NewDay launches Bip the UK’s first digital only credit card

NewDay, a leading UK provider of accessible credit, has launched Bip – the first completely cardless consumer credit proposition in the UK. Bip has been designed around the customer, offering a fully digital credit experience that is simple to use, fully transparent on costs and with the customer in complete control.

With no physical card, Bip customers can apply and have access to appropriate credit within minutes. Bip is available via the App Store and Google Play – and can be added to the digital wallet of the user’s mobile phone. Just like a traditional card, it can be used anywhere Mastercard® is accepted when making contactless or online payments.

Bip offers a transparent and seamless customer experience:

  • No hidden fees – no annual, foreign exchange or late payment fees. Just one interest rate – typically 29.9% APR.
  • Easy application process via the app. If eligible, users can be up and running in minutes. No need to wait for a card and PIN to be despatched by post.
  • Paperless (and plastic-less) apart from regulatory required communications – for example letters regarding changes to credit limit.
  • The full credit card experience (including secure access to CVV) via the app.

In addition, Bip has been designed to ensure the customer stays in complete control:

  • Customers can set two kinds of spending caps to give them control – including a warning and a freeze cap within the app.
  • Customers can also set spending alerts to ensure they remain in control.
  • Customers can see how much they could save on interest with the Payment Calculator, allowing them to understand the impact on the interest they will pay by increasing their repayments.
  • Everything is accessed through the Bip app – including a chat function to help customers service their account.

NewDay has involved its customers in the design of Bip from the start, producing a solution that truly meets their needs, which is evident from customer demand and initial feedback from the testing phase. The firm has successfully recruited a waiting list of over 30,000 customers through the development and testing of Bip. The product is rated ‘Excellent’ on Trustpilot, with a score of 4.5, with customers especially positive on aspects such as the ease of applying, simplicity of use and ability to track and cap spending.

Sharvan Selvam – Commercial Director at NewDay said: “We worked with our customers all the way through the design, testing and launch of Bip. It is a proposition designed to make credit easy to access, simple to use and, importantly, puts the customer in full control.”

Bip will be backed by a full consumer launch including mass market advertising later this year. Bip is the latest product from NewDay – one of the UK’s leading credit providers. NewDay offers credit to a broad spectrum of UK customers, providing accessible credit to close to 5 million people. This includes underserved sections of the market such as existing prime credit customers who may have seen their credit score reduced; and those new to credit who don’t have a full profile with the credit bureaux. At the heart of NewDay is its proprietary technology underpinned by two decades of underwriting experience and intelligence.

NewDay has seen digital wallet and contactless use of its other products more than double in the past year, from around 8% in August 2020 to 20% in June 2021 across customer retail spending. This is in line with wider trends, with 13.7 million people in the UK leading a “cashless life” last year (2020)1 and this accelerating due to the pandemic, and with the UK predicted to be a cashless society by 2026.

Ian Corfield, Chief Commercial Officer at NewDay, added: “We have seen a huge shift in the number of consumers who are swapping their physical wallet for a digital one. Consequently, we believe Bip will have a wide appeal, from early adopters and tech savvy individuals through to more mainstream consumers who are now more comfortable using their digital wallets for payment. This is even more relevant today as changes in spending habits have been dramatically accelerated by the coronavirus pandemic, with cash use falling dramatically from 60% to just 15% of transactions, highlighting our acceleration towards becoming a cashless society.

“Bip is a manifestation of everything we are at NewDay: responsible, transparent and accessible. We want to help our customers – whether they are retailers or consumers – move forward with credit.”

Markedly Lower Year-On-Year Increase in Credit Card Spend Suggests Consumers Are Adjusting to ‘New Normal’

Global analytics software provider FICO today released its analysis of UK card trends for May 2021, which suggests that some consumers are practicing pragmatic financial management, as well as continuing to make use of savings accrued during the pandemic. There are, however, warning signs of the financial pressure growing for those already in debt.

Whilst the effects of a full month of retail and hospitality re-openings were reflected in a further rise in card spend, the increase was just 4 percent compared to the 12 percent increase seen in April. This suggests that consumers foresee future pressure on income with the prospect of furlough support and payment holidays ending.

