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Car Finance Credit Score UK

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If you make a claim under this section and you choose to use our approved repairers, you will be provided with a guaranteed courtesy car for the duration of the repairs or until your policy expires, whichever is sooner.

If your vehicle is classed as immobile (unable to be moved), we aim to provide you with a courtesy car within 24 hours of the claim being reported. The vehicle provided is intended to keep you mobile and will not necessarily be a like-for-like replacement of your vehicle.

 

You will be provided with either a small, standard private car or small car-derived van. All courtesy cars are subject to the driver meeting the terms and conditions of hire from the approved repairer.If your vehicle is a total loss you will not be offered a courtesy car.

 

Vehicles subject to a finance agreement.

If the market value we place upon the insured vehicle is equal to or greater than the amount owed to the finance company. We may pay the finance company first and then settle the balance with the legal owner of the insured vehicle.

If the market value placed upon the insured vehicle is less than the amount owed to the finance company. We may pay the finance company the market value of the insured vehicle. You may be required by the finance company to pay them the balance, subject to the terms of your agreement with them.

Vehicles subject to a lease / hire agreement – no legal right to title
If the market value we place upon the insured vehicle is greater than the amount owed to the lease / hire company, we will pay them only the amount of the outstanding finance, which will settle the claim in full.

If the market value we place upon the insured vehicle is less than the amount owed, the amount we pay to the lease / hire company will settle the claim, and you may be required by the lease / hire company to pay them the balance, subject to the terms of your agreement with them.

Credit reporting and credit scoring

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In order to evaluate how credit scores affect consumers it is necessary to understand how the underlying data is compiled, how scores are created, and how they are used by lenders. This section provides background information on credit reporting and credit scoring.

Subsequent sections describe the market for scores sold to lenders and how lenders use scores, and the market for scores
sold to consumers.

A. Consumer reporting agencies and credit reports Consumer reporting agencies are companies that gather, organize, standardize, and disseminate consumer information, especially credit-related information. In mandating this study, the DoddFrank Act refers specifically to scores provided by “consumer reporting agencies that compile and maintain files on consumers on a nationwide basis,”1 also called “nationwide CRAs.” The three
nationwide CRAs are TransUnion, Equifax, and Experian.2 For the purposes of this study, these three firms are referred to as “the CRAs.” Most consumers with a history of using credit products will have a file at each of the three CRAs.

The CRAs collect, among other information, credit account information including the amount of a loan, the credit limit on a credit card, the balance on a credit card or other loan, and the payment  status of the account; items sent for collection; and public records, such as judgments and bankruptcies.3 The CRAs compile the information into files about individual consumers. The CRAs also track requests, or “inquiries,” for a consumer’s credit data, and records of those requests are maintained in the consumer’s file.4 Consumer files are used to produce reports that the CRAs provide to creditors, insurance companies, potential employers, and other users.

 

These reports are formally called “consumer reports” but are often referred to as “credit reports,” which is how they will be referred to throughout this report.5 The activities of CRAs, creditors, and others that provide

Consumer credit score marketplace finance

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Consumers can purchase credit scores in at least two ways. They can buy them as an add-on when  obtaining a credit report from a CRA or certain other vendors, or they can receive them as part of a “credit monitoring” service. Some of the scores consumers can purchase in this way are used widely by creditors; others are not. In any case, if a consumer buys a score, it is quite likely that any
particular lender that consumer approaches for a loan will use a different score, given the diversity of scores in use in the market.

In light of the important role of credit scores in consumer credit markets, there is a great deal of interest on the part of consumers in obtaining their credit reports and credit scores.

The market for providing credit reports and scores has grown in recent years to more than $1 billion in revenue, and sales to consumers make up roughly a quarter of the U.S. revenues of the CRAs and their affiliates.

21 In addition to consumer credit score purchases, there are several circumstances in which a lender is required to provide a consumer with a score, as discussed further below. In these cases, the score comes from the lender using the score, and the score the consumer receives will likely be a score that was used by the lender.

Types of credit scores

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As described above, FICO developed the first credit scores in the 1950s, and the FICO scores are still the most widely used generic scoring models. One industry observer estimates that FICO had
over 90 percent of the market share in 2010 of scores sold to firms for use in credit-related decisions.

There are numerous FICO scoring models. Because of differences in the data at the three CRAs, FICO develops unique generic scoring models for use at each of the three CRAs.12 There are also several different generations of generic FICO scores in use, and FICO develops industry models for credit cards, mortgages, and auto loans.

All scoring models FICO creates are built to generate scores that fall in the range 300 to 850. Different FICO scoring models, however, may produce minimum or maximum scores slightly
above 300 or slightly below 850.

