However, the ultimate price to taxpayers was heavy. About £35 billion was recovered through share sales and dividends, versus £45.5 billion injected, leaving a net loss on the bailout of roughly £10-10.5 billion. Indeed, official figures show the UK spent up to £137 billion supporting banks in 2008-09 (including loans and recapitalisations), though most of that has been paid back or written down, leaving a fiscal cost on the order of £30-35 billion.

As NatWest exits public hands, at a symbolic loss to the taxpayer, attention turns to the broader question raised by the BBC’s in-depth explainer: “Are banks today genuinely safer from collapse than they were in 2008?” In the immediate sense, the NatWest sell-off draws a line under one of the largest bailouts in UK history.

Nevertheless, the enduring issue is whether the banking system has learnt from the past. In 2008-09, Britain’s banks were on the verge of collapse. A run on Northern Rock in 2007 sparked panic, and Lloyds TSB had to rescue HBOS with £20 billion in state aid. Additionally, RBS’s aggressive expansion, including its £49 billion takeover of ABN Amro, left it insolvent and reliant on government support.

The government intervened with unprecedented measures, nationalising Northern Rock and Bradford & Bingley, and taking majority stakes in RBS and Lloyds Banking Group to prevent a more severe collapse. In retrospect, the Treasury insists it was “the right decision then to secure the economy,” as letting these banks fail would have risked a far greater economic shock.

Yet the intervening years have brought sweeping changes. Regulators and bankers now highlight that the system is fortified with stronger buffers and tighter rules. Global agreements, Basel III and subsequent “Basel 3.1” reforms, require banks to hold significantly more high-quality capital and liquid assets than before the crisis.

For example, British regulators originally proposed raising capital requirements substantially but scaled back the hike to under 1% of risk-weighted assets under Basel 3.1, a compromise they argue still “shocks” the system to cushion future shocks. Since 2019, the United Kingdom has implemented domestic ring-fencing regulations requiring its largest banks to legally separate core retail banking activities, such as deposit-taking and lending, from their higher-risk investment operations.

The aim is to protect ordinary savers if a trading or investment unit blows up. Meanwhile, the Bank of England has established a new oversight framework that includes the Prudential Regulation Authority (PRA) to monitor bank safety and the Financial Policy Committee (FPC) to identify systemic risks.

These bodies conduct regular stress tests to ensure banks can handle severe recessions. Since 2008, banks’ balance sheets have been bulking up; the major British lenders today hold far more common equity (shareholder capital) relative to assets than a decade ago. Indeed, the latest stress test for major UK banks notes that aggregate core capital ratios stand around 14.6% for major UK banks, well above minimum requirements, and none of the institutions fell below the stress-test hurdle rate in the 2023 scenario.

Key post-crisis regulatory reforms

Global Basel III standards and UK regulations have strengthened banks’ financial resilience by increasing Tier 1 capital requirements and implementing liquidity coverage ratios. Even before the latest stress test, British banks held sizeable “rainy-day” buffers. The bank’s Financial Policy Committee kept a 2% countercyclical capital buffer in place in 2023 to absorb potential losses without choking credit. These buffers are intended to ensure banks can take losses and still lend through downturns.

The ring-fence policy requires banks with large retail deposits to keep everyday banking (deposits, mortgages, loans) in a distinct entity, insulated from riskier market-trading businesses. This structural reform was explicitly aimed at “increasing the stability” of the financial system and preventing the costs of failure from falling on taxpayers.

A Bank Recovery and Resolution regime that aligns with European Union and international standards means that if a bank faces difficulties, its shareholders and creditors, rather than taxpayers, are responsible for absorbing losses through a process known as bail-in.

The BoE’s resolution framework aims for failures to be “orderly,” with customers either quickly compensated by the Financial Services Compensation Scheme (FSCS) or transferred to another firm. Under this framework, the FSCS guarantees deposits (currently £85,000) and aims to pay savers within days of a collapse. In light of the 2023 Silicon Valley Bank episode, the United Kingdom has even proposed raising the FSCS limit from £85k to £110k to better protect depositors.

Bankers and regulators now face strict oversight. The PRA carefully monitors banks’ leverage and risk, while the FPC employs macroprudential tools, such as adjusting capital buffers or loan-to-value limits, to manage system-wide risks.

Also, new governance rules (the Senior Managers and Certification Regime) hold individual executives personally accountable for misconduct. Collectively, these measures aim to catch problems early and force banks to repair their finances before a crisis spirals.

