• Product Reviews
• 16.12.2021 12:28 pm

New technologies, competitors and regulations mean that to remain relevant, banks must innovate faster than ever. Today, open collaboration is essential.

To address this challenge, Finastra created FusionFabric.cloud – the open developer cloud platform for the financial services ecosystem. By harnessing the power of collaborative innovation, the platform helps financial institutions to accelerate transformation, unlock the power of data, drive efficiencies and improve the customer experience.   

FusionFabric.cloud is made up of three core components:

• FusionCreator: This developer portal and Application Programming Interface (API) catalog enables developers to access to access datasets, build their own solutions and roll out products quickly.

• FusionOperate: The production environment, hosted on Microsoft Azure, to deploy and run apps. It allows fintechs to securely connect their apps to Finastra software running on financial institution environments all over the world.

• FusionStore: The marketplace from which applications developed through FusionCreator can be monetized, promoted, discovered and consumed.

Who needs the product?

FusionFabric.cloud opens up Finastra’s core systems via the FusionFabric platform to all players in the financial services ecosystem – banks, fintechs, system integrators, independent developers, consultants and students. 

What features are relevant?

Data commercialization

FusionFabric.cloud enables financial institutions to unlock meaningful insights with data. It allows clients to gain value from their own data, access third-party data and provides a mechanism to allow users to share their data. This helps financial institutions to lower costs, increase revenue and make more informed business decisions, while improving the customer experience. 

Intelligent data sharing 

The platform aggregates data from a wide variety of sources, cleanses and processes it for continuous model training, and curates the data for advanced analytics. This enables financial institutions to make forward-thinking business decisions.

Modern open architecture

The foundation of FusionFabric.cloud is a secure, open architecture. This gives financial institutions the control, agility and flexibility to stay efficient, be resilient to change, and increase their pace of adoption of new technologies – all at significantly reduced operating costs.

What are some real case examples?   

NetGuardians’ Payment Fraud Prevention app launched on FusionFabric.cloud. The app uses artificial intelligence to proactively detect fraudulent transactions in real-time and reduce fraud losses. NetGuardians’ operational experience shows that, compared to traditional anti-fraud solutions, the app reduces the number of false positives by an estimated up to 83 percent, resulting in bank staff spending around 93 percent less time investigating suspicious payments.      

The integration makes it incredibly easy for banks that are already using Finastra’s payments, cash management and retail banking solutions to deploy the app and start benefitting from fraud protection – with a reduced cost of implementation and fast time to market.           

What is special about the product? 

• Finastra’s Financial Services State of the Nation Survey 2021, which canvassed opinion from 785 professionals within financial institutions globally, found that shared data and infrastructure is expected to become a key part of the strategy for the move to Open Banking and Open Finance (77% of respondents agreed). Having an open platform in place, such as FusionFabric.cloud, is a key enabler in supporting innovation and increased collaboration. The use of platform technologies and open APIs are crucial for giving banks the agility to capitalize on the transition to Open Banking and Open Finance, as well as opportunities to provide Banking as a Service (BaaS) and embedded finance offerings.

Yolt, Europe’s leading open banking provider, has announced a strategic partnership with The Digital Debt Resolution Agency (The Digital DRA) to harness open banking payment and data services to improve debt resolution in the UK. Yolt’s Account Information Service (AIS) and Payment Initiation Service (PIS) provided to The Digital DRA, will go live in January 2022 and will simplify and streamline the way in which customers fill out Income & Expenditure (I&E) forms and manage their online payments.

The partnership has been built upon a mutual objective to use open banking to support people whose personal circumstances have changed and who need to put in place an affordable repayment plan. Transactional data provided through AIS is a real time measure of affordability, which enables The Digital DRA to set up tailored payment plans for customers, helping them resolve their account quickly and efficiently in a stress-free way.

In terms of speed, with the AIS function, The Digital DRA can pull the transactional information automatically, to pre-populate the I&E form for a customer. Currently, the online process to complete the forms can be time-consuming – it takes many clicks and there is a risk it is inaccurate as customers can be known to guess, generalise or, in some circumstances, manipulate the entries.

