RedAmberGreen Q4 2022

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In the news

SafetyNet Credit on the brink As we go to press, it has been reported by Sky News that Indigo Michael, owners of SafetyNet Credit and Tappily are lining up insolvency experts. The firm employs roughly 250 and has approximately 15,000 active customers. If confirmed, this will be a further blow to credit excluded consumers who are increasingly being left with no legal borrowing options and are turning to loan sharks (see our article on page 9) . Economists forecast a fall in UK interest rates Following a universal fall in the level at which economists expect rates to peak, many have begun to predict a fall in interest rates. Amongst those voices, the ratings agency Fitch expects further interest rate rises in 2023, but is predicting an easing in Q2 of 2024. Ben Laidler, global markets strategist at social investing network eToro, said: “All are now starting to see the light at the end of the high inflation tunnel as price rises start to peak and fall. This is the crucial first step towards a summit of UK interest rates around 4.25% early in 2023, and the start of rate cuts late in 2023.”

Edinburgh Reforms poised to rewrite the financial sector rulebook

FCA and friends bet big on Open Banking An update on the future of Open Banking, the initiative which enables third-party financial apps and services (such as LendingMetrics' own establish an independent entity which will oversee Open Banking moving forward.

As part of Chancellor of the Exchequer Jeremy Hunt's autumn statement, the UK government's plans to "repeal and replace hundreds of pages of burdensome EU retained laws" across the banking sector were revealed. Dubbed the "Edinburgh Reforms", the sizeable financial services overhaul centres on loosening tight EU restrictions, which could translate to more competitive banking with lower costs. However, detractors argue that the Reforms encourage taking undue risks during a cost-of-living crisis, and do little to benefit consumers. Potential changes on the table include eliminating separation between retail and investment banking, which could

expand banks' consumer offerings but was originally introduced during the 2008 financial crisis to protect said consumers. Executives also stand to benefit, with a review of the Senior Managers regime which holds execs accountable for rule breaking, and the removal of caps on bonuses. The implementation and subsequent impact of these reforms will likely take a long time. While encouraging deregulation and risk-taking against a backdrop of financial hardship is certainly a poor look, the banking landscape is likely to change and shift in the coming years.

Stated priorities for the platform include "unlocking the potential of Open Banking payments" by offering consumers greater choice between payment methods, adopting a model capable of scaling to support future growth, and establishing sustainable ongoing development of the platform. The JROC is expected to share a further update on progress towards these goals in Q1 2023, including a long-term regulatory framework overseen by the CMA.

OpenBankVision platform) to gain greater visibility of customer banking data, has been delivered by the Joint Regulatory Oversight Committee. Established in March 2022, the JROC is a joint venture between the Financial Conduct Authority (FCA), the Competition and Markets Authority (CMA), the Payment Systems Regulator (PSR) and HM Treasury. The JROC's goal is ultimately to realise the full potential of Open Banking as a platform. To achieve this, they intend to

UK retailers feel the card fee crunch Credit card providers are under fire for so-called "price gouging" in the wake of a massive boost to card payment volumes over the past two years.

have risen by an alarming 28% year-on-year. The BRC calls this unsustainable, accusing card firms of "abusing their dominant market position". MasterCard disputes this claim, stating that it provides "one of the lowest cost and safest ways to accept payment". Two market reviews, into card fees and interchange fees respectively, are to be conducted by the PSR. These reviews are expected to take up to two years to conclude; the BRC has called on HM Treasury to carry out its own inquiry in the interim.

The British Retail Consortium has called for emergency intervention from the Payment Systems Regulator to protect UK retailers from rapidly rising transaction and interchange fees. "With the public in and out of lockdown and cash usage discouraged in 2021, over 90% of retail spending used debit or credit card", the BRC says. Transaction costs topped £1.3 billion in 2021, and scheme fees

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