Visible effects of reform

British banks entered the post-pandemic period with stronger finances than before 2008. The Bank of England’s latest Financial Stability Report finds that major British banks are “strong enough to support households and businesses” even under worse-than-expected conditions.

In the 2022-23 stress test, bankers faced a scenario roughly as severe as 2019’s, with high inflation and deep recessions, and emerged well above the survival threshold. The aggregate capital drawdown (3.5 percentage points) was smaller than in 2019 (5.2 percentage points), partly because banks started with stronger balance sheets and higher deposit bases.

One analysis noted that “major UK banks would be resilient to a severe stress scenario” of synchronised global recession and market shock. Moreover, the banks’ liquidity buffers have grown; they hold large stacks of safe assets (government bonds and central bank reserves) that could be drawn down if funding became scarce. In short, by most quantitative metrics such as capital ratios, liquidity levels, and stress test results, the core banking system today is in far better shape than it was in 2008.

However, recent turmoil has shown that vulnerabilities still exist. The collapses of Silicon Valley Bank (SVB) and Credit Suisse in early 2023 were unrelated to the leverage crisis of 2008, yet they sparked global unease. These cases highlighted new risks in the environment of rising rates and lingering behavioural issues.

SVB’s collapse was primarily driven by unique factors, as its tech-focused clients withdrew deposits during a funding squeeze while rising interest rates devalued its long-term government bond holdings. In other words, SVB had little credit risk but a classic “liquidity and interest-rate” mismatch.

As one expert observed, SVB was deemed “safe” by regulators (its assets were government bonds), but they underestimated the pain from sudden rate hikes. Credit Suisse, by contrast, collapsed under years of deep losses and strategic missteps; even the recovery plans envisaged after 2008 proved “incomplete,” and Swiss regulators ultimately arranged a swift takeover by UBS at the eleventh hour.

Most analysts emphasised that these failures did not reflect a broad capital shortage across banks. Rabobank strategist Michael Every bluntly noted, “This is not a repeat of 2008…banks are much better capitalised generally,” and former US economic adviser Betsey Stevenson declared, “I’m not panicked – I don’t see a systemic solvency problem.”

Regulatory authorities took prompt action to contain the fallout, such as extending deposit guarantees and arranging for emergency liquidity, unlike the inconsistent response in 2008. SVB’s collapse raised alarms, prompting US regulators to reveal that by early 2023, banks were burdened with over $620 billion in unrealised bond losses from swift rate hikes, a latent risk if funding pressures emerge.

In Europe, the panic at Credit Suisse prompted tough talks. Authorities ultimately insisted on a private solution, wary of bailouts. Swiss policymakers privately admitted that post-crisis “reforms did not operate as intended” for Credit Suisse, and indeed, World Bank and IMF data show banks’ market valuations often lag their book capital, suggesting some risks might still be underpriced.

In Britain, the 2023 events left relatively modest scars. After SVB’s fall, the UK arm was bought by HSBC within days; other mid-size lenders were stable. The focus turned to deposit protection. The Bank of England, mindful that the FSCS limit was lower than in many countries, proposed raising insured deposits to £110,000.

Governor Andrew Bailey stressed that sound bank balance sheets are the real defence, but voters and politicians pressed for greater safety nets. Meanwhile, the BoE continued to tighten supervision. In March 2025, it announced a set of new “Future of Finance” reforms, including a credit supply buffer and adjustments to ringfencing rules, aiming to strengthen resilience without unduly hindering lending. London’s stance has been that while regulation will adapt to emerging challenges, the post-2008 reforms have significantly reduced the likelihood of a catastrophic financial collapse.

Expert perspectives reflect a cautious optimism. Many observers agree that global banking systems are safer overall than they were in 2008, meaning the likelihood of a run of large, unanticipated bank failures has diminished, but they also warn of new terrain.

For example, Bank for International Settlements research notes that “banks that were failing in 2008 still met their regulatory capital ratios,” and while capital and liquidity positions have improved since, the underlying lesson is that measurement is imperfect. Indeed, high leverage in risk-weighted terms and regulatory incentives to hold supposedly “risk-free” government bonds can mask tail risks.

The BIS recommends maintaining a substantial margin of safety beyond the minimum ratios. In the UK, despite regulators highlighting strong capital buffers, industry experts warn that banks still face emerging challenges such as a possible housing downturn, climate-driven financial risks, and the lingering effects of prolonged ultra-low interest rates. In addition, the sector’s profitability depends on keeping up lending, so there is tension between buffer building and supporting the economy.

