FINTECH & BANKING WEEKLY NEWSLETTER

21/09/2020 - 27/09/2020

CAPI N TA N L N

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Content

Atom bank launches Instant Saver 4

Profitability of 5

Marcus Bank slashes its easy-access account rate to 0.7% 7

Lawsuit against Revolut in Romania 8

Samsung Pay in Germany 9

Metro joins Berlin fintech Optiopay 12

Thought Machine’s new chairman Andy Maguire 14

HSBC’s shares dive to lowest level 15

FinCEN Files: HSBC 16

Close of accounts in EU 17

NatWest tracking carbon footprint 18

Metro Bank relaunches 90% LTV mortgages. 20

Metro Bank partners with Enterprise Nation for its corporate customers 21

The FinCEN Files: How Criminals Moved Trillions of Money 22

The true cost of saving with a High Street Bank 23

What is fscs protection? 24

www.edgeaccountants.co.uk W E E K L Y N E W S L E T T E R

Atom bank launches Instant Saver

Atom, the first mobile bank in the and secured business lending for UK, has launched Instant Saver with a small and medium-sized enterprises 0.75% AER interest rate. The highlight (SMEs). of Atom’s Instant Saver is that it is free to deposit and withdraw from Atom launched its first mobile 1p to £100k 24 hours a day, 7 days a mortgage product in December 2016 week. and has taken £1.8bn in deposits and lent over £2.4bn to small businesses New customers can open an Instant and homeowners to date. Saver by downloading the Atom app to apply for an account in minutes. (Atombank – 21/09/2020) After securing its banking license in June 2015, Atom bank launched operations in April 2016, offering market-leading Fixed Saver accounts

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Profitability of Starling Bank

The Prudential Regulation Authority (PRA) announced that many new banks had “underestimated the development required” to become successful and now needed to concentrate on making a profit. This announcement came after huge losses at Revolut (more than tripled to £106.5m in 2019); (rose from £47.1m to £113.8m) and Starling (doubled to £52m).

Anne Boden said that “If you look at why we’re going to make a profit [before others], there’s a couple of things going on. A lot of the others make a lot of money on international travel and we’re far more domestic payment based. We’re less impacted by international travel. Secondly, our customers are not necessarily spending on Starbucks or Pret; they’re much more likely to be spending at Sainsbury’s or Instead of challenging the high street Tesco. Our customers are banks, Britain’s important financial older and tend to use us as a real account. technology companies Monzo, Starling and What we’ve done is build a customer base Revolut haven’t earned a penny. However, that is far more profitable. We have just Starling CEO Anne Boden declared that “In launched kids cards, and our customers December, we will be monthly profitable”. have kids. It’s paying off.” On the other hand, it is uncertain when the bank might turn an annual profit. She added Coronavirus has increased the shift away from that “We’ve always had a business model branches and towards online banking and that was going to be profitable. Some of Boden says this could create opportunities. these other banks that launched from 2014 She mentioned that “The banks need to get thought they could be Amazon and make together to share branches. You don’t need losses for the foreseeable future. But the a branch from every bank in every town. Bank of really wants banks to be People are not using debit cards; they’re using mobile wallets. We did really well on profitable within five years.” A L I T P A C

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new account opening during lockdown as loans. Everybody is concerned about the people didn’t go into a branch”. reputational damage on this sector when we have to start collecting these loans, Coronavirus cases are increasing and but everybody realizes this has to be although no job cuts are on the cards done carefully.” (and no staff have been furloughed) Anne Boden claimed that working from Anne Boden is now on the board of home for such a long time could impact UK Finance and was appointed to the employees’ mental health. Due to this Government’s new post-Brexit board of fact, they have launched a program called trade earlier this month. She said that “Never Home Alone”, where staff can “You’ve got a situation where they weren’t socialize with each other through online at the sharp end during the financial events such as cooking classes. crisis, but they were cleaning up the mess afterwards. Those women are not going Starling is among the banks that have been to let it happen again. I have a lot of offering Government-backed coronavirus confidence in a whole cadre of women loans to small businesses, including who will be leading British banks over the Bounce Back Loan Scheme. However, the next couple of years and I’m proud to be sector will be tasked with chasing these one of them.” debts. Boden said that “Collecting [the money] is going to be difficult and we’re (Telegraph – 21/09/2020) expecting a substantial amount of defaults. At the moment UK Finance is working with the Treasury and the British Business Bank on all the processes to collect those

