sale finance for more than 2,000 retailers in the UK through its innovative online platform. It has seen significant growth over the past 5 years, expanding its Cardiff based workforce from 30 to 220 staff and growing approved loans to almost £750m in the last 12 months.

“Cybereason’s unique, innovative and easy-to-use solution is unlike others on the market and its innovative approach is one of the biggest reasons why we chose to use its AI Hunting Platform,” said Matt Hatton, IT Director at V12 Retail Finance. “Our employees, customers and partners are connecting multiple devices from disparate locations to our network making it a challenge to protect our business. Cybereason is the only company we spoke to that has the ability to meet our security challenges as we continue our rapid growth.”

“V12 Retail Finance has joined our growing list of international customers and we couldn’t be happier as we continue our EMEA expansion,” said Sam Schofield, Regional Vice President, Cybereason. “V12 sees the value in our award-winning AI Hunting Platform and our ability to stop increasingly sophisticated threat actors. Relying on yesterday’s technologies will not get the job done, and we’re excited to see our approach and perseverance recognized by V12.”

Cybereason is one of the fastest growing technology companies in the world. Founded in 2012 by Div and co-founders Yossi Naar and Yonatan Striem-Amit, Cybereason has exploded from a three-person team to more than 350 employees globally.

Bibby Financial Services announces new support for UK importers

Global financial services provider, Bibby Financial Services (BFS), has extended its Trade Finance proposition enabling UK importers to pay overseas suppliers in advance of goods being manufactured and shipped.

Under standard Trade Finance arrangements, suppliers are paid when title ownership is transferred from supplier to customer – ordinarily following shipping. BFS’s new prepayment feature facilitates deposits and full payments for international and domestic suppliers earlier in the trade process.

Managing Director of Trade Finance at BFS, Phil Tobin says the development will allow importers to consider a wider range of suppliers and ease cashflow pressure.

Phil said: “Offering prepayments and deposits in this way is unique and will enable importers to access funding to pay suppliers earlier in the cycle, alleviating cashflow pressure and enhancing their bargaining power.

“Critically, this will allow UK businesses the freedom to find new supply chains and to increase overseas trade at a time when many SMEs are considering how to protect profit margins amid the uncertainty of Brexit.”

According the IMF and the Bankers Association for Finance & Trade, over a quarter of global trade transactions (27%) involve cash-in-advance[i]. Through its enhanced service, BFS provides supplier deposits or full prepayment via ExWorks transactions.

Phil Tobin commented: “Many of our clients tell us that supply-chain relationships have changed since the referendum. Now, with just six months to go before the UK’s formal EU divorce, businesses need to be as versatile as possible to adapt to this changing environment.

“This development gives importers the option to work with international suppliers they may not have had access to before and can strengthen the relationships they have with existing suppliers. Furthermore, businesses will be able to negotiate early payment discounts with suppliers as a result of full or partial payment earlier in the trade cycle.”

The UK’s trade deficit narrowed to £1.86bn in June from £3.14bn in the previous month. Exports increased by 2.7 per cent to £52.41bn and imports rose by 0.2 per cent to £54.27bn.

Phil Tobin added: “While exporting undoubtedly presents growth opportunities for the UK, importing is an equally important form of international trade, which is often overlooked. Importing is a vital means of efficiency and growth for millions of businesses and supply chains throughout the world so it is critical that the public and private sector can do everything they can to support international trade, particularly given the backdrop of Brexit.”

Henry Howard Finance makes further senior appointments

Two new key appointments have been made at one of the UK’s leading independent funder, Henry Howard Finance to help support the independent funder’s continued growth.

Marie Dunkley and Charlie Ryley join the firm to strengthen its commitment to expanding its equipment finance offering.

Marie Dunkley, from Bristol, joins Henry Howard Finance as Head of Vendor, Hard Asset Finance, to create a new vendor-led asset finance stream from her role of UK sales director for construction, transport and industrial at DLL De Lage Landen.

Prior to this, Marie held senior roles at Hitachi Capital and GE Capital and has previously won the NSA Sales Director of the Year Award.

Ms Dunkley said: “I’m delighted to join Henry Howard Finance – the company’s forward-thinking approach, customer-centric ideals and growing own-book lending is an exciting journey that I’m keen to be part of as they establish a stronger presence in vendor asset finance.”

Charlie Ryley, from Cardiff, also joins Henry Howard Finance’s innovative vendor finance team as an account manager under the leadership of Gyles Thompson, after spending time in a role at Pinnacle Telecom (Wales) Ltd.

Mr Ryley said: “A major priority for Henry Howard Finance is to ensure all customers are provided with the best possible service. Previous roles have set me up well for that challenge and I’m really pleased to be joining such as innovative company that continually puts the customers first.”

Henry Howard Finance has supported more than 30,000 companies across the UK and recently celebrated a year-on-year increase of 50 per cent in own-book lending.

