May 2017 Issue 737 www.retailbankerinternational.com THE BEST OF THE BEST THE RESULTS ARE IN: THE RBI AWARDS 2017 ● TECHNOLOGY: Gamification ● DBC DEBATE: Biometric Security ● ANALYSIS: Post-Brexit London ● GUEST COMMENT: GFT RBI 737.indd 1 25/05/2017 16:14:44 POWERED BY Join thousands of fi nancial Intelligent Environments, the international provider services professionals who of digital fi nancial services solutions in association with have joined The Digital Retail Banker International, Banking Club to understand Cards International, Electronic Payments the future of mobile and International, Private Banker International, and Motor online fi nancial services Finance publications. 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Join The Club! www.thedigitalbankingclub.com Membership is free Or For further information please email: [email protected] TDBC RBI - final design.indd 1 10/05/2016 14:52:37 Retail Banker International EDITOR’S LETTER CONTENTS Intelligent Environments in association with Retail Banker International, 2 S NEW : ANALYSIS AND COMMENT UK retail banks still have work Comment pieces and in-depth anaysis Cards International and Electronic Payments International regarding winds of change that buffet buy-to-let lending, OCC charter plans in to do to meet consumers’ digital doubt, mobile and digital banking, and London’s post-Brexit fintech status banking needs 4 EVENT: RBI AWARDS 2017 Join thousands of financial services professionals who have joined The Digital Banking In an extended feature, Retail Banker Good, and improving, but work remains to and contactless – has increased significantly in International is delighted to announce be done: the summary of multinational tech- the past year. This highlights the need for UK Club to understand and discuss the future of mobile and online financial services the recipients of the 2017 Global Retail Banking Awards, sponsored by Fiserv. nology vendor FIS’s annual PACE (Perfor- banks to create truly feature-rich applications The winners were honoured at a gala mance Against Customer Expectations) index that allow customers to carry out a variety of dinner after the annual Retail Banking Conference in London’s Waldorf Hilton for UK banks. transactions, including real-time payments. Hotel on 11 May. Douglas Blakey The index is an in-depth analysis of what This is especially true with P2P payments, reports on the winners in 25 categories is important to users of consumer banking where use is highest among millennials. FIS 12 TECHNOLOGY: GAMIFICATION services, and their ratings of the quality of data shows that millennials appear untethered Businesses are trying to bring gaming those services. The findings come ahead of the to their primary banking provider’s mobile into the financial sector in an attempt introduction of Open Banking standards in app when making P2P payments; adding or to improve consumer engagement. Is this move a home run or a strike out? January 2018, which will open up the indus- improving this feature is critical to winning Patrick Brusnahan investigates try and set universal standards for connectiv- the battle for ‘top of phone’. ity options through open APIs. However, senior millennials (aged 26-35) 15 DBC DEBATE: BIOMETRIC SECURITY The PACE score indicates how well aligned are taking out loans and mortgages and sign- As banking and payments become increasingly advanced, security around financial institution performance is to cus- ing up for investment services more frequent- them needs to develop too. However, tomer expectations. Taking the UK positives ly than younger ones (18-25). In short, many can biometric security ever truly replace the tried-and-tested password? Patrick first: UK banks saw their PACE score rise six of behaviours line up with Gen-Xers (36-51). Brusnahan reports from the Digital points from 2016 to 88, reflecting collective Not being recognised and rewarded for Banking Club’s latest debate in London progress in meeting consumer expectations. their business is a common complaint among 16 S NEW : DIGEST The UK PACE score now trails the top-rated consumers. However, digging into the PACE US and Germany (tied at 90) by only two data, it is clear that consumers who use their 20 GUEST COMMENT: GFT points. The UK also scores way ahead of the primary bank’s credit card exclusively have It seems unlikely that BlackBerry will ever regain its dominance of the 2017 global PACE average of 82. much less negative views around recognition. smartphone market. Banks need to Where UK banks are falling woefully short, Nearly one-half of UK consumers do not adapt their models or meet with the says FIS, is in the basics of how they run, as currently have a credit card at all, up dramati- Join now and receive* same fate. GFT’s Christian Ball writes a cautionary tale of which the banking consumers said they are not meeting expec- cally from prior years. Primary banking pro- 10% discount on delegate passes for Europe’s leading conferences and awards: sector may need to take heed tations except in simplicity. UK consumers viders are not getting as much of their older believe their primary banking provider is not consumers’ credit card business as they are reliable or fair. from their younger consumers, suggesting 10% discount on subscriptions to leading global briefing services: In terms of how banks connect with con- that over time and as consumers age, the pri- Retail Banker International sumers, it is clear that investments in digital mary bank loses top-of-wallet status. Cards International banking are paying off. However, UK banks Credit card loyalty programmes are an effi- are performing far below consumer expecta- cient and effective way to reward customers Electronic Payments International tions for recognition, suggesting work needs for business, and build goodwill, argues the Private Banker International to be done to acknowledge customer loyalty. report. Consumers who use their primary In areas where UK banks can grow, they are bank’s credit card exclusively are also much Leasing Life not meeting customer expectations in terms more likely to rate the bank favourably in of the Control, Aspirations, Advice and Cus- helping achieve aspirations, as credit cards 10% discount on subscriptions to intelligence Join the club for free tomised KPIs. power most large purchases. services: Unsurprisingly, the report finds that millen- While UK bank scores are generally rising www.thedigitalbankingclub.com nials are leading the way, with Gen-Xers and against expectations, the report concludes Cards & Payments Intelligence Center baby boomers fast followers. Nearly 75% of there is rising demand for a new level of digi- Retail Banking Intelligence Center all users have gone online to check balances, tal service. Consumers in all generations want view transactions, pay bills, transfer funds to better connect with their banks at their WealthInsight between accounts or receive notifications. convenience, at any time and from anywhere For more information please email FIS’ PACE data clearly shows that millenni- Financial institutions have long recognised PLUS 10% discount on expert research reports and als, especially young millennials, are the most the importance of knowing your customer. research consultancy active users of digital banking solutions. This Digital disruption now makes it more impor- [email protected] includes digital payments, which they use to tant than ever before. Banks should consider pay bills and, increasingly, individuals. High using data analytics to anticipate when sig- mentioning MEMBER OFFER in the subject line street banks may be capturing the majority of nificant consumer life events, such as buying millennial consumers, but that does not mean a car or house, are likely to occur. they are delivering in terms of digital. The importance of providing digital pay- Douglas Blakey ment options – including mobile wallets, P2P [email protected] * Available to new customers only www.retailbankerinternational.com May 2017 y 1 RBI 737.indd 1 25/05/2017 16:14:50 DBCad draft 2.indd 1 30/05/2014 11:22:43 NEWS: ANALYSIS AND COMMENT Retail Banker International Buy-to-let lending buffeted by the winds of change n BUY-TO-LET GROSS ADVANCES IN THE UK market cycles and adversely affect the resil- ience of the banking system. Political opposi- tion to the buy-to-let sector has also emerged, September 2016: PRA sets with several critics claiming it is pricing first- underwriting standards for 2015 Autumn Statement: buy-to-let lending, covering ICRs, time buyers out of the market. three-percentage-point stamp income affordability, and interest duty surcharge on purchases of rate affordability. Came into effect November 2016: FPC given As a result, several new pieces of legislation additional residential properties, in January 2017. new powers, effective from effective from April 2016. have been announced, some of which are £bn January 2017, to require providers 15,000 April 2016: stamp to set limits on lending with already in force, aimed at reducing demand July 2015 Budget: reduction duty surcharge respect to ICRs