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Marcus Bank slashes its easy-access account rate to 0.7%

Goldman Sachs’ easy-access account continues to lower Marcus rates. It entered the market by making a great success in 2018. When it entered the market, the interest rate was 1.5%. Then it became 1.3%, then it saw 1.2% and lastly 1.05%. Now the point is a complete misery for customers: 0.7%. Marcus stated that the reason for these rates is the market conditions. It added there are ‘many factors’ it has to consider when setting its pricing structure with the Bank of England’s base rate remaining at 0.10%, the lowest on record, causing problems. Marcus said in order to build a sustainable savings business in the long term, it needs to adjust its pricing to current market conditions. (Dailymail -25/09/2020) A L I T P A C

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Digital bank Revolut is unaware that his account has he says. “Upon a search on accused of failing to provide been blocked because no Google, I noticed that such information about blocking reason is given. “Due to soft bad things happen regularly one of its customers account blocking, documents should with Revolut and there is no in Romania. be flagged immediately way for affected customers until they are provided, or to contact other company Florin Hrituliac, a the review is complete” through the chat window in Revolut personal account says Revolut spokesperson. the Revolut application” he client in Romania, He adds that depending adds. attempted to transfer on the case, the internal RON 20,000 ($ 4,832.68) review can take minutes or “Basically, they don’t care from his company’s bank hours. However, the firm about our money. This was account to his Revolut did not finish the review when I decided to sue Revolut account on September until it became aware of in my local court.” Hrituliac’s 9, 2020, but was unable Hrituliac’s account issues on account was finally unblocked to access this money. 10 September. “without any documents, just Hrituliac said his account based on my explanations” was blocked for five days “If Revolut has blocked the he adds. “Which again shows “without any explanation account since May, it means many flaws in their anti- from chat agents”. Revolut the account has been blocked (AML) unblocked the customer’s for five months - there is procedures.” account on September 15. still no notification about Following days, client sued it,” says Hrituliac. “I had full Revolut claims that the Revolut. confidence in transferring the freezing of accounts “could 20,000 RON to my Revolut be due to either a breach of Revolut claims that the account; If I had found out our terms and conditions or customer’s account was that it was blocked, I would as part of our security checks actually “locked” on May have resolved the problem which continuously monitor 21, 2020. A spokesperson first and then transferred the to keep our customers safe. at the company said money. “ This measure is a regulatory the customer’s account requirement.” The fintech’s was rarely used and Hrituliac claims that this new money laundering went through a review, information was not covered officer will have to tackle this resulting in the account in chat discussions with case and more, as Hrituliac’s being locked. According the first representative. situation has garnered a to the spokesperson, they “This transfer has only lot of interest since his explain that the client was been flagged for further post about it in a Revolut unable to access these verification, not the account Romania group on Facebook. funds “due to an error on has been blocked / blocked.” “Immediately, I have been our side that the review contacted by messenger by was not completed on Hrituliac also faced a other customers interested time”. Revolut has since similar situation with chat in filing a class lawsuit apologized to Hrituliac for agents. “After so many against Revolut in Romania the delay. attempts to get a piece of – I redirected them to my information (documented on lawyer.” Hrituliac, a Revolut print screens) from Revolut customer since April 2019, representatives and no (Fintechfutures 22/09/2020) states that his account response from them, I felt

