Innovation stymied by banking access issues

UK authorities must improve access to banking services for payments visionaries, legal experts have said, after industry unrest that innovation is being stifled by outdated and complex regulations. A recent paper published by the Financial Conduct Authority (FCA) revealed that many participants fear an antiquated, risk-averse and multifarious regulatory environment has developed.

The FCA responded by insisting payments innovators are free to use state-of-the-art compliance processes, such as digital due diligence and identity verification, provided they adhere to existing anti-money laundering (AML) laws.

But for London-based payments regulatory expert Bruno Fatier, a partner at Rosenblatt law firm, banks are often suspicious about those emerging fintech business models and react by shutting off their access to banking services.

“Those businesses need to open accounts with banks, and the banks need a thorough process of checking the identity of the sub-customers,” Fatier told PaymentsCompliance. “It’s that chain, and when you are dealing with potentially dangerous businesses like money remittance, banks will run away rather than open an account. “So the pressure is indirect.” He agreed in principle with the FCA’s suggestions, pointing out that emerging businesses that offer digital identity verification services could significantly help reduce compliance costs and improve efficiency, but said their effect is still limited if banks are not required to recognise them. “In general, there is a conservative position which is shared by the high-street banks, and this is that kind of unwillingness to open a bank account for businesses which are not ‘standard’,” Fatier said.

AML guidance issued by the Joint Money Laundering Steering Group (JMLSG), a group of industry bodies and associations, was singled out by payment and fintech firms as particularly troublesome.

The guidance warns the financial sector that relationships with payments and fintech firms are an area of substantial risk, as those businesses are “an attractive vehicle through which criminal and terrorist funds can enter the financial system”.

Despite revisions to the guidance published in November 2014, consultation respondents said the JMLSG’s stance remains outdated and “inherently biased against digital solutions in general”. “Respondents were concerned that these perceived barriers to the use of digital solutions for customer due diligence (CDD) mean the industry is failing to meet growing consumer demand for an end-to-end digital service,” the FCA said. “Some firms argued that this is also adding unnecessary inefficiency to the process of CDD for the purposes of AML.”

In its response, trade body and lobby group Payments UK expressed its concern at “uncertainties” within current legal frameworks for digital identity, urging the regulator to provide additional clarity. A Payments UK spokesperson told PaymentsCompliance that its stance remains the same, although welcomed the FCA’s response and said it would consider its suggestions.

The Electronic Money Association added that existing AML guidelines do not reflect developments in cloud computing, which it said could slash due diligence costs by outsourcing storage and analysis of identity and transaction information.

However, for Charles Kerrigan, head of finance and partner […]

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Advertising legend Sir John Hegarty explains the danger of opting for ‘content’ over old-fashioned ads — Oreo’s famous ‘Dunk in the Dark’ tweet was ‘S—-!’

John HegartyBBH

Sir John Hegarty is a British advertising veteran, having joined the industry in the 1960s and helping build brands like ;as Levi’s and Audi with ads placed on what are now thought of as “traditional” media that are still instantly recognizable decades on.

Almost everyone thinks they could easily be an advertising creative, but very few can actually build a successful career out of it. Hegarty has a poster on his wall at Bartle Bogle Hegarty (BBH), the London-based agency he cofounded in 1982, with his own quote blazened on it: “Advertising is 80% idea and 80% execution.” Few people have the craft and consistency of Hegarty, who, at 71-years-old is still very hands-on at BBH, which counts Axe, Samsung, Tesco, KFC, and Google among its clients.

Leaning back in a chair inside his office, Hegarty looks comfortable, but he’s not content. And the thing he’s not content about is content.

As digital media has become ubiquitous, advertisers have turned their attention toward producing content (like videos, articles, games, and social media posts) to compliment their spend on traditional forms of advertising, which consumers are increasingly going out of their way to avoid or block. Spend on content marketing is set to soar 186% to €2.12 billion in Europe alone by 2020, according to research from Yahoo and Enders Analysis.

That worries Hegarty, who sees the genius of advertising in a time-starved world as taking complex ideas and reducing them into precise, short, ads that are memorable. Think slogans and 30-second TV ads rather than 5-minute long branded content videos.

“I can say ‘Vorsprung durch Technik’ and you instantly know what I’m talking about [— it’s was the ad slogan Hegarty devised for Audi back in the 1980s.] That came out as a 60-second TV ad and there we are, 35 years later,” Hegarty said.

john hegartyBBH“We seem to have lost a desire to do that … Can anybody tell me, in the last 10 years, a piece of content that people remember and can quote back?”

We mention BuzzFeed’s 3-and-a-half-minute-long “Puppyhood” video for dog food brand Purina, which has been viewed more than 11 million times on YouTube.

