Bruce Curry, vice president for collections and recovery consulting and sales at FICO, believes the current confusing picture of consumer finances could lull lenders into a false sense of security

The latest data from MoneyCharity.org shows that in Quarter 1 2021 lenders wrote off £1,042 million, of which £355 million was credit card debt. These eye-watering numbers, viewed alongside the Financial Conduct Authority’s estimate earlier this year that 52% of adults (27 million) in the UK could now be considered as financially vulnerable, suggest that the size of the task for debt collections in the coming months and into 2022 should not be underestimated.

But the data is confusing. There are contradictions in the pace of economic recovery, accurate real-time analysis of household incomes and anecdotal evidence suggesting higher than expected paydowns of household borrowing. There are also reports saying the UK is bouncing back as payrolls continue to soar.

On the jobs front, the picture is even less clear. Furloughs are yet to be fully withdrawn, although the Treasury has indicated they are now winding down to a hard stop in October. And it's a mixed picture right now with around 1.9 million on furlough - down from a peak of 5.1m in January. Over a quarter (28%) of employers have been obliged to furlough staff, again down from 35% at the end of April.

Maintaining a genuinely accurate picture of customers’ financial position and fully understanding the pandemic’s true impact on household finances has to be the priority for lenders. Now is, therefore, the right time for banks, lenders and card issuers to ensure they continually interact with customers to better understand their genuine financial position — especially if household incomes are likely to take a hit later in the year.

Payment Priority Switches

The key to managing future potential delinquency hinges on the ability to spot — and flag — payment priority switches, as households are pushed into making harsh financial decisions. Mortgages, food, medical and education bills may take priority over credit card payments for some segments. Others may be inclined to behave in the opposite way if their ability to maintain living standards is dependent on access to revolving credit. Knowing who is likely to behave in which way is critical.

The ability to predict and pre-empt non-payment may also lead to stronger customer relationships, as lenders are viewed as being more understanding, helpful and caring. It’s worth considering why maintaining routes to repayments across the entire customer base is better than receiving nothing from some segments.

But lenders will also be facing an acutely tricky balancing act while being mindful of the regulatory requirements of IFRS9. Timing is everything, in considering the impact on balance sheets of extended repayment arrangements offered to some, while continuing to ensure appropriate customer outcomes.

Lenders may opt to enhance their customer assistance and collections capabilities. Risk analysis and assessment can also be adapted to help shape greater social responsibility. Insight into customer finances via Open Banking, real-time analysis and more AI-based analytics creates stronger long-term resilience for lenders. In turn, this leads to continued stakeholder satisfaction.

Digital-First Collections

It’s clear more and more customers are now happy to conduct communications via digital channels, and far less inclined to simply respond to ‘robo-calls’, which also now face regulatory scrutiny. Effective customer engagement, of course, helps lenders better align with regulatory requirements, which favour offering customers every opportunity to find a mutually agreeable debt avoidance or repayment solution.

As the industry continues to move towards more light-touch communications — digital-first, SMS, email and such — while offering extended payment holidays and freezing interest, it’s in everyone’s interest to try to avoid customer delinquency, or deal with it appropriately. It’s a position that’s clearly been flagged by regulators, which have offered clear guidance on how institutions should pursue equitable goals.

Lenders that can get the right combination of digital-first customer support are likely to reap benefits, including long-term customer loyalty. As a handy bonus, this also provides insurance against being left in the wake of more tech-savvy, ambitious peers.

The Enterprise Investment Scheme Association (EISA), in conjunction with Capital Pilot, has launched an investment platform for new growth businesses looking to attract fund investors. In its first year the platform, branded Curated Capital, is targeting £10m of investment to be made available to over 100 of the country’s brightest growth businesses.

The platform leverages the intelligent assessment analysis of Capital Pilot, which undertakes the initial review of the opportunity and provides a scoring methodology for potential investors, saving time and early stage due diligence.