The Digital DRA is also applying Yolt’s PIS to improve the customer journey when it comes to payments in full. Customers paying via PIS require fewer clicks than required when inputting debit card details, which significantly improves the payment journey and prevents customers dropping off when they come to pay. Payment authentication is also made easy and secure with AIS/PIS as customers use the same process as they do when they bank online.

Nicolas Weng Kan, Chief Executive Officer at Yolt, said: 

“We are thrilled to be working with The Digital DRA as their open banking partner of choice. Debt resolution is something we are incredibly passionate about, and will become increasingly important, particularly as we manage the fallout from the pandemic and rising inflation. Open banking will enable The Digital DRA to transform debt resolution by removing the risk of inaccuracy and the burden of data gathering, so the company can focus on supporting customers with affordable plans to improve their financial capability.“Working with companies such as The Digital DRA is enabling open banking to overhaul another area of financial services which is rather archaic, both in terms of the process and the customer experience.”

Commenting on the partnership, Arren Khan, Managing Director of The Digital DRA, said:

 “As a Digital Debt Resolution Agency, we have to use the best technology available to complement our brand. The open banking solutions from Yolt help not only streamline the customer journey, but they also actively help to set up better, more affordable and manageable plans for our customers based on their actuals not assumptions. This is key as the people coming to us, in most cases are in financial hardship and we do not want to push them into any further financial detriment.”

Venture capital firm Sequoia Capital India leads the round 

Australia's first instant online grocery supermarket, VOLY, has raised AU$18M in one of the nation’s largest ever seed rounds led by Sequoia Capital India, with increased backing from Global Founders Capital (GFC) and Australian-based Artesian Capital. This funding round will enable VOLY to continue to scale, expand the team, rapidly increase operations across key urban centres and start the national rollout. 

Following its launch in July 2021, VOLY has been preparing to take on the rapid food delivery market by delivering groceries to customers at incredible speed. It aims to make ordering groceries as easy and engaging as browsing Instagram and get them to you faster than you could do a trip to the supermarket yourself. 

Employing its own riders, delivery centre and store staff, VOLY does away with the need for customers to spend time in physical retail environments by giving people the power to order and receive their groceries in minutes. With a delivery promise of 15 minutes or less; VOLY is set to disrupt the +$122bn local grocery industry. 

Mark Heath, Co-CEO and Co-founder of VOLY, said: 

“VOLY is here to completely change the way people shop for groceries by giving Australians back their most precious resource, time. Our model, from a fully employed delivery and dispatch team to the way we use electric bikes to deliver, is designed around the way people live. We firmly believe that our customers have a better experience when our riders and other staff are part of the company, working with us.”

VOLY retails most key household products available at any major supermarket - from fresh produce to baby formula and cleaning products - everything you could possibly need, available online seven days a week from 8am-10pm. The winning recipe is instant and free delivery, together with the best quality fresh produce; all sold at retail prices. 

“We’re doing away with the need to do a weekly grocery shop by providing convenience alongside reliability in a market that offers some of the slowest delivery times in the world. By owning our own supply chain, VOLY delivers at blazing fast speed without compromising on price, quality or availability. We source directly from suppliers, store in our own micro-fulfilment centres and deliver using fully employed and mostly full-time staff. VOLY is the supermarket of the future that is built around our customers, not the other way around,” 

said Thibault Henry, Co-CEO and Co-Founder.

The seed funding announcement sets a new record for a food delivery company in Australia with support from Sequoia Capital India, a renowned venture capital firm. The interest in VOLY follows a new wave of investment in Aussie startups seen as world-class tech companies with potential to scale globally. 

"Australia's grocery market, which sees $90B in annual spends, is a large and profitable space that continues to be dominated by offline retail. The Sequoia Capital India team was impressed by the strong consumer love for VOLY, their compelling value proposition, and an impressive team of repeat founders that has blitzscaled businesses in Australia before. With on-demand models traditionally scaling very successfully in the country, the decision to lead their seed round and help them scale their business across Australia was an easy one to make,"

said Abheek Anand, Managing Director, Sequoia India.

