Stephen Jones, CEO of UK Finance
It’s hard to believe that we started this journey just a few months ago, but since six trade bodies came together to form UK Finance on July 1st, we’ve made remarkable progress establishing ourselves as the powerful new voice for the UK’s financial sector. At the helm is our exceptional Board, bringing together experience and representation from diverse financial backgrounds. In August, we finalised the line-up by welcoming former Permanent Secretary to the Treasury, Lord Macpherson.
We are ideally placed to deliver the support and services our members expect from us. We are equally focussed on representing the interests of consumers. Coinciding with the publication of our half year fraud figures, we launched phase two of our campaign Take Five to Stop Fraud, helping customers to recognise scams and confidently challenge requests for their personal or financial details by remembering the strapline ‘My money? My info? I don’t think so’. In partnership with the Home Office, the campaign focuses on three common scams: requests to move money into a new account, fake links that could give fraudsters access to customer details and requests for personal information. Look out for the campaign’s advert on ITV Hub, All 4 and Sky. You can preview it here. Also expect to see the Take Five to Stop Fraud logo on TV, in magazines, in bank branches and banking apps, cash machines and websites.
The breadth and scale of our external engagement over the last six months, and the range of stakeholders keen to work with us has been tremendous. In September, Chancellor Philip Hammond spoke at our inaugural Annual Dinner at Mansion House, attended by 300 senior representatives from across the UK and international financial services, and stakeholders from government regulators and wider industry groups. In addition to individual briefings and meetings, we’ve also hosted events including our Annual Mortgage Dinner, our first Mortgage Conference, a Foreign Banks Forum and an International Banking Conference attended by leading experts from around the world. Senior UK Finance representatives have visited the United States, Canada, Japan and of course continental Europe to strengthen links with our peers and help promote joint responses to common opportunities and challenges, from evolving regulatory frameworks to new digital banking innovations to developments in the fight against cyber crime. All parts of the financial services landscape can look forward to us facilitating more policy conversations and networking opportunities in 2018.
Shaping reform in the Payments industry
We’ve had a busy time engaging with the Payments Strategy Forum (PSF). In September we submitted our response to its consultation, Blueprint for the Future of UK Payments. The paper built on the Forum’s November 2016 strategy and featured more concrete proposals for the design, governance and developments timetable for a New Payments Architecture and new services such as Request to Pay and Confirmation of Payee amongst many other proposals. We also responded positively to two letters received from the PSF’s chair asking UK Finance to progress and deliver six initiatives from the workstream ‘Improving Trust in Payments’ – we agreed to take these on with member agreement to provide a safe home for the industry to continue delivering improvements to its customers. Finally, I had the pleasure of speaking at a PSF event earlier this week, which marked the official handover of the Blueprint to UK Finance and the new Payment System Operator for delivery as the PSF winds down.
Consumer Credit Taskforce
Over the summer, the FCA consulted on proposed changes to their rules and guidance on assessing creditworthiness in consumer credit and provided feedback on its ongoing review of high-cost credit. This followed a statement from the PRA, which raised concerns over the resilience of consumer credit lending. In response, the UK Finance Consumer Credit Taskforce was established to investigate a broad range of prudential and conduct related issues, with a particular focus on supporting customers who are experiencing persistent debt. We look forward to providing further updates on our work in this space in the New Year.
UK Finance has worked closely with members throughout 2017 to support their MIFID II implementation efforts. Our Transaction Reporting working group has developed approaches to a number of key challenges ranging from short selling to the reporting of corporate actions. On the investor protection side UK Finance has worked with members to produce formal guidelines on both product governance and the retail aspects of costs and charges requirements. We remain committed to working with our members in 2018 to support the implementation of MiFID II, and will continue to work alongside other industry associations to ensure the effective use of resources.
The Basel Committee on Banking Supervision (BCBS) recently finalised its revisions to the Basel III framework, including significantly reduced risk weightings for buy-to-let (BTL) exposures. These have been recalibrated, compared to the original 2014 proposals, to reflect the actual credit risk BTL lending poses. This was achieved by a concerted programme of influencing including a meeting in Basel with the BCBS working group and UK Finance experts supported by the CFO of Paragon, a major BTL lender. This is an exemplary case study of exactly the sort of policy influencing that UK Finance deploys, based on objective, evidence-based engagement with regulators who have listened to our arguments to the benefit of both our members and their customers.
2017 Autumn Budget
The Budget on 22 November held some good news for first-time buyers and the mortgage industry with the abolition of stamp duty for many; the Chancellor also undertook to boost house building with a number of measures to make better use of land resources and speed up the house-buying process to name but two initiatives. To me, this represents the value of our industry working together with a united voice to drive change. Our Budget submission supported a long-term agenda for growth and the UK credit market, and we will continue to lobby government to create a legislative framework that supports innovation, security and competition.
A new relationship with Europe
It goes without saying that Brexit remains one of the biggest challenges facing our sector. It’s appropriate that one of the first pieces of analysis we published revealed that the activities of UK-based banks is worth some £35.4 billion annually to the UK exchequer. £17.3 billion of that comes from overseas banks, reflecting the international nature of our industry and the very real need to preserve those cross-border connections and the trade they generate.
As we contemplate a new relationship with our largest market, UK Finance has been an active advocate for a close and mutually beneficial arrangement that enables the UK to remain at the heart of the European and global trade in financial services. We’ve published recommendations making the case for preserving a strong data-sharing relationship and for a comprehensive free-trade agreement with the EU that includes financial services. Both reports have been well received by policymakers and have generated substantial media coverage, and we’ll continue to promote a vision of a global UK that gives the financial sector room to grow and prosper.
I look forward to working with you to build on these early achievements. Looking to the immediate future, UK Finance will prioritise cyber resilience and the fight against economic crime, seek to reduce and simplify the costs of account opening, KYC and AML processes through better, more digital systems to be developed with our members in parallel with Government and regulators and seek to help our industry to support vulnerable or financially excluded customers. In Wholesale, we will support initiatives around the implementation of MiFiD and the 4th Anti-Money Laundering Directive.
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I’d like to take this opportunity to wish you and your families a peaceful Christmas and a successful 2018.