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Hello readers, and welcome to the first issue of December. A chill is in the air, and it’s not just the crypto winter.
One statistic that piqued my attention is from Adobe Analytics, looking at shopping over Black Friday and Thanksgiving.
The scale of spending came in above projections and orders utilising “buy now, pay later” rose almost 70 per cent compared to last year — but what was particularly interesting was that smartphones drove just over half of sales for the first time.
While Adobe Analytics predicts that the return to the office will mean that the laptop will be the preferred device for online shopping, companies such as Klarna have shown an effort to push app-based shopping as a core tenet of their strategy.
I’d be interested to hear readers’ shopping experiences: what’s your main way of stocking up on gifts ahead of the festive season? Email me your thoughts at [email protected]
Amy Kazmin in Rome has a fascinating piece on why Giorgia Meloni is pushing back on Italy’s shift to digital payments. Over 30 per cent of Italians used cash daily, according to research released earlier this year by ATM operator LINK.
Monzo’s chief TS Anil said the digital bank will be profitable in its next financial year. Speaking to banking editor Stephen Morris at the FT’s global banking summit last week, Anil also said that financial crime was an “industry challenge”.
Brooke Masters and Harriet Agnew report on asset managers pouring money into tech platforms, in a bid to emulate the success of BlackRock’s software as a service.
Discrimination remains a pervasive problem in financial services, survey says
Back in February, I wrote about calls for more data on diversity in banking and finance. Collecting and publishing this data is the first step — but it also reveals how much work there is to do on promoting equality in the workplace.
New survey data released today by Reboot, a financial services campaign group focused on race and ethnicity in the workplace, seems to confirm this idea. One of the most concerning findings is that nearly 70 per cent of the 600 ethnic minority respondents surveyed said they had experienced discrimination at work.
Further, 80 per cent said they had experienced unwelcome comments based on their background.
“Our industry should take these findings very seriously,” said Oliver Bilal, head of Emea distribution at Invesco. “An equal opportunity to progress is not only morally right, but a cornerstone of good business practice and key to creating a dynamic, productive workplace.”
The data are also set in the context of criticism over the slow speed at which European banks are progressing towards gender diversity at the executive and board level. In Portugal and Germany respectively, just 23 per cent and 29 per cent of board members are women, according to research by DBRS Morningstar.
“It is fair to say most individuals believe in a fair and diverse workforce,” said Noreen Biddle Shah, founder of Reboot, “but the systems in which they operate are flawed and we need to find a way to make real changes and measure the impact.”
The Reboot data follows research from government-funded entrepreneur network Tech Nation, released last October. While it found that around 20 per cent of the financial services industry are from ethnic minority backgrounds, the percentage diminished higher up the corporate ladder.
Reboot has proposed a three-point plan for the sector to make meaningful progress on promoting equality: financial services firms must challenge negative office cultures, have leaders focus on leading the debate around diversity and inclusion themselves, and close the ethnicity pay gap and increase transparency.
That final point in particular seems a key way to drive progress on these issues, allowing companies to hold themselves accountable and track their progress.
“The cost of [maintaining the] status quo is way too high, and success — or failure — will impact us for generations to come,” said Hannah Grove, an advisory member of Reboot’s board and a non-executive director.
“We saw a significant increase in usage of [buy now, pay later services] over the past two years. That has stabilised in the past six months.” — Charlie Nunn, chief executive of Lloyds Banking Group
The future of buy now, pay later has been one of the great questions of fintech. With inflationary pressures growing, there has been considerable uncertainty over consumer behaviour.
At the FT’s global banking summit last week, Nunn explained how BNPL trends forecast the challenges that retail may face heading into the festive season. While the Adobe Analytics research suggests an increase in BNPL usage year on year, Nunn’s comments suggests the market could plateau.
If sales do flatten over the period, BNPL providers without other lines of revenue may face real struggles. While regulation is coming down the track in the UK and abroad, a tough winter may cull the market before it comes into effect.
Allica Bank raises £100mn The UK digital lender has raised £100mn in a round led by TCV, reports Charlie Conchie at City AM. The bank, founded in 2020, has granted more than £1bn in loans to SMEs.
Zopa bucks lay-off trend The peer-to-peer lender turned bank is continuing to hire as competitors slash headcount, reports Simon Hunt at the Evening Standard, with an increase to minimum salaries.
Fintechs seeking Irish licences urged to speak to Central Bank Jonathan Keane in the Irish Independent reports on the Irish Central Bank’s call for fintechs to reach out before they file applications.
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