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Make it to Mayfair for £50K

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PLC vs Gold vs FTSE100 chart

By Personal Finance Reporter, David Alexander

Diamonds, gold and prime London homes: why are they so sought-after? Why do they rise and rise in value? Why do they go on appealing to global investors?  It’s simple: they are coveted and they are scarce. They are physical assets which derive value from inimitable factors such as age and aesthetics.

Prime London Central (PLC) is a financial centre, an educational hotspot, an international playground and a ‘go to’ destination. The factors affecting the UK’s housing market – lack of mortgage availability, unemployment and economic uncertainty – simply do not apply to PLC.PLC vs Gold vs FTSE100 chart

Since 1996, prices in PLC have gone up from £221,679 to over £1.3 million.  This six-fold increase may seem incredible but it actually represents growth of 9% p.a., spot-on long term trend over the last 40 years.

Loss of confidence in equities, concerns over the Arab Spring and the Eurozone has reinforced investors’ appetite for blue chip tangible assets.  Prices are now 25% higher than in pre-credit crunch days (Q3 2007) whilst the FTSE100 is still down 12%.

Not surprisingly, PLC’s performance against gold, that other perennial safe haven, shows an uncanny correlation. Both are proven performers in times of trouble. But there is a big difference. Properties can be used or rented out to generate cash flow whereas gold is infamously barren – making PLC the investment of choice in good times as well as bad.

The flip side of PLC’s desirability and exclusivity is that it costs an awful lot to get hold of. The substantial entry price has made it the preserve of the super wealthy. This is where London Central Apartments (LCA), a new property fund which invests only in prime London residential, comes in. The third fund from specialist asset manager London Central Portfolio (LCP) enables investors to get into the market with a ticket size of just £50,000+.

LCA will be closing its doors to investors in just a few weeks, riding high on the successful results recently posted for LCP’s first two funds. The first, closed in 2008 has shown an above target return of 16% over the last year. The second, closed 18 months ago, has demonstrated 23% growth over the same period.

LCA, which already has commitments of £30m, will build up a diversified portfolio of one and two bedroomed properties in PLC, each under £1m each. These will be in all the prime micro markets offering strong capital growth potential.  The fund is targeting a 10%-13% IRR p.a. over a five year hold.

LCP has revealed the fund has acquired its first five properties across Hyde Park, Marylebone, Kensington, South Kensington and the Pimlico grid. It has now started its refurbishment program and all the flats will be interior designed for the discerning tenant, achieving the highest possible rental yields

“There has been particular interest in LCA in light of its unique mandate to invest exclusively in prime properties under the £1m mark. It is an ideal investment solution for those wanting to access the market but nervous of the Government’s recent tax hikes for properties over £2m” explains Heaton.

This fund is attracting a new breed of investor – with more than 50% of uptake coming from the UK. Many are professionals priced out of investing directly but anxious to get a foothold in the market. With base rates at a historical low (0.5%) and cash holdings generating almost no returns, investors are also taking advantage of the fund’s SIPP and ISA eligibility.

LCA has also seen an influx of overseas investors, particularly from the Far East: investors, well aware of the value in PLC residential but historically deterred by the hassles of sourcing, buying and managing a portfolio from abroad. LCA provides a simple way in.

However, at almost one third, the second biggest up-take after the UK, comes from the Middle East. With Islamic investment options becoming increasingly important, LCA, as the UK’s first Sharia compliant residential property fund, has been a major draw. There have been few investment choices for Muslim investors and the fund is a welcome innovation. According to the Banker Magazine, there are just 765 global Islamic mutual funds, compared with 60,000 in the conventional sector.

The future of PLC looks bright. It is arguably the greatest capital city in the world with the lowest availability of property to buy.  In fact, only 5,366 properties were sold last year (15 a day).  Set against 10.9 million people around the world with over $1m+ of assets to invest and this makes a potential 2,000 investors for every property.  Prices are fuelled by growth in demand, combined with diminishing availability and PLC has both.

“Prices in PLC have risen steadily over the last four decades (at 9% p.a.) and this trend is set to continue. In LCP’s view, sub £2m properties will be the most attractive going forward as buyers avoid the new high levels of SDLT on more expensive properties. Investors coming into LCA will be able to take advantage of the exciting growth opportunities in this sector.” says Heaton

Having uniquely approached PLC as an alternative opportunity to traditional investments for over 20 years, LCP are well positioned to call the market.  They have championed the important role PLC plays in a balanced investment portfolio. Since the credit crunch LCP has seen a heightened appetite from both investors and institutions as they cotton on to the fact that PLC residential has significantly outperformed commercial property, both short and long term.

LCP pioneered the first closed ended fund targeting PLC, correctly called the bottom of the market to launch their second and have now launched the first Sharia compliant residential fund in the UK. Against this backdrop of success and innovation, LCP are bringing out two more funds in 2013.