VOLY was co-founded by Mark Heath and Thibault Henry, who are also co-CEOs of the company and have experience working with on-demand technology brands across the food supply and logistics industries. Mark Heath helped launch Uber in Australia after a career at Goldman Sachs and Thibault Henry built, scaled and sold Balto which was a B2B last-mile business with clients such as HelloFresh, Marley Spoon and YouFoodz. VOLY’s management team includes Chief Technology Officer, Anthony Rey, Head of Procurement Lyana Labrode and Head of Marketing, Josh Peacock. 

VOLY has been an early hit with customers flocking to the app, spiking a rise of new users and incredibly strong week-on-week growth in sales. While currently available in Sydney across 42 suburbs - VOLY has plans to rapidly expand its offering from January 2022 to reach millions more Australians around the country in the coming months and year ahead.

The VOLY application is available on both iOS and Android and at https://www.getvoly.com/

Trayport Limited, a wholly-owned subsidiary of TMX Group, today announced the successful pilot trade of voluntary carbon offsets through Trayport’s Joule™ platform as part of the pilot phase.   TMX Group, through its subsidiary, TSX Inc.,  and ClimeCo, a leader in the development and management of environmental market-based solutions, were the counterparties in this trade. This is a significant milestone towards digitising the trading of voluntary carbon offsets.

TMX Group has entered a transaction with ClimeCo to purchase voluntary carbon offsets, in accordance with TMX Group’s commitment to achieve carbon neutrality by the end of 2021.  In preparation for the launch of The Voluntary Climate Marketplace (TVCM), the transaction was successfully put through Trayport’s Joule platform as a pilot trade. 

“We are pleased to have participated in the inaugural trade of voluntary carbon offsets via Trayport’s Joule platform,” said David Arnold, Chief Financial Officer at TMX Group. “Not only does Trayport’s trading software help fulfil TMX’s target of achieving carbon neutrality, but it also represents an important solution for our clients and stakeholders across the industry as we look to support their evolving needs in making the transition to a low-carbon economy.”

The trade consisted of the Climate Action Reserve standard verified offsets purchased from a North American based offset project. 

“We are excited to have the pilot trade conducted through Joule, Trayport’s front end for energy commodity trading.  This positive development is another step towards the launch of TVCM which aims to bring transparency, liquidity and greater standardisation to the voluntary carbon marketplace,” said Peter Conroy, President, Trayport.  “I would like to congratulate the counterparties to this trade and we look forward to working with and supporting other companies and stakeholders who wish to meet their carbon neutral commitments.”

This trade follows the recent announcement of the collaboration between Trayport and IncubEx with a view to launching a marketplace for trading voluntary carbon offsets through Joule.  TVCM aims to offer market participants a transparent, efficient and standardised route to trading these contracts, leveraging Trayport’s existing trading software and expertise to expedite the availability of voluntary carbon offsets.  TVCM is expected to launch in the first quarter of 2022. 

Please visit www.trayport.com/markets/voluntary-carbon-trading/ for more information on trading voluntary carbon offsets through Joule.

Global marketing technology company Awin Group expands partnership with fintech unicorn Payoneer to streamline international payments

Payoneer, the commerce technology company powering payments and growth for the new global economy, and the Awin Group, today announced a strengthened partnership aimed at fueling growth for publishers around the globe. The latest collaboration follows a successful partnership, established in 2017, between Payoneer and ShareASale, and a partnership with Commission Factory; both entities are a part of the Awin Group.

Since the start, publisher experience has lived at the heart of the growing partnership between the two firms. ShareASale and Payoneer first started working together at the request of their growing publisher base. In the years since, the companies have kept a steady focus on making affiliate marketing payments more streamlined, cost effective, and transparent.

Following the success of the ShareASale and Commission Factory collaborations, the Awin Group moved to expand the relationship with Payoneer. Today, nearly 70% of international payments on the Awin Group are processed through the Payoneer platform, and the firm has reported a 90% drop in failed payments since the year has begun.