Fannie Mae and Freddie Mac, the government-sponsored enterprises that purchase and securitize a large portion of mortgages for the secondary mortgage market, require the use of FICO scores in the underwriting of mortgages that they will purchase.13 The Federal Housing Administration (FHA) has also required that mortgage lenders wishing to originate FHA-insured loans must use FICO scores.14 These requirements mean that, in the current mortgage market, most mortgages are underwritten using FICO scores.

Enhancing Digital Capabilities of Banks in a Changing World

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The banking industry is changing extremely quickly on both the retail and wholesale sides. Sometimes helped or threatened by new technologies and developments from third parties – both from fintechs and bigger technology companies such as Apple and Google – banks have to enhance their digital capabilities as a cornerstone to their offerings.

 Contributed by Tibor Bartels, Head of Transaction Services Americas, ING

Retail and wholesale banking have changed dramatically over the last 20 years and that it will change even more in the next 20 years. These days, customers expect and demand easy ways to initiate transfers, see balances or communicate with their bank either via an online tool or an app.

Collective evolution, not internal revolution

 The shift of customer expectations has impacted how we look at product development.Today we are leaning much more towards collaboration with fintechs or integrating products that are proven in the market, rather than to develop products ourselves. We don’t intend to reinvent the wheel but working with some of the strongest players in the market helps us to ensure we have a meaningful offering for our clients that is “future-proof”.

We are always asking ourselves the question as to how as a bank we stay relevant for our customers and we put our money where our mouth is by investing in new and innovative solutions for the market.

ING’s board fully realizes the importance of having a customer-centric approach to the market. While some banks are heavily investing in staying meaningful for their clients, others are sticking with the solutions they have and slowly becoming less relevant. If you are not working with a number of fintechs, I don’t think you have a future proof banking model.

Not about products, but about solutions

The role of the average treasury team is getting much more complicated. If you look back a decade or so, treasury was a cost center and very operational. Today, treasury teams face many extra burdens including fraud prevention, compliance, cost containment, harmonization of processes and so on. Corporates are looking for partners in the market that don’t just sell them products but provide solutions that help realize ambitions.

ING has made a number of investments over the last few years, in companies such as in Cobase, PayVision and TransferMate, for example.These actions prove that as a bank we are actively trying to improve the product offering for our clients.

This has always been in our DNA, take for example Bank Mendes Gans (BMG), it is a proven solution in the liquidity market, which is a big part of a treasury’s responsibility. BMG is a bank-independent plug and play solution that clients can lay over their global payments and cash management landscape, and it does the work for you. Essentially, this means we are part of your treasury team.

Thinking of new technologies and their practical application, we recently announced our part in co-creating a blockchain-based trade-settlement platform.

We have joined other global banks to create a digital coin that can be used to settle international money transfers instantly, cutting out intermediaries and lowering transaction costs. This is the next stage in the development of the utility settlement coin (USC) project set up by UBS a few years ago.

USCs, a digital version of existing currencies, can be used for payments and to transmit all the transaction data. It reduces the exchange rate risks of conventional transactions, making the payments and settlements process faster, cheaper and less risky. We had listened to our customers who had a predominantly documentary trade related business – if you have a lot of partners in Africa and Asia, this can be a full time job. This is where our experts looked at how to evolve this into a more modern way.

Looking to the future, we also want our platform to be a basis for other services that aren’t directly banking related. Using our platform as more of a fintech solution, if you have an ING online banking log in or mobile app, our goal is to also link that to other products from third-party providers.By providing just one entrance for all these different services, the bank would be even more meaningful. Especially taking into account that banks process large data flows which we can analyze to further improve our product offering to our clients. This fast changing banking landscape means we need to keep thinking ahead and finding innovative opportunities for partnerships and co-collaborations.

Citizens Further Expands Corporate Banking Capabilities by Adding West Region, New Midwest Leadership

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David Musicant hired as Citizens’ first West Region leader, Jim Malz to serve as new Midwest Region leader and Ohio President

Citizens Commercial Banking has established a West Region and tapped a new leader for its Midwest Region, further broadening and deepening its capabilities and reach.

These moves bring additional local focus and expertise to bear as Citizens continues to grow its nationwide roster of corporate clients.

David Musicant
David Musicant

David Musicant joins Citizens as the leader of its newly established West Region. Musicant, based in Los Angeles, has more than 30 years of banking experience and most recently served as a managing director at Fifth Third Bank where he led their geographic expansion on the West Coast. Prior to that, he had a 20-year career at Union Bank, most recently serving as group head of their Specialized Industries/Expansion Markets team.

The West Region team will serve existing and new corporate banking clients in Arizona, California, Nevada, Oregon and Washington. Previously, Citizens had announced the West Coast expansion of its Commercial Real Estate business.

Jim Malz joins Citizens as its new Midwest Region executive and Ohio President. Malz, who is based in Cleveland, joins Citizens after a successful 18-year career with JP Morgan, where he was most recently head of the Middle Market Banking and Specialized Industries business in Ohio.  Malz succeeds Joseph Giampetroni, who will be leaving Citizens to pursue other opportunities.