The percentage of payments to balance continued to increase – by 10 percent month on month. However, an 8 percent year-on-year increase in the average balance for accounts with three missed payments and a growth in the use of cash on cards – 6 percent – will ring warning bells for lenders.

June data will highlight the impact of a full month of the last stage of lockdown prior to the end of the final retail and entertainment restrictions. The ability of issuers to react swiftly and appropriately to sudden changes in their customers’ financial conditions will be tested over the coming months. Those who can detect and act upon the early warning signs accurately with a wide and flexible range of treatments and a robust collections strategy will provide the most benefit to their customers.

Spend on UK cards continued to increase, along with the percentage of payments

The average spend on UK credit cards increased for the third consecutive month, by £26 to £651 in May 2021. However, the monthly increase may not be as high as some might have been expecting for the first full month of the easing of lockdown restrictions, especially compared to the growth seen in April.

Some consumers receiving furlough payments may be showing caution relating to their spending levels, ahead of the planned scaling down of the government contribution as of 1st July. This caution could also be the reason that the percentage of payments to balance continued to increase — by 10 percent month on month to 36 percent, the highest ratio over the last two years.

Average balances on accounts missing three or four payments continue to grow

The percentage of accounts which have missed only one payment increased in May. June’s results will show if there is a segment of consumers where spend in April was unaffordable and so will miss their second payment.

Accounts missing one payment are £25 lower than a year ago. For accounts missing two payments, the average balances are £39 or 2 percent lower year on year, however, this was the peak month during the early stages of the pandemic, so this is not surprising. Average balances on accounts with three missed payments are £221 higher (8 percent) and four missed payments plus are £228 higher (8 percent).

One way to ensure payments aren’t missed is to set up a direct debit, but the percentage of accounts with a direct debit is 2 percent lower than a year ago.

Cash usage continues to slowly grow

May 2021 also saw the percentage of consumers using cash on their credit cards increase for the second time since September 2020, albeit again marginally. This is being driven by the increased spending opportunities, however, it remains 35 percent lower year on year.

Issuers could look at consumer cash spending patterns. If cash is being used when this was not the case prior to the pandemic, this could be another warning sign of financial stress.

CHL Mortgages cuts Buy-to-Let rates at 75% LTV

CHL Mortgages, the intermediary-only specialist buy-to-let lender, has cut rates across its 75% LTV product range by up to 15bps.

Five-year fixed rates now start from 3.10% at 75% LTV on individual and limited company with HMO & MUFB two-year starting from 3.39% and five-year from 3.48%.

The changes in full are as follows:

  • Individual and limited company buy-to-let range (up to 75% LTV)
    • Two-year fixed now 3.15% (1.5% arrangement fee unchanged)
    • Five-year fixed now 3.10% (2% arrangement fee unchanged)
    • Five-year fixed now 3.30% (1% arrangement fee unchanged)
  • HMO and MUFB buy-to-let range (up to 75% LTV)
    • Two-year fixed now 3.39% (2% arrangement fee unchanged)
    • Five-year fixed now 3.48% (2% arrangement fee unchanged)
    • Five-year fixed now 3.68% (1% arrangement fee unchanged)

In addition, at 65% LTV for individuals and limited companies, the 3.19% five-year fixed now has a reduced arrangement fee of 1%. Early repayment charges are 3/2 for two-year fixed and 5/4/3/2/1 for five-year fixed.

ICR starts from 125% of the mortgage payment and is calculated at payrate for all five-year products on both purchase and re-mortgage, including HMO/MUFB.

Ross Turrell, Commercial Director, CHL Mortgages commented: “We’ve seen positive movement in the markets with long term swap rates improving and so have moved quickly to pass these savings onto landlords through our intermediary partners.

“The buy-to-let marketplace is hugely competitive and it’s important to outline our product and service values on an ongoing basis. Passing on these savings – alongside no loading on our valuation fees – demonstrates our commitment to promoting transparency throughout our proposition. Attributes we will continue to build on in H2 2021.”

Experian findings show mortgage misunderstandings are extremely widespread

New research from Experian found that nearly two fifths (38%) of Brits said they were considering buying a new home within the next five years, rising to 66% of people in their 30s and 67% of those in their 20s.

People also suggested they are prepared to stretch themselves to secure their dream home, with nearly one third (31%) saying they would buy a property even though it could mean a very small amount of disposable income left each month.

