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Christian Ball, Head of Retail Financial Services, GFT

Over the last 18 months, retail banks have increasingly debated how they would manage in a post-Payments Service Directive II (PSD2) world. The directive (which came into force on 13th January 2018 in the UK) looks set to shake up the financial services industry, as high street banks go head-to-head with leading tech giants and FinTech start-ups, all seeking a slice of the consumer banking market. In this increasingly competitive landscape, designed to provide consumers with a more extensive and cost-effective array of financial services and products, retail banks need to be thinking seriously about how they will operate in 2018 and beyond.

Find out more from your data

FinTech startups have already begun to show how providing tailored advice and products is winning customer loyalty. You only need to look at the interest being shown in Squirrel and Monzo to see that consumers value having a dashboard that can help them to monitor their spending and understand where they might be able to save. This desire for bespoke guidance was reinforced in our recent research when we found that over half (55%) of consumers would feel comfortable with the bank monitoring their spending habits if it was then able to improve their disposable income through personalised offers, money saving tips, real-time reminders and updates.

Banks are sitting on a goldmine of customer data, which they should be planning to leverage by adapting their technologies. First and foremost, they should be improve the experience of their customers through greater use of transaction metadata, gained from smart transaction management(STM) and personal financial management (PFM) tools. They should also consider alternative sources of insight, such as social media activity.Banks can only stand to gain if they are able to build a detailed and accurate picture of their customer’s behaviour. The maturity cycle in this area is advancing rapidly and looks set to deliver significant benefits over previous, more manual methods of gathering data.

New models to provide alternative services

With the effects of PSD2 beginning to be felt, consumers will gradually see a range of different financial services and products emerge. Faced with increased competition from tech giants and FinTechs, retail banks need to ensure that they too are offering the different types of new and personalised services that their customers are likely to want in future. If they fail to do so, they may find that their customers (in particular the younger, more mobile ones who have not had a long relationship with the bank) decide to move their account elsewhere.

To meet this challenge, and free up the investments necessary to provide agile and cost-effective operations, banks must move to a Banking as a Platform model (BaaP). Banks should move away from a ‘full stack’ technology environment that requires them to own all of the technology required to offer a service, to one where they can ingest other services they do not own. In this way, banks can efficiently provide added value services for their customers that meet their existing and future needs, using a combination of their own technology, but most importantly, via third-party solutions.

Through a platform banking model that is open, banks can provide customers with enhancements to their existing services plus all of the new services they might require in future, without the heavy burden of the associated infrastructure costs of doing so. Also, more importantly, they can use the time and cost savings created to focus on enhancing their customer service even further.

Changing the culture

One consequence of PSD2 and BaaP is that they push the financial services industry further towards the model of open banking. In addition to updating their technology and platforms to enable them to compete in this new environment, banks will also need to examine their products, services and operations in order to embrace new opportunities.Unlocking the value in open banking models, looking beyond the obvious data and customer experience value will be key for banks in the future.

Exploring ‘marketplace’ initiatives and new ‘utility models’ anchored in the concept of the application programming interface (API) as a ‘product’, delivered through developer-friendly portals will be a major feature going forward. This will drive increased modularity for the value chain of the bank, opening up new income streams, and driving volume based traffic that will help cut the unit cost of manufacture for financial products.

Open banking is a new way of approaching the provision of financial services for customers, and as such, it demands a new way of thinking and new ways of working. Organisations need to develop so that they are both technically and business enabled. Out of necessity, this means that teams within banks in future will be hybrids – they are going to be more agile and have a mix of skills and people. However, this hybrid approach is challenging, as it cuts across the more traditional financial services methodology with its typical siloed organisational structure. Technologists and business leaders must come together and collaborate since it is this united experience that is so important for financial services to get right in the future.


They key priority for retail banks to focus on in 2018, is being entrepreneurial. They may have historically been entrepreneurial within the confines of their product innovation, but now they need to drive an entrepreneurial spirit deep into their go-to-market strategy by reinventing and improving their technology and business structures. Only then will they be able to maximise the opportunities offered by what may well become known as the era of a new ‘open banking revolution’.