The interest in LCA as a Sharia compliant offering has highlighted the appetite for Islamic investment options. In partnership with a large Middle Eastern organisation, LCP is developing a more substantial Sharia compliant opportunity. Alongside this, LCP are planning to launch the first residential property REIT exclusively targeting PLC. This will seek investment from large institutions that are keen to find a viable route into this sector.

Heaton adds that the new projects will not lose sight of what really works for the astute investor “Our new offerings will build on the successful model of our first three funds: investing in trophy locations but concentrating on small units. It might come as a surprise that the most profitable sector in PLC are portfolios of small units, individually commanding rents of less than £1,000 per week. Yields are highest; void periods lowest and capital growth the most consistent”.

Despite prime London houses being as expensive and desirable as diamonds and gold, LCP will continue in its goal to make the market accessible to all professional investors.

London Central Portfolio is a specialist fund and asset manager operating in the Prime London Central residential sector. Their third fund, London Central Apartments, is currently open to subscriptions. For further information visit www.lcpfund.com or contact Hugh Best, Investment Manager, on +44(0) 20 7723 1733 or [email protected]

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How payments can help streamline operations and boost customer satisfaction in the vending industry

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How payments can help streamline operations and boost customer satisfaction in the vending industry 1

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.

Darren Anderson

Darren Anderson

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[1].

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[2], and 86% willing to pay more for a positive experience[3].

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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ISO 20022 migration: full speed ahead despite recent delays, says new Deutsche Bank paper

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ISO 20022 migration: full speed ahead despite recent delays, says new Deutsche Bank paper 2

Today, Deutsche Bank has released the third installment in its “Guide to ISO 20022 migration series, which offers a comprehensive update on the industry shift to the de facto global standard for financial messaging: ISO 20022. This paper comes at a critical time for the ISO 20022 migration, with a number of changes to existing timelines and strategies from SWIFT and the world’s major market infrastructures having been announced this year.

The paper explores the latest developments, including SWIFT’s year-long postponement of the migration in the correspondent banking space. The decision meets industry calls for a delay and also provides ample time to build the new central Transaction Management Platform (TMP) – a core feature of SWIFT’s new strategy that will allow the industry to move away from point-to-point messaging and towards central transaction processing.

It also details the wave of action that has been seen by market infrastructures around the world – with many, including the ECB, EBA CLEARING and the Bank of England, announcing revised migration approaches.

“Now more than ever, with shifting timelines and strained resources, it is vital that banks and corporates alike do not view the ISO 20022 migration as just another project that can be put on the back burner,” says Christian Westerhaus, Head of Cash Products, Cash Management, Deutsche Bank. “The delays in the correspondent banking space, and across several market infrastructures, should not be seen as an opportunity for banks to take their foot off the pedal. The journey to ISO 20022 is still moving ahead at speed – and internal projects need to reflect this.”

The Guide also highlights the implementation issues on the migration journey ahead – most notably surrounding interoperability between market infrastructures, usage guidelines and messaging formats. This is achieved through a series of deep dives, case studies, and points of attention drawn from Deutsche Bank’s internal analysis.

 “As this year has proved, nothing is set in stone, “says Paula Roels, Head of Market Infrastructure & Industry Initiatives, Deutsche Bank. “The ISO 20022 migration involves a lot of moving parts and keeping abreast of the latest developments is critical for banks and corporates alike. As the deadlines near, and the ISO 20022 story develops, this series of guides will continue to highlight key points for consideration over the coming years.”

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The Psychology Behind a Strong Security Culture in the Financial Sector

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The Psychology Behind a Strong Security Culture in the Financial Sector 3

By Javvad Malik, Security Awareness Advocate at KnowBe4

Banks and financial industries are quite literally where the money is, positioning them as prominent targets for cybercriminals worldwide. Unfortunately, regardless of investments made in the latest technologies, the Achilles heel of these institutions is their employees. Often times, a human blunder is found to be a contributing factor of a security breach, if not the direct source. Indeed, in the 2020 Verizon Data Breach Investigations Report, miscellaneous errors were found vying closely with web application attacks for the top cause of breaches affecting the financial and insurance sector. A secretary may forward an email to the wrong recipient or a system administrator may misconfigure firewall settings. Perhaps, a user clicks on a malicious link. Whatever the case, the outcome is equally dire.

Having grown acutely aware of the role that people play in cybersecurity, business leaders are scrambling to establish a strong security culture within their own organisations. In fact, for many leaders across the globe, realising a strong security culture is of increasing importance, not solely for fear of a breach, but as fundamental to the overall success of their organisations – be it to create customer trust or enhance brand value. Yet, the term lacks a universal definition, and its interpretation varies depending on the individual. In one survey of 1,161 IT decision makers, 758 unique definitions were offered, falling into five distinct categories. While all important, these categories taken apart only feature one aspect of the wider notion of security culture.