Global reform divergence

The United Kingdom’s financial reforms since 2008 are widely considered among the most comprehensive, yet the global landscape remains fragmented. Different jurisdictions responded to the crisis with varying levels of intensity, speed, and regulatory innovation.

While the European country moved swiftly to ring-fence retail banking, enhance capital buffers, and establish independent oversight bodies like the Prudential Regulation Authority and Financial Policy Committee, other economies took alternative, sometimes more hesitant, routes.

The US responded to the financial crisis with the Dodd-Frank Act, which introduced broad reforms including stress testing (CCAR), the Volcker Rule (limiting proprietary trading), and a resolution regime for failing banks. However, political resistance and lobbying pressure led to a rollback of several provisions.

Notably, thresholds for stricter oversight were raised in 2018, which excluded banks like Silicon Valley Bank from heightened scrutiny, a move later criticised after its 2023 collapse. Unlike the UK’s strict ring-fencing, the United States relies more on balance sheet transparency and central liquidity backstops than structural separation.

The 2008-09 crisis revealed significant fragmentation within the EU. In response, the region implemented tighter capital rules through the Capital Requirements Directive IV (CRD IV), which is the EU’s version of Basel III. Additionally, the Single Supervisory Mechanism (SSM) and the Single Resolution Board (SRB) were established. However, progress toward completing the European Banking Union is still ongoing.

Crucially, the EU lacks a full common deposit insurance scheme, meaning depositor protections still vary by country, a potential source of instability in future crises. In contrast to the United Kingdom’s clearly defined resolution framework and deposit guarantee scheme (FSCS), the European Union’s mechanisms remain complex and politically sensitive.

Switzerland, once seen as a paragon of banking stability, faced a shock in 2023 with the failure of Credit Suisse. Despite Basel III compliance, years of poor governance, legal entanglements, and weak profitability culminated in a forced sale to UBS. Swiss regulators admitted post-crisis reforms did not function as intended in this case.

This failure reignited global debate about the effectiveness of so-called “too big to fail” policies. It also stood in contrast to the United Kingdom’s relatively smooth resolution and absorption of distressed banks, like HSBC’s takeover of SVB UK.

In Asia, countries like Singapore, Japan, and South Korea pursued conservative regulatory approaches post-2008, focusing on capital adequacy and strict supervisory regimes. Singapore, in particular, has emerged as a regional leader in integrating climate risk into stress testing.

However, much of Asia still faces rising risks from shadow banking, real estate overexposure (notably in China), and the lack of harmonised crisis resolution tools. In contrast, the United Kingdom’s resolution regime is among the few that aim for seamless depositor compensation and systemic containment.

Globally, the United Kingdom’s post-2008 regulatory architecture stands out for its structural clarity, proactive supervision, and crisis-readiness. While no system is immune to shocks, the European country appears better insulated against the specific contagion pathways that triggered past crises.

As shown by the failures of Credit Suisse and SVB, vulnerabilities often stem not just from capital adequacy, but from governance, market behaviour, and new-era risks—realities every major economy, regardless of policy strength, must continuously adapt to.

The sale of NatWest’s final shares closes the book on one chapter of public ownership and symbolises how much of the immediate crisis memory has faded. British banks today must navigate a different landscape. They enjoy stronger balance sheets and face tougher supervision, which by design makes a sudden systemic breakdown far less likely.

Following the 2023 financial turmoil, a former central banker summed up the situation by noting that the system is “safer but not safe enough.” Improvements in regulation and capital have indeed reduced the odds of a 2008-style meltdown, but critics caution that vulnerabilities have merely evolved, not vanished. The pandemic, the tech credit cycle, and geopolitical strains are new risk factors.

If another shock comes, whether it’s a sharp recession, an asset bust, or a new type of bank run, it will be fought on this reshaped battleground. Still, the swift responses from central banks and the higher buffers give authorities more tools than they had last time.

Banks may not be bulletproof, but they do have a much thicker shell than in 2008. The crucial question is whether regulators and bankers will continue to learn and adapt, ensuring that when the next crisis occurs, taxpayers and savers are genuinely better protected than before.

The post Is the British banking system truly secure? appeared first on International Finance.

“It is reasonable to expect that absent some big dislocation or economic event we’ll be back in private ownership next year, maybe as early as the first half of the year,” Paul Thwaite said, as reported by the Financial Times (FT).

The Keir Starmer-led United Kingdom government’s ownership of the bank has decreased from 38% a year ago to less than 11%. Since the 46-billion-pound bailout of NatWest during the global financial crisis, when the bank was still known as RBS, the state has owned a portion of the company.