Commenting on the appointments, Mark Catton, CEO of Henry Howard Finance, said: “I am thrilled to be welcoming Marie and Charlie into our team. We continue to enjoy success across our markets and we are very pleased to have their experience to help us manage this growth and build high quality customer relationships.”

Promotional Activity – Protecting the Benefits of Leasing

Personal Contract Hire (PCH) leasing has become big news in car retailing and in doing so is promoting the wider appeal of leasing with its wider benefits, not least of all cash flow and affordability. However, Allen Jones MD at financial software experts Copernicus, which provides leading-edge leasing calculator tools, is keen to ensure that businesses stay compliant when it comes to some of the promises being made.

“On a daily basis, I see and hear adverts promoting the availability of cars through PCH. What occurred to me is that these promises are so good, which in turn led me to wonder just how compliant they were with advertising regulations. Our research suggests that businesses could be placing themselves and potentially their leasing suppliers at risk.”

Copernicus asked a mixed demographic panel of consumers to review leasing promotions from a selection of 16 brokers/dealers/leasing providers based upon a basket of promotional platforms including; TV, radio, email promotion, online search and social media. Consciously subjective to mirror a customer’s car ‘buying’ journey, the overall conclusion from the Panel was that they found the promotion of PCH confusing.

In part, confusion was caused by a lack of understanding of leasing when compared to outright purchase, HP and PCP finance. Beyond this, not all promotions highlighted the type of ‘relevant risks’ that the FCA expects to be available to consumers that would support the principle of Treating Customers Fairly.

Common issues included:

Mileage and excess mileage – it was common to find no reference to any excess mileage implications at all while one site suggested that this was likely to be ‘only a few pence’ per mile;
Scant, or no information regarding end of contract vehicle condition requirements;
A lack of clarity on the issue of ownership at the end of the agreement period.
Beyond these potential compliance issues, the panel identified other areas of confusion:

A common misunderstanding of the ‘rentals in advance’ as a concept, as opposed to a deposit, or ‘initial payment;’

Confusion about the rationale of a price differential between business and personal users;
An absence of ‘traditional information’ – cash price of the car and the type of Representative Example & APR information most expected to experience
Allen concludes;“There was a broad span of quality in the promotions assessed and certainly the brevity of platforms such a social media, create their own challenges. However, the overall conclusion is that with the likelihood that the growth in PCH activity will lead to greater scrutiny; providers can benefit by providing a more customer-centric experience. Clarity in the product and risks should be very transparent at an early stage.”

Money Advice Trust appoints Vineeta Manchanda and Rebecca Wilkie as new trustees

The Money Advice Trust, the charity that runs National Debtline and Business Debtline, has appointed Vineeta Manchanda and Rebecca Wilkie as members of its board of trustees as of 1st September 2018.

Vineeta and Rebecca replace Claire Whyley, Merrick Willis and Sian Williams on the board whose terms of service have come to an end.

Vineeta has served as a non-executive director at organisations including the Royal Free Foundation Trust, Sandwell Children’s Trust and Relate. She spent twenty-five years in fund management and investment banking, including at blue chip global firms such as Merrill Lynch and Credit Lyonnais. She has recently operated at managing director and board level, growing start-up emerging market investment banks.

Rebecca is currently programme director at the Litigant in Person Support Strategy which helps people without means through the court and tribunal process. Prior to this role she was chief executive of the Bar Pro Bono Unit, a charity matching members of the public who cannot pay for advice with a pro bono barrister. She has also previously held a number of non-executive director roles including at the National Pro Bono Centre and the Advice Services Alliance.

Adam Sharples, Chair of the Money Advice Trust, the charity that runs National Debtline and Business Debtline, said: “I am delighted to welcome Rebecca and Vineeta on to the Board of Trustees. They bring with them a wealth of knowledge and expertise which will be of great benefit to the Money Advice Trust. With demand for the Trust’s services continuing to remain high, our work in helping people to tackle their debts and manage money with confidence is more important than ever.

“I would also like to thank Claire, Merrick and Sian, whose terms on the Board have come to an end, for their hard work and service over the last few years.”

Vineeta Manchanda said: “The work of the Trust in helping people to tackle their debts and improve the debt and credit landscape is a vital one. I am Iooking forward to working with Adam and the rest of the Board to help shape the important work the Trust delivers, and to bringing an additional outside perspective from my experience in the corporate world.”

Rebecca Wilkie said: “I am excited to be joining the Board of an organisation with such a strong reputation and I look forward to helping build on their outstanding work for people in financial difficulty. The need for free, independent, expert advice for people in debt is every bit as important as it is in the legal sphere, and I look forward to exploring what learning can be applied across these two sectors.”

Ultimate Finance boosts senior team

Leading SME funding partner Ultimate Finance has appointed three senior sales professionals to further strengthen support for SMEs in London and the South East.