“Expanding our partnership with Payoneer to Awin ensures our publishers across the globe have access to clear and reliable international payments,” comments Jasper Mulder, Global Publisher Director at Awin. “Off the back of these early successes that we’ve been able to build together, we aim to further deepen our technical and strategic collaboration with Payoneer, bolstering our continued efforts to provide best in class payment services to our publisher base.”

The recently launched API integration further simplifies the payments process and improve user experience. There are more expansion plans in the works.

“We are thrilled to continue to grow our relationship with the Awin Group,” noted James Allum, VP of Payoneer Europe. “Awin is a giant in the affiliate marketing space, and their dedication to their publishers aligns with our mission to empower small businesses around the world. We look forward to continuing to grow together, and to make international payments easier, more cost effective, and more secure for the tens of thousands of publishers across their global network.”

1982 Ventures, a leading early-stage venture capital firm in Southeast Asia, has announced the initial close of its first seed stage venture fund with US$12.5 million in committed capital. The fund is targeting to raise a total corpus of US$15 million.

Established in early 2020, 1982 Ventures is a Southeast Asia focused venture capital fund that invests in seed stage fintech startups in Southeast Asia. The fund was recently identified as the most active Southeast Asia based fintech investor of 2021 (UOB).

The firm's portfolio has made a return of over 3x, with early and first round investments in Indonesian open banking player Brick, Vietnamese retail investment platform Infina (YC S21), home financing proptech Homebase (YC W21), Singaporean automated financial data platform Bluesheets and Southeast Asia's first earned wage access platform Wagely.

Their first fund has been backed by US fintech unicorn Carta, Asia's leading multinational Genting Group's Venture arm, US fund of funds First Close Partners and Rally Cap and major Indonesian family office Trihill. The backers of 1982 Ventures include Southeast Asian, European and American family offices, fintech founders, senior executives of tech and financial services companies and GPs of other VC funds including Sheel Mohnot (founding GP of 500 Fintech and Better Tomorrow Ventures) and unnamed GPs at major Southeast Asian VC funds.

Herston Elton Powers, Co-founder and Managing Partner of 1982 Ventures stated,

"Seed stage fintech in Southeast Asia is a clear once in a generation opportunity. Our focus and credibility with founders make us first money invested and the partner of choice for fintech entrepreneurs in the region." He continued, "Our investors have access to the highest quality deal flow and as a result of their commitment to 1982 Ventures, have directly participated in the region's most competitive fintech rounds."

JunYuan Tan, Co-Founder and CEO, of Homebase (a 1982 Ventures portfolio company) stated

"1982 Ventures was one of our earliest institutional investors. They have been super helpful even up till today. In fact, 1982 Ventures has by far made the most number of quality introductions to us, especially for lenders, and it's not even close. 1982 Ventures' investment is one of the best money we've ever taken."

Southeast Asia represents a once in a generation opportunity with half a billion consumers waiting for financial services. The region is experiencing rapid urbanization and has some of the world's highest technology adoption and mobile and internet penetration rates. Southeast Asian fintech startups represent more than US$10 billion in unrealized value, with 100 projected fintech exits in the coming years (Dealroom).

Ian Sulaiman, Vice President, of Trihill, stated

"1982 Ventures is filling a critical gap in the VC market with their focus on seed stage fintech companies. The GPs understand how to invest in Indonesia and across the region. Scott and Herston have impressed us with their company selection and we have confidence in the judgement."

Going forward, the firm is looking to invest in a total of 30 start-ups primarily in the fintech sector across Southeast Asia. The firm has a core focus on Indonesia, Vietnam, Singapore and Philippines with the ability invest across the region and opportunistically in Pakistan and Bangladesh.

Scott Krivokopich, Co-Founder and Managing Partner of 1982 Ventures stated,

"We are on track to realize our goal of becoming the best performing fund in the region and we are encouraged by the support from the global investment community in backing 1982 Ventures." He continued, "We have seen the incredible rise of fintech in China, India, Latin America, Africa and the West -- now is the time for Southeast Asian fintech to lead the way."