“I think it will be a symbolic moment for the sector. It means we can talk about the future of the bank, the potential of the bank rather than having to talk about its past,” Paul Thwaite said.

Thwaite stated that after NatWest repurchased some of the state’s shares this year, going back to private ownership would also enable the bank to allocate capital more strategically.

According to him, one area of special attention would be expanding the bank’s wealth management division, which includes private bank Coutts, first through organic growth. Future acquisitions were not ruled out.

“The two transactions we’ve done this year have shown that we’re on the front foot and where we see interesting opportunities that deliver good financials, good strategic fit, then we’ll take them,” the NatWest boss added.

Thwaite, who was appointed permanent CEO after serving as interim CEO in July 2023, has seen NatWest acquire the majority of Sainsbury’s Bank and 2.05 billion pound in prime residential mortgages from Metro Bank.

Prior to this, the United Kingdom government had promised to put the bank back into private ownership by 2025 or 2026. Additionally, Labour abandoned the previous government’s plans to sell NatWest shares to the general public, which had already begun when it was elected in July 2024 and had cost the bank 24 million pound.

The October announcement of the Labour government’s budget received widespread support from Thwaite. According to him, British regulators could do more to encourage growth, but the government’s emphasis on science, infrastructure, and planning would help sustain economic expansion in the medium run.

“I think there are levers that regulators can pull which don’t risk the stability of the system, don’t necessarily risk protection of consumers,” he said, in reference to areas such as the ringfencing regime and regulations on fraud and customer complaints.

Who Is Paul Thwaite?

In July 2023, Paul Thwaite became the Chief Executive Officer. Before being hired, he served as the Chief Executive of the Commercial and Institutional (C&I) division, which brought together the teams that assisted NatWest’s business clients, which ranged from start-ups and entrepreneurs to multinational corporations and financial institutions.

Under Paul’s direction, C&I, which was in charge of establishing the strategy, vision, and culture for several companies, brands, and entities, provided long-term sustainable growth and value to its clients as a reliable partner.

In addition to his unwavering focus on the customer experience, Paul brings strong expertise in risk management, balance sheet management, and strategic transformation. His contributions to the Group’s strategy reviews in 2014 and 2019 were crucial, and he has spearheaded the creation and implementation of several initiatives and programmes that are at the forefront of their respective industries.

Most notably, he oversaw the Group’s response to helping companies during the COVID-19 pandemic and was in charge of NatWest’s integrated payments and embedded finance strategy. Paul has actively promoted talent throughout his career, assembling and managing diverse teams from various disciplines and geographical locations to meet the needs of clients and other stakeholders.

NatWest Remains On Track For Privatisation

The British banking group will keep on exploring “strategically congruent” and “financially compelling” M&A (merger and acquisition) opportunities after a flurry of investments in 2024, Paul Thwaite told during the FT Global Banking Summit, as he informed the audience of his having “lots of potential uses” for the bank’s excess capital but would be thoughtful about its deployment, whether supporting growth in existing businesses or pursuing additional “inorganic tuck-ins,” like the deal struck to buy the banking business of retailer Sainsbury’s in June.

NatWest in November 2024, bought back 1 billion pounds (USD 1.29 billion) worth of its shares from the Keir Starmer government, in another move towards privatisation. UKGI, which manages the government’s stake in the bank, said as a result of the transaction the government’s ownership would fall from around 14% of the company to around 11%.

“This transaction represents another important milestone on the path to full privatisation. We believe it is a positive use of capital for the bank and for our shareholders,” Paul Thwaite said during the occasion.

The transaction was the second such directed buyback in the last 12 months, and brought the total of its shares NatWest bought from the British government in 2024 to 2.2 billion, representing nearly 8% of its capital.

NatWest is also gearing up for its post-privatised future, as it has launched the “FinTech Growth Programme,” which will give the newly-formed fintech companies the resources, networks and expertise of a large bank, with the hope that participants will help bolster NatWest’s innovation efforts.

“This programme lays a pathway to create better outcomes for our customers. Working this closely with fintechs and UK entrepreneurs strengthens our ability to be future focused, while supporting the growth of the innovation economy,” said David Grunwald, director of NatWest Innovation.

NatWest plans to pick five fintechs that offer solutions for specific problems in the digital payment sector. Participating start-ups should be based in the United Kingdom and pre-Series A stage.

During 10 weeks of workshops, mentoring and coaching, NatWest will work with these fintechs to co-create solutions to lead the future of banking, whereas the participating fintechs will earn the opportunities to connect, learn and build networks with other fellow fintechs, coaches and NatWest’s dedication Innovation function.

