July 5, 2019
Our Weekly NewsletterContact
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.
‘Bro culture’ dominates FX trading
‘Bro culture’ and ‘laddishness’ is dominating foreign exchange trading, according to a Bank of England official, who has pointed towards a culture which encourages dangerous risk-taking and illegal behaviour among traders. Andrew Hauser claims the problem is partly due to the lack of women in the industry, which is instead dominated by hyper-competitive men. This comes as five banks were fined £935million last month after such groups conspired to rig the markets. (From This is Money, 28 June 2019)
Amazon back in business
A new service will soon provide benefits for UK businesses of all sizes when making Amazon purchases. The new membership offered by Amazon will also allow customers to visualise spending data and identify money-saving opportunities in a bid to support business growth. In the UK, Amazon Business currently serves over 50% of FTSE 100 companies. (From Banking Tech, 1 July 2019)
Fintechs taken over
Senior executives at fintech firms have complained that large financial institutions are trying to take information from them, while failing to offer adequate capital or benefits in return. This comes after takeover negotiations of two start-ups collapsed recently, forcing one of them to shut down. A number of commentators have pointed to Royal Bank of Scotland’s treatment of Loot and HSBC’s treatment of Pariti as examples of an unfair relationship between big banks and start-ups. (From The Times, 28 June 2019)
Can retirees weather a market storm?
Retirees taking advantage of pension freedoms have enjoyed fair market conditions thus far, but experts warn a crash could be looming that might put pensioners at risk of running out of money or being forced to cut withdrawals. Age UK has suggested that a potential market downturn could cause many older people to suffer losses, having not fully grasped the risks of their drawdown fund. (From This is Money, 2 July 2019)
Older tourist tax
Older tourists travelling abroad face paying a “holiday tax” that could heavily inflate travel insurance premiums, making it almost impossible for healthy people in their 60s and 70s to plan holidays. Many travel insurers charge policyholders more when they reach the age of 60, with the problem increasing the older holidaymakers are. Some providers decline to offer cover entirely. Insurance premiums are therefore accused of not reflecting the dramatic shift in life expectancy. (From The Telegraph, 29 June 2019)
Putting Inclusivity before Pride PR
Throughout the last month, many financial services firms flew the Pride flag in support of LGBTQ+ staff, customers and members of their communities. But barriers to entry still remain – not only for LGBTQ+ people working in the sector, but also for those accessing financial services products and services. Critics have called on firms to play down the inclusivity PR and focus instead on tangible action that makes financial services more accessible to all.
During Pride Week, diversity and inclusion was celebrated in the financial services sector – and there is much to celebrate. Financial services has made significant strides in inclusivity over the last two decades. An industry that has traditionally been dominated by white heterosexual men now includes many more openly LGBTQ+ employees, executives and business leaders. Brands are now proud to defend their inclusive stances, and the FCA even made it into Stonewall’s top 100 employer index for the most inclusive and progressive employers.
For example, the Investment Association (IA) highlighted employment issues for LGBTQ+ people in investment sector. While it noted that many investment firms should be commended for their attempts to be more inclusive, it also admitted there is still much to do. No asset management firms are on Stonewall’s top 100 employer index, and the IA report noted that more efforts are needed to support and protect those working and living in the 73 countries where homosexuality is still illegal.
As well as workplace inclusivity, financial services could also better recognise the social issues that blight LGBTQ+ communities, which can often result in financial problems. A recent study found that LGBTQ+ employees in the UK earn 16% less than heterosexual colleagues, with 14% feeling they would be less likely to be promoted at work if they were to reveal their sexual orientation.
Also, unique social issues can affect financial decision-making. LGBTQ+ people are statistically more likely to be single and childless in old age, which may affect their later life finances. They are also more likely to have mental health issues due to harassment and discrimination, which adversely affect people’s abilities to earn and manage money. From access to affordable housing to spiralling debt problems, the LGBTQ+ community would likely benefit from a renewed focus on the issues that affect their financial wellbeing.
Once brands’ social media avatars relinquish their Pride colours for the year, their efforts to champion and deliver greater inclusivity should not be cast aside. The flag must continue to fly prominently in all workplaces and for all customers, even if it doesn’t make the headlines.