Nedbank Private Wealth today stated that despite appreciating that UK elections typically have a limited impact on the UK property market, it expects the 12 December 2019 election to buck that trend and have a more significant impact due to the ramifications this election’s manifesto promises are likely to have on London’s residential property market.
Noting that it was agnostic with regard to any election outcome, the bank sought to highlight the likely impact of each of the various scenarios that could result from the vote, as well as a resolution to the current Brexit impasse, on its clients. It also flagged that political uncertainties are often difficult to discuss, and anyone’s political persuasions can be very firmly seated and are not always a foregone conclusion.
Speaking at its annual London property seminar reviewing the UK residential property market and offering an outlook for the coming 12 to 18 months, and the launch of a campaign to promote the bank’s flexible, quick and tailored lending solutions for high-net-worth clients, Colin Campbell, private banker, stated: “The UK property market has come off the record highs seen in 2017. Meanwhile, prime central London residences have seen a continued correction in prices since 2015. This drop in property values has come at a time when there is also limited confidence in other traditional investment options, such as bonds and equities, due to a variety of investors’ concerns about negative interest rates and the sustainability of financial markets.”
Knight Frank figures show a drop of 14% in property prices in sterling terms since the EU referendum – a figure that falls to 20% once exchange rates are taken into account although it was as low as 25% before the recent bounce in the value of sterling. Peak to trough, these levels are lower than they were during the global financial crisis.
Regarding the likely outcomes of the forthcoming general election, the main four scenarios are based on: (1) the Conservative Party gaining a majority or working with other parties/individuals to form a government; (2) the Labour Party gaining a majority or working with other parties/individuals to form a government; (3) a decision by any government to hold a second referendum; and (4) the ongoing impasse continuing while any future government sought to get a (new) Brexit deal agreed by parliament. The scenarios being considered ahead of the publication of updated election manifestos are:
The Conservative Party gaining a majority or working with other parties/individuals to form a government
Given the party has been in power for some time, Nedbank Private Wealth believes that any changes should already have been put through, although the first budget by Sajid Javid originally set for 6 November has been cancelled due to the election and we have not seen the new chancellor’s vision. However, election time always raises the possibility of the publication of an updated manifesto that draws ideas from other parties if they are a popular choice with voters. This may be the case with stamp duty, which has been cited as the second most unpopular tax in the UK, not least as the Conservatives had promised reform in their 2017 manifesto, although no changes were subsequently announced. A change here might see the levy changed to a new system that charges 4% on properties valued above £500,000 and 5% on those valued over £1 million.
The Labour Party gaining a majority or working with other parties/individuals to form a government
Here the UK residential property market would be affected by a number of changes that Labour are on record as putting forward for change. Any additional levies here are mainly due to their desire to redistribute income. Again stamp duty would be an area for re-assessment where the only published aim would be that stamp duty would only remain where the purchasers were for non-domiciled UK residents (non-doms), companies, second homes and investment properties. In addition, current council tax charges on properties would be replaced with a progressive tax based on the value of the property, which would be payable by the owners instead of those living in the house. Here too, scope for more change has been pledged with higher rates applicable for second homes, those standing empty and for properties that are owned by non-doms and/or non-residents. Last, but not least, another area affecting property would come in the form of a reformed capital gains tax charge that sees rates for second homes/investment properties aligned with income tax rates as a starting point, as well as the removal of principal private residence relief.
A decision by any government to hold a second referendum
This is only – as currently stands – an option being mooted if a Labour-led government were to be voted in. Here, Nedbank Private Wealth believes that any impact on the property market would be determined by the terms of a second referendum rather than the physical vote itself.
The ongoing impasse continuing while any future government sought to get a (new) Brexit deal agreed by parliament
A sense of caution has prevailed in the property market while prospective buyers have been waiting for a resolution to the EU issue. With the announcement of the general election, this is likely to continue. Given the extent of pricing correction in London to date, Nedbank Private Wealth does not envisage significant price adjustments in any holding period.
Also speaking at the event were representatives from global real estate consultants, Knight Frank; RSM, one of the largest tax advisers in the UK for individuals and trustees; and London’s Chartered Surveyors & Valuers with its 125+ years’ combined experience covering the capital’s property market.
Tom Bill, head of London residential property research at Knight Frank and author of the longest running index on central London’s residential marketplace, stated: “The more adverse tax landscape is now largely priced in by the market. This year has shown the extent to which political uncertainty is causing some to still hesitate. While a wall of capital has built up and buyers are scrutinising the market for value, as political uncertainty recedes, this should translate into higher levels of activity. This repricing, combined with the impact of a weaker sterling and ultra-low mortgage rates, is underpinning demand. The extent to which pent-up demand is released in 2020 depends on the disappearance of the risk of a disorderly Brexit and the emergence of a stable government.”