The post Business Leader of the Week: Under CEO Paul Thwaite, NatWest eyes full privatisation by 2025 appeared first on International Finance.

According to the estimates, the BoE will continue to unwind its portfolio of government bonds at the current rate of 100 billion pounds (USD 125 billion) annually.

The QE programme is expected to result in a net loss of 85 billion pounds by 2034, as opposed to an estimate of 80 billion pounds in February 2024, based on the market path for interest rates as of late March.

The loss would be 45 billion pounds, as opposed to the previous estimate of 50 billion pounds, if interest rates were to return to the BoE’s 2018 estimate of the non-inflationary equilibrium rate of around 2%.

“The figure, a small increase on the 80 billion pound in the BOE’s last quarterly report, underscores the burden QE poses for the public finances as losses mount on the £895 billion of asset purchases made between 2009 to 2021 to support the economy through the global financial crisis and pandemic,” commented a Bloomberg report.

“Until late 2022, profits from the programme reduced the Treasury’s budget deficit and helped pay for public services, but high interest rates and asset sales have reversed the effect. The portfolio is being unwound, with 704 billion pound remaining on the books,” it added further.

Why It Matters

Since the British taxpayers are bearing the brunt of losses incurred during the QE programme at a time when government resources are becoming more and more limited, these losses have become a contentious political issue.

Unadjusted for inflation, QE will lose around 20 billion pounds on a yearly basis until the early 2030s, a sum equivalent to a third of today’s British defence budget, the BoE estimated. Under a guarantee provided by the state in 2009, the taxpayer picks up that bill.

Around 48 Conservative Party lawmakers, who control the majority, demanded weeks back that the Treasury look into ways to deduct its own costs from these payments to the Bank of England.

Finance Minister Jeremy Hunt stressed the importance of keeping monetary and fiscal policy decisions apart in a letter to BoE Governor Andrew Bailey.

The QE programme’s profits, which peaked in 2022 at 124 billion pounds, were distributed to the government during the 2010s when interest rates were low.

These financial flows have reverted, with the Rishi Sunak government now covering the BoE’s losses as it pays higher interest on bank reserves it issues for its quantitative easing programme.

The earlier profits are factored into the projected net loss.

The Bank of England’s gilt purchases currently total 704 billion pounds, having peaked at 875 billion pounds following the COVID-19 pandemic.

Between 2009 and late 2022, QE raised 124 billion pounds, which was fully spent. After that, the British government transferred some 50 billion pounds to the BoE to cover its losses with more to come.

Unadjusted for inflation, the net loss over the program’s lifetime is expected to be around 115 billion pounds, the BoE showed. Assuming rates fall back to an “equilibrium” level chosen by the apex bank, the unadjusted lifetime losses are about 65 billion pounds.

On the BoE’s preferred “net present value,” lifetime losses would range between 45-85 billion pounds, it said. Three months ago, the BoE estimated the range at 50 billion pounds to 80 billion pounds.

The figures are likely to change at the next quarterly update as losses are determined by the path of interest rates. Rates are now expected to remain higher for longer, potentially increasing the losses.

Banks Report 135% Income Increase From BoE Reserves

Meanwhile, new data published by the Treasury Committee shows NatWest, Barclays, Lloyds and Santander received over 9 billion pound in interest on Bank of England reserves in 2023, a 135% increase on the previous year.

“Under quantitative easing, the Bank of England created 895 billion pound of new money in the form of central bank reserves held by commercial banks, of which around 700 billion pound remains in circulation. The Bank pays interest on those reserves at Bank Rate, currently 5.25%. This has generated considerable income for banks as a result of the sharp increase in interest rates since 2021. The Treasury is ultimately liable for these payments as it indemnifies the QE programme,” the committee remarked further.

“During the Treasury Committee enquiry into the Bank’s quantitative tightening programme, some evidence submitted to MPs suggested changing the rules on how bank reserves generate interest in order to reduce the amount paid out by the Bank of England. MPs on the cross-party Committee concluded they did not support this measure as they believe taxes on banks should be set through Parliament in a Finance Bill,” it added further.

During the Treasury Committee’s fact-finding stage, bank bosses listed out the steps they’ve taken to pass through better savings rates for customers. The listed measures include a significant uptick in the amount NatWest and Santander are paying customers in interest.

The communications from the banks also contain data on the lenders’ mortgage repossession rates and their criteria for closing branches.

The Treasury Committee has concluded gathering evidence as part of its enquiry into whether small and medium-sized businesses (SMEs) have adequate access to financing. The report will likely be published this year.

