INDEPENDENT PUBLICATION BY RACONTEUR.NET #0698 08/10/2020 FUTURE OF BANKING & CAPITAL INVESTMENT OPEN BANKING BANK MODELS BREXIT FINTECH Distributed in 04 It was meant to revolutionise 05 Could you create a tier-1 bank 10 The UK's departure from the EU 12 With the Strategic Review UK finance, but the promised from scratch - and should you is imminent, so what will this pending, we look at fintech's transformation is yet to appear really try to? mean for the City of London? role in UK recovery Published in association with CORONAVIRUS Society demands that Contributors Stephanie Baxter Financial journalist for more than a decade, and formerly banks step up deputy personal finance editor at The Telegraph. She is currently a financial journalist Coronavirus has shaken the UK’s personal at Rhotic Media. finances and customers are calling on Liz Lumley Global specialist commentator on banks to play a role in economic recovery, FinTech for over 20 years. Currently, she is Director of FinTech at VC but how well placed are they to do so? Innovations, and architect of the FinTECHTalents Festivals. Joe McGrath Joe McGrath Financial journalist and editorial director of Rhotic Media, with work published in Bloomberg, welve years on from the global lett. “They need to have a ‘human under- Financial Times, Dow Jones and T financial crisis, you might antici- standing’ approach. This means enabling Financial News. pate bankers have developed higher people to budget better, manage their bills levels of empathy with the British public. and maintain their mortgages.” Oliver Pickup After all, in 2008, it was the taxpayer who Despite this, those who have been work- Award-winning journalist, specialising in technology, business footed the bill for propping up fallen giants ing in partnership with the banks in recent and sport, and contributing to a such as Royal Bank of Scotland and Lloyds years say while attitudes within these organ- wide range of publications. Banking Group. isations have shifted – they do want to help In early-2020, as coronavirus started to – their systems and technologies have lim- Daniel Thomas wreak havoc on the UK economy, many were ited their ability to respond adequately to the Writer and editor, with work seeking payback. They wanted to see banks issues presented by the pandemic. published in The Telegraph, Newsweek, Fund Strategy and undertake a moral duty to support society EducationInvestor, among other and help industrial sectors that had been hit publications. by the pandemic. hit financially by COVID-19, but the speed of “The UK government bailed out the banks their response has been undermined by lack- Jonathan Weinberg to the tune of £500 billion in the 2008 finan- lustre digital innovation in the years leading Author and former national cial crisis. The UK taxpayer took the brunt of up to the pandemic. newspaper health editor and medical correspondent, he is a this and arguably is still paying for it today,” “At a time where customers have necessar- visiting lecturer at the University says Richard Skellett, founder of charity Digi- Banks have lost their way, ily embraced digital platforms and need per- “The entire ethos of the industry is predi- of Cambridge and University of tal Anthropology. sonalised, immediate and reliable services to cated on the assumption that analysis, and Westminster. “Despite this support, I would argue the starting with removing meet their unique and rapidly changing cir- modelling based on experience, are key suc- banks have little or no relationship with authority from bank cumstances, legacy systems that are inflexi- cess factors for a bank,” says Gouttebroze. their customers. Banks have lost their way, ble, expensive and inhibit innovation just no “This, by far, trumps innovation and change. Gretel, a company that specialises in reu- starting with removing authority from managers longer cut it,” he says. As a result, it tends to get caught and para- niting individuals with cash in accounts they bank managers.” Transformation must be a priority, but this lysed by unforeseen events.” have forgotten about, says one step would be The view that banks owe something to is easier said than done. “With customers Given the widespread criticism of the to raise awareness about the £50 billion in Publishing manager the British people has undoubtedly become needing support now and internal resources banks for not translating innovation into assets that is currently scattered throughout Reuben Howard more widespread over the past decade. Ben- “Banks have a generational opportunity to under pressure, transformations that have social action, it is easy to forget that three the financial services industry unclaimed. edict Ireland, head of experience at Splendid truly support customers through an unprece- historically been risky and take years are a years ago the Competition and Markets “Over 20 million people aren’t aware of the Managing editor Benjamin Chiou Unlimited, is among them. dented crisis, but years of inaction on creak- hard sell,” says