“Nobody I’ve ever spoken to has ever said: ‘Have you seen the BuzzFeed puppy?'” Hegarty responded.

“I used to always say I want my auntie in Harpenden to say ‘John, did you do that?’ That’s when I know I’ve cracked it. Sadly she’s no longer around as she was always my measure: ‘Did you do that Hovis ad, John?’ ‘No, sadly I didn’t.’ ‘Oh, it’s a really good one, you should do more like that.’ That’s when you’ve cracked it.”

The much-lauded Oreo “Dunk in the Dark” Super Bowl tweet is a “piece of s—-!”

Hegarty says people advocating content (paid-for or otherwise) instead of traditional campaigns need only look at the real numbers and those real conversations that happen about great ads outside of advertising circles — “Not when it’s big in Shoreditch. F— Shoreditch, I’m not interested in that.”

One of the most-lauded examples of “real-time content” comes from back in 2013. The power went out during the Super Bowl, plunging the stadium into darkness, prompting cookie brand Oreo to send out this tweet:

That single tweet won two highly-coveted Cannes Lions awards and countless other accolades from the media. But Hegarty points out that when marketing columnist Mark Ritson ran the numbers, he estimated the tweet only actually reached around 150,000 people — less than 1% of Oreo’s target market.

Hegarty scoffed: “F— off! I don’t get out of bed for less than a million. I mean, please. What business are you in? And it got awarded all over the world as ‘this is fantastic’. Not it’s not! It’s a piece of s—-!”

The 1980s Levi’s launderette ad couldn’t just be crowdsourced

The democratization of media means almost anyone can replicate Hegarty’s job — they could simply upload an ad to YouTube and send it to a brand or agency in the hope it gets picked up. Agencies — including BBH — have even experimented with “crowdsourcing” creative ideas.

Hegarty said it was a “bloody disaster.”

One of Hegarty’s most famous ad campaigns was for Levi’s, announcing its first pair of stonewashed jeans in 1985, at a time when the brand had lost its luster with youth and was associated with being the kind of pants your dad would wear.

A then-unknown model, Nick Kamen, strides into a launderette, removes his sunglasses and empties a bag of stones into the washer. He strips off his shirt and his jeans until he’s down to only his boxer shorts and plonks himself down on the bench next to a fat man. The ad is set to Marvin Gaye’s hit “I Heard It Through The Grapevine.”

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Hegarty reminisces that the idea was so ludicrous on paper he had to convince his client that it was going to change the brand — and you can’t crowdsource daring ideas like that.

“That revived not only a brand, but a music genre, and created a market for boxer shorts, and changed fashion. That’s the power of execution. If you don’t understand that, you don’t understand advertising,” Hegarty said.

“The idea that the creative director could be 100 people: Why is that necessarily better? It’s that world we’ve got into; the power of the crowd. No, the power of the crowd soon turns into a mob.”

Read more from our interview with Sir John Hegarty later this week at

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Benjamin Loh, Public Speaking Coach, On Being A Better Public Speaker & Overcoming Fear

Public Speaking Coach Benjamin Loh was a victim of bullying during his school days. His growing up years was marked with a lot of pain and shame as a serial bully victim. “Verbal, physical and emotional bullying – you name it, I had a taste of all of that,” he says. Being an introvert, he wasn’t particularly expressive or very popular with people. He’d usually keep to himself and had issues that were profound and emotional in nature. That would have remained as the narrative of his life if he hadn’t met his life coach at age 20, which started his journey of discovery and evolution. Ben says that looking back, his past and the traumas he had gone through has shaped him to be the resilient person he is today. “One of my “more positive” nicknames, when I was much younger, was “cockroach” – you can stomp on me and put me down, but I will almost, always, bounce back up.” Ben says he thought he’d end up becoming a bean counter after enrolling into accounting school, but that his desire to make a meaningful difference and his newfound conviction and confidence on stage as a public speaker led […]

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Standford Ignite Innovation Program to be offered in London

Yossi Feinberg is Professor of Economics at Stanford Graduate School of Business (GSB) and Faculty Director of Stanford Ignite, a 10-week global innovation and entrepreneurship programme.

We had a chat about the return of Stanford Ignite to its Canary Wharf campus in London at the end of September 2016.

In a few short months, Stanford Ignite will be back in London. Could you tell us briefly about the programme: who is it intended for and what innovation can we expect in this edition?
It’s intended for anyone who wants to create a new business. And it doesn’t matter if you’re an entrepreneur, or you are in charge of creating a new business within an existing firm. You could already have many years of experience managing teams and projects, but you want an all-encompassing view of all the aspects of the business. We are looking for people who want to create an impact. And we give them the tools to do that.

