Daily Dash: FCA Looks For Cost Of Living Answers

November 4, 2022
The UK’s Financial Conduct Authority (FCA) has called on consumer credit firms to send data in hopes of better understanding the cost of living crisis, Australia has said it will focus on crypto and greenwashing next year, and Stripe has laid off staff due to concerns of economic downturn.

FCA Looks For Answers On Consumer Credit

The UK’s Financial Conduct Authority (FCA) is asking a number of consumer credit firms that it regulates to assess the cost of living crisis. 

The data will be used to complement the financial watchdog’s ongoing work supporting consumers during the cost of living crisis. 

Although the FCA has said that it will not use formal information gathering powers to gather the data, it expects firms to be cooperative and abide by the timeframes set out. 

It is asking around 600 firms to take part providing data either on a monthly or quarterly basis, and information needs to be sent to the regulator ten days after the request was sent (November 1), according to the FCA’s Q&A.

Australian Agency To Crack Down On Misleading ESG Claims And Crypto In 2023

The Australian Securities and Investments Commission (ASIC) has said its enforcement focus next year will be on misleading ESG claims, cryptocurrencies and predatory lending.

ASIC published its Enforcement Priorities for 2023 on Thursday (November 3), setting out particular areas of its future enforcement focus for the first time.

One of next year’s enforcement priorities will be protecting Australians from investment scams and high-risk investment products, including crypto-assets, the agency said, noting that in the last two years it has received more than 2,200 reports of misconduct regarding crypto scams.

The agency will also closely monitor for misleading conduct and claims of greenwashing that cannot be sustained, and take enforcement action where necessary.

Stripe Lays Off 14 Percent Of Staff Amid Changing Economic Climate

Irish-US fintech giant Stripe has been the latest company to let go of a significant number of employees, citing “the beginning of a different economic climate”.

In a note sent to his employees, Stripe CEO Patrick Collison said that the company will reduce the size of its team by around 14 percent, returning to the company’s February headcount of almost 7,000 people.

Following the high growth experienced during the pandemic, “the world is now shifting again”, Collison wrote.

“We think that 2022 represents the beginning of a different economic climate,” he added.

Collison acknowledged that he and his brother John Collison, president of Stripe, made two “very consequential mistakes” and said they take full responsibility for the decisions leading up to the layoff.

“We were much too optimistic about the internet economy’s near-term growth in 2022 and 2023 and underestimated both the likelihood and impact of a broader slowdown,” he said.

In addition, Stripe grew operating costs too quickly. “Buoyed by the success we’re seeing in some of our new product areas, we allowed coordination costs to grow and operational inefficiencies to seep in.”

Along with the layoff, Collison said it will cut back further costs.

Nonetheless, he remained optimistic about future prospects, emphasising that Stripe “is fundamentally well-positioned to weather harsh circumstances”.

Canada, Australia Latest To Push Back ISO 20022 Implementation 

Australia and Canada become the latest countries to push back their ISO 20022 timelines, and are now confirmed to have delayed their implementation date from November 22 to March 20 next year. 

The European Central Bank (ECB) appears to have had a domino effect on other jurisdictions' delayed implementation of the financial messaging standard, which its governing council officially pushed back on October 21. 

On October 27, SWIFT officially announced its decision to reschedule in line with the ECB. 

As noted in the announcement, this decision was driven by the need to align the start of the global ISO 20022 migration for CBPR+ with the ECB’s updated timetable to ease implementation.

SWIFT, however, was adamant that any additional delay beyond March 2023 will not be considered.

587 Bank Closures This Year, Which? Reveals

Research from UK consumer association Which? has revealed a raft of bank closures in the UK. 

Beyond the 587 that have already closed, Which? warns that another 75 are scheduled to shut by the end of 2022. Meanwhile, 60 are already scheduled for closure in 2023.

Although these numbers are high, previous years have seen higher levels of closure, including 868 branches in 2017 and 792 in following year. 

“Our figures show how the number of bank branches and free-to-use ATMs has been slashed in recent years, so it’s vital that new legislation protects free access to cash for the millions of people who rely on it,” said Jenny Ross, Which? Money editor. 

