Strong growth continues in mortgage drawdown activity but slowdown evident in approvals

Banking & Payments Federation Ireland (BPFI) has today published the latest figures from the BPFI Mortgage Drawdowns Report for Q3 2018 and Mortgage Approvals Report for September 2018.

The following are the key figures the Mortgage Drawdowns report for Q3 2018:

  • 10,873 new mortgages to the value of €2,369 million were drawn down by borrowers during the third quarter of 2018
  • This represents an increase of 14.4% in volume and 17.5% in value on the corresponding third quarter of 2017.
  • It also represents an increase of 16.4% in volume and 17.6% in value compared with the previous quarter (Q2 2018).
  • First-time buyers (FTBs) remain the single largest segment by volume (48.3%) and by value (48.7%). Together, FTBs and mover-purchasers accounted for 81.4% of the total value of mortgages drawn down.

The volume and the value of re-mortgage loans (switching) continue to increase: there were 1,420 re-mortgage loans in Q3 2018 to the value of €325 million. This reflects year-on-year growth of 82.8% in volume and 82.2% in value.

The number of mortgages for new properties rose by 19.9% year-on-year to 2,438 in Q3 2018, while the value of those mortgages jumped by 26.4% to €588 million. Secondhand property mortgage volumes grew by 4% to 6,289 and by 5.9% to €1,398 million.

In addition BPFI also published the latest figures from the BPFI Mortgage Approvals Report for September 2018. The following are the key elements:

  • A total of 3,825 mortgages were approved in September 2018 – some 1,782 (46.6% of total volume) were for first-time buyers (FTBs) while mover purchasers accounted for 1,067 (27.9%).
  • The number of mortgages approved rose by 4.5% year-on-year and fell by 8.6% month-on-month.
  • Mortgages approved in September 2018 were valued at €822 million – of which FTBs accounted for €385 million (46.8%) and €271 million (33%) by mover purchasers.
  • The value of mortgage approvals rose by 4.3% year-on-year and fell by 11.6% month-on-month.

Re-mortgage/switching approvals rose on a year-on-year basis – by 51.7% in volume and by 42.1% in value terms.

The annualised volume of mortgage approvals reached 44,805 in the twelve months ending September 2018, marginally (0.3%) higher than the twelve months ending August 2018. The annualised value of approvals also rose by 0.3% to more than €9.9 billion.

Commenting on these latest figures, BPFI’s Director Public Affairs, Felix O’Regan, stated:

The level of mortgage drawdown activity continued the pattern of strong growth through the third quarter of this year.  As has been evident for quite some time, first-time buyers account of the lion’s share of all drawdowns – in excess of 48% in both volume and value terms. 

Mortgage approval activity presents a slightly different picture.  On an annualized basis activity by both volume and value shows an increase of 0.3%.  However, the most recent mortgage approval figures for September show a flatlining in activity.  The consensus among financial analysts is that this is most likely explained by the impact of the Central Bank’s macroprudential measures and by challenges in the housing supply market.  Notwithstanding these factors, BPFI member banks remain fully focused on supporting home ownership at every turn.”

The BPFI Mortgage Drawdowns and Mortgage Approvals reports can be viewed on the BPFI website here.

 

Note: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland.  Together with its affiliates, the Federation of International Banks in Ireland and the Fintech & Payments Association of Ireland, BPFI has over 70 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.

Contact: Jillian Heffernan, Head of Communications, jillian.heffernan@bpfi.ie 087 9016880

BPFI National Conference 2018

Culture in banking, innovation and customer experience among key themes

Banking & Payments Federation Ireland (BPFI) today held its annual national conference, Reshaping Retail Banking at the Marker Hotel in Dublin. Hosting a gathering of key senior bankers, policy makers and other key stakeholders, the conference addressed the three key themes of culture in banking, trends in retail banking and innovation and customer experience.

In his opening address to the conference BPFI President, Jonathan Lowey, reaffirmed the sector’s commitment to embedding a customer-first culture in banking both internally within individual intuitions and externally by supporting the work of the Central Bank and the new Irish Banking Culture Board:

“BPFI recognise the importance and value of the work conducted by the Central Bank of Ireland in undertaking behaviour and culture assessments of each of the five main retail banks. Arising from this we are committed to working, together with all of our member banks, with the Central Bank in helping to bring about further improvement in the consumer-focused culture of banking here.  

From the beginning of this year we have actively supported our retail members in the concept development behind the new Irish Banking Culture Board (IBCB).  The broad architecture of this new independent body was identified early on.  This has more recently been followed by the announcement from the IBCB Establishment Office that the search for a suitable independent Chairperson is underway, that a wide-ranging, public consultation process will be undertaken shortly and that two university-accredited, culture education programmes for bank staff are to be launched.  We welcome these developments towards embedding a customer-first culture in banking here and in rebuilding trust in our banks.” 