In fact, anyone can apply. And we have a lot of experience in figuring out who’s a good fit for the programme. We ask to provide background information and answer a few questions that help us understand why you want to come to the programme. And we also ask for two recommendations. Then we interview the applicants and decide who gets admitted into the programme.

You led the expansion of Stanford Ignite to Bangalore, Beijing, Paris and Santiago. The programme also runs in New York City, São Paulo, and of course in London. What is unique about the London programme and how does the business experience that participants gain here compare to other campuses worldwide?
We’re running a large number of programs all over the world, and we saw that basic principles of every discipline in creating a new business apply anywhere. But you implement and execute them differently to win in a different ecosystem, country, and market.

In our curriculum the focus is on execution and translating the general principles into the particular project you’re working on. We teach all the fundamental aspects of creating a new venture: Accounting, Finance, Marketing, Economics… and so on. And then we have mentors, professors, coaches, panellists and specialists from the local community to guide the team through the project. The learning is tailored and specific not only to the location, but to the particular industry and particular project.

If you’re working on a specific project you need to learn from the people in that industry who have expertise you want to learn from.

One could argue that in business the crucial knowledge transfer takes place beyond the classroom. How does Stanford Ignite – London ensure its students stay competitive?
It’s definitely not enough to stay in the classroom. Learning also happens when you go outside. But you need to learn how to learn.

I’m on the ground for four out of the seven weekends of the programme. I work with teams together with three other faculty members, all very experienced in working with new ventures. We do check-ins with each team so that they have a guided process […]

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Why China’s spectacular industrial resurgence could cause huge problems down the line

China Chinese Steel WorkerKevin Frayer/Getty Images

The rebound in China’s industrial sectors in recent months has really created a stir.

After years of weakness, plagued by acute overcapacity and heavy levels of indebtedness, suddenly these sectors have sprung back to life, underpinned by a surge in infrastructure investment, primarily from state-backed groups rather than the private sector.

Economic activity has improved, credit growth has surged, commodity prices have bounced, and optimism over the outlook for the broader Chinese economy, among some investors, has improved.

It’s been a remarkable turnaround, delivered in a manner only China could deliver.

To those who witnessed China’s unprecedented stimulus splurge between 2008 to 2011 — unleashed to mitigate the effects of the global financial crisis at the time — it all seems eerily familiar, harping back to the old China growth model of big investment and big credit growth all pushed out in record-breaking time.

For a government pushing the need for economic rebalancing and reform, this distinctive shift to the past has certainly raised some eyebrows.

Just how serious are authorities about reforming the industrial sector when they’ve just provided it with the largest stimulus boost seen in years? It’s a question than many investors are asking themselves, and understandably so.

Gerard Burg, NAB’s senior Asia economist, is one analyst who isn’t overly enthused by recent developments in the world’s second largest economy, describing the recent construction-led, credit-fueled rebound in the nation’s steel industry as “unsustainable”, suggesting it threatens to derail necessary reforms to the sector.

“The sudden improvement in conditions in China’s steel sector – with profitability back to multi-year highs – could draw idle capacity back into production,” says Burg.

Part of the reason why Burg is unenthusiastic about the recovery in China’s steel sector is that it has been assisted by a sharp recovery in construction activity in smaller Chinese cities, already plagued by a years of existing unsold housing inventory.

“At a fundamental level, little has changed in China’s property markets – with excess supply persisting in many locations,” says Burg, acknowledging the exception to this view is in the nation’s largest cities such as Shanghai, Beijing and Shenzhen.

Instead he suggests that “policy changes that have relaxed purchase requirements, looser credit and the poor performance of alternative investment options have started to re-inflate the property bubble that had somewhat deflated across 2014 and 2015”.

The recovery in construction activity, along with significant elements of speculative activity in Chinese futures markets, has underpinned stronger demand for steel, and as a consequence the main ingredients required to produce it, iron ore and coking coal.

As a result of increased demand, price gains in recent months have been epic, even forgiving recent weakness in prices.

The chart below, supplied by the NAB, tracks MySteel’s East China Steel price index, looking at the evolution in steel prices going back to 1997. After falling below RMB 2,000 a tonne in late 2015, the index has subsequently surged by more than 50%.

MySteel East China Steel Price Index May 2016Kevin Frayer/Getty Images

As a result of the recent surge in steel prices, Burg notes that profitability at Chinese steel mills is now at the highest level seen since 2009, right when the government was rolling out its enormous infrastructure stimulus package.

“Falling steel stocks have supported prices that have increased more rapidly than raw material costs. The result has been that while steel prices are around the highest levels since September 2014, steel profitability in late April was at its highest level since mid-2009,”says Burg.