Members of the EISA, many of which are FCA regulated investment funds benefiting from the Enterprise Investment Scheme, will as a result of the platform have sight of a wider list of opportunities, and investee businesses will no longer need to approach funds individually. Simply, Curated Capital will match the most investable start-ups with the best investor funds.

The Capital Pilot tool is a market leading investability rating agency that combines human research, proven analytics and sophisticated algorithms to produce a comprehensive assessment of a company’s readiness for investment.

The EISA is the membership organisation dedicated to the promotion of the tax efficient Enterprise Investment and Seed Investment Schemes benefiting investors with a willingness to invest in early stage businesses, and providing equity investment to promising businesses, which otherwise would potentially have no access either to private investment or traditional debt.

Commenting on the launch of Curated Capital, Mark Brownridge, Director General of the EISA said, “Doing some of the assessment heavy lifting for members means that not only do they now have the bandwidth to look at all relevant opportunities, but at the same time, through the use of the Capital Pilot model, they can quickly see if the sector and risk levels meet their objectives. We are looking to generate a further £10m a year for over 100 businesses to help fuel the county’s growth agenda.”

Richard Blakesley, founder and CEO of Capital Pilot added, “The model that we have built in Capital Pilot enables us to undertake a detailed review to see whether businesses looking for funds are investment ready. Through Curated Capital, we hope to see more businesses realise the investment they need to grow.”

New interactive online resource to help card issuers, merchants and solution providers optimise the EMV® 3DS payment authentication experience for e-commerce consumers.

Global technical body EMVCo has published EMV® 3-D Secure (EMV 3DS) UI/UX Design Guidelines to help card issuers, banks, merchants and solution providers optimise the EMV 3DS payment authentication experience for e-commerce consumers. The guidelines are publicly available on the EMVCo website in an easy-to-use interactive format.

In e-commerce purchases where EMV 3DS solutions are used, EMV 3DS user interface (UI) and user experience (UX) design refers to the look and feel of the screen that consumers interact with on their device during authentication with their card issuer. This includes how visual components (e.g., logo, colour, iconography, etc.) are displayed in various device layouts, and how information is presented and communicated to guide them through the steps for verifying that they are the legitimate cardholder.

According to an EMVCo-commissioned global market research study[1], consistent, familiar and efficient EMV 3DS UI/UX design is key to instilling consumer trust in the authentication process and optimising the checkout experience during shopping. The new guidelines are designed specifically to help card issuers, merchants and EMV 3DS solution providers achieve this objective and deploy user interfaces for EMV 3DS authentication that support a secure and seamless e-commerce checkout experience.

“Authenticating the individual making the payment continues to be key in the fight against e-commerce fraud. The EMV 3DS UI/UX Guidelines support the consistent implementation of EMV 3DS for fraud prevention to deliver an efficient and trusted e-commerce consumer experience, which benefits the entire payment ecosystem,” said Robin Trickel, EMVCo Executive Committee Chair.

The EMV 3DS UI/UX Guidelines are supplemental to the EMV 3-D Secure User Interface Templates, Requirements, and Guidelines chapter in the EMV 3DS Protocol and Core Functions Specification.

To learn more, view the EMV Insights post: Optimising the EMV 3DS Payment Experience: UI/UX Design Guidelines.

Europcar among the first of 100+ brands signed up to next generation mobile wallet Swapi ahead of Autumn launch

Swapi, the global digital loyalty wallet, has today revealed the latest feature as part of its industry-first app which is set to launch later this autumn - Swapi Points.

Swapi, which is mid-way through its latest funding round set to take its total amount raised to over £750k, is gearing up for launch at a time when loyalty has never been more important for retailers and consumers alike.

Swapi Points will aspire to become the nation’s ‘loyalty currency’, allowing brands to award Swapi Points to consumers who make purchases with a debit or credit card linked to the Swapi app. Consumers will be able to collate loyalty points from over 100 household brands and connect any bank card to the Swapi app, to automatically collect points when they shop in-store and online.

