By Jason Wells, VP and GM EMEA at Cradlepoint
As recently discussed here in Global Banking & Finance Review, banks have a range of technology-driven options to radically improve the customer experience. Digital transformation is impacting the industry in ways that would have hardly seemed possible just a few decades ago. The impact of technology and increased connectivity is particularly evident on the ‘front line’ of retail banking, where pop-up branches, digital signage and ‘smart branches’ are transforming the way banks interact with their customers like never before.
One of the growing challenges for banks and retailers in general is that in this digital era, customers expect better, more connected services, whether they are dealing with the retailer online or in person. But, whichever digitally-inspired direction they move in, connectivity is the underlying enabling technology.
In A Wireless World, We’re All On A Pathway To 5G
One of the major drivers of technology-led change is the arrival of 5G wireless connectivity in the UK. With EE’s recent rollout of services in six cities, a pathway is emerging to its general availability. 5G will offer the speed, quality of connection and reliability banks need to bring customer-focused innovation to the high street. While the 5G rollout gathers pace, Gigabit-class LTE wireless technology will increasingly provide high performance connectivity, eventually working alongside 5G to offer a comprehensive high-speed network.
4G LTE technology has already carved a valuable role as the go-to connection for failover and Day-1 connectivity, but now, it’s is a viable option for primary wide area network connectivity as well. This allows organisations to ‘cut the cord’ and replace multiple cable and fixed line providers – often stitched together to provide a branch network – with just one or two wireless providers. In doing so, they can also realise a significant improvement in connectivity uptime.
Specifically, for banks that want to extend the reach, reliability, and speed of their branch networks without all of the complexity challenges of traditional wired connections, Gigabit-Class LTE can already provide as much as 80% of the value of 5G.
The Digital Transformation Of High Street Banking
But where is this taking our banks? Along with every other sector that has built its success on the High Street, retail banking is looking to digital technology to change its relationship with customers for the better.
Innovation is arriving in many forms. The rollout of digital signage, for example, is making communication with customers more relevant, creative and timely. Similarly, digital initiatives that improve accessibility and widen the relevance and usefulness of branches are finding their way onto the high street. It’s increasingly possible to walk into a branch and get access to a financial expert via video link, instead of having to book an appointment with a member of staff in person.
As the traditional high street presence of banks gets smaller, the pop-up branch has emerged as a way to maintain services in places where a branch is no longer supported by demand. Pop-up branches offer many advantages over a permanent location, not least because they can be opened for a relatively short space of time, or placed in shared locations that are suitable to their local community.
Similarly, the pop-up concept has allowed new entrants to the industry with little or no high street presence to connect directly with consumers. Dozens, a finance startup, recently launched a one month pop-up branch on Harrow Road in Westminster, for example. On a wider level, Wiltshire Council has just announced support for a community bank serving the South West of England. The project could see pop-up branches opening in leisure centres and libraries.
This kind of useful, lateral thinking needs the right kind of enabling technology, and initiatives like these rely completely on secure, high performance data connectivity. In most cases, it’s not practical for a pop-up branch to organise fixed line connectivity for a limited period of time, or the connectivity cannot be shared with the location ‘host’ because of security or performance concerns. For these banks, wireless networks will provide the reliable, high performance and secure communications infrastructure they need when they open their pop-up branches.
Customers across every market sector value innovation that improves the retail experience. As banks try to differentiate themselves in a more competitive market, those that can offer new ideas that make it easier and more productive to use high street banks – in whatever form – will be better placed to retain and attract customers.
Bank of Ireland limits 2020 loss with strong second half, shares rise
By Padraic Halpin
DUBLIN (Reuters) – Bank of Ireland limited its underlying 2020 loss to 374 million euros ($452 million) after a return to profitability in the second half, the bank said on Monday, sending its shares more than 5% higher.
Ireland’s largest bank by assets also announced the closure of one-third of its branches in Ireland, 10 days after NatWest said it would wind down its Irish arm Ulster Bank.
