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www.retai l bankeri nternati onal.comIssue 740 / AUGUST 2017CONNECT ANDSURVIVEHOW ÍSLANDSBANKI’S BRANCHES CANTHRIVE IN THE DIGITAL ERAINDUSTRY INSIGHTFEATURENEWS COMMENTDiebold Nixdorf: Banksaround the world arerethinking their strategiesPayKey has won industryawards and backing for itssocial media P2P paymentsUniCredit’s Jean PierreMustier can toast a verysatisfactory yearRBI August 740.indd 118/08/2017 16:23:45
contentsthis monthNEWS05 / EDITOR’S LETTER18 / DIGESTCOVER STORYÍSLANDSBANKI INTHE DIGITAL ERA CBA to refund 8m for unsuitable CCICBA CEO to retireADGM, UAE Exchange sign agreementBarclays names new Barclaycard CEOPayPal to acquire Swift FinancialBanco Popular acquisition approvedThinCats gains full FCA authorisationUK branch closures top 4,000Tandem to buy Harrods BankPwC, Featurespace collaborateDBS closes migration of ANZ businessesTesco Bank adds card block featureBoA Merrill launches in ChinaFiserv launches analytics solutionChina creates new clearing house12Editor: Douglas Blakey 44 (0)20 7406 6523douglas.blakey@verdict.co.ukDeputy Editor: Anna Milne 44 (0)20 7406 6701anna.milne@verdict.co.ukGroup Editorial Director:Ana Gyorkos 44 (0)20 7406 6707ana.gyorkos@globaldata.comHead of Subscriptions:Alex Aubrey 44 (0)20 3096 2603alex.aubrey@verdict.co.ukSub-editor: Nick Midgley 44 (0)161 359 5829nick.midgley@uk.timetric.comDirector of Events: Ray Giddings 44 (0)20 3096 2585ray.giddings@compelo.comSenior Reporter:Patrick Brusnahan 44 (0)20 7406 6526patrick.brusnahan@verdict.co.ukCustomer Services: 44 (0)20 3096 2603 or 44 (0)20 3096 2636, briefings@verdict.co.ukFinancial News Publishing, 2012. Registered in the UK No 6931627. ISSN 0956-5558Unauthorised photocopying is illegal. The contents of this publication, either in whole or part, may not bereproduced, stored in a data retrieval system or transmitted by any form or means, electronic, mechanical,photocopying, recording or otherwise, without the prior permission of the publishers.18For more information on Verdict, visit our website at www.verdict.co.uk.As a subscriber you are automatically entitled to online access to Retail Banker International.For more information, please telephone 44 (0)20 7406 6536 or email briefings@verdict.co.uk.London Office: 71-73 Carter Lane, London, EC4V 5EQAsia Office: 1 Finlayson Green, #09-01, Singapore 049246Tel: 65 6383 4688, Fax: 65 6383 5433 Email: asiapacific@sg.timetric.comfollow RBI on twitter@retailbanker2 August 2017 Retail Banker InternationalRBI August 740.indd 218/08/2017 16:24:08
contentsaugust 2017s to talk about cracking China, disruptingSWIFT, and leveraging WeChaANALYSIS08 / MONEY TRANSFERSAs the referendum to decide whether the UKshould remain in the EU drew to a close,columnists attempted to deduce how thedecision would affect both sterling’s valueand money transfers. The two have takendivergent paths, writes Patrick Brusnahan12FEATURES06 / VANCITYVancity, Canada’s largest credit union,competes with national banks through itscommunity-focused branches and its openbranch design. Robin Arnfield talks to NeziheAquino, Vancity’s vice-president of communitymember services17s to talk about cracking China, disruptingSWIFT, and leveraging WeChaNEWS COMMENT16 / TANDEMSTRATEGY09 / PIRAEUS BANKPiraeus Bank has opened three fully automatede-branches, the first of their kind in Greece.Eftichia Kasselaki, head of retail banking atPiraeus, tells Douglas Blakey how the newformat represents the most exciting recentinnovation in Greek retail banking11 / PAYKEY16 / SURCHARGE BANWhile the UK Treasury’s ban on “rip-offcharges”, set to come into force in January2018, may look like a positive change forconsumers, there seem to be some adverseside-effects, writes Patrick BrusnahanPayKey has won payments industry awards,plus backing from major investors, for itssocial media P2P payments technology. Chiefmarketing officer Guy Talmi tells RobinArnfield that the Israeli fintech has signed upsix banks to use its technology17 / UNICREDIT09DISTRIBUTION12 / ÍSLANDSBANKI06After some negative PR this year, baggingHarrods Bank is a pretty dramatic way to landa banking licence. However, Douglas Blakeysounds a note of caution about signing up toTandem’s waiting listWith a mere 14 branches, only 18% ofIceland’s total branch network, Íslandsbankihas the country’s most efficient network. Itsoffering has now been boosted by a stunningnew head office branch in Reykjavik’s tallestbuilding, reports Douglas BlakeyWith a net profit of 945m ( 1.11bn) inthe second quarter of 2017 – way ahead ofanalyst forecasts – UniCredit CEO Jean PierreMustier can toast a highly satisfactory firstyear in office, notes Douglas Blakeys to talk about cracking China, disruptingSWIFT, and leveraging WeChaINDUSTRY INSIGHT22 / DIEBOLD NIXDORFThe impact of digital banking, artificialintelligence, machine learning and changingcustomer preferences is prompting banksaround the world to rethink their branchstrategies, argues Richard Broadbentwww.retailbankerinternational.com 3RBI August 740.indd 318/08/2017 16:24:21