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Samsung Pay in Germany

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Samsung officially launched its own mobile Samsung Pay is now available as an open payment service in 2015. Not much has beta and can be “linked to almost all German improved for Germany since then. Although bank accounts” as the company wrote in a the group announced that it is expanding message. From 28 October, the payment to other countries in 2020, mobile payment service is officially available in cooperation with Samsung Pay is still not available in the with Solarisbank AG and Visa. country. Samsung Pay starts exclusively in Germany Samsung Pay app is preinstalled on Samsung in collaboration with Solarisbank AG and Galaxy Note 20 Ultra. Installation cannot be Visa. This means that you signed up for done, instead you will be redirected to a Samsung Pay and then received a “virtual Samsung website. However, there has been Visa debit card” that can be “linked to a change about this over the past few days. almost all German bank accounts”. Some users now say they are “invited” to To merge Samsung Pay with a personal Samsung Pay. bank account, Solarisbank is using a new Creating the account is now semi-available. and simple KYC procedure that does not After signing up through the app, users require video identification or a branch visit. have been notified that their account would After activating Samsung Pay, you can enter be activated within the next 48 hours. The a PIN or use fingerprint or face recognition. payment app still cannot be downloaded Samsung states that the face is safe enough from the Play Store or the company’s even if the devices do not have a 3D Samsung Store yet. Following initial testing scanner. Then it comes to hold on to the on Galaxy Note 20 Ultra, Samsung Pay will NFC terminal. N N N soon be enabled for more users. C A P I T 10 A

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You can also use Samsung Pay with your Galaxy Watch if you want, and when you launch the app, you will be asked whether you prefer Google Pay or Samsung Pay as standard on your smartphone. The Samsung Pay app is free and will be available in Germany from October 28th.

Samsung Pay app works with Galaxy S8, Galaxy Note8 and Galaxy A6 (2018) and XCover Pro with Germany software; but is not applicable for Galaxy J series and Galaxy M series models and rooted devices.

(Giga & MobiFlip & FinanceFWD – 24/09/2020)

Analysis:

It is not yet clear whether Samsung will attract customers in Germany with its mobile payment service. Until now, those who want to use this feature are already using Apple Pay and Google Pay. The competition between Apple and Google is already one step ahead. Apple Pay and Google Pay split the mobile payments market among themselves. Samsung seems to be a bit late with Samsung Pay.

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Metro joins Berlin fintech Optiopay

Optiopay has been highly quiet for the past few years. It was initially working on Marcus Börner and Oliver Oster’s fintech, which aroused unprecedented excitement. It announced a collaboration with Comdirect a while ago. It tested its own new products, launched a platform for help against Corona - but no big news came out. The company may announce two new strategic investors. German retail group Metro will join with its investment arm LeadX and develop a product with Optiopay. In addition to this, Swiss core banking provider Avaloq is also coming into play. It will integrate and distribute the Optiopay product in the future. Optiopay had a great start in 2016, with well-known financiers such as DvH Ventures and investing in main incubators from the very beginning. Expectations rose rapidly. Optiopay used the quiet years after the turbulent initial phase to further enhance. Recently, seasoned executive Nicola Breyer came from PayPal to increase sales. Optiopay offers different functions. For example, customers can link their bank accounts to the electricity provider using Optiopay. Then that company would be able to show customized ad campaigns available to that specific customer, after an account analysis. “People only reveal account details if they see a financial advantage as a result” says founder Oliver Oster. This can be in the form of coupons or special offers. For example, shoppers in the organic market receive an offer for a green electricity tariff, Breyer says. In other cases, the account analysis shows that the customer is still saving very little. The Optiopay system offers a deposit for ETF- Savings plans. Almost 70 companies use N N N C A P I T 12 A

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Optiopay, including Sparkasse banks, Optiopay wants to grow further with Comdirect, Deutsche Post, and insurance its customers, so far fintech has been companies such as Axa and Gothaer. About operating in Germany, Austria, Switzerland 150 advertising partners include Amazon, and the Netherlands. Adidas and Zalando. Optiopay can combine various promotional offers from this Optiopay managed to increase its sales network. last year. In 2019, the company generated sales of €4.5m through coupons and The new funding round is now intended commissions - more than a million over to accelerate growth. Two new strategic the previous year. Losses fell from €3.2m investors and existing shareholders have to €2m at the same time. In the first seven invested a total of 5.25m euros in the months of this year, revenue increased to company - its value has been around 26m €3.6m (previously was €2.5 m), according to euros. the figures.