“Dave and Jim are both proven leaders in their regions who have long track records of building and leading corporate banking teams and fostering strong partnerships with clients,” said Steve Woods, head of corporate banking at Citizens. “Establishing the West Region builds off the great success we have had in the Southeast Region at expanding the Commercial Bank beyond Citizens’ traditional retail footprint. It is a natural extension for Citizens Commercial Banking and will enable us to continue our current strong momentum and grow our client base.”

In addition to leading the Midwest Region, Malz succeeds Ralph M. Della Ratta as Ohio President. Della Ratta will continue in his role as co-head of Citizens Capital Markets, Inc.’s mergers and acquisitions advisory business, delivering strategic expertise and advice to clients.

Citizens is positioned as a strategic and financial partner, offering deep expertise, great ideas and seamless deal execution. The Citizens Commercial Banking approach puts clients first and offers solutions that help clients make the best decisions throughout the life cycle of their business.

The state of insurance in Nigeria and the route to growth

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At the end of last week the 2019 Nigerian Insurance Industry report ‘From the Lagoon to the Ocean’ was released by Coronation Research, a leading research house in Nigeria. The report takes a critical look at Insurance industry, outlining the current state of the industry and the opportunities that exist for growth. To find out more we spoke with Guy Czartoryski,Head of Research at Coronation Merchant Bank.

In your recent report on the Nigerian Insurance sector you talk about the extreme lack of penetration and the three key opportunities you see present for growth.  Cooperation of government and all regulators, Micro-Insurance and education of the market, and finally technology.If we look at the first area of cooperation of government and all regulators (insurance, telecom, banking). Why is this key? Why not just leave it all up to the insurance regulators?

Guy Czartoryski
Guy Czartoryski

To begin with, consider that the National Insurance Commission (NAICOM) has a difficult job. Imagine a situation where you are regulating 59 insurance and reinsurance companies. Some of these companies do not have much capital, some are making losses, others might not comply with regulations.

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Most of the time NAICOM is, in all probability, looking after the difficult cases and resolving them. It is therefore spending disproportionate effort on the weakest companies. In such a situation you need to ask how to fix the problem in a strategic way. And the answer it to raise the minimum capital thresholds because that stabilizes the financial outlook of the industry and is likely to reduce the number of players at the same time.

This much NAICOM can do on its own. There are other factors working in its favour. If NAICOM had done this five years ago the available data and technology for industry expansion were not as developed as they are now. Today there are 38 million bank verification numbers in Nigeria, which is a very important starting point. There are over 170 million registered mobile phone lines (though not the same number of customers). Technological platforms to service several millions of customers are available.

However, it can be argued that the industry needs a deeper level of regulatory cooperation than it has at present. One of the results of our study was to show that the potential of allowing more bancassurance, or more involvement with telecom distribution, could take insurance penetration from the current level of 0.31% (total industry gross premiums divided by nominal GDP) to ten times this level over eight-to-ten years. That would benefit all parties: insurance companies, banks and telecom companies. It is a pretty easy concept to sell.

We have looked across at other insurance markets with similar GDP per capita, such as India and Kenya. Insurance penetration in India is 3.69%, in Kenya it is 2.37%. In Ghana total industry gross premiums were rising in US dollar terms between 2013-17 when in Nigeria they were falling. We are sceptical of cultural explanations for why Nigeria’s insurance industry is not performing.  Nigeria’s total gross premiums in inflation-adjusted or US dollar terms have barely grown in ten years. The reasons are: lack of capital; lack of scale; too many companies; not enough regulatory cooperation.

That last point is controversial, but the evidence to back it up is strong. In India the government backed a roll-out of insurance on a significant scale, using state insurance companies. Micro-insurance was rolled out as a priority. In South East Asia a number of different methods have been used, including bancassurance and mobile telephony. In Ghana mobile telephony plays a key role. In our view the regulations governing bancassurance and distribution with mobile telephony in Nigeria are more restrictive than in other countries. Yet the strength of bank and mobile telecom distribution channels are undoubted, and they have been used successfully elsewhere. There is the argument for the regulators to work closely together.

Can you tell us about the strategic implication of the NAICOM reform?

We took a sample of 38 of the 59 insurance companies in Nigeria, those for which sufficient information is available, and calculated how NAICOM’s reforms would affect them as things stood in May this year when NAICOM issued its key circular. The answer was that only 37% of companies met NAICOM’s new capital requirements while a further 25% reached at least 75% of NAICOM’s new capital requirements. We reason that if an insurance company reaches 75% of NAICOM’s capital requirement then it may find it possible to raise a small amount of extra capital, or retain earnings, in order to comply in full.  So, we think that 62% of our sample do not face significant difficulties.