Intelligent Environments,the international providerof digital nancial servicessolutions in association withRetail Banker International,Cards International, ElectronicPayments International, PrivateBanker International, andMotor Finance publicationsJoin thousands of nancialservices professionals whohave joined The DigitalBanking Club to understandthe future of mobile and online nancial servicesJoin The Club!www.thedigitalbankingclub.comMembership bene ts10% discount for new subscribers/purchasers on:Annual subscriptions to Retail Banker International, CardsInternational, Electronic Payments International@TheDBclubMembership is freeOrFor more information please email:World Market Intelligence’s archive of over 250 RetailBanking and Cards & Payments research reportsSubscription to the Retail Banking and Cards InternationalIntelligence Centres4 tdbc@intelligentenvironments.com August 2017 Retail Banker InternationalRBI August 740.indd 4TDBC Adverts - 2017 MG Edit.indd 118/08/2017 16:24:2527/07/2017 12:49:07
12:49:07editor’s letterAsda ramps up itsbanking challengeTDouglas Blakey, Editorhe UK personal loans market has becomeeven more crowded: Asda Money hasteamed up with lending platform FreedomFinance to launch Asda Personal Loans.Major UK supermarkets have been selling personalloans for years. Loans from Sainsbury’s and Tescohave regularly appeared towards the top of thepersonal finance comparison websites.But until now, Asda has stuck to offering credit andprepaid cards, insurance and – since April this year –a money transfer service.Asda will use Freedom Finance’s financialtechnology platform to search a panel of trustedlenders, the first time that a UK retailer has partneredwith a panel-based broker.Brian Brodie, chief executive of Freedom Finance,said: “It widens the market space for Asda Money,who will now be able to say yes to more customers.“It is our mission to help as many customers aspossible secure the funding needed to realise theirdreams and ensure we deliver on our promise ofgreat customer outcomes. This joint venture willsignificantly increase the number of personal loanapprovals that Asda Money will be able to provide toits 19m-strong customer base.”Katie Walley, head of Asda Money, added: “Ourstrong belief and analysis of the current market wasthat a new and different approach to personal loanswas desperately needed to better fit the needs of ourcustomers and consumers who are often turned downor offered a rate that does not suit them.“Unlike other high street lenders, we will consultwith a panel of trusted lenders through FreedomFinance to ensure we offer customers the best loanfor their circumstances, and rest assured thanks tothe soft search technology, there is no effect on thecustomer’s credit rating – something we do not feelis fair.”Asda has received favourable press for its travelmoney services, offering 0% commission, free clickand-collect services, next-day home delivery, andbuyback offers. Its remittances service launched inApril offers money transfer to over 145 countriesthrough a network of more than 317,000 locationsacross the world.On its launch, Walley said: “We will constantlybenchmark our prices against the largest moneytransfer providers. That not only makes us bettervalue, but also makes sure more of customer’s moneygoes to their recipient and less goes on fees.”Asda’s credit card offering dates back to 2012;at the time it launched an aggressive rebrand of itsmoney division and seemed set fair to target Tesco,Sainsbury’s and Marks and Spencer’s banking units.In the US, Asda’s parent Walmart has made twohigh-profile attempts to enter mainstream retailbanking. It has entered the retail banking sector inCanada and Mexico, having been rebuffed in the US.It has, however, been successful in the US with itsWalmart MoneyCard MasterCard issued by GreenDot Bank.Back in the UK, credit cards make up around 60%of total unsecured credit market, with personalloans, car finance and overdrafts contributing to themajority of personal unsecured debt.In terms of the source of unsecured lending, thevalue of non-bank lending has doubled in size since2011. Figures from PwC show that unsecured debthas reached an all-time high in the UK, standing at 10,000 per household.Concern about record debt levels led the Bank ofEngland-run Prudential Regulation Authority (PRA)to tell lenders in July to demonstrate that they areproperly managing their risks.The PRA’s review of the consumer credit marketfound that lower pricing, falling risk-weights, andincreased lending to higher-risk consumers arecontributing to heightened vulnerability.Asda may be banking on the major UK retailbanks taking a more conservative approach towardsunsecured lending. In particular, Asda may expectto grow its lending book by targeting the nearprime segment, considered by many analysts to beunderserved by the mainstream providers. Get in touch with the editor at: ational.com 5RBI August 740.indd 518/08/2017 16:24:29