Among those contributing to today’s conference were Patrick Kennedy, Chairman, Bank of Ireland and Richard Pym, Chairman, AIB who gave their perspectives on an array of topics including the future shape of the banking market in Ireland and culture in banking; Alison Cottrell, CEO, UK Banking Standards Board and Floris Mreijen, Deputy CEO, Dutch Banking Association outlined the approach and experiences of the UK and Dutch respectively in driving change in banking culture; while Julian Scan, Senior Managing Director – Accenture Strategy, Banking & Capital Markets examined the trends in retail banking drawing on a soon to be published global study across 14 different markets.

 

Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland.  Together with its affiliates, the Federation of International Banks in Ireland and the Fintech & Payments Association of Ireland, BPFI has over 70 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.

For Further Information Contact: Jillian Heffernan, Head of Communications, BPFI
T: 01 474 8835 / 086 9016880

BPFI supporting #CyberScams Awareness Campaign in partnership with An Garda Síochána

Banking & Payments Federation Ireland partnering with An Garda Síochána and in co-operation with the Department of Justice and Equality is supporting Europol and the European Banking Federation in the Pan-European #CyberScams Awareness Campaign from 17th to 23rd October 2018 as part of European Cyber Security Month.

The tactics used by cybercriminals to scam victims are becoming increasingly innovative and harder to detect.  The Internet Organised Crime Threat Assessment (IOCTA) 2018, published by Europol, highlights that criminals are more often using techniques, known as social engineering, to lure unsuspecting users into sending them their confidential data, allowing them to obtain your personal data, hijack your accounts, steal your identity, initiate illegitimate payments or convince you to proceed with any other activity against your self interest such as transferring money or sharing personal data.

The most effective defence against social engineering is the education of potential victims, who can be anyone of us who uses the Internet.  Raising awareness among the general public, on how to identify the various deception techniques used, will help keep both themselves and their finances safe online.

Over the next week the #Cyberscams Awareness Campaign will provide information on the seven (7) most common online financial scams and how to avoid them. These have been identified as:

  • CEO fraud: scammers pretend to be your Chief Executive Officer or a senior representative in the organisation and trick you into paying a fake invoice or making an unauthorised transfer out of the business account.
  • Invoice fraud: they pretend to be one of your clients/suppliers and trick you into paying future invoices into a different bank account.
  • Phishing/Smishing/Vishing: they call you, send you a text message or an email to trick you into sharing your personal, financial or security information.
  • Spoofed bank website fraud: they use bank phishing emails with a link to the spoofed website. The site will look like its legitimate counterpart, with small differences. Once you click on the link, various methods are used to collect your financial and personal information.
  • Romance scam: they pretend to be interested in a romantic relationship. It commonly takes place on online dating websites, but scammers often use social media or email to make contact.
  • Personal data theft: they harvest your personal information via social media channels.
  • Investment and online shopping scams: they make you think you are on a smart investment… or present you with a great fake online offer.

Detective Superintendent Michael Gubbins of the Garda National Cyber Crime Bureau offers the following advice: ‘I recognise that the Internet provides a positive contribution to everyday life.  Our message is to ask people to be cautious when they receive unexpected or unsolicited communication on the Internet.  Take account of the content and context of the contact before clicking on links or opening attachments.’

Keith Gross, Head of Financial Crime & Security, Banking & Payments Federation Ireland says ‘this is a prime example of public – private partnership launched as part of cyber security month (ECSM). This is a collaboration between law enforcement and the banking sector on a Pan-European basis who together have identified the main cyber scams that are currently trending across Europe and impacting citizens on a daily basis. Such trends include social engineering attacks like sophisticated phishing (i.e. via email), smishing (i.e. via SMS/Text) and vishing (i.e. via voice call) which are often combined and blended.’

The aim of the #CyberScams campaign is to highlight some simple steps to enable internet users to stay safe and to protect their personal, financial and professional data:

  • Be very careful about how much personal information you share on social network sites.
  • Check your online accounts regularly.
  • Phishing (i.e. via email), smishing (i.e. via sms) and vishing (i.e. via voice call) are the most common social engineering attacks targeting bank customers.
  • Check your bank account regularly and report any suspicious activity to your bank.
  • Perform online payments only on secure websites (check the URL bar for the padlock and https) and using secure connections (choose a mobile network instead of public Wi-Fi).
  • Your bank will never ask you for sensitive information, such as your online account credentials.
  • If an offer sounds too good to be true, it’s almost always a scam.
  • Keep your personal information safe & secure.
  • If you think that you have provided your account details to a scammer, contact your bank immediately. Always report any suspected fraud attempt to the police, even if you did not fall victim to the scam.
  • Take control of your digital life, don’t be a victim of cyber scams!