“The government must guarantee minimum levels of access without fees being charged and give the Financial Conduct Authority powers to oversee the cash system to ensure it meets community needs.”

The research comes at the same time as the announcement from LINK that there will be four new shared banking hubs in the UK. These will be located in Bury Park (Bedfordshire), Haslemere (Surrey), Welling (South-East London) and Prestatyn (Wales). 

Revolut Launches Chat Messaging In Mobile App

Revolut has unveiled superapp plans, with an instant messaging feature being added for customers in the European Economic Area (EEA) and UK. 

Customers in the UK and EEA can now chat as well as share gifs and stickers while sending and requesting funds to and from other customers.

A recent European survey of 8,000 people, which was commissioned by Revolut, revealed that two thirds of people find it difficult to discuss money. 

Revolut said that the new chat feature aims to make talking about money less awkward by keeping it in one place.

The messaging feature also has end-to-end encryption. 

Coordinated Crypto Regulation A G20 Priority Under India Presidency, Minister Says

Nirmala Sitharaman, India’s finance minister, said crypto regulation would be one of the eight priorities for G20 during the country's presidency, which begins next month.

Speaking at the ICRIER'S annual G20 conference, the minister said we need to encourage international organisations such as the International Monetary Fund, the Financial Stability Board and the Organisation for Economic Co-operation and Development, to understand “how crypto assets can be regulated with all countries being on board”.

“We need them [G20 countries] on board because no one single country can succeed individually, being in a silo, trying to regulate the crypto assets," she emphasised.

Sitharaman noted, however, that this is not a final list yet and it is possible that some priorities could change before the start of its presidency.

US Agency Re-Opens Bigtech Inquiry

The US Consumer Financial Protection Bureau (CFPB) has re-opened the public comment period in its inquiry into bigtech payment platforms.

The agency is seeking public input from consumers, financial institutions and other stakeholders on a number of questions regarding bigtech companies' use of their payments platform.

The Federal Register notice states that submissions to these questions will be considered in the agency’s rule-writing process for consumer data sharing, which kicked off last week.

FATF Consults On Beneficial Ownership Guidance 

The Financial Action Task Force (FATF) has opened a consultation on its updated guidance for beneficial ownership.

The body is proposing to update the guide, explicitly requiring countries to use a multi-pronged approach for the collection of beneficial ownership information.

For instance, countries could use a combination of different mechanisms to ensure that beneficial ownership registers are adequate, accurate and up to date, and can be accessed by the competent authorities in a timely manner.

Interested parties can submit comments until December 6. The submissions will be considered at the organisation’s February 2023 meetings, the announcement said.

TD Mobile Payment Shuts Down

TD Bank shut down its Mobile Payment app on Tuesday (November 1), citing the “growing popularity of other digital wallets”.

In an email sent to its customers, the Canadian big bank said the TD Mobile Payment app would stop working on November 1, but physical credit cards and pre-authorised payments would continue to work.

Complaining about the short notice, one of the customers said: “What really pisses me off about this is that it was like 3 days' notice. And none of the agents I called knew anything about it.”

Digital wallet adoption is one of the fastest growing trends in Canada. According to Payments Canada’s 2021 payment methods and trend report, around 29 percent of Canadians made a purchase using a mobile payment or digital wallet. 

Apple Pay and Google Pay are the most popular apps for making mobile contactless payments, with 22 percent and 18 percent overall penetration, respectively, while Samsung Pay had a 10 percent penetration, according to the report.

According to MobileSyrup, TD supports payments on Apple Pay and Samsumg Pay but it cannot be used by Google Pay.

Google India Suspends In-App Payments Rules Following $114m Fine

Google India has announced that it will suspend its in-app payment rules following a $114m fine for restrictive practices issued by the Competition Commission of India (CCI) last week.

Prior to the verdict, Google had planned to require that developers based in India use Google Play’s own billing system for in-app purchases of digital goods and services.

Google had set a deadline of October 31 for developers to comply, but that deadline has now been withdrawn.

“Following the CCI's recent ruling, we are pausing this enforcement while we review our legal options and ensure we can continue to invest in Android and Play,” Google said in a statement.

