Included in this issue: PRA statement on consumer credit; European Card Fraud for 19 Countries Hit Record €1.8B in 2016; New guide for digital wallet providers and more...
PRA statement on consumer credit
The PRA has published a statement on consumer credit following its review of consumer credit lending, which examined PRA-regulated firms' asset quality and underwriting practices for credit cards, unsecured personal loans and motor finance.
Prudential Regulation Authority, 4 July 2017
BoE policy statement on code of practice and supervisory statement on governance of recognised payment system operators
The Bank of England (BoE) has published a policy statement setting out a code of practice and supervisory statement on the governance of recognised operators of payment systems (RPSOs), being those payment systems that have been recognised by HM Treasury under section 184 of the Banking Act 2009. The code and supervisory statement apply to all RPSOs excluding those operated by a recognised clearing house (RCH) or a central securities depository (CSD), since they are or will be subject to other requirements, for example EMIR and the CSDR. The code will be implemented on 21 June 2018. The code contains a transitional provision stating that it does not apply for the first twelve months after a payment system is recognised as a RPSO. However, the supervisory statement clarifies that the BoE expects that an RPSO will make all reasonable effort to work towards full compliance as soon as practicable in its first year, and will in any event be fully compliant by the end of the twelve-month period. Once the code has been implemented, the BoE will no longer expect independent non-executive directors (INEDs) to have an explicit veto for public interest reasons, given that the composition of the board should ensure independence, and the board in its entirety would be expected to perform the function of systemic risk manager.
BoE, 3 July 2017
Simon Ricketts appointed as non-executive director to the Payments Systems Regulator board
The Payment Systems Regulator (PSR) has confirmed the appointment of Simon Ricketts as a non-executive director to its board starting 1 July 2017.
PSR, 3 July 2017
New guide for digital wallet providers
A guide to assist new digital wallet providers planning to operate in the UK has been published. Digital wallets, where a traditional debit or credit card account is loaded onto an electronic device, have grown in use in the UK in recent years. The new guide provides a practical manual for potential new entrants, setting out the conventions and behaviours of the card payment system in the UK. It has been developed with the input of a range of different organisations including card issuers and acquirers, existing digital wallet providers, mobile network operators and the international card schemes. The informal guide sets out all the industry-level considerations a digital wallet provider planning to launch a UK service needs. It covers processes throughout the whole lifecycle of the product such as registering and verifying a new card, making payments face-to-face, handling lost or stolen devices and terminating the service.
The UK Cards Association, 30 June 2017
UK banking app transaction numbers soar
A new consumer-led revolution is underway in the way we access and manage our money, with the trend in customers using their banking apps continuing at pace. Brits are increasingly relying on banking applications to manage their money, with nearly 40% of adults using apps in 2016 and transactions rising by 57% during the year. Over 19.6 million people used banking apps last year, up 11% on 2015, according to figures put together by the British Bankers Association and EY. Customer use of banking apps has soared by 356% between 2012 and 2017, with the number of transactions rising as customers begin to do more than simply check their account balances. These innovations are helping us to manage our finances more easily. Whether we want to visit our local bank branch, use a mobile or internet-bank, there are more ways we can now choose to access and manage our money than ever before.
BBA, 29 June 2017
EBA opinion responds to European Commission intention to amend the technical standards for open and secure payments under PSD2
The European Banking Authority has published an opinion in response to the European Commission's intention to amend the EBA's draft regulatory technical standards (RTS) on strong customer authentication and common and secure communication under PSD2. The EBA has also published a consultation paper on draft regulatory technical standards (RTS) that specify the criteria for determining when the appointment of a central contact point, under PSD2, is appropriate and the functions they should have. Consultation closes: 29 September 2017.
EBA, 29 June 2017
European Card Fraud for 19 Countries Hit Record €1.8B in 2016
European card fraud losses hit a record €1.8bn in 2016, with the UK seeing the highest losses at £618m, as criminals took advantage of a boom in CNP-based online and mobile shopping. The nine percent rise in UK card fraud over 2015, topped the previous peak set in 2008 after the introduction of chip and PIN. The figures, detailed in an interactive map of European card fraud produced by Fico and Euromonitor, show that card not present (CNP) fraud across European markets has gone from 50% of gross fraud losses in 2008 to 70% in 2016. Ten countries saw an increase in fraud losses, while eight saw a decrease. FICO is working with banks to advance the use of machine learning and artificial intelligence to identify fraud faster.
FICO, 29 June 2017