And then there are the others. 11% only met 50% of the capital requirement (but not as much as 75%) and 27% did not meet 50% of the capital requirement. This means that a number of companies are going to have to raise capital. We already know of eight companies raising new capital and we expect more to come.  However, some companies will not be able to raise capital on their own. The way forward for them will be to merge with other companies. But even then, we expect at least some companies to be eliminated altogether. We think the number of companies will be reduced from 59 to around 25.

The obvious comparison here is with Nigeria’s banking reforms of 2004, which raised sharply the minimum capital level of banks and reduced their number from 89 to 25. Something similar is happening in the insurance industry. The banks, as is well known, then went into a period rapid development, with total gross loans growing at a compound annual growth rate, in inflation-adjusted terms, of 26.9% between 2004-09. So, the strategic implication for the insurance industry is to have, from mid-2020 onwards, a much stronger capital base, far fewer companies, and the potential to grow rapidly.

Of course, we do not know exactly the shape of the insurance industry that will emerge in mid-2020. However, we can make some general observations. First, it is likely to have between six and eight foreign-backed (if not majority foreign-owned) leading insurance companies. This is significant because of the experience they have in rolling out insurance in South East Asia and India. Second, it is likely to have between six and eight leading wholly indigenous Nigerian insurance companies. So, the leaders will likely be evenly foreign and locally-owned.

What can insurers do to increase their profitability and RoE?

In our report we look in detail at the profitability of Nigeria’s insurance companies. The return on equity over time is generally lower than the risk-free rate, in other words the internal rate of return is less than what you would earn on a T-bill. And if the returns do not exceed T-bill yields then they get nowhere near the cost of equity. So, it not a good situation and not one in which it is easy to make the business case for raising fresh capital, unless you can argue that there is significant growth ahead.

We also look at the loss ratios of Nigerian insurers so see whether their underwriting ability, sometimes known as profitability of risk transfer, is at fault. The surprising thing, perhaps, is that the loss ratios of Nigerian insurers are not outside the bounds of international norms. There are differences between sub-sectors (Composite, Non-Life and Life) but in general the loss ratios do not seem to be the problem.

The problem comes with expense ratios. There are very high and well beyond what we consider to be normal in the global industry. But perhaps this should not be surprising. After all, we are talking about an industry which has barely grown, in real terms, over the past ten years. Fixed costs are difficult to carry when business is not growing. The companies have problems reaching the scale where their fixed costs make sense.

Adding the loss ratios and the expense ratios together comes to the combined ratio, and the industry aims for a ratio of less than 100%. Most Nigerian insurance companies exceed 100% most of the time. There are some remarkable exceptions, but in general it is not a very profitable industry. Since it is not underwriting that is to blame (in most cases) the real problem comes from lack of scale. And lack of scale is hardly surprising when, over the long term, there has been almost no growth.

How will micro-insurance products help increase awareness?

Insurance is about trust. In any market you begin with a sceptical audience. As noted above, we do not think cultural reasons explain the lack of insurance penetration in Nigeria. The role of micro-insurance is to provide insurance at low cost to many customers and, in the process, familiarize the market with the concept and operations of insurance. A reliable claims history is important here. One way of doing this is to bundle basic accident cover with other services, such as banking or telecoms services, so that the cost is not noticed and therefore goes unchallenged.

The key thing about micro-insurance is that it is widely seen as meeting a developmental goal. If you take household economics, and the devastating effects that personal accidents can have on them, then micro-insurance becomes important to achieving economic security. Once the market understands that it is buying economic security, then selling insurance becomes easier.

What are the key lessons from India that insurers can learn?

Not every market has the structural advantages that India has. There is a large network of state insurance companies, as well as state banks, to rely on. The firstpoint about India is that the regulator is called the Insurance Regulatory and Development Authority of India (IRDAI), the key word being Development. So the regulator works as a development body, not just a referee. The next lesson from India is that the public sector spearheaded the development of insurance but the private sector benefited from the market education that this brought.

How can technology assist insurers in reducing cost, boosting awareness and increasing their RoE?

Different markets develop insurance in different ways. In Nigeria all the ingredients are there in terms of technological datasets and operating platforms. And, from the middle of 2020 there will be a re-capitalized industry that will have undergone a process of consolidation. Whatever technology, or mix of technologies, will be adopted cannot be known. But all the raw elements for a transformation of the industry are in place, so NAICOM’s reforms are coming at a good time.

How do banks appeal to Generation Z?

 

For years now, banks have been targeting the Millennial customer. Born between 1980 and 1994, the academically defined Generation Y have struck fear and confusion into businesses concerned with how they can best engage with a generation that’s grown up with the Internet.

Mark Aldred
Mark Aldred

Millennials are getting older and are as likely to be senior managers within many retail banks. Their behaviours are well-known and thoroughly mapped out.

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So, while Millennials and, of course, older generations remain the most valuable groups of customers to engage with today, what of the next generation of new customers?  How should banks appeal to Generation Z?

