Of Special Interest
- New industry code to tackle fraud must deliver, says Which?
- New TTF report highlights loss of trust in financial services
- Arxan highlights financial app vulnerability epidemic
- SAS asks whether banks really need to choose between operations and innovation
- Which? raises alarm as almost 1,700 free ATMs become fee-charging
- Financial wellness affects half of peoples’ mental or physical health, finds report
- Study finds traditional financial institutions embrace Fintech disruption
- Grass is greener for environmentally friendly businesses, finds Barclays
- Prospective homeowners would consider a 40-year mortgage to escape renting, finds Santander
- Millennials’ needs are changing the face of banking industry, says new report
- FS is putting consumer data at risk by failing to protect mobile apps, says Arxan
- A lack of belief in their ability holds 28% women back in work, says Cambridge & Counties
- ‘Which?’ reveals Scotland has lost over a third of its bank branches in eight years
- Next downturn unlikely to be as bad as 2008, according to S&P
- FCA reveals findings from first cryptoassets consumer research
- US consumers favour single mobile app for banking and payments
- Banks suffering major IT shutdowns every day, ‘Which?’ reveals
- The US will be a key offshore centre in 2019, says GlobalData
- Debit industry changes markedly in 10 years of the Debit Issuer Study
- UK's ‘Big Five’ face ‘too big to compete’ as small challengers secure stellar returns
- Banks as vulnerable now as before crash, says new study
- Leverage ratio a constant conundrum for European and US banks, says SNL
17th May 2019
New TTF report highlights loss of trust in financial services
The Transparency Task Force (TTF) has released a report, with RSA and Newgate Communications, which highlights a worrying loss of trust and confidence in financial services, across all developed economies. TTF has established a global network of interested groups to tackle this issue, increase trust and improve consumer outcomes.
• The savings gap and rising indebtedness are a burning platform that must be addressed to alleviate later life poverty. Financial firms, regulators, trade bodies and Governments, are perceived to have been insufficiently attentive to the needs and protection of consumers.
• Although the public think that financial institutions' main role should be safeguarding people's money, there is a sense of disillusion and scepticism about the motives of financial firms. Rogue traders, lax regulation and unregulated products have caused major scandals and losses, feeding the perception that Regulators are always behind the curve, sweeping up after the fact, rather than pre-empting and preventing problems in the first place.
• Having spent many years trying to improve the way the pension system works for people, there have been significant steps forward such as the creation of the Pension Protection Fund; and pensions auto-enrolment, however there is much more to do. The vast majority of workers are in defined contribution schemes, where the level of contributions, investment returns and charges will determine their future pensions. More transparency, fairer charges and improved products can encourage higher contributions.
• The pensions industry has ongoing problems. I have called for simpler, more transparent charges for many years and have highlighted the ‘Net Pay/Relief at Source’ scandal that forces the lowest earners to pay 25 per cent extra for their pensions. Error rates in auto-enrolment and other pension data must be identified and corrected, so that a reliable Pensions Dashboard can be delivered. These problems are good examples of what can go wrong when the pensions industry fails to consider customer interests carefully.
• The era of 'light-touch' regulation (which was more like 'no-touch' regulation) resulted in the 2008 financial crisis. Since then, different risks have emerged. New technologies have enabled the rapid spread of unregulated, decentralised investments, which make greater demands on the regulatory system.
• Cold-calling and unregulated 'introducers' have enticed unsuspecting individuals to invest their pensions in bogus schemes which have subsequently collapsed. If the sector wishes to regain the trust of consumers, it seems essential that new approaches are adopted. One proposal might be to ban the inclusion of unregulated investments in mainstream pension products such as Self-Invested Personal Pensions.
• The TTF approach is about learning from past mistakes in order to improve future behaviours. The new global initiatives comprise a combination of regulatory bodies, Government Departments, Parliamentarians, campaign groups, Think Tanks, Governance and risk experts, academics and major financial firms who aim to achieve a collaborative, co-operative and collegiate approach to improve trust in the sector.