The post BoE tweaks lifetime loss estimate for QE programme at 85 billion pounds appeared first on International Finance.

Nigel Green, CEO of DeVere, the world’s largest independent financial consultancy, told International Finance, “Action by British banks has fallen short on climate change over the last decade and a half for several reasons. However, I think the main issue is the 2007-2008 global financial crisis. Banks were, in most cases, spectacularly caught off guard by the crash. In the fallout, they were understandably busy dealing with the new regulatory landscape that prevailed in the aftermath, evolving client expectations and, for some, the massive financial penalties that were imposed on them. As a result, corporate social responsibility obligations were way down their to-do list. They were too focused on regrouping. They were in survival mode. However, simultaneously, the rest of the world was waking up to the very real issue of climate change.”

And, as the beginning of this year has demonstrated, a lot is going to change for British banks and the economy at large. Of late, Britain has been witnessing a growing appetite for financial support in sustainable projects, as clients expect banks to be able to show environmental credentials. “This is why challenger, paperless banks with stronger green credentials, such as Vault, are filling the void left by traditional banks, especially in terms of what clients expect firms to be doing today and in the future when it comes to the environment,” Green said. “They are also, of course, getting serious because green investments are outperforming the market and are, therefore, good for their clients and profitable for them.”

British banks know the path forward
The global talk about the Paris Agreement on climate change and what it can do to the economy has put a lot of pressure on British banks. “Despite allegations that some banks are simply ‘greenwashing,’ I have not seen much evidence of this. I think that most are finally getting serious about this subject,” Green said. For example, NatWest and Lloyds of London have pledged to reduce their emissions linked to the loan book by half. However, the levels of their emissions are yet to be worked out. In another example, Barclays has already announced a host of green finance products to help clients finance sustainable developments in the country and globally. These green finance products are mainly designed to channel investments into environment-friendly activities and green initiatives leading to a successful low-carbon economic transition.

NatWest has made its action on climate change an integral part of its rebrand under the leadership of new chief executive Alison Rose. Last November, it launched the first green mortgage, which allows borrowers to enjoy lower-interest rates while purchasing an energy-efficient home. The green mortgage for new customers might be a relatively small move, but this year is anticipated to see NatWest’s efforts on a large scale as it aims to target an expansive customer base. Lloyds, on its part, has become increasingly active in financing clean energy projects. Because it is one of the country’s biggest providers of car finance, it has strategic plans to expand lending for electric vehicles. Again, British banks are likely to come under the scanner with the country preparing to host the UN COP26 climate summit in Glasgow in 2021-end. “This should provide positive impetus for the industry,” Green said.

Barclays has worked with Sustainalytics, a leading independent global provider of environmental, social and corporate governance research and ratings to investors, to develop a Green Product Framework, which will be used to identify sustainable projects that will have a beneficial impact on the environment and demonstrate full support of green financing activity. Although Barclays has refused to halt fossil fuel lending, it is optimistic that setting a carbon limit on its activities will lower emissions. The work of British banks “will sharpen the industry’s focus on the issue of climate change for sure. It is a significant step to ensure that banks are playing their part,” Green explained.

British banks remain quite bullish about their progress in fulfilling climate goals over a series of announcements and product launches that are slated for this year. “I think that they will be compelled to make real advancements, not only by regulators but by pressure and expectations from their clients,” Green said. “Those banks that are slow to respond will face not only increased regulatory and public scrutiny but also limited growth. In 2021, and moving forward, banks can no longer afford to ignore climate change.”

Another fact that points to the real efforts by British Banks is the recently licenced Oxbury Bank’s world’s first-ever carbon-offset savings account, known as Oxbury Forrest Saver, which provides a huge opportunity for British savers to help in the transition to a low-carbon future. The money that would be earned in interest from the Oxbury Forrest Saver accounts will be used to finance tree-planting projects. This is especially important for savers because a new survey commissioned by Triodos shows that 65 percent of the respondents are clueless about their savings—whether they are supporting fossil fuel developments in some form. An even higher percentage of respondents expect banks and savings providers to be transparent about their investment. In this movement, the government seeks to enforce disclosure mandatory by 2025.

Obviously, this still requires the government to take the initiative. And, as known, Bankers for Net Zero initiative backed by an influential group of MPs, is assembling banks, regulators and businesses to enable banks to fully support their clients, speed up the net-zero transition and deliver on the government’s climate change vision. According to its official website, the initiative is built to explore two crucial aspects of the climate change action: How can British banks support key sectors in the net zero transition? What is required in terms of policy and regulation to finance a rapid transition?