This latest addition to Swapi’s growing offering will provide even greater incentives for brands signed up for Swapi’s existing Points Swap product, which was unveiled late last year by founder and CEO, Pete Howroyd, to give consumers the power to swap their unused loyalty points for other promotions and incentives in the Swapi marketplace, while providing brands with an innovative solution for the common problem of the points liability that sits on company accounts every year. In the UK the average consumer has £47-worth of loyalty rewards sitting unused on their loyalty cards, totalling £6 billion across the UK and £360 billion globally.

Swapi Points will offer retailers a more collaborative and cost-effective loyalty programme solution with a simple onboarding process, allowing brands to expand their loyalty offerings to a larger market and incentivise a global customer base with bespoke perks and rewards through the Swapi app.

Swapi already has over 100 brands and retailers signed up ahead of its Autumn launch, including rental car giant Europcar UK.

Clive Forsythe, Commercial Director at Europcar UK, commented: ‘Swapi Points are an appealing proposition for us because they provide a way to engage and reward our customers in a more effective way than through a traditional loyalty model. It’s an easy and modern way for our business to drive both new customer acquisition and retention of our valued existing customers. Most importantly, it means our customers can enjoy a broad range of exciting offers and perks which they control, in return for their loyalty to Europcar, which is a top priority for us as a business.”

With power shifting from businesses to consumer - a trend accelerated by the pandemic - Swapi will give consumers power over their points for the first time and give brands the opportunity for much-needed innovation. Instead of being tied to one retailer or brand, consumers can earn loyalty points in their digital wallet and spend them with a variety of different brands within the Swapi marketplace.

Swapi founder and CEO, Pete Howroyd, said: “Our latest addition to Swapi’s growing suite of products, Swapi Points, will revolutionise the way retailers and consumers think about and interact with retail loyalty for the foreseeable future. With the Swapi app we aim to encourage greater collaboration to the retail space by offering loyalty points to customers irrespective of brand, company size or location. Customers can engage and purchase from their favourite local and national retailers and brands, and through those transactions open up a whole new world of rewards and perks via Swapi Points.”

Specialist RegTech provider Shield is proud to announce its platform has won the ‘Best Complete Communications Compliance Platform 2021’ category in the Wealth & Finance International FinTech Awards.

Upon announcing Shield as the winner, a statement from an award spokesperson said, “This is a well-deserved achievement and I’d like to pass on my warmest congratulations! After a tough year, it is a testament to your perseverance and dedication to have triumphed despite the many difficulties and pressures brought on by the pandemic, and we at Wealth & Finance are delighted to have been able to recognise your unique contribution to the FinTech industry.”

The award recognises that Shield has set a new level of expectation by creating the world’s only truly end -to-end communications compliance platform. The award entry also highlighted that Shield’s fully automated next-generation platform meets all the demands of the compliance officer, helping to ensure the integrity of the business and trust of customers and regulators in a rapidly evolving post-Covid world, whilst also turning compliance into a competitive advantage.

The judges were impressed by the Shield platform’s automation and orchestration of the complete communications compliance lifecycle - delivering all elements of capture, correlation, data enrichment, analytics, proactive and preventive detection. Shield's solution empowers numerous functions within regulated organizations, from departments such as surveillance and monitoring, risk, and governance, forensic and control, all the way through to conduct and management.

Reflecting upon the win, a spokesperson at Shield added, “We are proud to have been recognised in this year’s award. Our team completely understands the daily struggles of the compliance team, from top to bottom, and we have created the most cost-effective, super-smart, and shockingly efficient solution. We believe the Shield platform truly stands out as the best complete communications compliance platform choice on the market and this award is a clear endorsement of this.”

Shield and its platform have won numerous awards, recently including 'Most innovative unstructured data management project’ in the A-Team Innovation Awards 2021. The company has also been named on The Financial Technologist ‘Most Influential Financial Technology Companies 2021’ list, the third time in a row that it has been recognised.

For more details on the Shield platform or to schedule a demo to see it in action, please contact Shield via email: info@shieldfc.com or visit www.shieldfc.com.