feature vancitycanada’s vancity:a new focus onrelationsHIPS withlocal communitiesVancity, Canada’s largest credit union, competes with national banks through itscommunity-focused branches and its open branch design. Robin Arnfield talks toNezihe Aquino, Vancity’s vice-president of community member servicesVancity has over C 25bn ( 18.86bn)in assets plus assets underadministration, over 523,000members, and 58 branches in the greaterVancouver area.In April 2017, Vancity won an awardfor Excellence in Customer Service at theTemenos Community Forum in Lisbon.Vancity has successfully pursued a strategyof ensuring strong connections with localcommunities and operating extensive social,environmental and ethical programmes. Theseinclude helping to build affordable housingand expand renewable energy.“Vancity is very community-focused in itsbranches,” says banking analyst David Cavell.“Engaging with the local community is the wayforward for branches.“Whilst banks have been whingeing aboutcredit unions’ growing retail propositions,forward-looking CUs like Vancity have beendeveloping the customer and communityrelationship strategies for the next generationthat the banks should also have been into.”Vancity says community social andeconomic needs are at the heart of itscustomer proposition, and that its aim is “tomake good money by putting money to good.”Vancity’s vision is that by 2020, its totalassets will have grown to C 40bn, and thatits member base will reach 600,000. It alsowants 50% of its total assets to be allocated toimpact efforts to improve its members’ livesand local communities. “Our engagementwith our members and the community iscritical for us,” Nezihe Aquino, Vancity’svice-president of community member services,tells RBI.“The way we talk to them never starts fromthe position of products, rates or features,but from their needs. We have grant aidprogrammes to help non-profit associations.We offer mortgages for affordable housing,and we help small businesses needingprofessional services – for example referringthem to accountants or website designers.”FEDERAL APPROVAL“Our branch design conversation started in2011, and it took us a while to differentiatewhat we wanted for our branches from therest of the industry,” says Aquino. “In 2012,we opened two prototype branches, whichare no longer prototypes, featuring art walls,business showcases, open-plan teller stations,and community stage rooms.”Vancity currently has eight fully renovatedbranches, including the former prototypes. Itsgoal is to upgrade all its branches, eventually.Currently, around half of its branches includea concierge desk.Aquino says the ambiance of the redesignedbranches is open, inviting and spacious.Vancity’s banking subsidiary, VancityCommunity Investment Bank (formerlyCitizens Bank), has been granted federalapproval to offer financing and advisoryservices to community impact organisationsand non-profits nationwide.“Vancity Community Investment Bank has abank charter and offers Visa-branded prepaidcards, commercial real estate, and foreignexchange services,” says Aquino.“Its next evolution is to take what we dowell in Vancouver – making an impact on thecommunity – and take this nationwide.”In April 2017, the bank launched a pilotto provide matching loans or grants tocommunity organisations in the GreaterToronto area.6 August 2017 Retail Banker InternationalRBI August 740.indd 618/08/2017 16:24:30
feature vancity“Gone are the days of dark wood-panelledbranches,” she says. “We use pastel colours.”The art wall is situated behind the conciergedesk, and is designed by a team involvingVancity staff and the local community.“We ask local artists to suggest an art wall tous that articulates the life of their community,”says Aquino. “The art wall in one branch istotally different from the art wall in another.”The business showcase helps people findout about local firms in their community.“By deliberate design, the business showcaseis analogue, not digital,” explains Aquino.“Rotated every two weeks, it involves a localbusiness telling members in that branch whatits products or services are.“The community stage room is open tomembers and non-members, and is free ofcharge to use. For example, a local businessneeding somewhere to meet with multipleclients could use the community room, andsome rooms are open after hours.”Vancity sees its branches as places wherepeople convene, not as places for retailtransactions. “When we designed our newbranches in 2011-12, we were ahead of ourtime,” Aquino says. “Now the retail andbanking industries have caught up with us,and stores are becoming convening placeswhere people gather, exchange ideas and dosome transactions at the same time.”Unlike some financial instituions, Vancitydoes not offer events such as “mums andtoddlers” in its branches. “Our primary focushas been to enhance the business showcasesand community stage rooms,” Aquino says.“What we offer in the branches is partly afunction of available space.”IN-BRANCH EDUCATION“Our branches are beginning to deploy digitalsignage,” says Aquino. “For example, we havedigital signage offering videos explaining howour members can protect their informationonline. We are also holding membersmeetings to tell them about digital literacyand how they can use our banking app, andto find out what makes them uncomfortableabout technology.”For many years, Vancity has held financialliteracy seminars in its branches, explainingbasics such as how to save and how to borrow.
Finance to launch Asda Personal Loans. Major UK supermarkets have been selling personal loans for years. Loans from Sainsbury's and Tesco . have regularly appeared towards the top of the personal finance comparison websites. But until now, Asda has stuck to offering credit and prepaid cards, insurance and - since April this year -
