Each week we take a look at some of the latest finteh news stories from the UK. This week, Half of UK regulated firms report rise in financial crime and New analysis reveals at least six million are ‘ID Challenged’.
Nearly half of Brits spend all their monthly wage and depend on credit at least once a year
Debt management company Lowell has conducted research into the spending habits of Brits following payday, including how fast Brits spend their wages and how many depend on credit following a spending spree.
It revealed that nearly a quarter (24%) of Brits do not put any of their wages into savings or ‘rainy day pots’ and with almost one in 10 Brits (9%) spending up to 60% of their wages within the first week of payday. The study also found that half of Brits (48%) spend all their wages and depend on credit at least once a year, with 13% of Brits doing this every month.
John Pears, UK CEO of Lowell, said: “Unfortunately, this research confirms that many people across the UK are caught in the trap of living from payday to payday, but this can be a slippery slope into unmanageable debt if your circumstances were to change unexpectedly. If you’re struggling to keep track of where your money is going each month, try to set some time aside to tot up all your outgoings and build a clearer picture of your expenses. Once you know this, plan ahead by creating a realistic monthly budget that you know you can afford. Sticking to this is a great way to help get your finances back under control and avoid accidental over-spending.”
UK businesses fear increased risk of data breach as a result of hybrid working
More than eight in 10 (83%) UK businesses say hybrid working increases the risk of a data breach, yet over a fifth (22%) remain unprepared if it happens, with speed of response the top concern.
According to new research published within TransUnion’s Data Breach Support for Businesses ebook, business leaders expect 43% of their workforce to be hybrid working in the coming year, splitting their time between the office and remote working. Yet this change to working practices means a far greater potential for devices and data to end up in the wrong hands.
Hybrid working is currently seen as the top data breach threat, identified by almost a quarter (23%) of business leaders. This is because workers are now regularly switching between secure office environments and vulnerable home networks, and handling sensitive information on either public or unsecured private networks. As a result, the risk has increased for both accidental and malicious data breaches.
Millennials say their faith in insurance has increased
A third of millennials say their faith in insurance has increased since Covid, and across all ages, 77% of people in the UK who currently have car, home or contents insurance say their faith in insurance to deliver when needed has not changed since Covid. This was slightly higher for women than men at 83%.
Over half (59%) of people agree that insurance in the UK is still fit for purpose, and this is most strongly felt amongst millennials (52% agreed). Only 7% of people disagree with this statement.
Christian Wiens, Founder & CEO of Getsafe, comments: “The results of this survey will surprise many as they appear to contradict the current consensus from the industry that its reputation has been severely sullied over the past 12 months, due to the fallout from Business Interruption claims during Covid, issues around dual pricing, and the impact of a hard market.”
Half of UK regulated firms report a rise in financial crime
Almost half (48%) of regulated firms in the UK reported seeing a rise in financial crime attempts in the past 12 months, with a further 26% confirming they have been victims themselves – according to new research by RegTech firm SmartSearch.
The survey of 500 regulated businesses in the financial services, legal and property sectors found just a quarter (25%) said they have not seen any change in the level of financial crime attempts. The increase in financial crime and money laundering has been driven primarily by the gaps in security that opened up due to the global coronavirus pandemic, as businesses rushed to adapt to new working practices.
CEO John Dobson said: “There’s no doubt the conditions since the outbreak of coronavirus have been ripe for criminals to seize the opportunity for money laundering and other fraudulent activities in the property market. They have been able to do this because a lot of businesses still rely on manual methods of verification when onboarding new customers.
“Even so, the fact that half of the businesses we surveyed have reported an increase in criminal activity brings home the sheer scale of the problem. The most effective way of preventing this is by switching to a digital solution which does away with the need to rifle through documents which are easily forged by today’s organised crime gangs.”
UK customers switching banks due to complaints handling process
Research released reveals that UK customers are leaving their banks due to the mishandling of customer complaints during COVID-19.
The 2021 Global Regulator Report by global software company Nuix shows that banks are failing to address complaints adequately, leading to a loss of customers. A quarter (25%) of UK banking customers who complained said they wouldn’t use the same bank in future as a result of the company’s handling of their issue.
Among the banking customers surveyed, two-thirds (66%) have complained within the past 12 months, and almost a third (32%) of those who complained said their problem had not been resolved.
New analysis reveals at least six million are ‘ID Challenged’
New analysis from the Open Identity Exchange (OIX) reveals that at least six million people can be classed as ‘ID Challenged’, meaning they likely struggle to access government services such as Universal Credit.
With millions lacking a passport or driving licence, the research identified the extent of the UK’s identity challenge, leaving millions of the public unable to validate or verify themselves on services like GOV.UK Verify. This is because government and private sector services rely on users to have either a passport, driving licence or online banking and non-bank credit account and provide evidence of these online.
Nick Mothershaw, Chief Identity Strategist, OIX commented: “Digital ID will only work if it’s truly inclusive and that means opening up access to more datasets, often government data. This will be vital in enabling more people to prove who they are and get access to the services they are entitled to. Anyone who wants to use a Digital ID to access services should be able to create one, and the process of setting it up should be as easy as possible.
81% of adults say the quality of online experience determines who they bank with
81% of adults say the quality of online experience determines who they bank with, according to new research by digital agency MagiClick and conducted by YouGov into post-pandemic digital banking trends in the UK.
Use of online web banking overall rose significantly, with half (50%) of those who have used digital banking services more since the pandemic began stating they have used online web banking more often. The highest rise in usage for online web banking was amongst the 55+ age group (60% using this service more often).
Mark Lusted, MagiClick UK CEO, said: “This research clearly shows that the events of the past 18 months have accelerated the adoption of digital banking services by consumers across all age ranges.
“The quality and ease of use of the digital experience is clearly now of high importance to a large majority of users when choosing who to bank with and, interestingly, this was of highest importance to the over 55s. In an increasingly competitive landscape, with an array of new digital-only challenger banks entering the market, incumbent banks should take note.”
Millennial investor habits have changed with Covid
Millennials have changed their overall investment habits the most during the pandemic according to research by MoneyTransfers. 1/3 of millennials take ‘Environmental, Social and Governance’ factors into account when they invest (only 19% of Gen Z, 16% of Gen X and 2% of Boomers)
Jonathan Merry, CEO of MoneyTransfers.com comments: “As the global economy and stock markets stabilise further, millennials are likely to show even more confidence in their portfolios and report a larger appetite for risk. That could mean assets like cryptocurrencies and NFTs, but it could also expand to broader investment opportunities as millennials’ knowledge base grows.”