With an incomplete understanding of the term, many organisations find themselves inadvertently overconfident in their actual capabilities to fend off cyberthreats. This speaks to the importance of building a single, clear and common definition from which organisations can learn from one another, benchmark their standing and construct a comprehensive security programme.

Defining Security Culture: The Seven Dimensions

In an effort to measure security culture through an objective, scientific method, the term can be broken down into seven key dimensions:

  • Attitudes: Formed over time and through experiences, attitudes are learned opinions reflecting the preferences an individual has in favour or against security protocols and issues.
  • Behaviours: The physical actions and decisions that employees make which impact the security of an organisation.
  • Cognition: The understanding, knowledge and awareness of security threats and issues.
  • Communication: Channels adopted to share relevant security-related information in a timely manner, while encouraging and supporting employees as they tackle security issues.
  • Compliance: Written security policies and the extent that employees adhere to them.
  • Norms: Unwritten rules of conduct in an organisation.
  • Responsibilities: The extent to which employees recognise their role in sustaining or endangering their company’s security.

All of these dimensions are inextricably interlinked; should one falter so too would the others.

The Bearing of Banks and Financial Institutions

Collecting data from over 120,000 employees in 1,107 organisations across 24 countries, KnowBe4’s ‘Security Culture Report 2020’ found that the banking and financial sectors were among the best performers on the security culture front, with a score of 76 out of a 100. This comes as no surprise seeing as they manage highly confidential data and have thus adopted a long tradition of risk management as well as extensive regulatory oversight.

Indeed, the security culture posture is reflected in the sector’s well-oiled communication channels. As cyberthreats constantly and rapidly evolve, it is crucial that effective communication processes are implemented. This allows employees to receive accurate and relevant information with ease; having an impact on the organisation’s ability to prevent as well as respond to a security breach. In IBM’s 2020 Cost of a Data Breach study, the average reported response time to detect a data breach is 207 days with an additional 73 days to resolve the situation. This is in comparison to the financial industry’s 177 and 56 days.

Moreover, with better communication follows better attitude – both banking and financial services scored 80 and 79 in this department, respectively. Good communication is integral to facilitating collaboration between departments and offering a reminder that security is not achieved solely within the IT department; rather, it is a team effort. It is also a means of boosting morale and inspiring greater employee engagement. As earlier mentioned, attitudes are evaluations, or learned opinions. Therefore, by keeping employees informed as well as motivated, they are more likely to view security best practices favourably, adopting them voluntarily.

Predictably, the industry ticks the box on compliance as well. The hefty fines issued by the Information Commissioner’s Office (ICO) in the past year alone, including Capital One’s $80 million penalty, probably play a part in keeping financial institutions on their toes.

Nevertheless, there continues to be room for improvement. As it stands, the overall score of 76 is within the ‘moderate’ classification, falling a long way short of the desired 90-100 range. So, what needs fixing?

Towards Achieving Excellence

There is often the misconception that banks and financial institutions are well-versed in security-related information due to their extensive exposure to the cyber domain. However, as the cognition score demonstrates, this is not the case – dawdling in the low 70s. This illustrates an urgent need for improved security awareness programmes within the sector. More importantly, employees should be trained to understand how this knowledge is applied. This can be achieved through practical exercises such as simulated phishing, for example. In addition, training should be tailored to the learning styles as well as the needs of each individual. In other words, a bank clerk would need a completely different curriculum to IT staff working on the backend of servers.

By building on cognition, financial institutions can instigate a sense of responsibility among employees as they begin to recognise the impact that their behaviour might have on the company. In cybersecurity, success is achieved when breaches are avoided. In a way, this negative result removes the incentive that typically keeps employees engaged with an outcome. Training methods need to take this into consideration.

Then there are norms and behaviours, found to have strong correlations with one another. Norms are the compass from which individuals refer to when making decisions and negotiating everyday activities. The key is recognising that norms have two facets, one social and the other personal. The former is informed by social interactions, while the latter is grounded in the individual’s values. For instance, an accountant may connect to the VPN when working outside of the office to avoid disciplinary measures, as opposed to believing it is the right thing to do. Organisations should aim to internalise norms to generate consistent adherence to best practices irrespective of any immediate external pressures. When these norms improve, behavioural changes will reform in tandem.

Building a robust security culture is no easy task. However, the unrelenting efforts of cybercriminals to infiltrate our systems obliges us to press on. While financial institutions are leading the way for other industries, much still needs to be done. Fortunately, every step counts -every improvement made in one dimension has a domino effect in others.

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