Both Herston and Scott are former executives of tryb Group, a Southeast Asian fintech investor, and have each been in Asia for well over a decade. Scott Krivokopich was previously the Head of Investments at tryb Group and prior to that established Moore Stephens Corporate Finance business in China, advised on M&A for Southeast Asian fintech transactions, worked with Micro-Finance pioneer Grameen Bank. Scott started his career in New York working for PwC Structured Credit and Derivatives Advisory.

Herston Elton Powers, an INSEAD graduate in Singapore, previously led investments, operations and investor relations at tryb Group. He is credited as the first institutional investor in Indonesia's leading fintech and Neo bank Alami. Prior to becoming a VC investor, Herston was a banker at the Bank of New York Mellon (BNY Mellon) in New York, Hong Kong and Singapore where he was Head of Southeast Asia and worked on numerous Chinese, Indian and Southeast Asian listings on NYSE and Nasdaq. He also supported the founding of a global fintech company based in Europe.

"1982 Ventures has proven its ability to source and invest in the best fintech start-ups in the region." stated Scott Krivokopich. He continued, "Our mission is clear to back the next generation of unicorns which will come from the fintech sector in Southeast Asia."

1982 Ventures expects to announce the final close of its first seed fund soon and is only open for investment from strategic investors to participate in a "greenshoe option" as the fund is already oversubscribed ahead of its final close.

With this excellent score for its 3^rd assessment, Worldline confirms its leadership and commitment to fight against climate change.

Worldline, the European leader in the payments and transactional services industry has been recognized for its leadership in corporate sustainability by global environmental non-profit CDP, securing a place on its prestigious ‘A List’ for tackling climate change. Worldline was acknowledged for its actions to cut emissions, mitigate climate risks and develop the low-carbon economy, based on the data reported by the company through CDP’s 2021 climate change questionnaire. Furthermore, Worldline’s greenhouse gas emission (GHG) reduction objectives are in line with the criteria and recommendations of the SBTi (Science Based Targets initiative) and therefore consistent with a 1.5°C trajectory on its scopes 1 and 2.

Worldline amongst the “happy few” CDP’s A List

Worldline is one of a small number of high-performing companies out of nearly 12,000 companies that were scored. Worldline is leading on corporate environmental ambition, action and transparency worldwide through significant demonstrable actions on climate:

Ambitious Climate Change objectives at Group level

In order to be consistent with the 2°C scenario of the Paris Agreement, Worldline set quantified objectives to reduce its environmental impact in the four main areas of its data centres, offices, payment terminals and travels. The long-term CSR transformation programme, TRUST 2025, reflects the ambition and the commitments of the Group for sustainable development.

Worldline's specific targets related to climate change for 2025 are as follows:

• Reducing of 25% its CO₂eq. emissions (scopes 1, 2) and of 7,4% (scope 3 from purchased goods and services and use of sold products categories);
• Offsetting 100% of its remaining CO₂eq.emissions for scopes 1, 2, 3a.

In addition, Worldline's long-term, quantified environmental commitments to combat climate change have been aligned with and approved by the SBTi (Science Based Targets initiative) since September 2021 and include all Group activities. This implies that the greenhouse gas (GHG)  emission reduction targets submitted by Worldline are in line with the criteria and recommendations of the SBTi initiative (version 4.2).

The ambition of Worldline’s scopes 1 and 2 targets is therefore in line with a 1.5°C trajectory and are as follows:

• Reducing its absolute scopes 1 and 2 GHG emissions by 25% by 2025 compared to the base year 2019;
• Reducing absolute Scope 3 GHG emissions from purchased goods and services and the use of sold products by 7.4% within the same timeframe.

Worldline’s climate commitments are also compliant with the TCFD (Task Force on Climate-Related Financial Disclosures).

Numerous environmental improvement and optimisation action plans

In order to limit its CO₂eq. emissions as much as possible in order to reduce its carbon footprint and to offset its residual emissions.

These action plans are based on three strategic axes:

• Reducing its emissions through an improvement programme of the energy efficiency of its operations;
• Using decarbonised energy through the renewable energy programme; 
• Offsetting its residual emissions through a carbon offset programme.