Analysis: At first, it may be odd for the shopping chain to partner with a fintech. However, there does not appear to be a hindering reason for the partnership. Therefore, in partnership, the parties can provide support in matters that may be useful. As in this news, several companies are coming together and starting to develop a new product. The companies that signed the partnership appear on the right track with an expanded product and strategic partners.

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Thought Machine’s new chairman Andy Maguire

Thought Machine has appointed Andy Maguire as chair. The former group chief operating officer at HSBC was responsible for the bank’s IT, business operations, change support, procurement and real estate services. Prior to HSBC, Maguire was Boston Consulting Group’s managing partner for the UK and , and a member of their global executive committee. The cloud-native core banking platform has added more than 150 employees this year, with several senior hires during the second quarter, including Nicole Jude as chief people officer. She recently Prior to HSBC, Maguire was led HR and people functions Boston Consulting Group’s at Diligent Corporation and Bloomberg. managing partner for the UK and Ireland, and a member Thought Machine stated that it of their global executive will be announcing new clients in committee. the coming months, following a $42m Series funding round in July. Founded in 2014 by Google engineer Paul Taylor, the company already names , , Atom bank and SEB as customers.

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HSBC’s shares dive to lowest level

HSBC’s share prices plummeted. He had HSBC, which is Europe’s never seen this level since 1995. biggest bank, has set aside between $ 8bn and $ 13bn this Between 2013 and 2014, it turned out year for bad loans as it expects that he was willing to transfer millions more people and businesses to of illegal funds. However, HSBC said that default on their repayments because they fulfilled their legal responsibilities of the coronavirus pandemic. and reported suspicious transactions. In August, it reported a 65% drop in Leaked documents from the US pre-tax profits to $ 4.3bn for the first Financial Crimes Enforcement Network half of the year - much steeper than (FinCEN), involving about $2 trillion of analysts had forecast. transactions have revealed how some of the world’s biggest banks have allowed It also became embroiled in a political criminals to move dirty money around battle over its support of ’s the world. national security law in Hong Kong and was lambasted by both the US and UK. The Asian wing had hit HSBC before the documents were leaked. Although HSBC is currently pushing ahead with HSBC is based in London, more than major restructuring of its global half of its profits come from Asia. That’s banking operations. HSBC would why it was already very fragile, both due “accelerate” an earlier restructuring to political pressures in Hong Kong and plan which includes the axing of the epidemic. 35,000 jobs.

Its role in £62m fraud is detailed in the FinCEN leak of documents - banks’ “suspicious activity reports”. HSBC moved the money through its US business to HSBC accounts in Hong Kong in 2013 and 2014.

