Written by:
Stephen Jones, CEO, UK Finance


Summer has finally arrived and our reception on Tuesday evening in the College Gardens at Westminster, following a fraught day for Parliamentarians on the Withdrawal Bill, was well attended by a broad range of industry stakeholders and was blessed by outdoor weather.

It has been a busy year so far and whilst Brexit continues to dominate the domestic parliamentary agenda, with little sign of this changing in the near future, UK Finance has also been able to focus on other key areas including economic crime, mortgages and personal finance, cards and payments, the consumer and SME agendas, and cyber and technology, to name a few.

In May we hosted the International Banking Federation board, and we were joined by representatives from the US, Canada, Italy, France, Germany, South Africa, Japan, China and Russia and the EU, who will hopefully have returned home with a strong sense of the historic resilience of the UK as a global financial centre. Andrew Bailey, Chief Executive of the FCA, joined to provide reassuring context on the future of UK regulation and supervision and the City of London Corporation hosted a dinner in the magnificent Crypt of the Guildhall, which demonstrated well the soft power that the UK continues to exert on the international stage in financial services despite short term uncertainties.

We have held round tables for members in recent weeks with Adam Farkas, Executive Director  of the EBA, Johnny Reynolds, Shadow Economic Secretary to the Treasury, John Healey, Shadow Housing Minister, and Rostin Benham, CFTC Commissioner. We continue to engage regularly across Whitehall on behalf of members including with the Chancellor of the Exchequer in advance of his Mansion House speech next week, with John Mahon, the UK’s new Director General for Exports at the Department for International Trade regarding the service export opportunities for the UK and Tom Hurd, Director General for Economic Crime at the Home Office on the forward public/ private agenda in fighting economic crime. I took part in a panel at the Bank of England’s Market Forums 2018 on FICC (Fixed Income, Currencies and Commodities) Markets – horizon scanning for key emerging market structures and coordination issues.

Following on from the introduction of GDPR at the end of May, I wanted to remind you all of the huge range of information available to members, in the form of our much enjoyed daily News In Brief, expert blogs, our thought leadership pieces, seminars, conferences, webinars, training and so much more. Please do encourage your staff to sign up to ensure that they can continue to benefit from hearing about – and participating – in all that we can offer. Members benefit from discounted and often free access to many of these events in particular. Visit the UK Finance website for further details.

Putting customers interests first

At the end of May, the Financial Conduct Authority (FCA) published its High Cost Credit – Overdrafts consultation paper, summarising the outcome of its high-cost credit review.  We welcomed the consultation paper, which proposed a number of measures to make overdraft costs more transparent and to prevent customers unintentionally drawing on their overdraft facilities. We will consider these with the regulator, with a particular eye to ensuring that consumers retain the ability to access appropriate credit, including overdrafts, to meet their needs.

Meanwhile there was good news on housing, with our latest figures showing that the number of interest-only mortgages almost halved in six years, with a particularly steep decline in higher loan-to-value mortgages. There are now 1.7 million outstanding interest only mortgages. We have encouraged borrowers with interest-only mortgages to contact their lender for advice on their options. We will also be developing best practice for lenders in this area, to help the industry engage successfully with more borrowers.

Fighting fraud and cyber crime

Fraud and cybercrime generally are issues that are going nowhere. In April we published our ‘Staying ahead of cyber crime’ report, which highlighted that cyber security is now second only to political risk as one of the key challenges facing the UK financial sector. With the global impact of fraud now exceeding $450 billion a year, the finance industry must increasingly work together with government and law enforcement, as the report highlights, to find new ways of working and new security models that are ‘agile, responsive and focus on protecting customers against exploitation’.

Meanwhile Justine Walker, UK Finance’s Head of Sanctions Policy, chaired the Institute of Money Laundering Prevention Officers’ conference in mid-May. Tina Blockside of the Lloyds Banking Group (a former IMLPO chair) took the time to email to remark on Justine’s conduct, professionalism, expertise, energy, drive and exemplary collegiate working.

With the introduction of the General Data Protection Regulation (GDPR) at the end of May, we also took the opportunity (on GDPR day) to urge consumers to remain vigilant of scams, particularly in relation to GDPR but also reiterating the messaging of our Take Five to Stop Fraud campaign.

We are also providing the secretariat for the independent review looking at instigating a contingent reimbursement model for victims of Authorised Push Payments (APP) fraud. This review aims to deliver a simple framework which consumers will find easy to understand that apportions liability for APP fraud by September. This is a resource intensive, demanding project where we have brought in external consulting support to ensure delivery against high expectations of the Payments Service Regulator and outcomes which are potentially damaging to responsible Payments Service Providers. We will continue to work closely with all relevant members to manage expectation and ensure an outcome that does not unfairly attribute blame and cost to PSPs.

We hope to be able to launch shortly the detailed business planning phase of the public/private review of the current SARs regime. I will keep you up to date on developments here.

Earning trust

The speed and scale of digital transformation within the financial services industry is contributing to the emergence of new non-financial risks, according to a report we published in May – ‘Sustainable Financial Services in the Digital Age’ –  in association with Parker Fitzgerald. The report highlighted the need for firms to consider their exposure to risk and operational resilience in today’s digital age. The report also called on the industry to collaborate with technology suppliers as well as domestic and cross-border regulators to create a risk framework that embraces the benefits of digital transformation.

Embracing innovation

The Way We Bank Now report revealed banks are embracing innovation – with banks investing in similarly fast and convenient webchat services with customers embracing online support. In coming years video banking and voice activation will become even more prominent. We will continue to track and draw attention to the increasing digitisation of banking in order to widen the public policy debate about the role of cash and cheques in our economy.

Events and training that deliver and reward

We have had a busy few weeks with the Personal Finance Conference taking place last month. This provided an annual update on changes in personal finance and explored themes around the implementation of Open Banking and PSD2, the opportunities for innovation and the importance of educating and protecting customers and their data. It was well attended and included speeches from journalist Naga Munchetty and Jayne-Anne Gadhia, CEO of Virgin Money.

We also held our annual SME Banking conference. The speakers included Simon Walker, former head of the Institute of Directors, who was recently appointed independent chair of the UK SME Complaints and Resolution Review. He spoke about the independent review which concerns how disputes between banks and their SME clients can be settled without going to court.

Meanwhile a popular and interesting sanctions webinar was led by our Head of Sanctions Policy, Justine Walker, along with Peter Harrell and Zia Ullah on Managing the Shifting Sands of Sanctions Compliance. The webinar focused on the recent geopolitical developments, with emphasis on Iran, Russia and North Korea.

Click the links below for the UK Finance Training and Events schedule and to sign up for alerts:

Thought leadership, expertise and integrity

This month we have launched a major new service to support and help the bereaved. Feedback from consumer groups and industry experts highlighted to us concerns that many people found it very hard, following the death of a friend or family member, to have to report that death to several different financial services organisations.  Over the last year UK Finance members explored the feasibility of an industry wide Death Notification Service (DNS), which allow members of the public to securely inform a number of retail banks and building societies of the death of an account holder with one single notification.

The free online DNS launches today and will act as a ‘gateway’ for customers to financial institutions, removing the need for repeated notifications with different organisations. Over the next few months, UK Finance and member organisations will work together to evaluate, enhance and evolve the service to ensure it best meets users’ needs.

We are rapidly approaching our one-year anniversary as UK Finance. It has been an eventful 12 months, but we have achieved a great deal and look forward to building on these successes and addressing the future challenges we will undoubtedly face, as a stronger organisation and a clear voice for the industry. In next month’s newsletter we will look at some of the highlights.

CEO Newsletter – June 2018
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