Early Morning Briefing Friday 7th February 2020

 

Early Morning Briefing
Friday, 7th February 2020
Funding Solutions is delighted to provide a free weekly press summary to our contacts. It will summarise relevant news about SME’s, Business Finance and Banking. It’s aim is to keep you up to date on stories in the press that are interesting and relevant.

Funding Solutions remain committed to finding businesses the very best financial solutions to help meet their goals.

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SME NEWS

 

SMEs want more funding for apprenticeships

The Federation of Small Businesses, along with senior figures from the further education and training sectors, have written to the Chancellor calling on him to increase the apprenticeship levy “to address the shortage of funds available for apprenticeships offered by SMEs”. The letter’s signatories said SMEs are “only receiving half of the apprenticeship funding that they were before April 2017”. A Department for Education spokeswoman said: “The apprenticeship levy means more money is available than ever before for training, giving employers of all sizes the freedom to invest in the skills they need.” Meanwhile a poll by the FSB suggests the apprenticeship levy is not providing enough support for smaller companies and has made it harder to access entry-level training. More than one-in-four small companies that employ apprentices say that changes introduced three years ago have been counterproductive. In 2017 when the levy was introduced there was a 24% drop in apprenticeship starts, with a further drop last year. Big employers are using more of their levy funds than expected because of a sharp rise in more advanced “higher” and degree-level apprenticeships, while many employers are finding it hard to transfer levy money to smaller businesses.

The Daily Telegraph The Times The I The Guardian The Daily Telegraph

 

Small UK businesses have big plans for the US

A report from the FSB and the UK Trade Policy Observatory at the University of Sussex Business School has found that the US will be the top destination for UK SMEs to trade with over the next three years. Trading with the EU would also continue, with Germany and France the next best trading destinations after America for UK small business post Brexit. Mike Cherry, FSB national chairman, said: “It is essential that the needs of smaller firms are at the heart of future free-trade agreements through a dedicated small business chapter in each agreement.” Meanwhile, the Independent reports that a third of small business leaders are ready to quit the UK in the wake of Brexit. A survey carried out among just over 1,000 small business owners, freelancers and entrepreneurs by the research company Censuswide found 60% of respondents were dissatisfied with the government’s approach to protecting British businesses from the Brexit fallout. And one third said they would consider moving either their businesses or themselves across the Channel to remain part of the EU. Respondents were quizzed in mid-December, mostly after the general election, on behalf of e-residency, the Estonian government’s programme enabling firms to create “virtual companies” to trade in the EU from the UK.

Daily Express The Independent

 

Britain will remain hotbed for fintech

Specialist technology bank LHV has said that Britain will keep its position as one of the world’s leading hubs for fintech companies despite Brexit. LHV said fintech would continue to flourish in the UK due to its large talent pool, access to finance and 65m population. Andres Kitter, head of LHV, added that the Financial Conduct Authority is business-friendly and willing to help fledgling financial groups. He said: “All of that makes a very strong argument for establishing your fintech here.”

Sunday Express

 

Glitch delays business rates relief

Hundreds of companies due to receive business rates relief will have their discount delayed after a problem with local councils’ IT software. Some 75 local authorities have been told by their software provider, Civica, that changes to bills cannot be made until after the new financial year.

The Times

 

Government needs to invest in SMEs

Keith Morgan, the CEO of the British Business Bank, says that the government should invest more in SME businesses if it wants to deliver on its promise of “levelling up” all parts of the UK.

The Times

 

 

FINANCE NEWS

 

Credit card firms cautioned over indebted customers

The Financial Conduct Authority has told credit card providers to cut or stop fees for those who are caught in a cycle of persistent debt. In a letter to the chief executives of credit card firms, the financial watchdog said lenders must either cut, waive, or cancel fees if customers are unable to make payments. FCA executive director Jonathan Davidson says: “If a customer cannot afford the firm’s proposals for how to do this, the firm must offer forbearance, potentially including reducing, waiving or cancelling any interest, fees or charges.” An estimated 1.78m credit card customers are stuck in persistent debt, paying £1.3bn a year in interest, according to the regulator. James Moore in the Independent says the FCA’s stance is laudable but he questions whether those in debt will challenge banks and ask for help.