Yet, even though they want to own a home, 49% of people in their 30s and 42% in their 20s were worried that they’d never appear ‘mortgage-ready’ to providers.

Further, nearly one third of consumers (27%) said they were unsure of how to prepare to get a mortgage.

Experian has found common misunderstandings in the mortgage application process and is clearing up assumptions to help people secure their dream properties.

James Jones, Head of Consumer Affairs at Experian, said: “It’s important to understand what properties are in your price range and the types of mortgages available to you.

“With our research suggesting that many are prepared to stretch their budget and purchase a property at the top of their price range, it goes to show how much home ownership is a source of pride and joy for people in the UK. Taking the time to improve your credit score when searching for your perfect home will help you access the best mortgage rates and, as a result, have more disposable income every month to spend on other things.

“It’s positive to see that the majority of potential buyers understand the importance of their credit history, as unpaid bills and other red flags on credit reports can scupper people’s chances of securing a good mortgage deal. Making yourself as attractive as possible to a mortgage lender starts with knowing your credit score, which you can check for free with Experian.”

Foundation Home Loans launches ‘No-fee’ 75% LTV Limited Edition Portfolio Landlord specials

Foundation Home Loans, the intermediary-only specialist lender, has today launched a set of ‘No-fee’ 75% LTV two-year fixed rate Limited Edition buy-to-let products exclusively for portfolio landlords.

Both products have no product fee, no application fee and come with one free standard valuation.

The first no-fee two-year fixed rate is part of Foundation’s core buy-to-let F1 range and is being offered at 3.24% up to 75% LTV, with a £0 product fee and a maximum loan of £750k.

In addition, Foundation has introduced a no-fee two-year fixed rate at 3.44% up to 75% LTV, with a £0 product fee for standard HMOs (up to 6 occupants), also with a maximum loan amount of £750k.

Both products are available for purchase and remortgage purposes and are offered to either individuals or limited company borrowers. The rental cover requirement is calculated at a notional rate of 5.5%, including for HMOs and stress tested at 125% for limited companies and basic rate taxpayers, and 145% for all others.

Foundation Home Loans has recently increased the maximum portfolio size that a landlord can hold with them to £5m, with no limit to the background portfolio size, and has also streamlined the document requirements for the majority of portfolio applications when the portfolio is submitted at the outset.

George Gee, Commercial Director at Foundation Home Loans, said: “We are experiencing sustained activity across the buy-to-let marketplace, so these Limited Edition products provide further options for those portfolio landlords who may prefer a shorter fixed term or are looking to finance a specialist property type.

“Upfront costs can prove a real issue for some landlords who are looking to secure a competitive rate, and can offer especially good value to those purchasing or remortgaging multiple properties. By introducing these ‘no-fee’ products – which include one free standard valuation, no product fee and no application fee – we are aiming to deliver a product range which offers portfolio landlords access to greater flexibility.”

The Independent and Evening Standard partner with Experian to help future-proof advertising revenues

The publisher of The Independent and Evening Standard has teamed up with Experian to use a new industry-leading solution which will future-proof advertising revenues and increase audience addressability at scale.

The new partnership will see the publisher use Experian Match, a first-to-market privacy-centric solution, which removes the need for registration data or third-party cookies to power targeted digital advertising.

Even with Google recently announcing a delay to its phasing out of third-party cookies, publishers need to act now to ensure they have alternative options and control over their own data without compromising scale – many other internet browsers have already moved to disable their use.

By using first-party cookies or proprietary identifiers, Experian Match, powered by the InfoSum decentralised data collaboration platform, delivers meaningful insights about the likely characteristics of online audiences, regardless of which web browser they use, and without the need for publishers to continually share information about their website visitors with advertisers. Users can easily opt-out of sharing their information at any time.

Colin Grieves, Managing Director of Marketing Services, Experian, said: “The entire industry is experiencing seismic shifts driven by the need of greater transparency, privacy and consumer control over their data.

“Experian Match offers a transparent, privacy centric solution which supports the needs of both advertisers and publishers in an uncertain world. The industry needs to protect its own data and have control over its future both now and in a post-cookie world. We’re thrilled to be working with such a major news publisher in what will be a successful and fruitful partnership.”