Generation Z is pegged as those born between 1995 and 2015,and they are aged anything between four to 24 years old right now.

Quite simply they are the banking customers of the near future.Gen Z already makes up 30 percent of the world’s population and will represent a third of global consumers in ten years’ time. In some countries like the USA, Gen Z makes up a quarter of the population and will be within reaching distance of being a half of all US consumers by 2020.  Their spending power is already high. It is estimated that the total spending power of Gen Z today is $3.4 trillion. In the US it is estimated their direct spending power could be as high as $143 billion.

Digital Super Natives

Understanding Gen Z will become crucial over the next 10 years. So, what should banks be doing about engaging with this group, alongside their current focus on Millennials and older age group customers?

There are some obvious characteristics. With the oldest GenZ-er currently aged 24 – they are younger than Amazon, which celebrated its 25th birthday in July 2019.  GenZ grew up in the connected digital age and has no experience of anything before the Internet or the mobile phone.

This absolute lack of experience of a pre-digital world sets GenZ apart from Millennials.  Members of Gen Z take digital to the extremes.

Gen Z do not simply use smartphones; they live their lives on them. One study by generational experts revealed 65% of Gen Z admit to being on their smartphones after midnight a few times a week or more often; and of these, 29% confess they are on their smartphones after midnight every night.  More so than Millennials, Gen Z is always on – and content consumers of – everything from YouTube to Snapchat to Netflix and everything else in-between.

Best Ways for Banks to Interact with Gen Z-ers

In crafting their omnichannel strategies, it is important for banks to appreciate that Gen Z makes no distinction between the online and offline worlds. They don’t see any differences between going on the Internet and doing something else.

Mobile banking seems to be the obvious channel to interact with them; indeed, because it is less common for them to use a laptop to access things, the rise of Gen Z may hasten the demise of “traditional” web banking.  In this regard Gen Z consumer don’t choose a bank, rather they choose a banking app they like. And like other apps, they are as likely to ditch that app when it loses relevance or functionality for their personal lives.

Is Gen Z Interested in or Indifferent to Banks?

All the above may make you think that Gen Z has little connection to traditional banking. Some studies do suggest this group don’t see a role for banks in their lives, for example a 2018 report by Raddon and The Financial Brand, found nearly a third of Gen Z do not believe they will need to rely on banks in the future.

The Gen Z absolute mobile-first, app-led attitude has to make this generation ripe for alternative app-only banks. Yet, GenZ can be engaged on financial affairs by traditional banks if they address this generation’s real interest in money.

Unlike Millennials, generational experts define Gen Z as more conservative about money because of how their young lives have been shaped by the financial recession and austerity of the early 21st century.  This is creating an interest in savings and financial management that is stronger than the previous generation – for example, 56 percent of Gen Z have spoken with their parents about savings. One 2017 study  has said more than one in 10(12 percent) of Gen Z have even started saving for their retirement.

There is another, seemingly contradictory side to this generation’s interest in taking greater control over their financial affairs. While they may seem to dismiss the idea of using a traditional bank, Gen Z says it prefers to do its banking face to face; in the same Raddon/Financial Brand study, 48 percent expressed this preference. This trait stems from more than just their financial conservatism but also how Gen Z are generally regarded as considerate consumers who want to dig deep into a brand. A hefty 78 percent seek authenticity in brands, answering why they might prefer to look a banker in the eye when they seek financial advice that’s trustworthy and authentic.  Indeed, some generational experts refer to Gen Z as the True Generation.

Will Gen Z Save the Bank Branch?

So, GenZ appears to be reinforcing how banks need to have a physical strategy for their online and branch banking.

In considering how banks make their branches attractive to GenZ, banks should learn some lessons from physical retailers in their response to this younger generation. The accepted wisdom is younger people are rejecting bricks and mortar retail. Yet, the latest research says a majority (76 percent) of Gen Z  say the experience of shopping in physical stores is better than going online and they make most of their key product purchases in stores.

This finding seems to offer hope for bank branches, but it is important to understand what makes physical shopping preferable to Gen Z, and apply those findings in how branches are redesigned and run. For example, what makes Gen Z like physical shopping is how it allows them to socialise, see, try and buy merchandise immediately.  This might translate into reconfiguring branches as social hubs, as well as empowering staff to offer financial assistance easily and with quick decisions on confirming financial products within the branch. A great example of this is how Capital One is opening up cafes rather than bank branches to serve financial advice alongside lattes and much more. And, of course, the branch has to be mobile-friendly at all times – the fact that more than four-fifths of Gen Z use their smart phone when shopping must apply when they visit a branch, too.