That’s quite a turnaround, particularly given just a few months ago China’s state council announced plans to cut crude steel capacity in the nation by between 100 and 150 million tonnes over the next five years.

The chart below, again supplied by the NAB, looks at the relationship between Chinese hot-rolled steel prices and the profitability of Chinese producer.

HR China Steel Prices Mill Profitability May 2016Kevin Frayer/Getty Images

Even with the improvement in profitability for the sector, Burg believes that there are significant long term challenges that need to be addressed, noting that China’s annual production capacity is currently 1.13 billion tonnes, over 300 million tonnes more than its total output in 2015.

From a demand perspective, recent commentary from the China Steel and Iron Association (CISA), the nation’s peak steel body, suggests thatChinese steel demand has already peaked, adding to supply-demand imbalances if its view turns out to be correct.

Though in the short-term Chinese mills could export excess supply into foreign markets, Burg suggests that “Chinese producers [are] already stretching the limit as trade tensions rise”, noting China exported nearly 100 million tonnes of steel last year, a figure akin to Japan’s total annual output.

Of course, should the dumping of cheap excess supply onto global markets be met by greater hostility from other steel producing nations, something that other analysts have already cited as having increased, it could further exacerbate overcapacity and solvency concerns in the sector.

You can see why Burg, and others, are cautious on the outlook for the sector, even with the recent improvement seen.

There are more questions than answers, with most fundamental factors suggesting the government is merely exacerbating problems for the sector, creating an even larger task down the line to restructure this and other industries.

Instead of encouraging idle production to come back online, Berg believes that policymakers need to play a long game, dealing with the problems now before they get worse in the future.

“(Encouraging idle capacity back into the market) could impact both the short term – through worsening trade relationships and further pollution – and the longer term, if it is allowed to derail much needed reform to the sector,” says Burg.

“Chinese authorities need to remain focused on the long term strategic benefits of reform.”

It’s certain many share this view in light of recent developments. The only question now is which path policymakers will take — reform or reversion to the previous norm.

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Improve Your Credit Score – Tips for Long-Term Planning & Daily Doing

How to optimise and improve your credit score Cultivation of a good credit score is as important these days as brushing your teeth regularly! There comes a time in everyone’s life – whether you’re looking to take out a car loan, or enrolling at a university with the support of an education loan, or closing on that dream home, or even just applying for a new credit card – when your creditworthiness will be assessed by a financial institution. The level of your credit score, which reflects the likelihood of your paying off any money loaned to you, will be scrutinised by any smart lender who obviously wants to avoid a potential defaulter. Your credit score is an important factor affecting your ability to borrow money from banks and other financial institutions. It will also influence the ease with which a lender will offer you a low interest rate. A good credit score can save you hundreds or thousands of dollars in the long run. It is therefore crucial that you monitor your credit score and take extra steps to raise it as high as possible and keep it there. Here are 6 ways to improve your credit score . […]

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Professional Tips for Paying off a Consumer Proposal

Okay, so you got yourself into a financial pickle and now you need to find a way to pay off a consumer proposal. You may think that you’re out of luck and options, but the truth is there is still a way to recover. Check out the tips below to learn how to effectively make payments on this financial agreement without ruining your credit score and reports in the process.

Figuring Out Your Finances

First of all, if you have been faced with the problem of paying off your consumer proposal, then you need to start by analyzing how you got here. What exactly is a consumer proposal? Well, it is one of the legal contracts that enables you to bypass filing for bankruptcy. While you are given freedom from debt collectors, you are still obligated to work on paying off your outstanding debts. The reasons for your unpaid loans or expenses will vary; it could be credit card purchases, a mortgage foreclosure, or a combination of poor financial choices. Whatever the case, you are required to work on paying off the debt incrementally, while your credit institution forgives a portion of the sum.

Breaking it Down

So, now that you have the basics, let’s take a look at the nitty-gritty of paying off your consumer proposal. The day you file for this arrangement, you relinquish most of your ability to apply for other loans, while the interest on your existing loan debt is put on hold. Unlike bankruptcy, you will not be at risk for losing your home or property, and most agreements allow for a maximum payment period of five years. If you can’t pay off the debt amount within that time frame, the remaining amount is forgiven. Unfortunately, finding a way to pay off the amount could prove tricky, since many banks refuse loan applicants who have a consumer proposal.

Seeking Alternative Solutions

Even so, you should be aware that there are other options out there. Some financial institutions or credit companies are willing to offer applicants with consumer proposals some alternative methods of paying off their debt. For instance, applicants are encouraged to obtain a second mortgage in order to accumulate some extra income to pay off the amount. Another strategy could be to apply for a personal loan, as accepted by the financial institution. The key is finding a business that won’t turn you down for a loan even with an outstanding consumer proposal.

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