Read more on how to stay protected at www.Garda.ie and follow the #CyberScams  campaign. Also at www.europol.europa.eu/cyberscams

Brexit

At the upcoming Leaders’ summit on 18 October, Chief Negotiator Barnier will deliver his evaluation of the progress achieved and expectations for the realistic prospect of a deal in November. Therefore, the next two weeks are fundamental to the success of the Brexit negotiations and there is a growing sense of urgency in Brussels. ECB President, Mario Draghi, was recently asked about Brexit by Brian Hayes MEP and what the EU should do to help a country disproportionately affected by Brexit, such as Ireland, to which Draghi responded that he thinks it unlikely the EU would let Ireland suffer alone. There is also more discussion around contingency planning among EU authorities, and in the financial services space this is largely guided by a joint ECB – Bank of England technical working group set up to map the risks in the area of financial services in the period around 30 March 2019. It is still considered that final agreement will not be reached in October and an emergency summit is tentatively scheduled for November.

PSD2 – The Customer Experience

Following the January 2018 transposition of the PSD2 regulation into Irish law, the countdown to implementation of the regulatory technical standard (RTS) on strong customer authentication (SCA) and Common Secure Communication (CSC) on 14 September 2019 has now commenced.

BPFI is continuing to work closely with its members to support:

  • industry wide communications.
  • engagement with the Central Bank on the processes involved
  • working with the Open Banking Implementation Entity (OBIE). Adoption of the OBIE standard by the Irish community will benefit all stakeholders and provide for standardisation and harmonisation across the industry.

The primary requirement is to provide a secure interface to allow open access for Third Party Providers (TPPs) to provide account information and payment initiation services directly to customers.

The provision of such an interface also necessitates but is not limited to, enhanced fraud reporting requirements, commitments regarding service availability of the interface to TPPs, and probably the most challenging for members and customers, a significant uplift in the security protocols.

Effectively, there will be changes to the customer experience with additional ‘friction’ being introduced at the point of consent.  BPFI believes the introduction of TPPs in the market place is a very positive step along the journey to a single payment ecosystem.  Consumer education and awareness will be a key contributor towards the success of PSD2.

BPFI inputting to ECB Integrated Reporting Framework (IReF) Proposal

The European System of Central Banks (ESCB) has proposed an Integrated Reporting Framework (IReF) that would aim to integrate into a unique and standardised framework the ESCB’s statistical reporting requirements, including interest rate and balance sheet statistics. The ECSB aims to implement the IReF in 2014-2017. The ESCB began its consultations on the IReF by issuing qualitative stock-taking questionnaires (QSTs) to reporting agents, banking associations and national central banks across Europe. The questionnaires aim to gauge views on how integrated reporting could be achieved and the initial design choices that would have to be made. This will be followed by a cost-benefit assessment questionnaire, which will help identify the most appropriate approach for the banking industry and the ESCB to take. Working through the BPFI Statistics Reporting Working Group, BPFI is responding to the QST and has supported members in preparing their own responses.

Anthony O’Brien, Public Affairs

BPFI supporting Sustainable Finance Summit

The 2018 Climate Innovation Summit, hosted by EU EIT Climate-KIC and supported by Sustainable Nation Ireland and the Department of Finance, will take place at Dublin Castle on the 6-8 November as part of Climate Week 2018.  Climate KIC is Europe’s climate innovation body funded by the European Institute of Innovation and Technology.

BPFI has invited the European Banking Federation Sustainable Finance Working Group to hold its H2 meeting in Dublin to coincide with this event. Toni Ballabriga, BBVA, Chair of this working group and the EBF representative on the United Nations Environment Programme – Finance Initiative (UNEP FI) that is currently preparing Principles for Sustainable Banking, will participate in a panel discussion at this launch.

BPFI’s Financial Education Programme 2019

Planning is now underway for BPFI’s financial education programme for the year ahead. BPFI will once again participate in European Money Week, an annual initiative consisting of a series of events both at national and European level, with the aim of raising public awareness on financial literacy and improving financial education for students at primary and secondary level. As part of this initiative we plan to compete in the European Money Quiz (EMQ), a European-wide financial education competition aimed at 13-15 year olds and organised by the European Banking Federation (EBF) in association with banking associations across Europe. BPFI will host the Irish heats of the quiz on 12 March 2019 with the two winning students from this round representing Ireland in the European final in Brussels in May. Great success was achieved at the inaugural EMQ finals earlier this year where our Irish students took second place in the finals in which 25 countries competed.

Plans are also underway to host an Economist Masterclass which will bring together the chief economists from our retail member banks to engage in a live webinar streamed to secondary classrooms across Ireland. Earlier this year this event attracted over 100 schools and we hope to build on this success. BPFI will continue to add material to BusinessEducation.ie, our online resource for Leaving Cert Business, Economics and Accounting students. Finally, BPFI is currently working to drive out action points from our Financial Education Stakeholder Forum in June which saw representatives from a wide range of stakeholder interests come together to discuss the current state of financial literacy in Ireland and future challenges.