Banking Spotlight July14

8/10/2019 Banking Spotlight July14

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VOLUME 2; ISSUE 1

NEWSFLASH! NEWSFLASH!Under the MortgageMarket Review, which cameinto force on 26 April,prospective borrowersnow have to prove thatthey can aord to repaytheir mortgage!

Is this really news? I rmlybelieve that it isnt, but the

media hype surroundingthe introduction of theMMR seems to tell adierent story.

So, lenders are nowresponsible for evidencingaordability is this reallysuch a shock? From a smalllenders viewpoint we arealways concerned aboutrisking our Members capitaland try to treat every case

on its merits as if we wereadvancing our own money.

However, perhaps thishasnt always been the caseacross the nancial servicessector as a whole and, ifaordability checks havebeen skimped in the past,then I can fully understandwhere the Regulator iscoming from. Perhapsthey are right to insist

upon more rigid checksbeing made?

However, care is requiredas to how far we go withall of this MMR hype,particularly with regard todiscretionary spending.Most people will cutback on what they see asdiscretionary spendingin times of an incomesqueeze, especially if

this is to protect the roofover their heads. Onmany occasions I haveseen mortgage payments

preferred ahead ofcredit card and other

unsecured debts.As always, the devil isin the detail. Take SkyTV for instance is thisa necessity in times ofnancial strain? For someit will be and others not.Should we be able to trustour borrowers to make thatsubjective decision?

I think we also need to

be cautious regardingthe need for crystal ballgazing. Its all well andgood to enquire aboutlikely future events, butunexpected occurrenceswill still keep happening!If there was no risk inlending money then therewouldnt be a variety ofcharges for it. There arelots of unknown unknowns redundancy, divorce andthe possibility of accidentalchildren to name butthree! What is certain isuncertainty.

For some, the MMR willmean the collection ofmuch more customerdata and the involvementof intermediaries inmore cases. Personally Isee this as a good thing,

provided the advice givenis of good quality and valuefor money.

In the early stages of

Ivan Gould, Chief Executive,Buckinghamshire BuildingSociety, June 2014

discussion relating tothe MMR I was at a

seminar where one of theother participants was alarger lender. They werechallenging the need tosee bank statements andquizzing me as to whatwe did with them whenwe got them. I answeredthat, for instance, wecompared the car loanon the budget planner tothe bank statements to

evidence both the amountof the payment and alsothat it was going throughthat bank account. Theyalso validated monthlyincome rather than seeingindividual payslips. Thecomment I got was thatthis lender didnt have thesta to undertake suchan exercise and theircosts would rise if they didundertake those checks.

They then stated that 95%of their applications wentthrough without touchingthe sides. Might I suggestthat their fall out rate willnow be somewhat higher asthey have to check more?!

Oh, times-they-are-a-changing.

Ivan Gould, Chief Executive,Buckinghamshire BuildingSociety, June 2014

This article is the opinion of the author and not necessarily the Society

Newsash-MMR 1

The currentRecruitmentMarket, a classiccase of supply anddemand

2

60 seconds with... 3

Quick news 3

Mobile talent 4


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Increased demand

for Talent

The rst quarter of 2014 saw arelative explosion in demand acrossmany areas, but particularly anythingrelated to Mortgages, something I amsure comes as no surprise. We haveseen strong demand across MortgageUnderwriting (both Residential andCommercial), Qualied MortgageAdvisors and Sales & Marketingroles as lenders look to forge deeperrelationships with their brokernetworks. We do expect the trendto continue and in recent monthshave seen increased appetite forcommercial lending as well.

This is certainly backed up by theeconomy as a whole showingconsistent growth and the jobswebsite reed.co.uk showing a 28%rise in advertisements in April,compared to the same periodin 2014).

Limited supply ofTalent, pressureon wages

We have witnessed more counter-oers in the rst half of 2014 thanprobably in the whole of the last 5years, a sure sign that the balance ofpower (when it comes to recruitment)is shifting back toward the candidate.We are stressing the need to speedup the recruitment process, goodcandidates will no longer have to waitfor opportunities to come along, theyare telling us that roles are coming tothem and are often getting more thanone rm oer.

This is backed up by a report releasedby KPMG (in conjunction with ourtrade body, the Recruitment &Employment Confederation REC).The report shows 37.7% of employershad fewer candidates available to

THE CURRENT RECRUITMENT MARKET,A CLASSIC CASE OF SUPPLY AND DEMAND

In 2013 we saw a gradual, but marked, increase in recruitment levels throughout the year.Business Leaders throughout the Retail, Mutual and Mortgage sector spoke to us about theincreased demand for Mortgage products as the housing market gathered pace and of coursethe need to prepare for the implementation of the Mortgage Market Review. In 2014, all of thatslow growth changed.

them than in the previous month,forcing companies to oer higherstarting salaries and more creativereward packages.