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FinCEN Files: HSBC

HSBC allowed fraudsters to transfer millions while expecting enforcers to deal with the of dollars around the world even after it had problem. If they have evidence of criminal learned of their scam, leaked secret files activity, they should stop moving the cash. show. The leak shows how money was laundered Investment fraud at HSBC started right through some of the world’s biggest banks after the penalty he received for mediating and how criminals used anonymous British money laundering. He was fined $ 1.9bn (£ companies to hide their money. 1.4bn) for money laundering. The bank had The investment scam that HSBC was warned promised not to do such a practice again. about was called WCM777. It was started by The scam was a Ponzi scheme - a notorious Chinese national Ming Xu. Little is known type of investment racket that pays existing about how he came to be living in the US, stakeholders with money collected from although he claims to have studied for an new members. MA in California. The documents leak includes a series of Based in the Los Angeles area, Xu - or “Dr other revelations - such as the suggestion Phil” as he styled himself - acted as a pastor one of the biggest banks in the US may at evangelical churches. have helped a notorious mobster to move Xu said he was operating a global investment more than $1bn. bank, World Capital Market, that would pay What are the FinCEN Files? out 100% profit in a 100 days. In reality, he was running the WCM777 Ponzi scheme. The FinCEN Files are a leak of 2,657 documents, at the heart of which are 2,100 Through travelling seminars, Facebook and suspicious activity reports, or SARs. The webinars on YouTube, it raised $80m selling leaked SARs had been submitted to the US supposed investment opportunities in cloud Financial Crimes Enforcement Network, or computing. FinCEN between 2000 and 2017 and cover What is a Ponzi scheme? transactions worth about $2 trillion. A Ponzi scheme - named after early 20th SARs are not evidence of wrongdoing - Century conman Charles Ponzi - does not banks send them to the authorities if they generate profits from the cash it raises. suspect customers could be up to no good. Instead investors are paid a return from By law, they have to know who their money coming in from other new investors. clients are - it’s not enough to file SARs (BBC – 21/09/2020) N N N and keep taking dirty money from clients C A P I T 16 A

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Close of accounts

Lloyds or have been notified to in EU British customers living in EU countries that their accounts will close at the end of December 2020. Lloyds has 13k customers who are in this situation and informed. The Brexit negotiations between the UK and the EU, which have not yet resulted positively, have a great impact on this decision. Spokesperson for Lloyds said that “We have written to a small number of customers (13,000) living in affected EU countries to let them know that due to the UK’s exit from the EU, regrettably we will no longer be able to provide them with some UK-based banking services”. Member states of the EU have different rules for cross-border bank accounts, which will be effective immediately after the UK’s transition period. If a suitable route is not found, UK banks will break the law if they announced that “In the event that do not apply for new banking licenses in no alternative to the European Economic each European Union Country. Area passporting regime for financial services is agreed between the UK and Lloyds stated that it will notify its customers EU, we have taken the difficult decision of new developments and suggest action to withdraw from offering our services plans. On the other hand, two of the other to clients who reside in the EEA,” banks, HSBC and NatWest, have not declared any changes to their customers This situation is predicted to be an on this issue so far. Besides, Barclays and opportunity for digital banks to increase Coutts also started to contact customers. their market share. Well-known neobanks such as N26 and Bunq, native to the EU, Barclays declared that “In light of the are already available as alternatives for UK leaving the EU at the end of 2020, we British immigrants and have a simple continue to review the services we offer to account opening process. customers within the European Economic Area (EEA), and any impacted customers (Fintech Magazine & The Local (Sweden)- will be contacted directly,” Barclays said in a 22 September 2020) statement. “The timings for account closure will depend on the type of product that a customer holds, but we will always give notice to customers.” A L I T P A C

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NatWest tracking carbon footprint

NatWest partnered with Carbon Footprint Tracking experts CoGo track their real-time emissions in their app as they spend. The CoGo app helps customers see what they’re doing well, and where they can make even more of a difference. CoGo also suggests hints and tips on how to reduce their footprint, like switching to renewable energy or buying second-hand clothes. NatWest is inviting customers to test this feature as part of an 8-week pilot and to provide feedback on their experience. In what it called a “UK banking first”, the banking group which has 16 million customers across all its brands, will trial a new app the emissions impact of their shopping choices. Georgina Bulkeley, chief operating officer of personal banking at Natwest, said: “We know our customers are as passionate about climate change as we are – but it’s really hard to change what you can’t measure….the initiative would

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ensure that our customers have access to the best tools so that they can make informed decisions about their spending and the impact that has on the environment”. Participants in the trial will be sent a unique link to download the NatWest CoGo app. If it is successful, the technology could then be integrated into the bank’s main app. Earlier this year Lloyds Bank introduced a similar service for its commercial banking customers. However, Doug Parr, policy director at Greenpeace UK, suggested that the bank should focus on its own emissions. He said: “Informing customers on how best to clean up their spending is all well and good, but maybe NatWest should start by looking at their own climate footprint, which will dwarf any changes that can be made by giving their customers lifestyle tips.”