UK’s Co-op Bank cuts losses despite pandemic hit



UK's Co-op Bank cuts losses despite pandemic hit 1

LONDON (Reuters) – Britain’s Co-op Bank cut its annual losses in 2020 despite a 22 million pound hit from expected loan defaults due to the coronavirus pandemic.

The bank on Thursday reported pretax losses of 103.7 million pounds, down from 152.1 million pounds the previous year.

Co-op Bank has been labouring to turn around its finances since its near-collapse and rescue by a group of U.S. hedge funds in 2017.

Talks between the bank’s backers and potential buyer investment firm Cerberus collapsed in December without agreement.

“We will have (takeover) interest coming into our shareholders… I think it’s a fact for this bank with the shareholders we have,” Co-op Bank chief executive Nick Slape said.

“I’m just focused on running the bank and getting us profitable. These are distractions that happen every now and again.”

The lender expects to return to “sustainable profitability” from 2021 onwards, despite underlying losses tripling to 64 million pounds last year as the pandemic crunched the lender’s income.

Slape said growth in mortgage lending to take advantage of a housebuying boom and lower costs would help the bank to achieve its target.

Co-op Bank cut around 350 jobs and closed 18 branches last year to reduce costs.

The bank’s core capital buffer – a key measure of financial resilience – was 19.2%.

The lender also said it would link part of executive pay to environmental and social targets from 2022 onwards.

(Reporting by Iain Withers; Editing by Rachel Armstrong and Jane Merriman)

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StanChart profit falls 57% as COVID-19 inflates bad loans



StanChart profit falls 57% as COVID-19 inflates bad loans 2

By Alun John and Lawrence White

HONG KONG/LONDON (Reuters) – Standard Chartered PLC (StanChart) on Thursday posted a 57% fall in annual profit, missing analyst estimates, on higher credit impairments due to the COVID-19 pandemic.

StanChart, which earns the bulk of its revenue in Asia, posted a pretax profit of $1.61 billion. That compared with $3.71 billion in 2019 and the $1.85 billion average of analyst forecasts compiled by the bank.

Credit impairments last year more than doubled compared with a year earlier to $2.3 billion because of the pandemic, the bank said, but noted the majority of these took place in the first half of the year.

The London-headquartered lender said it would return capital to investors via a 9 cents per share dividend and $254 million buyback, with the total payout being the maximum permitted under temporary ‘guardrails’ set by the Bank of England.

The central bank last year told Britain’s largest lenders to suspend dividend payments and share buybacks for 2020 to help them maintain capital buffers against an expected hit to loan books from the pandemic.

“Having now resumed it, we expect to be able to increase the full-year dividend per share over time as we execute our strategy and progress towards a 10% return on tangible equity,” Jose Vinals, Standard Chartered’s chairman, said in the exchange filing.

The bank said its return on tangible equity, a key profit metric, would climb from 3% to 7% by 2023.

It also said overall income in 2021 is likely to be similar to 2020’s because of the impact of global interest rate cuts.

(Reporting by Lawrence White and Alun John; Editing by Christopher Cushing)

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Reasons Why You Should Be Opening an Offshore Savings Account Today



Reasons Why You Should Be Opening an Offshore Savings Account Today 3

No one has to convince you that savings accounts are a bad idea. As a safe investment, this approach is hard to beat. It also has the benefit of allowing you to set aside funds for all sorts of purposes while you earn a little interest.

While this can be done with a domestic account, there are compelling reasons to consider opening an offshore savings account. How can you eventually use those funds, and why would it be better to house them in an offshore setting? Here are some ideas to consider.

1. Setting Aside Funding for a Short-Term Goal

You have a specific financial goal that you want to reach in five or ten years. It could be saving the money for a down payment on a home or possibly buying real estate. Any such goal requires dedicating a part of your income to reach it. Placing funds in an interest-bearing account in the interim is a good option. That’s where an offshore savings account comes in handy.

The temptation to withdraw money from an offshore account is less likely. While doing so would be easy, it’s not unusual for people to turn toward the balances in their domestic accounts before pulling money from offshore ones. The result is that you’re more likely to consistently make progress toward building the funds needed to reach your goals successfully.