The bank set aside 1.1 billion euros to cover possible loan defaults due to COVID-19 disruption, the bottom of its forecast range and which it expects to capture the majority of credit impairment risk associated with the pandemic.
An underlying 295 million euros second half profit limited the damage as lending and business income improved, trends Chief Financial Officer Myles O’Grady said continued into 2021, even though Ireland was in a long lockdown again.
“It’s clear that there is some impact from this lockdown but the signals overall are encouraging. We do think (the second half) will be a return to a more normalised level of activity,” O’Grady told Reuters.
Shares in the bank were 5.1% higher at 3.6 euros by 0910 GMT.
The bank cut it costs by 4% year on year in 2020, meaning it achieved its 1.7 billion euro annual cost target one year early. It set a new goal of cutting costs further to 1.5 billion euros by 2023.
That will partly be achieved by branch closures, with its Irish network cut to 169 from 257 from September and Northern Irish presence more than halved to 13. It struck a deal with the Irish post office to offer customers access to banking services at An Post locations.
The head of Ireland’s Finance Services Union described the announcement of closures in the middle of a pandemic as a “shameful act” that needed to be reversed.
Bank of Ireland’s core Tier 1 capital ratio, a key measure of financial strength, stood at 13.4% versus 13.5% at the end of September. The bank said it expected capital to remain broadly in line with those levels in 2021.
The bank’s guidance for this year should support the restart of distributions to shareholders in relation to full-year 2021 results, Chief Executive Francesca McDonagh said, adding that future distributions will likely include share buybacks.
($1 = 0.8272 euros)
(Reporting by Padraic Halpin; Editing by Edmund Blair)
Functions and Features of Offshore Banks to Know About
By Luigi Wewege, Senior Vice President, and Head of Private Banking of Belize based Caye International Bank
Have you been mulling over the idea of establishing an offshore checking or savings account? Maybe the idea of having an investment account with an offshore bank has been on your mind. If so, now is the time to explore these options more fully.
You’ll find that the features and functions of offshore banks have quite a bit to offer. Here are just a few examples to keep in mind.
Account Types That Are Familiar Plus More
One of the first things you’ll notice is that all of the domestic account types you’re familiar with are also available internationally. Along with those, you’ll find accounts that have some features that aren’t found at home. Some of them will help you grow your accounts or save money faster.
From time deposit accounts to special retirement funds, there’s something for just about everyone. Bank officials are happy to explain how each account type works and what it can do for you.
Competitive Interest Rates
Depending on how much you can deposit into an account, the interest rate that applies can be higher than what you receive at home. This is especially true if you opt for accounts that come with tiered interest rates. As you exceed and maintain certain balance levels, it’s possible to lock in higher interest rates.
Think of what this could mean if the plan is to save money for your retirement years. As you add to the balances and let them remain in the account, more interest is earned. Start that when you still have at least a couple of decades left to work full time, and the result could be a significant nest egg to use during those retirement years.
Easy Online Management
The days when managing offshore accounts required the post or some other slower method are gone. The best offshore banks provide online management to their clients. That means you can transfer funds between accounts with ease.
Think of how nice it would be to initiate a funds transfer that moves money from a domestic account to an international one. This can be done any time of the day or night. You will know when it posts to the account, often on the next business day. How much simpler could it be to get money in those accounts?
With the Best in Security Measures
Security is a priority with offshore banks. Data is encrypted correctly, account access is monitored, and there are plenty of safeguards in place. Other than authorized bank personnel and yourself, no one is getting into your accounts.
Top offshore banks evaluate and update security measures regularly. This makes it possible to remain ahead of the most recently launched threats and prevent hackers from accessing your funds.
Protection From Political and Market Upheavals
It’s no secret that political shifts and marketing changes impact the financial world. One way you can minimize the effect on your wealth is to house part of it in offshore accounts. Whatever is happening at home will not impact the funds you have placed in offshore accounts.