Gary Heynes, head of private clients at RSM, stated: “From a tax perspective, there are still some changes coming through, which may affect the health of the property market, and not just in London. In April 2020, the most significant of these is the change in capital gains tax reporting which gives everyone just 30 days to report on a sale after the transaction has completed. That is a very short timeframe for buyers to pull together the full history of their relationship with the property. Added to that are changes affecting individuals with regard to their main residence. The first of these is that the previous 36-month timeline for sellers to benefit from principal private residence relief, which had already come down to 18 months, is now going to be reduced to a mere nine months. The second change is the removal of letting relief. Both of these could mean more individuals are drawn into the scope of capital gains tax, just as the window for calculating and paying the tax shortens.”
Simon White, managing director of London’s Chartered Surveyors & Valuers, added: “Although the London market in the last year has dropped by 2% in terms of value and 8% in terms of the number of properties coming to the market, there is still value in the capital. Aside from the effects of gentrification that still impact many areas, other factors are leading to some areas seeing a rise in value now. Areas such as Battersea are enjoying an increase due to the continued domestic demand for the right property, while areas such as Whitechapel and Lewisham are seeing the impact of better transport links – due to the Elizabeth line and extension of the Bakerloo line respectively. It’s not all bad news and there is still some considerable value to be had, particularly over the longer term.”
Corporate treasuries under pressure need multi-banking trade finance technology
By Andrew Raymond, CEO, Bolero International
The pressures on corporate treasuries in global trade have continued to mount since an HSBC survey last December found many felt ill-equipped to meet the demands placed on them.
Since then the pandemic has caused massive disruption and has overturned many carefully-laid plans. The same pressures identified in the survey remain, but have intensified. Treasurers still face ever-more complex flows of information from multiple systems while relying substantially on manual processes. At the same time they are expected to drive change and provide strategic insight.
It was no surprise then that two-thirds of treasurers in the survey were planning changes to the technology they used as part of transformation programmes to increase efficiency and bring greater visibility to treasury operations.
Reliance on manual methods and paper documents makes little sense and is unsafe
As we move through the pandemic, pressure on cashflow and working capital remain potent factors. Many treasurers working for enterprises engaged in global trade know that continuing to use manual methods to manage credit lines, and important trade finance instruments such as letters of credit (LCs) or guarantees is hard to justify in an age of digitisation and multi-banking trade finance solutions.
Not least because of the constant problem of fraud and forgery in relation to paper documents, which has led some banks to withdraw from involvement in commodity trade finance. The allegations of prolonged major fraud against the oil trader Hin Leong in Singapore are a case in point, sending tremors through the trade finance world. Court documents reportedly allege the fraudulent use of 58 import letters of credit that were not supported by any underlying transaction. Forged bank statements, bills of lading, sales contracts and invoices are also allegedly involved in very substantial fraud designed to cover losses and give a false impression of liquidity.
The case has not just exposed the susceptibility of paper trade documentation to forgery – it has also prompted some well-known European long-term commodity finance banks to withdraw or review their activities in this field. None of this makes everyday operations any easier for corporate treasuries still using paper in trade finance.
Reducing fraud through digitisation of trade finance
With fraud such a substantial problem, treasurers need to think hard about digitisation and how it reduces the risks. Paper documents can be forged when out of sight while being couriered around the globe. Once a document is digitised, however, fraud or forgery become extremely difficult because of encryption and audit trails. The electronic document remains completely visible at all time, but only to those engaged in the transaction and only the legitimate holder can amend it.
Increasing the efficiency of each trade transaction through digitisation
Digitisation substantially reduces the chances of fraud, but it also transforms how treasuries manage credit lines, letters of credit and guarantees, vastly increasing the speed and efficiency of transactions. It also maintains relationships with preferred banks.
In a digitised workflow, automation takes care of the data-uploading for LCs, while transfer between parties is at the click of a mouse across secure digital networks. LCs are notoriously complex instruments requiring close attention to detail and strict compliance with the rules governing their use. Compliance-checking can also be automated to reduce the administrative burden on treasuries and increase accuracy.
These advantages are important because the use of paper under LCs can imperil a transaction at many potential break-points. Documents must be presented physically, often to a prescribed location. Yet being time-limited, LCs (and bank guarantees) often expire before they are used, or their presentation periods are found to have been exceeded. Prevention of these problems requires constant supervision and many hours of work. When lines expire, new and potentially more expensive credit must be negotiated, while failure to present on time threatens transactions, leads to substantial extra costs, delays in releasing cargo and poor relationships between counterparties.
