Included in this issue: FSB report on FinTech financial stability implications; New FCA cyber security guide for firms; Consumer uptake of FinTech services surges - EY and more...
FSB report on FinTech financial stability implications
The Financial Stability Board (FSB) has published a report on the financial stability implications from FinTech.
The report outlines analysis of the potential financial stability implications from FinTech, with a view to identifying supervisory and regulatory issues that merit authorities' attention.
UK Card Expenditure Statistics: April 2017
The total card spending reached £58.0 billion in April, an increase of £306 million on March, and up from £52.6 billion in April 2016. The number of card purchases increased to 1.4 billion, a 1.2 per cent rise on March. Contactless payments accounted for 30 per cent of all card purchases in April. The average transaction value fell to the lowest level since October 2000, at £41.86. Retail card spending totalled £26.5 billion in the month, an increase of £201 million on March. The largest increases in spending came from food and drink, where spending reached a milestone of £10.0 billion in a single month, after increasing by £103 million on March. Service sector card spending rose to £31.6 billion in April, up by £105 million in the month. The debit and credit card share of total retail sales was 78.4 per cent in April. The largest monthly increases in card spending was recorded at amusement parks (up 143 per cent), aquariums (up 100 per cent) and tourist attractions (up 51 per cent), coinciding with Easter and the half term holiday.
UK Cards Association, 27 June 2017
New FCA cyber security guide for firms
The FCA has published a new guide to the foundations of good cyber security in its June 2017 Regulation round-up. The FCA has designed the guide to help firms, particularly smaller businesses, become more resilient to cyber-attacks and to respond appropriately to cyber incidents. The FCA has seen a significant increase in the number of material cyber incidents reported to it over the last three years: from five incidents in 2014, to 90 incidents in 2016. This trend shows no sign of slowing down. By outlining the foundations of good practice, the FCA hopes the guide will help firms to review their approach to cyber security. More specifically, the guide:
- Helps firms develop their cyber security strategy by identifying potential areas of strength or weakness.
- Provides some useful questions to ask about the way firms manage and protect their people, processes and technology.
- Explains when firms may need to report a cyber-incident, how to report it, and to whom.
- Sets out how to link with the UK networks for sharing threat information.
Consumer uptake of FinTech services surges - EY
Consumer uptake of innovative FinTech products is set to be embraced by the mainstream as adoption levels surge among digitally-savvy consumers, according to a study by Ernst & Young. The research, based on 22,000 online interviews with digitally active consumers across 20 markets, shows that the emerging markets are driving much of this adoption with China, India, South Africa, Brazil and Mexico averaging a 46% participation rate. The UK has also shown significant growth, as the arrival of a new generation of challenger banks rise up to take on the incumbents, with adoption rates now standing at 42%. Across all markets, cheaper money transfers and more streamlined mobile payments services are leading the FinTech charge with adoption standing at 50% in 2017.
ECB to develop service for settlement of instant payments (TIPS)
The European Central Bank (ECB) has announced that it will develop a new service, referred to as TARGET instant payment settlement (TIPS), for the settlement of instant payments. The new service is intended to help facilitate instant money transfers, offered via banks, so that instant retail payments can be made across Europe. It will be available all day and on every day of the year. The service will be developed in close co-operation with the EU banking industry. To encourage take-up, it will be offered to banks at a low price for at least the first two years of operation. The ECB has also published an article on TIPS. The article considers the emergence of instant payments and their challenges, together with the services and benefits that TIPS will offer. TIPS is scheduled to start operating in November 2018.
European Commission responses to FinTech consultation
The European Commission has published the responses to its consultation on FinTech, which was published in March 2017. The respondents include the Payment Systems Regulator. Among other things, in its response, the PSR summarises the work it is carrying out relating to FinTech and how it has established the Payments Strategy Forum to help deliver a strategy involving innovation and industry collaboration.
Partner, Head of Competition