Make Banking Authentic, Not Gimmicky for Gen Z

Some might be attracted to make banking more of an experience for this generation. Certainly, some retailers who are fighting for relevancy with Gen Z and Millennials have invested in major re-modelling of their stores to attract consumers by offering much more than a traditional retail experience. For example, UK fashion retailer,Primark, has opened its largest store with in-store experiences including a Disney themed café, beauty salon and barber shop. Some stores have gone even further and created experiences aligned with Gen Z digital obsessions – for example, US department store, Macy’s, is creating floors within its stores where brands run experience events that consumers want to post on their Instagram accounts.

Whether banks should go so far as Macy’s and other retailers is hard to say. Gen Z is good at calling out brands which act unauthentically and may find banks that set up Instagram experiences as obviously a stunt. Don’t forget how this generation is financially conservative and thus strongly calls out for credible guidance. Banks can respond with financial education programmes designed for this generation including the money coaching sessions that banks like Capital One are offering

Banks do need to be careful about how they tailor their approaches because this generation’s attitudes can be hard to read. It is important to recognise that for Gen Z permanence is an important value. A recent study of British Gen Z-ers dug into the contradictory nature of this generation. While they can be extremely transient – for example, be mad about SnapChat only to suddenly dump it – Gen Z-ers value physical things they can touch and surround themselves with.

Gen Z presents a challenge to banks and other traditional customer service businesses because we are only now getting data on how they might want to access financial services and advice. There are contradictory traits about them, such as they live on smartphones and are supremely digital, and yet they are conservative and search for authenticity in brands. Both of these traits carry risks for banks. For instance, ensuring their digital services are sufficiently omnichannel and resilient because no Gen Z-er tolerates poor service or outages?

So, finally a short set of recommendations of how banks can reach out to Gen Z:

  1. Accept they are young with many still in school. Gen Z’s searching attitude can be answered by how banks get more involved in financial education in schools and colleges. Consider opening up pop-up or mobile bank branches in or near schools. It’s an old principle but get them when they’re young and keep the financial counselling part of your USP to this group when they open their first account with you
  2. Become known for your free education about everything from budgeting for your gap year to managing credit. Make study fun and available online and in-branch with after-hours food and drink
  3. Some banks are getting their first Gen Z customers. Run active programmes to involve them in everything from how you design apps to re-modelling bank branches. Recruit Gen Z-ers, rather than young Millennials, to mentor your staff on messaging and even how to take criticism. Quite simply there’s nothing better than first-hand knowledge of what works or doesn’t for this group
  4. Socialisation is a common trait of this generation. Research from the Center for Generational Kinetics has shown how Gen Z likes to share how much they are saving with their friends. Within the rules of financial confidentiality, support how some Gen Z customers will want to share their financial experiences online or even within your branch
  5. Be really smart on monitoring and measuring digital experiences and how your omnichannel strategy is smoothly and reliably delivered. Gen Z customers are sometimes called “screenagers” for good reason – they interact via screens all of the time and are hypersensitive to anything that doesn’t look right. Their instinct will be to leave and move onto something else if the digital experience is poor or interrupted.
  6. Saving, rather than spending, seems to be a financial driver for this generation. Investing in innovative savings products and services that automatically save money into accounts for clothes or dining
  7. Gen Z is likely to be the first generation to ditch plastic money – debit and credit cards – for managing cash and credit on their smart phone. So, ensuring in-branch self-service machines interact with smartphones for authenticating and accessing services,like updating digital wallets is key
  8. Be ready to offer access to a bank branch and a live person. Train your staff in consultation skills for this generation. Your people become vital brand advocates who this generation need to identify with and regard as authentic. See how in-branch systems can help augment your human capital.
  9. Remember Gen Z love online video. Leverage YouTube for how-to video advice on financial matters but also consider how you can offer face to face financial advice over live video
  10. Responsibly collecting and using data to anticipate the needs of customers who share a great deal of data about themselves is key.
  11. And finally, get ready for the next generation of customers. Already designated Generation Alpha or Gen Glass, these are people born after 2010 who are growing up in the world of Internet of everything when the online and offline worlds are totally blurred!
 ‘Bank to the future’ –what 5G means For high street banking

As recently discussed here in Global Banking & Finance Review, banks have a range of technology-driven options to radically improve the customer experience.  Digital transformation is impacting the industry in ways that would have hardly seemed possible just a few decades ago.  The impact of technology and increased connectivity is particularly evident on the ‘front line’ of retail banking, where pop-up branches, digital signage and ‘smart branches’ are transforming the way banks interact with their customers like never before.

One of the growing challenges for banks and retailers in general is that in this digital era, customers expect better, more connected services, whether they are dealing with the retailer online or in person. But, whichever digitally-inspired direction they move in, connectivity is the underlying enabling technology.

In A Wireless World, We’re All On A Pathway To 5G

One of the major drivers of technology-led change is the arrival of 5G wireless connectivity in the UK. With EE’s recent rollout of services in six cities, a pathway is emerging to its general availability. 5G will offer the speed, quality of connection and reliability banks need to bring customer-focused innovation to the high street. While the 5G rollout gathers pace, Gigabit-class LTE wireless technology will increasingly provide high performance connectivity, eventually working alongside 5G to offer a comprehensive high-speed network.