REC director of policy andprofessional services Tom Hadleysays that employers are learning tobe more exible in their approachto hiring, with recruiters having tomanage their expectations aroundrecruitment times and availabilityof suitable candidates. Over thelast few years, hiring managers havebeen used to getting people in withina week or two and with relativelylittle eort, he said. Thats not thecase anymore. Now theyre havingto be proactive in their approach,maybe look at their recruitmentprocesses, and realise this is acandidate-driven market. Hadleyadded that businesses may have toaccept candidates who do not t allof their criteria immediately, but whocan be trained up to perform theirrole eectively.

Bernard Brown, partner and head of

business services at KPMG, warned

that employers ignore the increasing

number of candidates who are new

to the market at their peril. Not

acknowledging what they have to

oer continues the very real risk

of losing a generation of talent, hesaid. It makes no business sense,

because without a blend of youth

and experience the workplace will no

longer reect the marketplace.

It has been well documented

recently that nally wage growth is

outstripping ination and we would

suggest that there is still plenty of

pent up wage ination to come.

With condence in the economy,

a strong housing market andcontinuing regulatory demands, there

is a scramble for talent and many

organisations looking for the same

candidates, thus a perfect storm

potentially brewing.


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How long have you worked at National Counties?

Ive been here a year on 1st May and have enjoyed every minute of it.Having spent 4 years working in central London even the journey into work(including the M25) is better.

What do you like about working for a Mutual?

Having not worked for a mutual since the late 1980s its refreshing to cometo somewhere like National Counties that is not completely driven by thebottom line (although thats not to say it isnt important) and where themembers are genuinely thought about.

Being the Lending Guru what have been your challengessince MMR?

Thats a big question and obviously its still relatively early days but ourbiggest challenge from a lending viewpoint has been how to interpret therules around aordability. Id like to think the approach we have takenby developing a model to incorporate spending data from the ONS is a

pragmatic and straightforward solution and has avoided some of the issuesthat we have seen in the press about people asking what some may see asintrusive questions like what do you spend on steak!

Where do you see the Market going over the next year andwhat do you think will be the biggest challenge?

I think the impact of the MMR might well slow the market down and if thisdoesnt I think there may be steps from the Bank of England to do this,especially in London and the South East.

On a personal note what is your favourite lm and why?

Its a bit old school but I love Zulu, especially on a Sunday afternoon. Itsa great lm and the cinematography with the fantastic African landscape,blue skies and red of the uniforms is brilliant.

Each quarter we will have a

one minute interview asking acouple of pertinent questionsabout the market. Many thanks

from the team at Ultimate tothe frst interviewee AndrewDeeley, Associate Director,Lending at National CountiesBuilding Society.

Cambridge BS and Teachers BS appoint new Chairman Lord Myners tells Co-op: Reform or Die OneSavings Bank raises 134M in its initial public oering Digital Banking reaches 1bn a day according to BBA Mortgage market shows signs of slowing down

Regulator claims dozens of new bankingentrants are on their way

Lord Myners


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According to a consumer survey (admittedly by google)recently, 88% of people have searched for a job on

a mobile device. I am unsure this quite reects thepopulation as a whole, as I presume you would have tobe on a website to answer the survey, but nonethelessillustrates the increasing use of mobile technology. Sit onany morning commuter bus or train and where once yousaw papers and books, now you see people plugged in totheir mobile/laptop/tablet.

The question is; are you ready to adapt to this? In theconstant scramble for top talent, can you aord not to beinvesting in attracting the eyes of such a wide market? Inlooking at a large number of company websites within theBanking sector from our mobile devices this morning, the

answer is unequivocally No. We struggled on many tond the recruitment/jobs section and when we did theywere quite often out of date or poorly displayed on thescreen. On some there was no recruitment/jobs sectionat all.

That is not to say it is easy (or cheap) to achieve, butwith so many now searching from their mobiles, a poorexperience can be damaging to that brand. Mobile userswant quick and simple functionality and in order to becompatible with this, we should re-think how we set out

the application process. A long application form is notgoing to encourage users on the move, being able toquickly attach a CV stored on dropbox might, or even anability to simply send a link to their LinkedIn prole. Thisdoes require more follow-up by the receiver, though, butcompanies are going to have to adapt to the needs of theapplicant if they are to be at the front of the queue forthose applying on the move.

Ultimate BankingUltimately Different

Ultimate Banking

Website: www.ultimatebanking.co.uk

Phone: 020 8777 5833

E-mail: [email protected]

Tim BettsExpert Retail, Commercial & Corporate Banking Recruiter

Phone: 07590 253 277


Claire PhillipsExpert Recruiter in the Mutual and Mortgage Market, FIRP

Phone: 07590 254 473


Banking Spotlight July14

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