No matter what happens to your domestic assets, your offshore funds and holdings remain intact. Regardless of the losses you might incur at home, you’ll still have your offshore balances to help you get back on your feet.
Safeguard Against Legal Troubles at Home
No one is immune from being the defendant in a lawsuit. It could be a personal injury suit or a civil action against you. It could even be problems with a tax agency that leads to seizing your bank accounts or garnishing your wages. While it would be impossible to protect your domestic assets from these types of issues, your offshore assets are different.
In most instances, a judgment in a civil suit or a tax garnishment will not result in the seizure of any of your offshore accounts. They remain outside the jurisdiction of a domestic court.
A Wider Range of Investment Opportunities
Setting up accounts in the right offshore location allows you to take advantage of many investment opportunities that aren’t available at home. It’s not just the possibility of greater returns that captures your interest. The options themselves are broader than what you can access using any domestic banking or investment firm.
From real estate to currency trading, some options are likely to be of interest. Many of them can be managed through one or more arms of your international bank. Since many offshore banks have personnel who can provide information about investment opportunities, it’s easy to access factual data to help you decide if a particular investment fits in with your overall financial goals.
Possibly Superior Rates of Exchange When You Travel
Here’s something to consider if you tend to travel abroad regularly. When it comes to the exchange rate between different currencies, using your offshore checking account balance rather than a domestic one may be a better choice. That’s because there may be a more favorable exchange rate between your offshore account and the nation where you’re visiting.
A better exchange rate increases your buying power and lessens the overall cost of your trip. You’ll spend less on big-ticket items like hotels, air or rail travel, and meals.
Benefit from Opening an Offshore Bank Account
You don’t have to be rich to establish and grow offshore bank accounts. You’ll find banks that allow you to open an account with relatively modest balances and add to them with ease.
Over time, these balances help you achieve greater financial stability and ensure a more secure future.
This is a Sponsored Feature
Luigi Wewege is the Senior Vice President, and Head of Private Banking of Belize based Caye International Bank, a FinTech School Instructor and the published author of The Digital Banking Revolution – now in its third edition.
You can follow his posts on trends shaping the banking and financial services industry on Twitter: @luigiwewege
Banks in EU to publish world’s first ‘green’ yardstick from next year
By Huw Jones
LONDON (Reuters) – Banks in the European Union would have to publish a groundbreaking “green asset ratio” (GAR) as a core measure of their climate-friendly business activities from next year, the EU’s banking watchdog proposed on Monday.
As the trend in sustainable investing gathers pace, regulators want investors to get more reliable information on a bank’s exposures to climate change as storms and other weather events affect the value of their assets and liabilities.
The European Banking Authority (EBA) said the ratio, put out to formal public consultation on Monday, will measure the amount of climate-friendly loans, advances and debt securities compared to total assets on a lender’s balance sheet to reach a percent figure.
“I believe it’s the first time regulators are asking for a green asset ratio,” said Piers Haben, EBA’s director of banking, markets, innovation and consumers.
“The numbers may well be single digit for banks at first and that’s why context will be important. When a bank talks about where it wants to be in 2030, that is going to be really interesting on the green asset ratio.”
The new EU “taxonomy” would be used to define which assetsare environmentally sustainable.
EBA said that many stakeholders have a legitimate interest in the physical and transition risks that banks are exposed to from climate change.
Banks are likely to face pressure from investors to show what steps they are taking to increase their GAR over time, though few lenders are expected to reach 100%.
The watchdog was responding to a request from the EU’sexecutive European Commission on how to implement upcomingrequirements on climate-related disclosures by banks.
The GAR would published in a bank’s annual report, starting from 2022 based on data up to Dec. 31, 2021.
Banks will also have to publish three other indicators showing the extent to which fees from advisory services, major trading operations and off-balance sheet exposures are derived from climate-friendly activities.
(Reporting by Huw Jones; Editing by Ana Nicolaci da Costa)
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