4G LTE technology has already carved a valuable role as the go-to connection for failover and Day-1 connectivity, but now, it’s is a viable option for primary wide area network connectivity as well.  This allows organisations to ‘cut the cord’ and replace multiple cable and fixed line providers – often stitched together to provide a branch network – with just one or two wireless providers.  In doing so, they can also realise a significant improvement in connectivity uptime.

Specifically, for banks that want to extend the reach, reliability, and speed of their branch networks without all of the complexity challenges of traditional wired connections, Gigabit-Class LTE can already provide as much as 80% of the value of 5G.

 The Digital Transformation Of High Street Banking

But where is this taking our banks? Along with every other sector that has built its success on the High Street, retail banking is looking to digital technology to change its relationship with customers for the better.

Innovation is arriving in many forms. The rollout of digital signage, for example, is making communication with customers more relevant, creative and timely. Similarly, digital initiatives that improve accessibility and widen the relevance and usefulness of branches are finding their way onto the high street. It’s increasingly possible to walk into a branch and get access to a financial expert via video link, instead of having to book an appointment with a member of staff in person.

As the traditional high street presence of banks gets smaller, the pop-up branch has emerged as a way to maintain services in places where a branch is no longer supported by demand. Pop-up branches offer many advantages over a permanent location, not least because they can be opened for a relatively short space of time, or placed in shared locations that are suitable to their local community.

Similarly, the pop-up concept has allowed new entrants to the industry with little or no high street presence to connect directly with consumers. Dozens, a finance startup, recently launched a one month pop-up branch on Harrow Road in Westminster, for example. On a wider level, Wiltshire Council has just announced support for a community bank serving the South West of England. The project could see pop-up branches opening in leisure centres and libraries.

This kind of useful, lateral thinking needs the right kind of enabling technology, and initiatives like these rely completely on secure, high performance data connectivity. In most cases, it’s not practical for a pop-up branch to organise fixed line connectivity for a limited period of time, or the connectivity cannot be shared with the location ‘host’ because of security or performance concerns. For these banks, wireless networks will provide the reliable, high performance and secure communications infrastructure they need when they open their pop-up branches.

Customers across every market sector value innovation that improves the retail experience. As banks try to differentiate themselves in a more competitive market, those that can offer new ideas that make it easier and more productive to use high street banks – in whatever form – will be better placed to retain and attract customers.

Why are banks struggling to meet SMEs’ needs?

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Something’s wrong here.As reported by J.D. Powerlast year, only 32% of SMEs in the US feel that their bank understands their business.  The UK market, according to Ipsos, faces a similar challenge in 2019: 30% of the local SMEs look for financing opportunities outside of the banking realm. According to World Bank, overall approximately 70% of all micro, small and medium-sized enterprises (MSMEs) in emerging markets lack access to credit.

How Your Driving Record Affects Car Insurance

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While your auto insurance company cannot pull your full motor vehicle report (MVR), it does pull a summary listing your most recent tickets, accidents, and convictions.

The look-back period for your MVR varies by state and the insurance company.

Generally, this period is between three and five years, but it can be much longer. For example, in California, a DUI remains on the MVR record and counts as an offense for ten years, whereas an accident has a look-back period of three years.

How Insurance Companies Use Your Driving Record
When applying for auto insurance, the insurance company conducts as risk assessment as a part of its underwriting process. This assessment or selection process includes determining how to classify the applicant (e.g., low-risk vs. high-risk or standard vs. substandard).

The best way to assess the applicant is to review their driving history, which typically includes moving violations and accidents, including at-fault and not-at-fault. The insurance company can estimate the level of insurance risk based on the frequency and severity of recent driving violations and collisions.

If there are several accidents or traffic infractions, the driver is more likely than other drivers to have similar problems in the future, increasing the insurer’s liability. Also, he or she will probably make multiple, costly insurance claims; as a result, the insurance company may deem the driver too risky to insure or may charge an increased rate to compensate for the probability it will pay out claims. (For related reading.

KEY TAKEAWAYS
In the underwriting process, an applicant’s driving history is reviewed to determine insurability and premiums.

A driving history outside of the look-back period (e.g., 3 or 5 years) is not used to determine premiums.

The MVR summary typically includes moving violations and accidents, as well as convictions resulting from driving violations.
What Is Included In the MVR?
In addition to accidents and moving violations within the past three years, the MVR also includes information about any criminal convictions associated with the driving record, such as DUIs and any incidents in which the driver failed to appear at a scheduled court hearing related to a driving infraction.

The MVR also supplies the insurance company with information about any license restrictions, such as not being allowed to drive at night due to poor eyesight. Any prior license suspensions or revocations within the look-back period are also included.