The new senior recruits are made up of Nick Haggitt, Head of Sales, Matthew Taylor, Senior Regional Director and Chris Mitcham, Regional Director. Between them, they bring more than 50 years’ experience in the sales and financial services sector, including significant time spent at challenger banks, alternative lenders and high street banks.

The team will be responsible for ensuring Ultimate Finance continues to deliver the support and finance solutions small businesses throughout the region require, while driving increased business growth and awareness in the area.

Research highlights that although the region hosts the companies with the highest growth, London is also the area where start-ups are most likely to fail. Ultimate Finance offers financial support to give SMEs the platform they need to succeed – from asset-based lending and invoice finance, to bridging loans and trade finance.

Ron Robson, CEO at Ultimate Finance, said: “A third of all SMEs in the UK are located in London and the South East and it’s vitally important companies in the area are given the support needed to not only survive, but thrive in these testing times. This is why we’ve invested in three senior appointments within the regional sales team, making sure we further strengthen our offering in the area and continue to deliver the fast and flexible funding small businesses need.

“I’m proud to see just how passionate they are about joining us on the Ultimate Finance journey. Our latest results highlight the continued growth the business has enjoyed, and I look forward to the team continuing to meet and exceed expectations.”

Ultimate Finance has enjoyed 150% growth since it was acquired by independent investment firm Tavistock Group, in July 2015 and this summer announced it had reached a lending milestone of £200m finances available to SMEs across the UK.

FICO Makes Artificial Intelligence Explainable with Latest Release of its Analytics Workbench

Leading analytics firm FICO today announced the latest version of FICO® Analytics Workbench™, a cloud-based advanced analytics development environment that empowers business users and data scientists with sophisticated, yet easy-to-use, data exploration, visual data wrangling, decision strategy design and machine learning.

As new data privacy regulations shine a spotlight on AI and machine learning, the FICO Analytics Workbench xAI Toolkit helps data scientists better understand the machine learning models behind AI-derived decisions.

“As businesses depend on machine learning models more and more, explanation is critical, particularly in the way that AI-derived decisions impact consumers,” said Jari Koister, vice president of product management at FICO. “Leveraging our more than 60 years of experience in analytics and more than 100 patents filed in machine learning, we are excited at opening up the machine learning black box and making AI explainable. With Analytics Workbench, our customers can gain the insights and transparency needed to support their AI-based decisions.”

“Computers are increasingly a more important part of our lives, and automation is just going to improve over time, so it’s increasingly important to know why these complicated AI and ML systems are making the decisions that they are,” said assistant professor of computer science at the University of California Irvine, Sameer Singh. “The more accurate the algorithm, the harder it is to interpret, especially with deep learning. Explanations are important, they can help non-experts to understand the reasons behind the AI decisions, and help avoid common pitfalls of machine learning.”

Built for both business users and data scientists, the FICO® Analytics Workbench™ combines the best elements of FICO’s existing data science tools with several open source technologies, into a single, cloud-ready, machine learning and decision science toolkit, powered by scalable Apache Spark technologies. The Analytics Workbench provides seamless and automated regulatory audit compliance support, producing the necessary documentation for internal review and external regulators.

The Analytics Workbench has been designed for users with a variety of skill sets, from credit risk officers looking for a consistent tool to data scientists and business analysts collaborating and working together to inform and enrich strategic decision making. With an intuitive interface, users can expect faster time-to-value, higher levels of productivity, and significant business improvements through analytically powered decisions.

StepChange comment on Help to Save

Following a successful pilot, StepChange Debt Charity is pleased that the Government has today announced that the new Help to Save scheme is now available across the whole of UK to eligible lower income working households.

When people turn to StepChange for debt advice, 98% of them have no savings whatsoever. The charity has long called for realistic mechanisms to enable more households to save – and in previous research has estimated that if every household in Britain had £1,000 in accessible savings, this would reduce the number of people in problem debt by half a million.

Under the Help to Save scheme, delivered through NS&I, eligible lower income households can save up to £50 a month, and after two years get a bonus of 50% of the highest balance they achieve during that period, with a subsequent additional bonus at the end of four years. From the perspective of the charity’s clients, this type of saving may be particularly helpful and realistic for those who are becoming debt-free, to help build their financial resilience for the future.

Phil Andrew, CEO of StepChange Debt Charity, commented: “98% of our clients have no savings at all at the point they turn to us, and only 1% have £1,000 or more. Yet we know that having £1,000 in rainy day savings virtually halves the risk of falling into problem debt, so helping lower income working households to build savings should be an important policy goal.

“We campaigned for Help to Save and it is a good scheme. Yet it will only bring benefits if people actually use it. The Government’s impact assessment suggested only one in seven of those eligible are likely to use Help to Save in its first two to three years of operation. It’s vital for the Government to make a real effort to promote the scheme if it is to have the desired result, and for all of us who work with eligible households to support that effort.”