Financial Times The Times The Daily Telegraph The Guardian City AM Daily Mail The Independent

 

City of London has not witnessed ‘Brexodus’

City of London municipal authority leader Catherine McGuinness has said that the number of post-Brexit financial job relocations to the EU has so far been much lower than previously expected. The figure currently stands at between 2,000 and 7,000. McGuinness said: “We really have not seen any major Brexodus,” adding, “We are not hearing signals of huge further moves.” Commenting on the upcoming UK-EU trade talks, McGuinness urged Britain not to retaliate if the EU limited financial market access, and said that the UK financial sector is not calling for any major divergence from EU rules that may threaten equivalence-based access to the bloc, under which the EU offers access to non-EU countries with equally robust financial rules. She said: “The big potential competitor to London is New York. We will remain Europe’s only global financial centre into the future”.

Reuters City AM

 

Financial services deal is crucial for Britain and Europe

Writing in the Telegraph, chief executive of the Investment Association Chris Cummings says there is a need for a close relationship between the UK and EU on financial services. He suggests the establishment of a joint UK-EU financial services committee would provide a solution to institutionalise rule making, while respecting each other’s freedom to regulate. Elsewhere, the FT’s leader says diverging from all EU directives is not worth the cost of losing all access to European markets.

The Daily Telegraph Financial Times

 

FCA powerless to stop scam ads on Google

Andrew Bailey, the chief executive of the Financial Conduct Authority, has admitted that regulators are powerless to stop scammers from placing bogus investment adverts on Google to dupe the public. In a leaked email, Mr Bailey said that the FCA cannot block rogue firms from using the site to snare customers. Google has said it is working with the FCA and “other independent experts” on a long-term solution to ensure consumers are protected. An FCA spokesman said: “The FCA has no power to direct Google to stop advertising online scams and frauds nor does any other agency. This is why we strongly believe this should be covered in the online harms bill.”

The Daily Telegraph

 

Replatforming warning from FCA

The Financial Conduct Authority has identified technology upgrades as a key risk of potential harm for the platform sector. In a Dear CEO letter to platforms, the regulator warned: “Insufficient investment, processes and resources for technology and operations can lead to business continuity issues with services to customers and advisers being unavailable, intermittent or restricted.”

Money Marketing FT Adviser

 

Free trading app Robinhood takes aim at the UK

Analysts say investment app Robinhood will find it tough to crack the UK market, with rivals and regulators having toughened up since the company’s emergence in the US.

Financial Times

 

 

BANKING NEWS

 

Metro Bank probed over sanctions breaches

Metro Bank has hired DLA Piper to conduct a major review of its compliance controls after handling money from Cuba and Iran in breach of strict US and EU sanctions. It is believed DLA Piper’s review is serious and at a fairly advanced stage, examining how Metro’s “Know Your Customer” rules had broken down, and whether there had been other breaches. Metro said it had kept the US Treasury’s sanctions policing unit informed since the Cuba failings in 2017. Meanwhile, an editorial in the Evening Standard considers whether modern banking is too complex for challenger banks, suggesting that in its rush to attract new customers Metro Bank looks to have cut corners.

The Daily Telegraph Evening Standard The Times City AM Daily Mail

 

Contactless crackdown could baffle consumers

Experts have warned that an EU crackdown on contactless payments could cause mass confusion for millions of customers and trigger a €57bn (£48bn) hit to businesses across Europe. The new Strong Customer Authentication (SCA) rules require banks to verify a customer’s identity every time they make payments totalling €100 (£85). If customers breach this limit through repeated contactless card payments, they will be forced to type their pin into a machine. But a report published by 451 Research and commissioned by payments company Stripe estimates that €57bn of payments across the EU will be abandoned because of the extra checks.