World-class green finance research hubs
Interestingly, the government will be investing £10 million for world-class green finance research hubs that will be based in Leeds and London. The two cities will house hubs designed for driving green finance and investment globally. These hubs are slated to open in the coming months in collaboration with a set of British institutions such as University of Oxford, University of Leeds and Imperial College London. Their potential ability to provide world-class data and analytics to financial institutions around the world will help banks, lenders, investors and insurers to make wise investment decisions by taking into account the environmental and climate change impact.

This advancement is essentially what the country needs to step up its game on a global level. It could even create new opportunities in the form of positioning Leeds and London as global centres for green finance—a promising logic that could take it to the next level of promoting green finance and protecting the global economy from climate risks.

According to the Energy and Clean Growth Minister Anne-Marie Trevelyan, “Climate change is the biggest issue that we need to tackle to protect our planet for our children and grandchildren. While the government has invested billions of pounds so we can end the UK’s contribution to climate change, we will not reach our net zero target without mobilising private capital and unleashing the power of the free market. The UK Centre for Greening Finance and Investment in London and Leeds will encourage financial services to turn the tide of their investments and focus on sectors and companies that have a smaller environmental footprint. Doing so will support industries and businesses to develop clean green innovations, creating thousands of jobs across the country—ensuring we build back greener,” as reported.

Back to sustainability bonds and carbon taxes
In 2019, the London Stock Exchange already expanded its green bond segment into a comprehensive Sustainable Bond Market that will incorporate sustainable, social and issuer-level segments. Essentially, these segments offer a host of opportunities for investors transparency and sustainability-related debt instruments. By the numbers, 155 green bonds, nine social bonds, seven sustainability bonds and 77 green issuers from 23 countries and regions are listed on the Sustainable Bond Market, raising £51 billion so far. With that, its strong-record is likely to continue.

This, now seems clear, is the year for Britain to get to the bottom of green finance. British Finance Minister Rishi Sunak plans to launch the country’s first green government bonds. These bonds will be created to finance environment-friendly investments and even encourage the Bank of England to focus deeper on climate change action. It is reported that the finance minister is also urged to reduce the 20 percent value added tax on energy efficient projects. In the case of carbon taxes, any progress that was vouched for by the International Monetary Fund in October might be slow. This is because the budget deficit of £400 billion is still worked on, marking the largest since the second world war. However, it does seem like the country has taken a slow approach to environmental taxes.

The post Britain is on a mission to build back greener appeared first on International Finance.

As part of the trial, the bank allows customers to ask Google the following questions: “What is my balance?,” ”What is my latest transactions?” and “What is my pending transactions.” According to media reports, the device  provides verbal answers to those questions in addition to appearing on the customers’ smartphones. 

The trial will only support basic bank account information to customers. However, NatWest said customers in future may be allowed to instantly transfer funds or pay bills by communicating with the device. 

NatWest customers will have to call out loud two digits from their new four digit password  to the speaker to obtain their account information. However, the downside of this technology advancement is that it might raise concerns about privacy and security. The bank is quite aware of those concerns. A spokesperson said “Other people in the area will be able to hear your balance, which is something you will want to take into consideration.”

That said, NatWest is also confident that the technology could transform the way banking system function at this point. Kristen Bennie, head of Open Experience at NatWest said the bank is exploring voice banking for the first time. 

Currently, the bank said 9.6 million people own Google Assistant or Amazon Alexa devices in the UK — and is expected to grow by 30 percent in 2019. That said, 55 million people use a smartphone in the country. So the voice banking technology could in some sense transform financial management similar to mobile banking, Bennie said. 

The post Move over mobile banking: NatWest’s voice banking is here appeared first on International Finance.

Last month, MarketInvoice reached the milestone of funding £2bn worth of invoices and business loans to UK companies. Launched in 2011, the company has provided business finance solutions to thousands of businesses across the UK who employ more than 19,000 people. During this time over 90,000 invoices have been funded to 93 countries. In 2017, MarketInvoice almost doubled the average amount advanced to UK businesses – from £606,000 in 2016 to £1.14m.

Anil Stocker, CEO and Co-founder of MarketInvoice commented: “Featuring on this panel will broaden our reach and help even more businesses achieve their goals. Companies across the UK are choosing to diversify funding sources with more than £4b advanced through alternative finance firms. Furthermore, the invoice finance [and asset-based lending] sector is providing more finance to UK businesses than ever before. Funding volumes are up 5% year on year and stand at just over £23b. This is the highest figure ever.”