Jo Holdaway, Chief Data & Marketing Officer, The Independent and Evening Standard, said: “By partnering with Experian Match, The Independent and Evening Standard feel confident in our ability to help safeguard our advertiser revenue and offer our clients a scalable, privacy-centric way to reach their target audiences across our properties, using our own first party data and without relying on third party cookies.”

Richard Foster, CRO at InfoSum, said: “Experian is setting a much-needed standard by offering first-party data solutions that prioritize data security and consumer privacy. Experian Match is a privacy-first solution that ensures consumers retain full control over how their data is collected, while providing media owners with greater addressability.

“We are delighted to work with Experian to provide companies with a solution that helps them deliver relevant messages at scale while protecting consumer privacy.”

Hodge ramps up Portfolio Buy-to-Let offering with higher LTV and new variable rate product

Hodge has today made some changes to its Portfolio Buy to Let (PBTL) loans, including increasing its maximum LTV to 75%, as well as increasing the LTV for multi-unit freehold blocks (MUFB) for up to 15 units to 70%.

The specialist lender has also introduced a variable rate product which will have a rate of 3.25% over Bank of England base rate, offering an alternative to their five year fixed rate loan.

Mike Clifford, head of commercial propositions at Hodge, said: “Here at Hodge, we’re always keen to add to the flexibility of our products and develop them in line with what landlords and brokers are telling us.

“Our recent research into the market found that flexibility is key for landlords and brokers, with 40% of landlords saying that finding the correct mortgage is frustrating. We’ve listened to these concerns, and come up with some changes to our product range that will give landlords greater choice in how they shape their lending; making managing their property portfolios more straightforward.”

Mike added: “In particular, the variable rate PBTL option will give landlords the option to select a rate that will reduce their early repayment charges significantly in the early years of the loan, while the fixed rate option offers certainty over their interest costs – allowing them to select products that are right for them, depending on what their investment strategy is.”

Hodge’s portfolio buy-to-let loan is designed for landlords with four or more properties, looking for one loan which covers them all, offering a practical solution to help professional landlords stay organised, helping to keep things streamlined and flexible.

LOQBOX & ClearScore launch world’s first app integration for the financially excluded

Financial exclusion impacts billions of people around the world, including younger people who are thin file* or new to credit. As the UK economy works hard to bounce back from the pandemic, British lenders are now expecting a rise in unsecured lending. As more people apply for credit, inevitably, more people will be declined.

LOQBOX and ClearScore have partnered to help UK consumers build a credit history, support them in getting a head start on credit and secure a responsible financial future.

The integration of the multi award winning service, LOQBOX into ClearScore Build is a world first and will help hundreds of thousands of UK consumers. ClearScore x LOQBOX will allow customers to view their credit-building progress, learn how to build a healthy credit score and receive updates all in one place.

Co-Founder and Co-CEO of LOQBOX, Gregor Mowat commented: “This world-first partnership and integration is a huge step towards ending financial exclusion. Certainly, since the pandemic, we have seen more and more young people who have suffered from a poor or non-existent credit score, preventing them from participating fairly in the financial world. We believe ClearScore x LOQBOX will help thousands of people who want to get a head start on building a credit history and to eventually become financially included”.

Co-Founder and CEO of ClearScore UK, Justin Basini said: “We are very excited about ClearScore x LOQBOX which is designed to help everyone, no matter what their circumstances, achieve greater financial wellbeing. We’ve always helped our users to improve their credit report and score but we wanted to go further. The reality for millions of people is that they are locked out of mainstream credit products, either because they don’t have any credit history or have made some mistakes in the past”.

For LOQBOX members who successfully completed a 6 month period, their credit scores went up by 34 points on average. Members then go on to perform better than their peers with traditional credit products and in turn are rewarded by saving thousands of pounds over their financial lives.

Co-Founder and Co-CEO of LOQBOX, Tom Eyre commented: “We wanted to work with ClearScore to provide a way that a person could simply and easily, without traditional borrowing, actually prove in a relatively short period of time that they were credit worthy and build a better future. We are proud to partner with ClearScore on Build and look forward to helping thousands more people to become financially included”.

