Capital Markets Corporate

March 2, 2018

Our Weekly Newsletter


Across Instinctif Partners’ Financial Services team, we are always keeping an eye on the key developments taking place across the sector to evaluate their impact on the many businesses we work with. Here we share our picks of the week’s most interesting news, and our expert views.

Rudyard Kipling’s Words of Wisdom

Berkshire Hathaway’s Warren Buffett addressed his shareholders in his much-anticipated annual letter, saying some of the best market advice he has got can be found in the words of 19th-century British Nobel laureate Rudyard Kipling’s poem ‘If’. Given recent markets’ turmoil and investors’ jitters, the ‘Oracle of Omaha’ noted that ‘an unsettled mind [does] not make good decisions’. Investors would be wise to take stock of these words. The difference between making it or tanking might just be worth it. (From Quartz, 24 February 2018)

Is Dementia Tax 2 On Its Way?

Millions of workers face having to pay hundreds of pounds more each year in a ‘radical’ new plan to ‘tax the over-40s’ to pay for their future, long-term care. The measure, put forward by ex-Deputy Prime Minister Damian Green, is sure to cause controversy. We will likely see more headlines on it as a proposal for the adoption of the scheme is put forward. (From The Daily Mail, 24 February 2018)

Clients Desert Queen’s Broker

JP Morgan Cazenove and Canadian bank Canaccord have suffered the most stock market losses in the five years to November 2017 – losing 30 clients and 60 clients respectively, to smaller competitors Peel Hunt, Numis and Liberum. Is this symptomatic of a paradigm shift, or are the big players in the space just having an off quarter? (From The Telegraph, 26 February 2018)

Cyber risk: Thematic review of Insurer’s Data

The FCA told delegates at an Association of British Insurers (ABI) conference that it is concerned about data protection and insurers’ capacity to adequately protect clients’ personal data. Insurers often hold sensitive personal data from their customers, and the regulator might potentially make that the focus of one of its thematic reviews in the coming year. (From FT Adviser, 28 February 2018)

Verified Scamming – Is Twitter a Crypto Trap?

Scammers on Twitter managed to replicate verified accounts of the Tron Foundation, a digital entertainment protocol, to defraud users by setting up fake cryptocurrency wallets for ether donations. While Twitter maintains that accounts lose their verified status when they change their name, the scam worked because the hackers obtained verified status on an account before changing it into one mimicking the Tron Foundation. (From CoinDesk, 28 February 2018)

Has the Open Banking revolution been downgraded?

Though Open Banking is only two months old, the recent cold spell has seemingly put out the fire in the bellies of soothsayers who predicted a revolution in UK financial services during 2018. The benefits of open financial data are clear, but it may be that the revolution is, in reality, a slow tectonic shift that will take years, rather than weeks, to fully implement.

A recent survey found that eight out of ten Brits would not choose to use Open Banking as there is too much mistrust of banks and their ability to protect data. Another study noted that banks would have to “work very hard” to convince people to allow their data to be shared with third parties. When it comes to banking, as much as we have significant reservations about our chosen provider, people are very much set in their ways – we divorce quicker than we switch banks. Also, banks themselves are not exactly clamouring to share their data with other organisations – as of February, six of the nine biggest UK banks had missed the government deadline and still had not begun to share API data.

It is not all bad news for digital believers, though. The biggest UK institutions are clearly committed to developing smart propositions based upon the technology that fintech challengers pioneered and estimates predict that an additional £1bn could be injected into the economy thanks to Open Banking initiatives. It is also worth noting that nearly a quarter of Europeans are open to the idea of Open Banking, which is a huge base to begin offering new solutions. It is therefore unsurprising that fintech firms took in more than £20bn in investment in 2017.

So the Big Bang has not happened and even the challengers are cautious, but the rise of smart tech solutions for financial services is undeniable. Open Banking has been heralded as a revolution, but it might just take a little longer to change our minds.

Creds Button