“The requirement to use Google Play's billing system applies for in-app digital content purchases for users outside of India.”

Thailand To Start Testing CBDC With Banks In December

The Bank of Thailand (BOT) has announced that it will start testing limited retail central bank digital currency (CBDC) use in December in partnership with the private sector.

The central bank also revealed that it has set up a retail CBDC hackathon. The hackathon, which has more than 100 participants, will look at additional use cases for a retail CBDC. 

In addition, a new electronic letter of guarantee system run on blockchain is now widely available to the public after 18 commercial banks successfully completed the regulator’s sandbox, BOT said.  

Monzo United 

The challenger bank’s staff have notified management that they intend to form a union and achieve recognised status. 

The union that staff intend to join is the United Tech & Allied Workers, which is already reportedly home to staffers from Microsoft and Google. 

The United Tech and Allied Workers is a branch of the Communications Workers Union, which is one of the largest trade unions in the UK.

$5m NZ Banking Partnership Boosts Access To Finance

Financial mentors and banks are working together to help people in small communities across New Zealand to access banking services, in a new initiative launched by the New Zealand Bankers' Association (NZBA). 

These partnerships are one of several projects being delivered under a partnership between the country’s national financial mentoring service, FinCap, and the NZBA.

The projects have been varied. For example, one use case involved teaching a senior citizen how to benefit from online banking services, therefore reducing the time that was previously spent driving to a local banking branch as they did not know how to download bank statements. 

Young Maori people have also been taught how to apply for bank accounts and set up online banking services.

Refunding Authorised Scam Payments Would Harm Consumers, US Bank Association Says In Zelle Fraud Spat

The American Bankers Association (ABA) warns that shifting liability to banks for authorised payments would eventually have a counterproductive effect on consumers.

Requiring banks to refund authorised scam payments “will ultimately harm consumers and competition”, ABA wrote in a letter to the Consumer Financial Protection Bureau (CFPB) on Thursday (October 27).

“Many banks will reconsider whether to offer P2P payments, whether to be more restrictive in access and options, and whether to begin charging for the service, which is now free at the vast majority of banks. In addition, consumers will have to wait to use their money,” the association argues.

“In effect, the value proposition of P2P disappears,” it stressed.

The letter follows an investigation by US Senator Elizabeth Warren (D-MA) who had asked the CFPB to update and strengthen regulations for fraud protection on P2P apps.

OCC To Launch Fintech Office

The US Office of the Comptroller of the Currency (OCC) is establishing an Office of Financial Technology early next year to bolster the agency’s expertise and ability to adapt to a rapidly changing banking landscape.

The department will build on and incorporate the Office of Innovation, which the OCC established in 2016 to coordinate agency efforts to support responsible financial innovation.

The driver for this decision appears to be concerns over the rise of bank-fintech partnerships, which the OCC believes will continue growing in number and complexity. 

“To ensure that the federal banking system is safe, sound, and fair today and well into the future, we need to have a deep understanding of financial technology and the financial technology landscape,” said Michael J. Hsu, acting comptroller of the currency.

“The establishment of this office will enable us to be more agile and to promote responsible innovation, consistent with our mission.”

Telegram Quietly Tests Pay-To-View Posts, Skirting Apple Rules

Instant messaging platform Telegram has begun testing a new pay-to-view posts feature on its iOS app, as seen in screenshots shared by social media consultant Matt Navarra.

If launched, the new feature would likely violate Apple’s App Store rules, which prohibit the use of in-app payment channels other than Apple’s own.

Pavel Durov, CEO of Telegram, has long been a vocal critic of Apple’s in-app payments policy, and has called for both its billing monopoly and its 30 percent commission per transaction to be scrapped. 

“The regulators in the EU and elsewhere are slowly starting to look into these abusive practices,” Durov said in August. “But the economic damage that has already been inflicted by Apple on the tech industry won't be undone.”

Our premium content is available to users of our services.

To view articles, please Log-in to your account, or sign up today for full access:

Opt in to hear about webinars, events, industry and product news

To find out more about Vixio, contact us today
No items found.