What if My Record Isn’t Clean?
Luckily, even if you have to pay an increased insurance rate due to a less than favorable MVR, it may not be permanent.

Once your infractions are older than the look-back period, they drop off the insurance summary and are no longer considered when determining your premium. If your insurance company has a look-back period of three years, for example, an accident you had in 2016 drops off your record in 2019. If you have no new collisions, your insurance rates may decrease at your next policy renewal.

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A Beginner’s Guide to Car Insurance

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Accidents happen, and when they do, insurance is what keeps our finances safe and sound. Whether an auto collision is your fault or somebody else’s, your auto insurance coverage should help you.

How much it helps, however, is up to you, and this is determined by the combination of options that comprise your insurance policy.

Buying Auto Insurance

In order to protect yourself without overpaying, explore the factors you should consider in putting together the right coverage for your vehicle, as well as how to select a good insurance company that will handle your claims if an accident happens.

It can be confusing, but remember that taking it step-by-step makes it a much easier experience.

Personal Injury or Personal Liability: Always put you and your family’s safety before anything else. Personal injury or personal liability coverage should be given great importance when putting together an insurance package.

During accident situations, health insurance is the first thing requested by any medical facility treating you. If you don’t have health insurance, load up this option with hefty coverage that will pay for any medical expenses incurred in a major accident.

Uninsured Drivers: According to an Insurance Research Council (IRC) study, if someone is injured in an auto accident, the chances are about one-in-seven that the at-fault driver is uninsured.

Don’t trust other drivers and don’t take for granted that they will have as good coverage as you do. Though it can be hard to digest that you must pay a premium and the deductible for someone else’s mistake, it’s better than forgoing this coverage and risking losing your vehicle.

Major Accidents: You should never neglect the worst-case scenario when selecting insurance. What if your car is totaled and needs to be replaced? If the accident is not your fault, the other driver’s insurance (or your uninsured motorist coverage) will pay for the vehicle. But there are other situations and natural calamities that can also destroy your vehicle, and in those cases, you’ll only be able to rely on your own insurance. In case such a situation arises, it is better to have enough coverage to fully repair or replace your vehicle.

Getting Stranded: A vehicle is a combination of mechanical, electrical, and rubber parts. Things can go wrong at any time, and they are not always in your power to prevent. However, being prepared for those events is in your power if you add towing and rental coverage to your insurance.

This might work out better than having a separate towing club membership, which could save you those annual fees.

Deductible Versus Premium

The insurance deductible is inversely proportional to the premium amount. If the deductible goes up, the premium goes down and vice versa.

This relationship reflects whether you prefer to pay more or less from your own pocket before stretching out your hand to the insurer.

Whichever option you choose, make sure you can afford it. Some people are better off paying a higher monthly premium in exchange for a lower deductible to avoid any large payments after an accident.

Amount of Driving Experience
Many insurance companies automatically recommend certain coverage for particular drivers. For example, if you have a teen driver at home, it is better to have good personal liability coverage with a lower deductible because new drivers are prone to making mistakes.

On top of that, rates to cover teen drivers will automatically be higher because of their lack of driving experience. Try not to let the higher rates prevent you from getting ample coverage, though.

Experienced drivers with past mistakes, such as moving violations or accidents, can also have higher premiums. Defensive driving courses help to offset some of the cost, but not all of it, so drive carefully and consciously to avoid paying higher premiums later in life.

Choosing Your Auto Insurer
Choosing the right coverage is just the first step. You must also choose a good insurance company if you want to maximize the chance that your claims will be paid. Look for the following qualities when choosing your auto insurer.

Reliable and Reasonable: Insurance companies should be reliable and offer reasonable coverage for the prices they charge. In some states, there isn’t much difference in price among insurance companies because of state mandates. In most states, however, companies will quote different prices for similar coverage.

Covers the Vehicle at All Times: Many small insurance companies offer low rates compared to the big ones because of their lower overhead costs. But when there is an accident and an insurance claim is filed, these small companies can sometimes be a pain. They may try to wash their hands and say, “It’s not covered under your policy.” That’s not what you want to hear when you really need them after paying your premiums for months. Also, don’t go with a local insurance company that doesn’t cover out-of-state accidents.

Don’t Overdo It
When you talk to any insurance agent or service provider, they are going to try to sell you more coverage so they can make more money. In general, you don’t a need a high amount of coverage unless you own an expensive vehicle, drive extensively or don’t have adequate health insurance. Many insurance companies are able to make easy money off of uneducated buyers who don’t know what they want. By using the tips from this article, you won’t have to let a smooth-talking agent steal money from your pocket.

The Bottom Line
Having ample and reliable insurance coverage is a very important component of auto ownership: You don’t want to experience money problems when you are already going through the trauma of an accident. Be a smart buyer, do the proper research, compare quotes and create a package that suits both your coverage needs and your budget.

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