Virgin plans Internet bank

Virgin Money is planning to launch a UK Internet bank in a bid to take advantage of public anger at traditional high street outfits, according to the Observer newspaper.

The financial services arm of Richard Branson's empire is preparing to apply to the Financial Services Authority for a banking licence that would allow it to take deposits and offer mortgages.

Virgin Money was launched in 1995 and claims over two million UK customers, offering credit cards, personal loans, savings products and insurance. Sales rose from around £70 million to £100 million in 2008 with profits estimated at £30 million.

The unit is now looking to follow the lead of Tesco and push much further into financial services, taking advantage of public anger at traditional banks. Tesco bought out RBS to take complete control of Tesco Personal Finance in December and plans to open 30 bank branches in its stores by the end of the year. Another retailer, Boots is also considering following Tesco's lead.

The Observer says Branson is now in discussions with US investment banks over financial backing and is also talking to advisers about a new bid for failed bank Northern Rock.

Branson is said to be considering three options: launching a new bank with a branch network; teaming up with another finance firm; or joining a consortium to buy a troubled bank like Northern Rock.

www.finextra.com

Industry Stats

Statistics provided by CML for March 2009

  

Societies see sharp rise in mortgage approvals

1 May 2009

Mortgage approvals by societies in March were £1,542m compared to £742m in February.

Gross lending among societies amounted to £1,462 million in March 2009 compared to £3,633 million in March 2008.

Adrian Coles, director-general of the Building Societies Association, says the market remains challenging but the latest figures are encouraging.

He says: “As might be expected at this time of year, mortgage approvals in March rose sharply. Even adjusting for seasonal influences this is the highest figure since November. Although this may suggest a very slight recovery in activity in the housing market over the next few months the environment nevertheless remains very challenging.”

Societies experienced a small net withdrawal of £196m from savings accounts in March. However, with interest credited, balances rose by £2,140m.

Coles says: “The Bank Rate was reduced to 0.5% at the beginning of March, and the figures show the impact of low interest rates and economic conditions on people’s ability and willingness to save. However, it is pleasing that despite this, an extra 450,000 savings accounts were open at building societies at the end of March compared to the start of the year.

"Over £1bn was deposited in building society savings accounts during this period and the sector’s share of the retail savings market increased from 20.2% at the end of February 2008 to 21.4% at the end of February 2009.”

www.mortgagestrategy.co.uk

Temenos T24 R09 on general availability

5 May 2009

Temenos (SWX: TEMN), the global provider of integrated core banking systems, today announced the release of the latest version of its core banking software, TEMENOS T24 (T24) R09. Featuring over 100 individual enhancements to the packaged solution, including TEMENOS Insight (Insight), the Business Intelligence product suite, T24 R09 introduces new modules for structured products, corporate internet banking and loan origination, while further leveraging T24's strong Service Oriented Architecture (SOA). In addition to this release, Temenos has also announced the first implementation of T-Verify, its automated software upgrade tool, at Schroders Private Bank.

The annual T24 release, which spans all geographies and banking sectors, is designed to keep clients one step ahead of evolving marketplace requirements, as banks seek to reduce costs while increasing competitive advantage. Key improvements include:

1) T24 R09 now incorporates Insight which was launched in March. Fully integrated with T24, Insight empowers users to analyse and understand enterprise data in depth and identify customer trends, profitability and risk, thereby improving decision-making and boosting profitability. Senior management enjoy dashboards that incorporate the business's key rations and performance indicators, providing daily management information across the enterprise. Existing T24 users can deploy the system in three to eight weeks. High-quality, real-time information is a strategic asset for banks and has become more vital to their survival in this era of economic uncertainty.

2) T24 R09 marks the release of the first of T24's Reference Business Services in the T24 Service Catalog, extending Temenos' SOA investment and development. These real-world business services definitions, included as standard in T24 Model Bank, allow for faster, simpler, and more reliable and efficient integration of T24 with the bank's broader technology environment within a service orientated architecture. T24 R09 signifies the first formal release of a set of Model Bank banking services, which have been aligned with the work being done through BIAN on the banking services landscape.

3) With the key role of structured products in portfolio hedging strategies in a post-credit crisis climate, T24 R09 incorporates a new module for the creation of structured products with support throughout the entire investment life-cycle. This module addresses high market demand for a more conservative investment approach, which is more suitable to the retail investor seeking to minimise risk but maximise returns in a volatile investment market.

4) T24 R09 also extends Temenos' proven ARC Internet Banking (ARC- IB) product to the corporate market. Until now, ARC-IB supported both the personal and intermediary internet banking segments in the retail and private banking verticals. It now offers corporate clients a full range of electronic banking facilities including cash management, individual payments, bulk payments and bulk direct debits. This is supported by role-based workflows that can be defined by the client and controlled through sophisticated account mandates and challenge/response transaction signing.

5) T24 R09 also includes a major extension to the system's existing loan origination capabilities with the introduction of T24 Loan Originator (LO24). LO24 embraces all aspects of the lending lifecycle, fully supporting front-to-back processing from client handling at the initiation of the loan enquiry across any channel. Temenos clients now benefit from loan origination functionality for retail, SME and corporate financing in a single, integrated solution.

Andreas Andreades, CEO, Temenos, says: "Our continuous product development programme ensures we consistently deliver value to our customers. With each release we offer our clients more functionality, pre-packaged with standard service definitions, which means that the technology remains modern and the cost of ownership is reduced. This model gives an immense competitive advantage to our clients and enables them to upgrade to the new version of T24 with minimum effort. We anticipate smooth upgrades of T24 across the globe and expect clients to quickly take advantage of its new offerings."

Launched at Temenos' Client Forum last year, T-Verify has now been deployed by Schroders Private Bank to automate the testing processes involved in the upgrade of its T24 system. T-Verify automates a significant part of the software upgrade testing procedure, making it faster and more cost-effective to upgrade to the latest releases of T24 while reducing the banks effort and cost for the upgrade by as much as 70%.

Rolf Fischer CIO, Schroder & Co Bank AG, says: "T-Verify is an exciting product because it reduces the cost, effort and time to market of making new enhancements. And, as a CIO, I am always trying to maximise the part of the IT budget that goes into new functionality and automation."

www.bobsguide.com