Banca Transilvania, the largest bank in Romania, has selected HPD Lendscape, a leading international secured-lending platform vendor, as their technology partner to expand their product offering, streamline lending processes, and further digital and mobile services.

Since 2014, factoring volume has nearly doubled in Romania. According to FCI statistics, it is one of the very few countries to record growth in total factoring volume during the COVID-19 pandemic crisis (3.5% in 2020). Banca Transilvania has grown dynamically in the last few years and is one of Romania’s leading banks offering factoring services.

Designed as a secure, flexible solution with automation and efficiency in mind, the Lendscape platform will allow Banca Transilvania to support growing factoring volumes and build streamlined digital experiences while minimizing risk and diversifying its portfolio of products to meet customer needs.

“We thank Banca Transilvania for placing their trust in our company and our Lendscape platform,” said HPD Lendscape CEO Kevin Day. “We are confident that we will have a successful implementation project to enable the bank to quickly realise the benefits of our leading technology, to grow its portfolio and increase the funding it delivers to Romanian businesses.”

Fully browser-based with power-user functionality and new UX, version 10 of Lendscape offers Banca Transilvania flexibility, sophistication and simplicity while supporting their customers with more personalised digital products and paperless services, faster funding decisions and a unique, real-time, customer online and mobile user-friendly experience.

HPD Lendscape’s Regional Commercial Director, Claudia Perri has been working closely with Banca Transilvania and commented, “The team at Banca Transilvania have been a delight to work with. They have an excellent vision and some exciting ideas to develop the market based on Lendscape. I am really excited to see how the business evolves over the coming months and years.”

With this new collaboration, HPD Lendscape extends the local footprint, by supporting the three market-leading banks with more than half of the market’s factoring volumes running on the Lendscape platform.

• iwoca data shows how embedded finance leads to speedier and more successful loan applications for small businesses

• Half of applications through embedded finance partners receive a decision within two minutes, and are 58% more likely to be successful than direct applications

• Nearly 30% of all loan applications to iwoca now come through embedded finance partners

• As big banks reduce their risk appetite, embedded finance will make it easier for small and micro businesses to access finance, helping to speed up the economic recovery

• iwoca has over 20 embedded finance partners including accounting software platforms and neo-banks, with more set to be announced before the end of the year

New data from iwoca - one of Europe’s largest small business lenders - reveals how embedded finance will play a vital role for small businesses as they look to recover from the pandemic.

Fast and successful loan applications

Exclusive insights bring to life the benefits of embedded finance, highlighting how iwoca’s small business customers receive faster lending decisions and are more likely to be successful in getting the finance they need.

In Q1 2021, iwoca data shows that 50% of customers who applied through an embedded finance partner received a lending decision in less than two minutes, compared with 12% of direct applications. In addition, small business applications via embedded finance partnerships are 58% more likely to be approved than those that applied to iwoca directly.

Embedded finance technology improves process for lenders and small businesses

iwoca is an industry leader in using embedded finance to support small businesses, with nearly 30% of all loan applications to iwoca now coming through embedded finance partners. Businesses can access loans from iwoca through a range of platforms such as accounting software and digital neo-banks including Xero, Tide and Funding Options. This makes the process of applying for finance far simpler for SMEs as loan offers are readily available in the services they use day-to-day.

In addition, these platforms hold much of a company’s financial information - such as cash flow and trading performance data- that a lender would need to review a loan application. This allows iwoca to make faster decisions and to tailor products to a customer’s individual needs, which translates to greater chances of getting approved for finance. 

Access to finance will be key in helping SMEs get back on track following the impact of the COVID-19 crisis. However, with the closure of the Bounce Back Loan Scheme many high street banks are likely to reduce their lending to small and micro businesses as their risk appetite narrows. Alternative lenders can fill this gap, with embedded finance integrations providing small businesses with simple access to the finance they need. 

