The Latest Headlines From Across The Banking Sector - August

2021-09-10 |  Ben Dineen

The headlines this August were a bit lighter than usual, partly down to the UK summer holiday season. This month we focus on the prevalence of financial crime and the booming UK housing market; two of the hottest topics in the industry at the moment.

Financial crime

  • One positive to come out of the last 18 months is the accelerated adoption of online, however it has also driven an increase in opportunities for financial crime
  • Research from Experian and ONS indicate that financial investment fraud is at its highest for more than 3 years, driven by a substantial increase in computer crimes
  • There has also been a strong increase in APP fraud, despite the wider roll out of Confirmation of Payee. There are a number of interesting research topics (and we’d certainly point you at the one from the Open Banking Implementation Entity) which explore this in more detail
  • It is estimated that fraudulent activity like this resulted in a record £479 million being taken from victims last year
  • It is hoped that the upcoming Online Safety Bill will go some way to support financial institutions in tackling fraud, however UK Finance believes it can go a lot further in helping to protect individuals
  • Lenders and payment companies will have to do more to combat fraud, particularly with the adoption of digital and growth of open banking making it even more difficult to control

Mortgage price war

  • As the UK stamp duty holiday winds down, the housing market was expected to cool
  • However, August has seen another increase in UK house prices
  • A significant driver in this is the hugely competitive mortgage market which has seen a number of banks and building societies launching their lowest ever rates, and even the first-time buyer market is benefiting
  • The Government’s 5% mortgage deposit scheme has reduced the risk to the lender of high loan to value mortgages, supporting the high street lenders into taking on riskier business. As a result, lenders are looking to offset this by taking on a large amount of low risk business
  • It remains to be seen how long the booming market will last, but lenders have shown over the last year that they are willing and able to adapt quickly to changing circumstances

And in case you missed it…

  • In a month where mortgage rates tumbled to record lows, Natwest are now incentivising customers to live in more energy efficient homes by rewarding them with a preferential interest rate, setting themselves a target of 50% of their mortgage book with energy efficient homes by 2030
  • We mentioned last month that the Bank of England has warned of the control of the large technology companies providing cloud services. A survey from Google shows a number of financial organisations trying to mitigate this risk by adopting a multicloud strategy
  • Mastercard have announced they will be phasing out the magnetic strip from all debit and credit cards, making way for chip card processing

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