Capital Markets Corporate

November 16, 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.


Auditors In The Firing Line

The UK’s largest accountancy firms have faced significant criticism over the last year and it looks like that is set to continue. New claims by Rachel Reeves, chairwoman of the Commons’ business committee, note that some of the nation’s largest company’s reports have become “works of fiction”. In the wake of a series of accounting issues at BHS, Carillion and Patisserie Valerie, the committee is going to launch an investigation into the state of auditing in Britain. But how will this story end? (From The Times, 12 November)

The Fintech Threat

Is fintech taking over banking? And if so, how do the incumbents fight back? The latest FT Special Report on the way technology is changing the banking industry looks at everything from digital attackers, acquisitions, partnerships, diversification, and simply admitting defeat. There is no one solution for a sector facing a technological overhaul – but hopefully, the customer stays at the heart of any changes (From the Financial Times, 12 November)

Blockchain Across Borders

A buzzword that most people in financial services use, but few can explain, blockchain has seen much conversation around it ever since the cryptocurrency hype has taken off. But what can banks actually do with the technology? It looks like they’ve finally found a problem that Blockchain is just the solution for: cross border currency transfers. Now, how are they going to communicate it how that works? (From the Financial Times, 12 November)

Investing with Kids

Kids (Key Information Documents) are making supposedly safe investment options misleading and more risky, according to reports. Regulation was introduced in January called for the creation of these documents to accompany Britain’s 402 investment trusts, with the aim to make funds more easily understandable for the average investor. But some are warning that Kids are over-simplifying complex investment structures and could lead to cautious investors making the wrong choices. (From The Times, 11 November)

The Nudge Export

The Government’s Behavioural Insights team, jokingly referred to as ‘the nudge unit’ works well – so well, in fact, that it’s now being exported to the private sector. Starting out as just a small team of civil servants putting “nudge theory” into practice, BIT has grown into a British success story with clients from across the world, a legendary team that has worked for example with the Money Advice Service to help families tackle debt and encourage ‘rainy day savings’ (From The Guardian, 10 November)

Taking it to the Post

This week it was announced that Starling Bank, one of the new breed of digital banks taking on the incumbents, has partnered with the Post Office to allow personal and business customers to withdraw and deposit money at their local branches across the country.

The bank has said that the agreement would benefit so-called ‘banking deserts’ – pockets of urban areas not served by high-street bank branches.

Starling’s decision seems to provide an answer to recent research findings by Citizens Advice that rural areas are twice as likely as urban areas to use the Post Office’s banking services.

This reliance on the Post Office as a provider of financial services, away from large urban areas, has been a growing trend that continues to gain traction – not only in rural Britain, but also amongst an elderly segment of the population for who face to face human interaction, rather than digital customer services alternatives, are important.

As a result, we have witnessed Post Offices branches increasingly becoming hubs of financial services, providing a range of offerings – ranging from mortgages to insurance – for those customers and businesses living in communities with no access to a local, physical bank branch.

If any proof of this popularity of the Post Office was needed, just last month Post Office bank card holders reacted furiously to the Government’s attempts to change the way pensions are paid by making it compulsory to have them paid only into a bank, building society or credit union account.

Given that there are more Post Office branches in the UK (11,500 to be exact) than there are bank branches – and since the current trend is for bricks and mortar bank branches to all but disappear – we might just see the day when partnerships between financial institutions and the Post Office become the norm for those of us who still like to handle our financial affairs over a counter.

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