Characteristics Of Financial Services

Hoban addresses insurance community

"We are also abolishing the Financial Services Authority in its current form, and creating a new Prudential Regulation Authority with a focus on micro-prudential regulation. It will bring judgement to the vital task of regulating the soundness of individual firms that manage risk on their balance sheet, particularly banks and insurance companies. "But we recognise, of course, that banks and insurers engage in very different types of business. The inherent characteristics of an insurance business model are different to those within a bank's. This is why we are proposing to provide the PRA with a specific statutory objective for its insurance responsibilities. Insurance regulation will not take a back seat to deposit-taker regulation in the PRA. "As the Government has said before, we are extremely disappointed by this decision, but there is no right of appeal. The judgement goes against the grain of a common sense approach to equality. Of course, nobody should be treated unfairly simple because of their gender, but financial services providers should be allowed to make financial decisions on the basis of sound analysis of risk factors, including gender. "However, we need to abide by the ECJ ruling so this morning I have announced the Government's position on the Judgment. It is our view that the judgement only applies to new contracts for insurance and related financial services entered into on or after the 21 December 2012. That means, that any contracts with gender-sensitive pricing of premiums and benefits concluded ahead of that date, can continue unchanged after that date. "Early indications are that this is an interpretation shared across Europe. That said, we fully understand the need for legal certainty. The European Commission has already said it will issue guidance on the interpretation of the judgement, and we welcome this step. However, we are continuing to press the Commission to make an amendment to the Gender Directive to give legislative effect to the judgement "We have made great progress. Not least by securing recognition across Europe that helping the industry to maintain its role as a stable long-term investor is critical to long-term economic growth. The Commission's proposal for a Matching Premium for UK annuities will be key to this.

Time is getting short to invest in African financial services

, Consulting firm Accenture notes that due to growing income levels, many Africans are embracing financial services . However, once consumers have access to a particular bank or insurer, they are not likely to switch easily.

“So companies that hang back now may find that the early movers have already gained an unassailable lead at a defining moment,” says Accenture. “Decisions that companies make now with regard to Africa will shape their future ability to participate in the continent’s rapid expansion over the coming years.”

The report says that many African and international banks and financial services firms are already positioning themselves to capitalise on the continent’s underserved markets.

In recent years there has been considerable merger and acquisition activity in the financial services area. To name a few: Barclays has bought stakes in South Africa’s Absa bank and Nile Bank in Uganda; the Industrial and Commercial Bank of China (ICBC) acquired a 20% share in South Africa-based Standard Bank; and Portugal’s Banco Espírito Santo bought 25.1% of Mozambique’s Moza Banco. “Soon there will be fewer . . . companies to buy,” says Accenture.

Many lenders have also secured partnerships with mobile network operators to develop their mobile banking capabilities. “Telecom providers typically establish close partnerships with only a few selected banks, so their dance cards could soon be filled.”

Accenture has developed a Tipping Point Index, which ranks the maturity and attractiveness of Africa’s financial markets. Key factors such as financial infrastructure, consumer financial services and economic development have been used to segment African countries into four distinct groups.

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