Consolidating credit lines and trade finance on a single, easy-to-use platform
The most effective form of digitisation for corporate treasuries is through a multi-bank trade finance platform which will slash the time involved in supervising credit lines, LCs and guarantees. An exporter may have thousands of LCs and guarantees with dozens of different banks. Optimising their use still requires laborious logging in and out of banking portals. Finding a single LC or guarantee relating to a transaction can be very difficult.
If treasuries implement multi-banking trade finance solutions, they will eliminate the need to toggle between different bank portals. They gain quick and easy access to all their banks, along with far greater visibility and control of all their credit lines and individual LCs. From a single platform they can manage and edit all their trade finance documentation and electronic presentations, as well as open account transactions and electronic bills of lading. All tracking and reporting is accomplished with a few mouse-clicks, while communications with banks remain secure. This is a major advantage when remote working is on the increase in so many areas of the globe.
As the world changes, but the pressures intensify, there is an urgent need for treasuries to grasp greater efficiency and visibility in their management and optimisation of credit lines and trade finance. It makes the adoption of multi-banking trade finance solutions an obvious first move.
How can financial services companies deliver great customer service and retain customer loyalty?
By Chris Angus, Senior Director, 8×8
The reality many banks are facing now is that given Amazon Prime can deliver goods to our doors in less than 24 hours, even during a pandemic, consumers expect the banks they use to keep up with their needs.
People want to be able to access their bank accounts, services and speak to an expert within a matter of minutes, whether it’s via an app on their device, web-chat or over the phone – their expectations are high. Adding to this, the World Health Organisation has advised consumers to use cards instead of banknotes during the Covid-19 pandemic – changing the way consumers pay for products.
With the recent health crisis forcing contact centres to shift to home working, collaboration can be more challenging, especially without the appropriate IT systems and applications in place. A delay in communication or unavailable information can, over time, cause reputational damage.
According to Deloitte, the bank of 2023 will look very different from today, making it clear that financial institutions should consider how they prepare for the future.
- Review your business communications strategy – both inside and out.
A crucial part of this preparation needs to be on reviewing business communications – both internally and externally – ensuring that employees can seamlessly collaborate and connect regardless of their location.
And technology is key to this movement, not only between teams, but also with customers. With the right communication tools in place, employees can gain better insight and deliver services that meet customer expectations. This results in not only satisfied customers, but also happier, and more motivated employees. All of which goes towards truly building a solid foundation for business recovery and continuity.
For many businesses right now, the future feels uncertain, so it’s important to consider the flexibility of solutions before deployment. Cloud computing, for example, allows businesses to stay nimble, scaling up and down their requirements to reflect the needs of the business and their customers.
- Implement an ‘Operate from anywhere’ strategy
The first half of 2020 was defined by the need for agility, an adjustment in how we operate our day-to-day lives and how we communicate both professionally and personally. The remainder of 2020 and beyond will focus on the application of technology to define how we reinvent working and connecting with each other, our customers, partners, and beyond.
To deliver great customer service, while ensuring employees are happy, productive and most of all safe, businesses need to be able to operate from anywhere. Yet, for many with contact centre requirements, this is not an easy transition. Enabling contact centre agents to work flexibly and from remote locations is now a critical component of business operations that must be top of mind for the entire C-suite.
Agents need to have the right tools to ensure they can continue to provide the same level of customer service, from any location. For an operate-from-anywhere strategy to be effective, organisations should consider how they can combine voice, team chat and video meetings on a single technology platform.
The use of multiple apps for multiple purposes can have the opposite effect than intended. Unifying communication channels enables collaboration and productivity while minimizing complexity. It also means a more streamlined and efficient experience for both employees and customers aiding great customer service.
- Meeting expectations is key
Not only have recent events affected contact centres operations, but the traditional, in-person branch experience has also been significantly impacted. Bank branches can now only accommodate a small percentage of customers. These restrictions have accelerated the impetus for businesses to meet their customers’ needs online, but also, the expectations of customers have also evolved rapidly. Virtual instant communication between businesses and consumers is now becoming a basic customer need. For financial services, this means considering digital-first applications, such as chatbots or instant messaging, where possible.
Businesses now also need to be where their customers are and offer them an omnichannel experience. Via the cloud, businesses can continue to serve customer needs through multiple channels such as voice, video, email, SMS and more.
While meeting expectations needs to be a priority – it’s not enough. Financial services institutions need to ensure they meet those expectations at speed, being the new battleground for competition. When it comes to finances, consumers expect their problems to be dealt with at speed and to the highest standards.
In summary, taking a technology-first approach which enables both employees and consumers to operate and access their data and communication tools from anywhere is the defacto business priority. Helping the financial services industry empower employees to better serve customer expectations with speed and accuracy – and ultimately delivering great customer service.