Colin Goldstein, Commercial Growth Director at iwoca said: “The technology behind embedded finance has huge potential for SMEs, and the possibilities to embed finance are vast. Small businesses are already benefiting from embedded finance through faster and more successful loan applications.

“iwoca has led the way in developing embedded finance products, and well over a quarter of businesses we are now serving come through our embedded finance partners. Accelerating this should be a central pillar to rebuilding our economy, and we look forward to working with more partners to help their small business customers get the finance they need.”

iwoca has been at the forefront of innovation in embedded finance in the UK, becoming the first alternative lender to offer lending through an API. The company launched its own OpenLending platform following the £10 million Capability and Innovation Fund award from the Banking Competition Remedies in 2019, which allows partners to integrate seamlessly with iwoca’s lending API. The company has created over 20 embedded finance partnerships, with more expected to be announced over the coming months.

• 4.9x bigger prize pool than last year at up to 7.5m USDT & NFT addition
• Largest WSOT donation to UNICEF at $400,000 in BTCThe summer games of crypto trading are back. The 2021 edition of cryptocurrency exchange Bybit's World Series of Trading (WSOT), set to open for registration on Aug. 18, promises to be the world's largest crypto trading tournament yet again.

The WSOT 2021 prize pool is up to an unprecedented 7.5 million USDT, plus a bonus track of WSOT NFT collectibles and additional USDT, Bybit announced today.

"WSOT is returning bigger and better as promised," said Ben Zhou, co-founder and CEO of Bybit. "We want to celebrate excellence and the spirit of competition, as well as shine a light on the positive influences of crypto on our daily lives — improving financial literacy, getting people interested in tech, and putting on top of mind ways we can be a force for change and give back to the wider society."

The flagship trading event by Bybit, one of the world's most popular crypto exchanges, attracted over 12,000 participants last year. The winning teams and individuals out of 135 troops and 2,128 solo contestants took home $1.27 million in prizes in 2020.

Eyes on the Prize

With a prize pool of up to 6,000,000 USDT for teams and up to 1,500,000 USDT in the individual competition, WSOT 2021 is slated to be the event of the year for crypto traders around the world.

"Bybit remains in awe by the overwhelming support from the global crypto community. In response, we worked hard in the past 12 months to take the competition experience to the next level with the largest prize pool to date," said Zhou.

WSOT 2020 was trader junki84's first ever crypto trading competition. The participant tested out his trading strategy and finished with a legendary 5,242.02% in Individual P&L(%). Equally impressive was trader SalsaTekila, who came in second with a 3,956.56% Individual P&L(%). With greater rewards and more participants, the competition is expected to be even more intense this year.

"We are grateful for the opportunity to provide a platform for the world's best traders to live up to their ambition. Their achievements were something to behold. And their craft and passion epitomizes everything crypto is about: creating a fair, transparent and open environment for individuals to be the best they can be," remarked Zhou.

WSOT 2021 is open to global traders where Bybit services are available. Participants can form a troop or play solo to access early bird perks, trading fee discounts or waivers and a chance at more than 1,000 NFTs and 40,000 USDT bonus in lucky draws.

Supporting a Better Future

In 2020, Bybit donated from the WSOT prize pool 10 BTC at market value of over $100,000 at the time, to UNICEF's pandemic relief efforts^[1]. One year on, COVID-19 continues to be a universal crisis, particularly disrupting children's access to education and threatening their long-term well-being.

Bybit has quadrupled its donation to $400,000 in BTC this year to support UNICEF in their efforts to provide STEM education for girls in Vietnam and deliver quality education in East Asia and the Pacific.

"The world is learning to cope with the ongoing pandemic, but vulnerable groups who feel the deepest impact are often overlooked. Over the years Bybit has borne witness to the talent and potential of members of the global crypto community, regardless of age, gender and background," said Igneus Terrenus, head of communications at Bybit. "There really is no better investment than in the welfare of children and their right to education. We hope our donation to UNICEF will help change life for the better for those who will grow up to shape the future."