Insurers Urged To Re-Examine Risk Models as COVID-19 Complicates Lending Picture

Economic uncertainty means judging credit risk is more complex than ever for insurers – with TransUnion’s Consumer Pulse study showing that nearly half (48%) of UK households have recently experienced a change to income.

Most commonly, this was due to being furloughed (14%), experiencing a reduction in salary (11%), losing a job (11%) or newly receiving benefits (11%).

Colin Wallace, director of insurance at TransUnion in the UK, said: “As lockdown lifts, we’re continuing to see a polarised financial picture amongst UK consumers, with optimism in some quarters contrasted with a significant minority still struggling to pay bills and seeing their income change regularly. For the insurance industry, this uncertainty is making it more important to obtain a holistic picture of an individual’s financial situation, in order to help insurers make informed risk assessments and drive longer lifetime value.”

How COVID-19 has impacted the insurance sector

The financial uncertainty that the pandemic has brought means that for insurers, traditional data sources may be flagging customers as low risk when they are actually struggling with income shock or taking payment holidays elsewhere. According to TransUnion’s ongoing study, which has been tracking the financial impact of the pandemic, one in five (20%) UK households say they expect to be unable to keep up with at least one of their current bills or loan payments.

Of those, 9% will be unable to cover car insurance costs, while 7% say that they will not be able to pay their home insurance. And with the courts having been shut, county court judgements (CCJs) may have been delayed, meaning some signs of risk may not be visible to insurers unless they are able to use additional data sources.

At the other end of the scale, some potential customers being flagged as high risk may have seen their fortunes improve due to decreased cost of living during lockdown. In fact, 16% say that they paid down debt faster in recent months.

Price walking and profitable growth

This instability comes at a complicated time for the insurance sector. The implementation of impending price walking regulation from the Financial Conduct Authority is likely to make footprint growth more expensive, with stricter controls on incentives and price cuts offered to new versus existing customers. A data-led understanding of the quote pool will be key to identifying where there are opportunities for growth.

This and other ‘fair value’ considerations for instalment customers – such as making it easier to cancel auto-renewal on contracts – have the potential to reduce revenues unless offset elsewhere. Targeted risk selection may have a bigger role to play in ensuring new customers offer greater value to insurers in the long-term, and that potential problems are minimised by reducing the number of customers that will be likely to either default or consistently shop around.

Colin Wallace continues: “The current regulatory picture – combined with COVID-19 uncertainty – makes it harder to offset the cost of attracting business. In response, insurers will be rebuilding their risk models with greater power and precision as a priority. It will be key for the sector to use precise data and insights to aid them in targeting customers appropriately and confidently offering more instalment finance options.”

Supporting financially vulnerable customers

There is also greater regulatory pressure to ensure affordability checks are performed on all instalment customers. Balancing this requirement alongside making the right commercial decisions means insurers will need to work harder to cater for credit histories that are improving or declining over time – calculating for example, whether customers are long-term vulnerable or have suffered only a short-term income shock.

Globally, there are signs that an uneven economic recovery has affected insurance behaviours. Recent research from TransUnion in the US found a fifth of consumers went from being fully insured to being under or uninsured during the COVID-19 pandemic.

The Council’s confirmed status as a charitable organisation further supports its efforts to bolster the UK cyber security community

The UK Cyber Security Council – the self-regulatory body for the cyber security education and skills sector – today announced that its application for charitable status has been approved by the Charity Commission, and that the Council has been added to the register of charities accordingly.

The confirmation of the Council as a charitable body is recognition of the inclusive and non-profit support role the Council will play in supporting the development of education, training and skills within the UK cyber security community. Through its founding principles and key pillars of operation, the Council will serve as a trusted and expert body working to support policy makers, training and education bodies, membership associations, employers and cyber security practitioners.

“We’re very pleased to say that the Council has been granted charitable status. Being a charity doesn’t particularly change how the Council will operate, but it’s both a reminder and proof to everyone that the mission of the Council is exclusively to benefit the public, in particular by making the UK one of the safest places in the world to live and work online,” said Don MacIntyre, interim CEO of the UK Cyber Security Council.

In accordance with UK’s charity legislation, the UK Cyber Security Council is controlled, and its assets held in trust, by a board of trustees, which is responsible for ensuring that the Council is well-run and delivers its charitable activities for the public benefit.