Capital Markets Corporate

April 27, 2018

Our Weekly Newsletter

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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.

Looking Up to the Stars

The machine learning technology that safeguards Europe’s space missions could soon be used to reduce the risk of “fat finger” trades. The news come after the European Space Agency agreed its first collaboration with the financial services industry. (From Financial Times, 18 April 2018)

Fintech Jargon (Un)Explained

A recent survey has found that Brits have not quite grasped some of the everyday fintech jargon used in the news. Terms like ‘cloud computing’, ‘cryptocurrency’ and ‘blockchain’ are frequently misunderstood, with often hilarious interpretations of their meaning. A Dictionary of Computing has just been launched to fill in the gap in knowledge. (From The Mirror, 29 March 2018)

Reining Back Research

Asset managers have cut the number of investment banks and brokerages they use after Mifid II forced them to show how much they pay for research. The regulation has triggered far-reaching changes in the industry and a price war over the cost of research. (From FTfm, 23 April 2018)

Crypto Goes Institutional

The burgeoning world of crypto trading mainly exists on the margins of the established financial industry, but that could be changing, as around one in five institutional financial firms have plans to start buying and selling digital tokens within the next 12 months. (From Quartz, 23 April 2018)

Retirement 2050: Saving for the Future

With a third of all millennials predicted to still be renting by the time they come to claim their pension and with the “gold plated” pensions schemes as good as over, The Telegraph takes a look at how millennials are approaching their retirement savings early. (From The Telegraph, 21 April 2018)

A quick search for variations of “retirement lending”, “retirement borrowing”, “lifetime mortgage” and “later life lending” suggests media references have increased by over 250% in the last five years, outpacing even the sustained growth of equity release activity over this period.

Since last week’s newsletter led on younger generations’ homebuying travails, media interest has focused on developments at the other end of the age spectrum and homeowner journey. Partly prompted by the weight of owner-occupiers facing looming interest-only mortgage repayment deadlines – but with many wider factors at play – the emergence of new products and players in this expanding area of financial services has many implications. Not least, that the concept of secured borrowing in later life may increasingly become the norm for a generation seeking to navigate a complex web of financial needs.

The latest reading of the Financial Guidance and Claims Bill also heard Crispin Blunt MP suggest the upcoming single financial guidance body should therefore explicitly signpost alternative sources of finance, such as housing wealth, as a consideration alongside pensions to support “effective decisions about retirement income” (referencing the work of our client, the Equity Release Council, in the process).

With an ageing population and an evolving industry landscape, considerations around the interplay of property and later life financial services are increasingly inseparable from wider discussions as diverse as healthcare – raised again by NHS boss Simon Stevens this week – and intergenerational transfer of wealth. It would be no surprise to see the exponential growth of news and analysis continue, bringing challenges and opportunities for an increasingly wide cast of actors and their audiences.

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