2. Creating a Contingency Fund

No matter what your life circumstances happen to be, it’s a safe bet that you’ll need emergency funds at some point. Think of what it would mean to have six months to a year’s worth of cash to carry you over if your company went out of business or if you lost your job. Even if it took some time to find another full-time position, the money in a contingency fund allows you to maintain a reasonable standard of living while you’re in search of opportunities.

Using an offshore account to house your contingency fund works well because you are less likely to withdraw funds until the need is significant. By opting to set up recurring funds transfers from a domestic account to your offshore account, you can add to those emergency funds without having to give the process much thought. When the day comes when you need the money, it will be easy to transfer the funds back to a domestic account or use the debit card supplied by your offshore bank.

3. Building Assets for Retirement

As many people learned during the last recession, employer-provided pension funds may or may not be around by the time you retire. If the investments made with the retirement contributions tank, there goes all or at least most of the money you planned on using to live after leaving the workforce. Establishing your resources for retirement, and diversifying them, protect your financial future.

An offshore savings account can be one of those solutions. A time deposit account lets you build more reserves for retirement. Since the account is not tied to your employment status or to the investments used to shore up your pension fund, it will be there when you need it.

4. Growing an Education Fund for the Kids

Perhaps the plan is not so much about investing in your financial future. Education for your children may be what’s driving you right now. Knowing how much a college education costs these days, you realize that now is the time to start saving. Even if the kids can secure scholarships that cover much of the expense, there will still be costs that need attention.

An offshore savings account provides an excellent means of setting aside funds for education. Let the balances roll over from year to year and earn more interest. Take advantage of offshore accounts that provide higher rates of interest when the balances exceed specific amounts. This strategy will make funding college a lot simpler.

5. Building Reserves for Purchasing a Vacation Property

You’re reaching a point in your life when having a second property to use for vacations sounds appealing. Now is the time to start setting aside funds that will aid in the purchase. An offshore account can be the means of growing the balance a little faster. The result is that when you’re ready to buy that second property, there will be considerably less that needs financing.

This solution also makes the process of transferring funds for purchasing international real estate easier. For example, you decide to buy a vacation home in the same country where your offshore account is based. Your bank can make withdrawing the funds and remitting the money to the seller much simpler.

6. Protecting Some Assets Just in Case

You don’t have to work in a high-profile field to be sued. What would you do if things didn’t go your way? The court could order most of your domestic assets seized to settle the judgment. How would you get by then?

Here’s something that you may not know about the money in offshore accounts – domestic courts can’t order a seizure of the account balances. Even if a lawsuit means every asset you have at home is taken away, there is still the money in your offshore savings account to help you rebuild. It may also be the way that you keep a roof over your head and food on the table while you decide how to go about rebuilding.

7. Taking Advantage of Higher Interest Rates
If you compare the interest rates offered in many international settings with what you can command at home, the difference is immediately evident. It’s possible to open an offshore savings account with a relatively low balance and gradually add to the balance. Over time, you reach a balance level that allows you to earn some of the best rates found around the globe.

When the plan is to place money in an account to accrue interest for over many years, an offshore savings account is the way to go. Once the day arrives when you want to use those funds, the balance will be noticeably more than if you had invested the same proportion in a domestic account. Think of how good you’ll feel knowing that your money was able to grow simply because you chose the right offshore location for the account.

8. Enjoying Peace of Mind

At times, it seems increasingly difficult to find peace of mind in today’s tumultuous world. With money placed in an offshore savings account, it’s possible to secure a little bit of tranquility even when everything else is upside down.

By establishing an account in a politically stable country, offers excellent returns in the form of interest, and is protected from any domestic court action, you know there will be assets to draw on no matter what. That’s a good feeling.

Get Help Setting Up an Offshore Savings Account

These are just a few reasons why opening an offshore savings account is a smart financial move. There is no better time to start than now, and an excellent offshore location to choose is Belize.

Caye International Bank, located on Ambergris Caye island in Belize, Central America has helped thousands of people establish offshore financial accounts. We can help you, too, in determining which offshore accounts work best based on your goals. You’ll find that setting up an account is a lot simpler than you anticipated.


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