Analysis: Climate change is an important issue which came to front in the financial market as well as other industries. It is vital to create a global awareness on this subject. There are duties for individuals, communities, companies and governments. It is our responsibility to our children that all projects on climate change achieve their goals with sincerity. Supporting individual efforts with companies and managerial movements will accelerate progress in this regard.

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Metro Bank relaunches 90% LTV mortgages.

Metro Bank has introduced a 90% LTV on, or have recently been furloughed, will not product into its residential mortgages range. be accepted. Applications for further advances Loan to value” is the amount you want to above 80% LTV will also not be accepted. A borrow described as a percentage of the total maximum property value of £600,000 applies, value of the property. For example, if the with all loans subject to a physical valuation. property is valued at £100,000 and you wish The products also carry a £999 product fee, to borrow £75,000, the loan to value is 75%. which can be added to the loan. Remortgages The mortgage is available on properties up are also available but at a higher rate of 4.24%. to a maximum value of £600,000 and comes with a £999 product fee. Customers who are

Jeremy Cook, head of corporate relationships lenders withdrew 90% LTV ranges, Metro (mortgages) at Metro Bank, said: “We’re Bank started to offer this product again. One pleased to reintroduce our five year fixed of the criteria it sets for this is important: not rate mortgages at 90% LTV. There are lots of being furloughed from work. This means that customers with smaller deposits looking for a those who demand credit will be sectors that mortgage at the moment, and we’re thrilled are not affected by Covid-19. to support them as they seek to get on the housing ladder or move home.” (Mortgagesolutions & Ftadviser & Todayheadline24/09/2020, Creditstrategy, Many lenders withdrew 90% LTV ranges 25/09/2020) during the summer and in September. HSBC suspended offering its 90% mortgages to new customers due to significant pressure on service levels. The likes of , Virgin Money, Ipswich Building Society and Melton Building Society all put their 90% products on hold earlier in June 2020 as the UK started to emerge from the enforced coronavirus lockdown. Analysis: Interestingly, Metro Bank continues to invest in areas that have been vacated. While many banks are closing branches, Metro Bank continues to open branches. Likewise, many N N N C A P I T 20 A

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Metro Bank partners with Enterprise Nation for its corporate customers

Metro Bank announced a new partnership created to support networking and mental with leading Enterprise Nation that provides health among entrepreneurs in the UK. advice and expertise to small businesses in the UK. Metro Bank launched Business Account Online (BAO) on September 9, 2020. So, the Enterprise Nation has announced it had timing of partnership with Enterprise Nation partnered with Amazon on June 2020 to was very convenient. launch a major support package for 200,000 small businesses and start-ups across the UK David Thomasson, Chief Commercial Officer called the Amazon Small Business Accelerator at Metro Bank, comments: “As a full service, to include free e-learning, virtual events, community focused bank, partnering with services and support to start, grow and Enterprise Nation was a no brainer for us. accelerate. It has a proven track record for helping SMEs to survive and thrive through effective The new collaboration will typically cost £ management and business guidance. As 99 for Metro Bank’s corporate customers and a result of this partnership, Metro Bank will include a free one-year Enterprise Nation business customers will benefit from access membership. This will provide a set of online to one of the best support networks for tools that connect business owners with the SMEs in the UK.” answers and advice they need to run and grow their business. Emma Jones, MBE, founder of Enterprise Nation, said: “Small businesses have faced To access the offer, Metro Bank customers a barrage of relentless challenges in 2020. will visit the bank’s website to begin the Now more than ever, they need support registration process. and advice to adapt, grow and succeed and this partnership with Metro Bank will give Metro Bank’s customers will also be able business customers access to our business to attend Enterprise Nation’s various virtual resources on tap.” events held across the UK. On the other hand, the bank will sponsor Enterprise Nation’s Heads Up campaign. Heads Up was