Wilson. Authority outlined the Open Banking pro- dormant assets they have sitting in forgot- Having worked with HSBC extensively, he ing infrastructure is thwarting best inten- So why are banks so slow to embrace digital gramme. The project was designed to free ten accounts and investments,” says Dun- Associate editor believes the banks that have invested in dig- tions to protect lives and livelihoods,” says transformation? And has this lack of transfor- up the data held by banks to stimulate inno- can Stevens, the company’s chief executive. Peter Archer ital tools in the years leading up to the pan- from Simon Wilson, director of global pay- mation in the years prior to COVID-19 harmed vation, enhance competition and allow new “Imagine the impact if people could be reu- Deputy editor demic are ultimately those able to help the ments solutions at Icon Solutions, which has their ability to help society now? challengers into the market. It was also sup- nited with that money.” Francesca Cassidy most, particularly given the increased digi- been working with HSBC and Lloyds Banking Fabrice Gouttebroze, managing director of posed to lead to an explosion of new services. While there is a “moral imperative on tal migration of customers since the start of Group, among other well-known European Sirma Group’s S&G Technology Services, says There is some evidence that this has banks to support the global economy”, Ste- Digital content executive Taryn Brickner the outbreak. banking giants. the industry is “notoriously change averse” worked, however. Non-bank entities, vens says the requirement should be broader. “Banks should have a moral obligation to Wilson says the banks are doing everything because of its laser-like focus on trend analy- which compete with the legacy high street “The responsibility to support lies with all Production manager help customers cope financially,” says Skel- they can to support people who have been sis and modelling. banking cohort, have stepped up during financial services providers to make acces- Hannah Smallman the pandemic, offering individuals and sibility to this money as quick and simple as Design businesses speedy access to loans, new possible in light of the financial impact of the Sara Gelfgren PUBLIC FEELING TOWARDS THEIR BANKS HAS YET TO RECOVER FULLY accounts and payment services. But, cru- pandemic,” he says. Kellie Jerrard cially, there has been limited help for those Colm McDermott UK adults were asked to rate the services they felt their primarily-used bank was especially good at, but results were underwhelming. with the greatest need. Samuele Motta “There has been no shortage of new Jack Woolrich Range of digital services money management and investment apps, (app, online banking etc.) 42% Art director but precious little for other business sectors Joanna Bird Security 41% or people who aren’t already affluent, sophis- Design director Personal service (including ticated investors,” says Sara Korchmaros, Tim Whitlock telephone, email) 28% chief commercial officer at retail technology platform Recash. 97% Quality of advice 25% “As a result, the original vision for Open of banks say the customer Although this publication is funded through advertising Range of financial products Banking – to extend the benefits to other sec- experience is a focus and sponsorship, all editorial is without bias and sponsored and insurance offers 23% features are clearly labelled. For an upcoming schedule, tors – has remained largely unfulfilled.” partnership inquiries or feedback, please call +44 (0)20 8616 While this assessment of Open Banking’s 7400 or e-mail [email protected]. Raconteur is a leading Transparency 22% publisher of special-interest content and research. Its pub- success may be justified, it does not tell the lications and articles cover a wide range of topics, including Terms and conditions business, finance, sustainability, healthcare, lifestyle and full story of innovation across the UK bank- technology. Raconteur special reports are published exclu- for keeping an account 21% ing sector more broadly. In reality, banks have sively in The Times and The Sunday Times as well as online at raconteur.net. The information contained in this publication Range of payment options been helping society in dozens of other ways. has been obtained from sources the Proprietors believe to 21% be correct. However, no legal liability can be accepted for any “There have been some great examples errors. No part of this publication may be reproduced with- Free-of-charge % out the prior consent of the Publisher. © Raconteur Media % of banks supporting their customers dur- cash, also abroad 19 69 ing the pandemic, offering multiple mort- of banking Lending conditions 10% gage holidays, removing overdraft fees, customers are keeping branches open and even provid- /raconteur.net None of the above 7% “nonpromoters” ing helplines to provide expert help,” says based on their Net @raconteur Kam Chana, product innovation director at Don’t know 11% Promoter Score @raconteur_london Temenos.