7th July 2016

Chief Executive newsletter – July 2016

Written by Anthony Browne

Welcome to my newsletter. The British people took a historic decision in June to leave the European Union. This has led to a political earthquake in Westminster and Brussels, even if day-to-day life for most people remains largely unchanged. The banking industry is united in our commitment to maintaining financial stability, to continue providing great service to our customers and clients, and doing everything we can to support the British economy. As such, the BBA will work with the wider banking industry and other sectors in the coming months to help Government achieve the best possible outcome for the UK.

The UK votes to leave the EU

June 23rd will go down in history as a day when everything changed, and yet nothing changed. The vote to leave the EU sparked an extraordinary period of political upheaval in the UK and market volatility across the globe.

For most people, however, it was business as usual in the days after the referendum. Customers continued to use bank cash machines to withdraw cash, people looking to get on the property ladder still took out mortgages, and tourists exchanged foreign currency.

The banking sector has weathered the immediate aftermath of the post referendum storm, which was the first real test since the financial crisis. Banks are in a much stronger and resilient position than 2008. Capital requirements for the largest institutions are now 10 times higher than before the crisis.

Any consequences arising from the referendum result will take place over several years. We must now work together with the Government, regulators and wider industry groups to lay the ground for a clear negotiation strategy that delivers the best outcome for the UK before Article 50 is triggered.

That is why the BBA hosted a meeting between senior representatives of the wider banking sector last month. This brought together leaders from across the industry to discuss how banks can support the economy and maintain financial stability during this period of uncertainty.

Retaining access to the single market was top of the agenda for many of the banks in the room. Stability and continuity will helps us continue serving customers in the UK and across Europe so it is crucial that the UK commits to a regulatory stability, rather than a bonfire of regulations. The latter would risk us being denied access to markets in the continent.

The banking industry fully respects the will of the people, and our sector will do all it can to support the economy, businesses and households during this time of transition. As the Chancellor George Osborne has said, we must focus relentlessly on what we can do – what is good for the economy is good for our customers and our clients and as a result our sector too.

Inclusive innovation in retail banking

BBA Conf SR 077The BBA’s annual Retail Banking Conference took place less than a week after the EU referendum vote, which meant that ‘Brexit’ was a hot topic throughout the day. A number of high street bank CEOs, Baroness Bowles and Harriett Baldwin, the Economic Secretary to the Treasury, all gave their thoughts on what it potentially means for the UK and the banking industry.

Away from the referendum, the spotlight was on how retail banking is in the midst of a customer-led revolution.

The way we bank now is almost unrecognisable compared to a decade ago. Technology is making it easier for us to manage our money on the move. It also has the power to help some of the most vulnerable people in our society.

BBA Conf SR 078For example, 9,000 ATMs in the UK are now equipped with ‘audio assistance’ to help the blind and partially sighted. Biometric identification, video conferencing and cheque-imaging are other innovations from banks making life easier for customers and empowering communities.

Another key theme throughout the day was how fintech firms and challenger banks are shaking up the market, increasing competition and offering consumers more choice.

This is not innovation for innovation’s sake. Instead it is genuinely helping to improve the lives of those who matter most – customers.

Andrew Bailey takes the reins at the FCA

The Financial Conduct Authority has a crucial role to play in protecting consumers, ensuring market integrity, and promoting effective competition. It’s vital, therefore, that it has strong leadership.

Andrew Bailey has shown exceptional leadership at the Prudential Regulation Authority, and has worked hard with the industry to ensure we have a stable banking sector that serves the needs of customers and the wider economy.

He is highly respected both within the industry and the international regulatory community. We look forward to continuing to work with him now that he has taken over as Chief Executive of the FCA.

BBA Summer Reception

The England football team have made an ignominious exit from another international tournament, festival-goers encountered a mudbath at Glastonbury, and it’s raining: in other words it must be the start of the British summer.

In line with these grand traditions, the BBA is again hosting our Summer Reception on 12 July in Westminster. Even with the European Championships and Wimbledon drawing to a close, there will be plenty for us to discuss and I look forward to seeing many of you there.

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