“As the first invoice finance provider on the panel, we will be able to showcase how invoice finance can help businesses of all sizes and work with them to find the right solution. Enhancing access to borrowing is essential for jobs and economic growth.”

Alison Rose, CEO of Commercial and Private Banking at Natwest, said: “We’re excited to welcome our first invoice finance provider to Capital Connections. MarketInvoice has serviced a large number and wide variety of businesses. Their robust service, quick and easy to use solutions, provide another distinct choice for the many innovative businesses in the UK. As the biggest supporter of British business, we understand that traditional funding routes are not always the best option for fast growing start-ups. Through Capital Connections we’re able to signpost a broad choice of funding options through its impressive range of alternative lenders.”

MarketInvoice is the ninth alternative finance provider to join Capital Connections, alongside Funding Circle, Assetz Capital, Start Up Loans, Seedrs, Together, iwoca, Esme Loans* and NatWest Social & Community Capital**. Each provider has been selected to cover the range of different funding products and include a mix of specialty finance and peer-to-peer lending.

MarketInvoice business highlights (last 12 months):

• Reached landmark milestone of funding invoices and business loans worth £2b to UK companies
• Launched new brand and business loans solution
• Secured credit insurance (Euler Hermes) and credit control (Veritas Commercial Services) partnerships
• Partnered with European banks that are participating directly on the platform alongside the British Business Bank, UK local authorities, global family offices and sophisticated and HNW investors
• Selected in The Sunday Times Tech Track 100 and Global CB Insights Fintech250 2017 rankings
• Appointed Giles Andrews OBE, the founding father of peer-to-peer lending, as Chairman

MarketInvoice’s main strategic ambition is to broaden its reach to be able to support a wider range of businesses, from start-ups to larger businesses looking to scale up. The company aims to help even more companies with their working capital needs, so business owners can save time and focus on running their business.

The post NatWest and MarketInvoice join forces to fund British businesses appeared first on International Finance.

In April 2016, and attending the Innovate Finance Global Summit in London, Hamish Anderson, CEO of Money Mover, was set a challenge by one of the world’s most highly regarded strategy consultancies.  Could Money Mover make its innovative international payments proposition for SMEs fit for purpose for one of the UK’s major banks? In what became a competitive pitch to NatWest the answer was a resounding ‘yes’.

A shared outlook in terms of delivering the best possible service, a shared work ethic that ensured similar standards and delivery was achieved, all coupled with the class-leading technology, saw Money Mover’s international payments platform for SMEs beat four other companies to partner with NatWest to build a prototype for a six-month pilot.

Hamish Anderson, CEO of Money Mover, said: “We were delighted to be chosen as NatWest’s partner for this important project.  We have always been confident that our platform and customer proposition is a game changer for SMEs.  But this pilot has proved that we can operate at the highest level, and most importantly, that our technology, security, service and user experience is class-leading and ready to be deployed by other financial institutions.”

July 2016, a plan was in place and, working with the NatWest Innovation Team, a pilot programme was established to offer NatWest’s London and South East’s SME customers a new user interface for international payments. For the purposes of the prototype, Money Mover was tasked to create a ‘white labelled’ service, provided by Money Mover but under the auspices of NatWest.

The aim of the pilot was to obtain feedback from its customers on the radically different user interface and process flow provided by Money Mover. NatWest, understandably, was not prepared to compromise on its high standards of security, compliance, reliability, speed and service, so the bar for the innovative fintech start-up was set high.

The customers selected ranged across a number of industries and sectors and included sole traders with £100,000 turnover to high growth SMEs and small industrial companies.

Money Mover was able to offer customers a modern look and feel with easy functionality, use and seamless customer journey.  For the customer this meant having access to activity reports, transparency on fees and progress of the transaction, and flexible tools for reporting and proof of payment.

For its part, NatWest wanted the ability to switch on and off functionality, such as forward payments and use of some currencies, depending on circumstances.

Money Mover was able to offer all of this.  It undertook its own KYC checks to supplement NatWest’s knowledge of the customer, added its logo and identity to its platform, combining the best of both to ensure the customer got the functionality and ease of use they needed, while feeling comfortable that it was part of NatWest’s familiar stable of services. To ensure a flawless experience for the customer, Money Mover was also able to offer dedicated customer support for the duration of the pilot.

For Money Mover, selection for the pilot confirmed that its carefully crafted UI and UX were class-leading. It also demonstrated it could raise its game to work strategically with one of the world’s largest banks to become a trusted and secure provider.

The post NatWest chooses Money Mover for pilot on overseas payments service appeared first on International Finance.