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The FinCEN Files: How Criminals Moved Trillions of Money

Banks such as HSBC, JP Morgan, Standard Even the Bank’s own employees Chartered, and more have been charged with allegedly warned institutions about this thousands of suspicious transactions totaling problem, with more than a dozen former $2 trillion worldwide. compliance officers at HSBC questioning the effectiveness of banks’ anti-money It was revealed that between 1999 and laundering programs. 2017, a potential corruption transaction of $2 trillion (£1.55 trillion) was made through the The laws in force do little to stop this type US financial system. of financial crime. As long as a bank issues a SAR notification, it is protected from any The information was leaked to an criminal prosecution - it acts as a “free pass” international group of investigative to carry money and collect fees. journalists (International Consortium of Investigative Journalists). While 400 At no point are banks required to stop journalists in 88 countries have been receiving money from criminals, and even in investigating the transactions for the last 16 the rare cases where banks were prosecuted months, Buzzfeed News ended the report on or fined for financial misconduct, some Sunday, September 20. continued to launder suspected criminal money - including HSBC, Standard Chartered, These documents, called FinCEN files, and JPMorgan Chase. consist of suspicious activity reports (SARs). SARs are prepared by banks and The repercussions of this spill can already other authorized organizations. They share be seen worldwide, with shares in the suspicious transactions that they see in their banking sector dropping just a day after own bodies with the government. When the report was published, London Barclays they suspect their customers, they report it dropped 4% and HSBC fell 3%. In Hong by explaining the reason for this suspicion. Kong, HSBC fell more than 4%, its lowest This report is sent to the US Department share since May 1995. of Treasury Financial Crimes Enforcement Network (FinCen). (thefintechtimes – 22/09/2020)

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The true cost of saving with a High Street Bank

Savers continue to save money whole can boost their interest by due to uncertainty arising from up to £7b. Covid-19. But they lose their money in interest rewards of up to £7b It is important you earn more by giving their money to High than inflation on your money — if Street Banks, which pay almost no you don’t, it loses its value. With interest. inflation at 0.2%, you need to earn £20 interest a year on each £10,000 According to the data announced of savings. At 0.01%, you earn just by UK Finance, the amount in easy- £1, so effectively lose £19 a year. access accounts increased by 6% in the second quarter. For ten years Data analyst Moneyfacts says that this figure had not been reached. there are 81 easy-access accounts Half of the year, savers saved on offer from other banks and £55.9b. building societies that beat the rate of inflation. Major banks including NatWest, Lloyds, Barclays, Royal Bank of Rachel Springall, finance expert , HSBC, and at Moneyfacts, says: ‘In my view, Santander hold most of the savings savers would be wise to look away but pay 0.01% interest to their from the High Street banks as customers. they are paying next to nothing in interest. By switching to better deals at 0.75% to 1%, Britain’s savers as a (Daily Mail - 22/09/2020)

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What is fscs protection?

The Financial Services out of business. Compensation Scheme (FSCS) is an independent fund set up by Because of the way the £85,000 the government to help protect limit works, there are a few things people’s money. you need to bear in mind: The FSCS covers companies that Don’t exceed the £85,000 limit: have been authorised by the UK If the money in your current regulators, the Financial Conduct account is over the £85,000 limit Authority (FCA) or the Prudential for FSCS protection, you might Regulation Authority (PRA). want to spread your money How does it work? across multiple accounts, to make sure it’s all protected. Having If a bank, building society, different types of account at credit union or other financial a financial institution doesn’t institution fails, the FSCS will “reset” the limit - meaning if you protect up to £85,000 the money have both a current account and you have at each institution. a savings account with the same This is sometimes known as the bank, you’d only receive the deposit guarantee scheme. £85,000 FSCS cover once, and not on both accounts. That means you’ll get any money in your account back within a week if your bank goes

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