Both consumers and SMEs will undoubtedly continue to want services provided faster and easier. But if confidence improves, could they be willing to pay a premium for superior service? At least until such levels of service becomes standard. Of course the flip side of this is that customer expectations will only continue to increase, and they will more likely vote with their feet around issues such as IT outages.
Continuing demographic shifts such as an aging population, the renting generation and inter-generational lending will continue to shape new market opportunities for specialist propositions addressing these needs.
Will we see open banking driven propositions gain more traction amongst UK consumers and SMEs?
On the Prudential Regulatory Authority (PRA) agenda, banks will be busy working on regulatory reporting, operational resilience, a continued follow through on the fast growing firms review, and beginning to focus on climate change risk.
The impact of the Financial Conduct Authority (FCA) agenda could be higher than last year – for example, the impact of new regulation in peer to peer (P2P) and auto markets, and a continued focus on high cost credit. The activity of Claims Management Companies will also be one to watch as they search for business to replace the loss of income from Payment Protection Insurance (PPI) miselling.
Then as the 2021 expiration date for LIBOR looms ever closer, we expect to see market solutions begin to emerge.
We expect Challenger & Specialist banks to continue being vocal around the challenges to growth emanating from policy action such as internal ratings-based (IRB) accreditation, minimum requirement for own funds and eligible liabilities (MREL), the bank corporation tax surcharge and regulatory coordination (we were proud to support the response by UK Finance to HM Treasury’s call for evidence regarding regulatory coordination in October 2019).