12th April 2016

BBA Brief – 12 April 2016

Fintech firms raise funds to challenge banks

Technology companies raised almost $1 billion of investment last year to compete with UK banks, according to a report from Accenture (FT, £, p4). The bulk of the investment raised went to fintech firms that are seeking to directly challenge traditional lenders. This trend is in contrast to the US, where 83 per cent of investment went into fintech companies seeking to collaborate. The report also showed that banks participated in less than 10 per cent of all reported fintech deals, totalling less than $5 billion. Separately, City AM (p6) notes that the Financial Conduct Authority has launched a ‘sandbox’ project for fintech firms, which will attempt to boost innovation in a similar way to already established tech accelerators and incubators.

Financial abuse against the elderly on the rise

An investigation by the Times (£, p1, p6-7) focuses on financial abuse against the elderly. It finds that the number of theft and fraud cases involving the elderly doubled in a year. Ray James, President of the Association of Directors of Adult Social Services, said: “Theft is always reported to the police but whether or not they prosecute comes down to the availability of evidence. The combination of vulnerable elderly people who have informal arrangements with carers to get them cash and who know their PIN makes it hard to get evidence.” The newspaper also highlights concerns that reforms to Lasting Power of Attorney have actually left elderly people more vulnerable to fraud (Times, £, p7).

Latest from the BBA

BBA Policy Director Robert Driver blogs about new rules that will require firms to provide European regulators with substantially more data on market transactions.

On 4 May, the Institute for Regulation and Ethics of the Centre for Commercial Legal Studies at Queen Mary University is hosting a conference to discuss key recommendations of the Group of Thirty’s special report on “Banking Conduct and Culture: A Call for Sustained and Comprehensive Reform”. For further information or to register click here.

The new rules on accountability that came into force last month will make it easier for the regulators to hold senior individuals to account. So, what do senior managers have to do to ensure that they are taking ‘reasonable steps’? The BBA in partnership with Macfarlanes LLP, will be addressing many of the issues around ‘reasonable steps’ at a breakfast session on the 26 May. For further information click here.

Latest from our sponsor Jaywing

Read a blog by Jaywing’s Data Management Practice Director, Inderjit Mund, on the complex challenges that businesses face when it comes to measuring and managing data.

Today’s diary

House of Commons Treasury Select Committee: Budget 2016 with Deutsche Bank, PwC, LSE and IMF (10.00)

ONS: monthly inflation figures March 2016

ONS: house price index March 2016

ONS: UK producer price index March 2016

WTO: annual trade statistics and forecasts

IMF: Economic outlook forecast

Stat of the day

£18 million – the estimated value of money and goods stolen from the elderly last year (Source: Action on Elder Abuse).

In brief

Recruitment in the financial services sector dropped sharply last month amid slowing economic growth and uncertainty around the EU referendum, according to recruiter Morgan McKinley (Telegraph, B2).

Lord Lamont, Britain’s trade envoy to Iran, has stated that British banks are reluctant to finance trade with the Middle Eastern country amid concerns over US sanctions (Reuters).

The European Commission will today outline plans to force the largest companies to disclose more about their tax affairs on a country-by-country basis (BBC News).

Brock Pierce, Chairman of the Bitcoin Foundation, has stated that the growing popularity of blockchain will create opportunities for banks as well as hitting some parts of their businesses (CNBC).

The Swedish military has said that its computers were hacked and used in an attack targeting major US banks in 2013 (Daily Mail, online only).

The European Commission is considering whether to force US citizens to apply for a visa before travelling to Europe in response to Washington imposing stricter entry requirements for some central and eastern member states (FT, £, p8).

US Treasury Secretary Jack Lew has urged the International Monetary Fund to more aggressively tackle members that manipulate currency exchange rates and fail to deliver on pledges to boost global demand (FT, £, p7).

What the commentators say

Rosa M. Abrantes-Metz, Managing Director at Global Economics Group, writes that it is time to proactively reform deficient market structures in order to minimise the likelihood of abuse (FT, £, online only).

Writing in City AM (p22), Nancy Hulgrave highlights how Chinese companies could increasingly threaten London’s position as a world leading hub for fintech.

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