How payments can help streamline operations and boost customer satisfaction in the vending industry
By Darren Anderson, Business Development Manager, Self Service, Ingenico Enterprise Retail
The COVID-19 pandemic has had an astounding impact on the payments industry, causing cash usage to plummet as contactless and card-not-present volumes soared. Of course, this phenomenon was not unforeseen by payments professionals, who had predicted such a movement away from cash, but not at the speed the virus guidelines facilitated. In fact, due in part to the hygiene perks of contactless payment methods increasing its adoption, 50% of customers think that cash will disappear completely at some point in the future.
The unattended market was ahead of the pandemic in terms of contactless alternative payment method (APM) adoption, and it continues to upgrade its offerings to suit a wider range of industries. Nevertheless, the pain point for vending operators is that they’re often not sure exactly how these technologies work, or how to implement them. And with payments offerings constantly evolving, it’s becoming harder for vending operators to know which solution would be the best fit for their business.
As such, one easy way for vending operators to ease this load is to partner with a knowledgeable payments advisor who can not only provide the best solutions for their business, but guide them through the process and any need-to-knows. It’s also important to investigate the payments trends across the vending market, what the future might bring and what vending operators need to know about newer payments technology and the value it can bring to their unattended retail business operations.
Vending through the pandemic
Coronavirus has impacted the unattended market in various ways. In some cases, vending machine use has decreased as a result of lower footfall and closed premises. However, the nature of vending being self-service, for many it’s just been a case of upgrading systems to meet new guidelines and hygiene recommendations to start boosting their usage again. As cash usage decreased over the course of the pandemic, cards and APMs stepped in to provide a host of benefits, and as customers use and enjoy these seamless technologies, they are fast becoming the preference.
These developments have provided the opportunity for vending operators to embrace newer technologies which, although ultimately positive, can prove daunting if such retailers are not accustomed to working closely with payments. Fortunately, the vending market is in a great position to take advantage of new contactless technologies, being already low on human interaction and having 24/7 capabilities.
What’s more, the market can not only cater to consumers’ evolving needs, but it can also provide the flexibility and reliability that consumers are relying on as the world around them is changing. Many new technologies can also improve the general operations and management of vending, offering features such as easier on-the-go stock management and maintenance notification technology.
Keeping the consumer in mind
Consumers today want to enjoy the latest innovations and best-in-class customer experiences. These shoppers believe that self-service is a time-saver, and they also view cashless and contactless as faster and more seamless ways to pay – a fact which is reflected in the recent consumer demand for a wider variety of APMs. Customers now expect even more options to pay for their goods and services, from QR codes, to in-app payments and more.
Alongside the cashless trend, data-security and customer experience are two other factors driving the vending market evolution. With constantly evolving fraud developments in the online world, good security is more pertinent than ever, and has to be a central consideration to vending operators – as well as ensuring a seamless customer experience.
From a customer usage standpoint, mobile payments are becomingly increasing popular, as driven by the Gen Z market. According to our research, 63% of Gen Zers have said they would pay more for a mobile experience.
Trust and a good experience are also considerable factors across all customer groups, with 95% of customers claiming their loyalties lie with a company they trust, and 86% willing to pay more for a positive experience.
To appeal to ever-hungry consumers, vending operators need to provide the options they want. In the unattended market, this is relatively simple – not only do they provide a convenient and reliable method of payment for customers, but they also avoid face-to-face interaction. They can also supply a range of different products and accept a variety of payment methods to appeal to all customers, no matter their preference.
Using payments to drive revenue
Driving revenue is a two-pronged approach – you need to appeal to customers to keep them coming, and streamline operations to reduce overheads. In order to meet both parties’ expectations, it’s important to respond well to new vending challenges, taking note of the solutions that enable merchants to provide their customers with the payment methods they prefer.
Payments are complicated, so there’s no need to worry if you’re not hugely familiar with the offering out there, or unsure where to start – that’s where a payment service provider (PSP) can assist. With the expertise that a PSP brings, along with the technological solutions they offer, vending operators can improve customer journeys in all unattended environments.
Such technological solutions are flexible and can cater to specific business needs, while providing easy, quick, and secure payment methods that protect both the business and the customer’s personal data. They can also improve operational efficiency, increasing business performance with features such as real-time reporting and smart transaction management, to provide a best-in-class customer experience.
With smart devices, a secure gateway and advanced acquiring capabilities, PSPs can help vending operators design a flexible vending solution tailored to their individual and specific needs. To find out more about unattended retail and how your company can benefit from Ingenico’s unique expert knowledge, get in contact with Ingenico Enterprise Retail today at www.ingenico.com/smartselfvending.
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