The Daily Telegraph

 

TSB prepares to launch short-term loans

TSB is looking at introducing short-term loans to lure borrowers away from payday lenders. Chief executive Debbie Crosby said she wants to target customers who find themselves dipping into their overdrafts with a new range of borrowing deals. Ms Crosbie said: “Overdrafts are great for emergency borrowing. But frankly for borrowing over a longer period of time – which is when these products get expensive – we would really want to work with our customers to give them different solutions.”

The Mail on Sunday

 

FCA orders lenders to stop increasing charges for unarranged borrowing

Jessie Hewitson, writing in the Times, comments on the Financial Conduct Authority ordering banks such as HSBC, Nationwide and TSB to stop charging higher amounts on unarranged borrowing. She notes that people’s savings give banks the “funding benefit” of “having access to cash that is almost free, thanks to terrible interest rates, which they then lend to mortgage customers at higher rates.”

The Times

 

Nationwide to refund customers for failing to warn of overdraft charges

The Competition and Markets Authority (CMA) has ordered Nationwide to refund customers £900,000 after failing to inform them that they would be charged for using an unarranged overdraft. Under the rule, which came into force in 2018, current account customers are meant to receive a text alert that they are about to be charged for entering into an unarranged overdraft. Around 70,000 Nationwide customers were affected by the building society’s latest text messages failings. The CMA said Nationwide has already “begun refunding” affected customers and has appointed an independent auditor to “review its processes.”

Financial Times The Times The Daily Telegraph Daily Mail City AM

 

Customers spend millions more on cash withdrawals

Research from Which? reveals the amount paid by consumers to withdraw cash jumped by £29m to £104m last year, as many free machines vanished. The shift in the cashpoint network has saved banks £120m since January 2018, according to figures from Link.

The Daily Telegraph Financial Times

 

Savers advised to maintain more than one account

In the wake of a series of technological problems suffered by lenders in 2019, account holders are being advised to hold more than one current account, with over 75% banking with only one provider. A survey by Which? found that customers could be left unable to make card payments in the event of a wide-scale failure, like the one which took place at Visa in summer 2018. This comes as Nationwide customers were unable to transfer money or pay bills yesterday, with all attempted payments being held in a queue.

The Sun The I

 

Bankers using apprentice levy funds to boost CVs

Figures from the Department for Education show that almost 200 people started level 7 “senior investment/commercial banking professional” apprenticeships since 2018. The Daily Telegraph notes that banks enrolling staff on these training courses can draw up to £18,000 a year from the apprenticeship levy to fund the courses. As a result it means financial institutions have potentially used £3.5m of levy funds to pay for the level 7 apprenticeships – which the Government markets as the equivalent of a Master’s degree.

The Daily Telegraph

 

Travelex services still offline

Sainsbury’s Bank, Royal Bank of Scotland, Lloyds and Barclays are among major High Street banks still unable to offer online currency services. The problem stems from provider Travelex, which is still working to bring back services more than a month after it suffered a major cyber-attack. Customers are able to buy travel money in branches, but cannot order online or over the phone.

BBC News

 

Specialist bank gets approval

Oxbury, the UK’s specialist agricultural bank, will soon be able to launch to market, offering funding to farmers, after being granted approval by the FCA and the Prudential Regulation Authority.

Yorkshire Post

 

Marcus scraps plan for Isas with Nutmeg

Goldman Sachs’ retail banking arm Marcus will target more cash savings products after abandoning plans for the launch of a stocks and shares Isa in the UK. Goldman Sachs is also set to hire another 65 staff and to launch a mobile app to boost Marcus in the UK.

Financial Times The Times

 

Challenger banks lend record amount

New figures show that challenger banks lent a record of £115bn in the UK last year, although growth was slower than previous years.

The I City AM