The numerous technological investments made since 2015 in the environmental area (virtualization, switch to renewable energies, application of eco-design and circular economy principles on the entire lifecycle of its payment terminals) have borne fruit. As a result, in 5 years Worldline succeeded in reducing its global carbon footprint 59 % in intensity per euro revenue on its scopes 1, 2 and 3a. This demonstrates the efficiency of Worldline climate strategy and actions plans to fight against climate change.

“I am very proud of our Group being included in CDP’s A List for the first time. This prestigious recognition testifies of our strong commitment and continuous efforts and of the involvement of our  organization and teams to take the right actions to fight against climate change. The level of ambition we set ourselves as part of our TRUST 2025 programme reflects our willingness to play a key role in one of the most critical global challenge of our century. Building on this strong climate leadership, I also encourage all stakeholders to join forces and to make environmental commitments that are as ambitious as us  to collectively succeed in limiting global warming to 1.5 C°.” stated Sébastien Mandron, CSR Officer at Worldline.

A honorary award

CDP’s annual environmental disclosure and scoring process is widely recognized as the gold standard of corporate environmental transparency. In 2021, over 590 investors with over US$110 trillion in assets and 200 major purchasers with US$5.5 trillion in procurement spend requested companies to disclose data on environmental impacts, risks and opportunities through CDP’s platform. A record-breaking 13,000 companies responded.

A detailed and independent methodology is used by CDP to assess these companies, allocating a score of A to D- based on the comprehensiveness of disclosure, awareness and management of environmental risks and demonstration of best practices associated with environmental leadership, such as setting ambitious and meaningful targets. Those that don’t disclose or provided insufficient information are marked with an F.

“Many congratulations to all the companies on this year’s A List. Taking the lead on environmental transparency and action is one of the most important steps businesses can make, even more so in the year of COP26 and the IPCC’s Sixth Assessment Report. Leadership from the private sector is essential for securing global ambitions for a net-zero, nature positive and equitable world.” said Paul Simpson, CEO of CDP.

The full list of companies that made this year’s CDP A List is available here, along with other publicly available company scores: https://www.cdp.net/en/companies/companies-scores

Plans to create new talent stream with ‘Internship to Hire programme’~

Tide, the UK’s leading business financial platform^[1], with operations and an imminent launch in India, has announced a hiring spree of more than 600 tech professionals by the end of 2026. This drive, which constitutes nearly 60% of the company’s total hiring, stems from Tide’s expansion strategy to boost its local presence in India, its first international market.

Earlier this year, Tide announced plans to create more than 1,000 jobs in India over the next five years. In the coming 18-24 months, the fintech’s Hyderabad technology centre/global development centre (GDC) will onboard more than 300 engineers across various roles, with a particular focus on backend engineers in Java and Python, as well as experts in data science and Flutter.

Keeping in mind the current tech talent crunch across the globe, Tide is creating new hiring streams through an ‘Internship to Hire’ programme to attract and nurture top quality talent. Focused on training fresh graduates from premium institutes, such as IITs and NITs, Tide will leverage the programme to recruit entry-level candidates and then gradually increase the count as the model matures. Upon successful completion of the programme, interns will be offered full-time employment opportunities at Tide.

Gurjodhpal Singh, CEO, Tide (India) said “We have seen a tremendous response from the India market within a short span of starting operations in the country. The additional technological capabilities will help us build our product for India as we expand our roots deeper into the country and invest in the technology leaders of tomorrow.”

Tide’s aggressive hiring spree can be attributed to its ambition of serving the 64-million and growing Indian SME sector. Earlier this year, when the second wave of the COVID-19 pandemic hit SMEs hard, digital banking platforms emerged as critical solutions to increase efficiency, saving time and money for people running businesses.

As an employer, Tide is focused on championing entry-level engineers and making tech employment opportunities more accessible to all, without any gender or socio-economic background biases.

Commenting on this Neeraj Agrawal, VP Engineering-Hyderabad Technology Centre, Tide (India) stated, “Tide’s global development centre in Hyderabad has a global mandate, although it currently serves the UK and India markets, we plan to expand to multiple countries in future. Moreover, the GDC is integral to scaling our business in India. The country has a huge pool of technological expertise available locally and I am confident the team we are building will help us tune our offering better for Indian SMEs and deliver superior support to them when we roll out our offering here in India.”

