31st March 2014

BBA Brief – 31 March 2014

BBA reports huge increase in use of banking technology

A number of papers report on the BBA’s The Way We Bank Now study which shows mobile banking use has doubled in just 12 months. BBA Chief Executive Anthony Browne writes in the Telegraph (pB2) that these innovations in technology “give customers greater flexibility than ever before about how they manage their money”. He stresses that although the increased use in technology has resulted in a decline in footfall, bank branches will “remain at the heart of banking services for years to come”, becoming used for “big life moments” such as arranging a mortgage.

The Telegraph Business section leads with the BBA’s report, highlighting that around 1,800 transactions are made every minute on smartphones. The Times (£, p37) notes that “branches would still be important, especially for mortgages”, whilst CityAM (p7) quotes Anthony Browne who states that there is a “groundswell of people who now find that banking on the move is fast, easy and convenient”. The Independent (p13) writes that 28 million debit and credit cards have been fitted with contactless technology, whilst 450 million texts for balances were sent in 2013.

More information on The Way We Bank can be found here.

Questions mount over potential CMA investigation into banking

CityAM (p3) understands that the Competition and Markets Authority (CMA) may choose not to launch its investigation into the banking sector “leaving the industry alone for a time to let new changes come into effect”. The paper adds that even if an investigation is launched, the CMA has a “range of other tools short of breaking up banks that could encourage more competition”. This comes after CMA Chief Executive Alex Chisholm told the Sunday Telegraph that any investigation leading to the potential forced sale of bank branches would take “18 months at least” and require “a ton of work” – longer than Labour leader Ed Miliband’s target of six months.

Export figures highlight importance of EU to UK

The FT (£, p2) cites a report by the Centre for Economic and Business Research which states that exports to EU countries help support 4.2 million jobs and are worth £211 billion to the UK economy. The EU’s demand for goods and services from the UK has risen steadily, with exports to other member states worth £3,500 per head. The Telegraph (pB4) reports that out of the 4.2m jobs, an estimated 3.1m were directly supported by exports to the European Union.

Stat of the day

Consumers used banking apps an average of 18.6 million times per week in 2013, up from 9.1 million the previous year. (BBA)

Today’s diary

BBA: Parliamentary Reception 2014

Bank of England: Bankstats (Monetary and Financial Statistics) – February 2014

CBI / PwC: Quarterly financial services review

Financial Stability Board plenary meeting (London)

City & Financial: City Week 2014 – The International Financial Services Forum begins

In brief

A survey by the CBI and PwC shows that financial services is set to have added 26,000 jobs in the year to June 2014. (FT, £, p4)

CityAM (p1) cites a survey of senior executives by Deloitte which suggests that companies with revenues of more than £1 billion plan to invest £200 billion by the end of 2015.

The FT (£, p21) reports that investment bankers are becoming more optimistic in Europe, partly driven by the rise in IPOs.

The FT Weekend (£, p17) writes that the FCA and PRA will launch a joint review into banks’ IT systems.

CityAM (p12) cites EY figures which suggest that bank lending in the EU will not rise as fast as hoped this year as banks make sure their balance sheets are in good condition ahead of asset quality reviews and stress tests.

Former Deputy Prime Minister Lord Heseltine has suggested that capping the loan-to-salary ratio for mortgages should be considered in order to prevent a house price bubble. (Times, £, p2)

The Mail (p33) reports that the Ministry of Justice will launch a consultation today on whether heavy new fines should be given to firms which break Claims Management Regulation Unit rules.

What the commentators say…

Wolfgang Münchau argues that the European Central Bank must take action of quantitative easing rather than simply discussing it. (FT, £, p13)

One year after its introduction, Szu Ping Chan comments on the regional impact of Help to Buy, stating that the Government scheme has had the greatest impact in areas which have seen the smallest price rises in the past year. (Telegraph, pB4)

If you have five minutes…

In an interview with the FT (£, p16), departing Lloyds Banking Group chairman Sir Win Bischoff admits that it will take a long time before banks will be trusted.