Tide already has over 350 highly skilled employees in India, with most based in its Hyderabad technology centre, which was set up in early 2020. Its business headquarters are in Gurugram.

New FICO data suggests the tide might be turning on consumer finances with average card spend falling and early missed payment rates rising as furloughs finish

Highlights

• October sees second consecutive month of a fall in spending – falling £5 month on month
• Missed one and two payment rates rise
• Percentage of payments to balance increases – another over 8-year high

Global analytics software provider FICO today released its analysis of UK card trends for October 2021 with the first signs that lockdown savings — which have appeared to underpin consumer confidence over the last 18 months — may be running out for some. Even though October saw the contactless limit on cards increased to £100, average card spend fell and missed payment rates increased. There was also growth in cash usage, albeit still well below pre-pandemic levels.  However, continuing the confusing picture seen all year, October also saw growth in the percentage of payments to balance.

Against this backdrop, it is even more critical for lenders to focus on identifying behaviour trends to recognise signs of financial stress, particularly as seasonal spending ramped up in November and additional economic pressures may be seen as a result of the Omicron variant, and rises in fuel costs.

UK card average spend falls for second consecutive month
The average spend on UK credit cards in October 2021 fell a further £5 to £703. However, this is £55 above pre-pandemic spend levels. Average sales in 2021 have increased 23 percent, compared to a 4.5 percent drop this time last year.

Percentage of accounts missing one and two payments rose in October
Another sign of financial duress increasing is the percentage of accounts missing payments, which rose marginally in October, and their associated balance as a percentage of total balance, which remained stable. However, the percentage of accounts missing payments is 31 percent lower than two years ago, and the percent of total balance is 18 percent below. 

Only average balances on accounts missing two payments increased in October, and is 6.4 percent above two years ago. Consumers with two missed payments were £147 higher than two years ago. Those missing three, four or more payments saw an increase of 14 percent or £352 and 14 percent or £384 respectively.
 

Percentage of payments to balance continues to increase – at another over eight-year high
On a more positive note, the percentage of payments to balance increased to another over eight-year high, although the growth rate has slowed. Year-on-year it is 21 percent higher and 28 percent above October 2019.

The rise in full balance payers is driven by accounts opened more than a year, with nearly 60 percent of those with an account opened more than five years paying the full balance. Those opened less than a year started to fall in May 2021, and this has continued into October, potentially a forewarning of financial problems.

Spending over card limits drops
The percentage of accounts breaching their limit decreased 9.5 percent in October, potentially linked to the continuing drop in average spend, and is 55 percent below October 2019. The average amount being spent above limit increased £2 and is 13 percent higher than two years ago.

Cash usage growth starts to slow
October saw lower growth in the percentage of consumers using cash compared to September, increasing by 1.7 percent. Cash usage is on a par with a year ago but is 55 percent below pre-pandemic levels. Cash as a percentage of total spend decreased and is 9 percent lower than a year ago and 37 percent below October 2019. The results may be due to the increase in the contactless limit mid-October from £45 to £100. As more issuers and merchants accommodate this change the FICO November data will show the impact of a full month.  

Looking Ahead
FICO data for November and December card patterns will show the impact of two further months with no furlough support, increasing retail and energy prices and seasonal spend. It will be clear in the first quarter of 2022 how sustainable the Christmas credit card spend is, or if the extra lockdown savings will remain a lifeline for some.  November data will be the first full month reflecting the increase in the contactless limit to £100.

With uncertainly remaining regarding some consumers financial stability, especially with the added pressure of Christmas, lenders will continue to focus on collections in the near term. As the extra savings continue to have a positive impact, the outlook may be more optimistic with lenders moving forward with business-as-usual approaches.   

These card performance figures are part of the data shared with subscribers of the FICO® Benchmark Reporting Service. The data sample comes from client reports generated by the FICO® TRIAD® Customer Manager solution in use by some 80 percent of UK card issuers.