A Liberal Democrat priority enshrined in the Coalition Agreement, Vickers was tasked with ensuring that there could not be a repeat of the 2008 bank failures that led to a £66bn public bailout. Crucially, the focus was not on avoiding bank failures, but on ensuring that resolution of any further bank failures was as manageable as possible – thereby limiting the exposure of the public purse. Released in September, the Vickers Report sets out three sets of measures to avoid public financing of bank bailouts.

The first is to Ring-fence retail banking from investment banking. Ring-fencing will see the UK retail and commercial banking operations having a legally separate board and ring-fenced capital to ensure that losses in investment banking cannot result in the failure of a banking group’s retail and commercial arms, thereby affecting the “real economy”.

Combined with this protection, there will be enhanced capital requirements, explicitly including bail-in provisions that will increase UK banks’ tier one capital ratios to 10%, considerably ahead of the 2019 Capital Requirements Directive proposals of 9%. When fully enacted, the largest UK banks should be able to weather losses of 17% of risk-weighted assets to the UK balance sheets without recourse to the public purse. Limiting this to UK as opposed to global balance sheets should save large UK global banks (e.g. HSBC and Standard Chartered) from in what would otherwise be an effective levy on their international operations.

Finally, enhanced competition is designed to drive retail consumer choice and should reduce overall costs. The privatisation of Northern Rock to Virgin Money, the EU-enforced sale of 318 RBS branches and customers to Santander, and 632 Lloyds branches and customer to Co-Operative Bank, combined with a new scheme to streamline changing banks for personal customers, should reduce the barriers to competition. Time will tell whether or not this is an effective spur to historically passive consumer behaviour. Interestingly, the new Financial Conduct Authority (FCA) will have a statutory mandate to promote retail competition in the forthcoming Financial Services Bill.

Specific ring-fencing legislation – both primary and secondary – will be implemented by the 2015 election, with the implementation within what Osborne called a “reasonable transition timetable” – which Treasury will be consulting on. Separately, the increased capital cushions will be implemented in line with Basel III in 2019.

Open Questions and Next Steps

First, how open to amending the implementation will the Treasury be to true evidence-based regulation? Concerns over the future standing of the City mean it is likely that carefully marshalled evidence will be influential in helping to determine the timing of these changes. FH will be working with clients to ensure that this evidence is presented as effectively as possible.

Secondly, how much of this can or will be delivered through the Financial Services Bill which Osborne flagged as being scheduled for publication in January 2012? It appears to be limited to the giving the FCA an explicit statutory to promoted retail financial services competition.

Third, it was interesting that Osborne used his speech to make clear that RBS and Lloyds would have reduced bonus pools for 2011, and that RBS’s investment bank and overseas operations would be scaled back to the level required to support a large UK bank, focused on retail, SME and corporate customers. Osborne indicated that RBS would returned to the private sector – but the manner and timing of how privatisation will occur is for another day.

Political Impacts

Banking reform could have been a political train-crash for the Coalition. So far, it has been adroitly handled with both Liberal Democrats and Conservatives able to claim credit for an enhanced regulatory structure. However, the devil remains in the implementation detail.

Quotes:

“[This] statement will start a formal process rather than conclude one. In other words, after the Chancellor has spoken we will see some form of a consultation paper on both the ICB proposals and the Treasury view of them, and that the outcome of this process will be a white paper in 2012.” Angela Knight, Chief Executive, British Bankers Association

“…. Sir John Vickers and his fellow commissioners have got broadly what they wanted – and our banks will in the coming five years be forced to undergo significant financial, cultural and managerial reconstruction” Robert Peston, BBC Business Editor

“We’re going to proceed with the separation of the banks – the casinos and the retail, business lending parts of the banks … Moreover we’re going to get on with it. Both the primary and secondary legislation is going to be completed within this Parliament. It’s got to be done. We can’t have a position where the big banks are too big to fail.” Dr Vincent Cable MP Secretary of State for Business Innovation and Skills

“Expect to see more and more evidence of banks deleveraging, selling assets, shrinking their businesses to raise capital. This does not bode well for the health of the European banking industry, or the prospects for a damaging credit crunch.” Louise Cooper, BGC Partners

To a large extent, Cameron’s political capital over the next few days depends in large part on his performance. Initial backbench Conservative (and associated media) commentary has been very supportive. That said, very real questions about where this leaves the UK’s international competitive position remain. The answers will very much determine the UK’s role in Europe and the future of the Conservative Liberal Democrat coalition Government.

The most important point is that though the existing EU Treaties remain in force, legislation and regulations have been largely decided by Qualified Majority Voting (QMV) since 1986 rather than the unanimity required for Treaty revisions. Contrary to Eurosceptic fears, the UK has done well out of QMV, usually being able to assemble a qualified majority for its priorities, and to build a blocking minority when required.

Hence, the most serious impact of the decision by the other EU member states to go forward at 26 is that any QMV measure decided at 26 is de facto decided for the UK – with the UK having no direct input and very limited influence. Although the Financial Transaction Tax (FTT) will not be included, the Financial Crisis Management, Solvency II and IORP dossiers could be affected by the UK’s self-enforced absence.

Politically, the UK’s loss of influence makes the position of the UK’s key officeholders much less secure. In some cases – such as Sharon Bowles MEP, the European Parliament’s Chair of the Economics and Monetary Affairs Committee – this could be a near-term removal and loss of influence. In others, such as ESMA’s chair Verena Ross, it makes it much less likely that they will be asked to stay for a second term, or that senior British candidates will be selected in future.

The net result of this is that the most likely outcome for the UK is to increasing look and feel like a European Economic Area (EEA) country – applying the EU’s rules without the ability to influence their formulation. In this sense, the only veto that David Cameron has thrown is to veto Britain’s influence in the debates framing the EU future. Down the line, this raises real questions about the sustainability of the UK’s position within the EU on the current basis – which will clearly increase pressure for a full-scale reappraisal of the UK – EU relationship.  Over time, if the result is clearly a marginalisation of the UK within the EU, pressure to leave would dramatically increase.

Future EU Financial Regulation

This has engendered a disturbing lack of clarity about the operation of inter-governmental arrangements, the UK’s ability to influence on key briefs with the Commission, and the role of the European Parliament.

On the banking side, in addition to the FTT that is currently being proposed by EU Commissioner Michel Barnier, the proposals for Financial Crisis Management could impose additional multi-billion euro capital costs on EU banks – including UK-based subsidiaries of non-EU banks.

As a tax FTT is still subject to a UK veto, but the crisis management proposals – which could require the top 25 European banks to raise more than an additional EUR 2,400bn of capital – could be passed under QMV and therefore agreed by the 26 “core” EU members. The UK’s loss of direct influence on these proposals should worry not just London-based banks, but for the sector as a whole given the silencing of the EU’s most consistent advocate for proportionate, evidence-based regulation. It also raises questions about the location of the European Banking Authority in London, and the UK Government’s ability fully to implement those aspects of the Vickers report which go beyond CRD IV.

For insurers, there are real questions about where this leaves UK efforts to ensure that key briefs work for the UK market. Most pertinent here are Solvency II and IORP, where the UK is already struggling to influence the outcomes in ways which recognise the distinctiveness of its annuity market.

Cameron’s Response

Reflecting the long-standing anti-EU views of elements of the conservative and populist press, Cameron’s intervention has been broadly welcomed in the UK, with polls suggesting up to 70% favouring the “veto”. However, these numbers are soft, in that whilst “Europe” evokes strong views, it is much less important to voters than the economy.

Speaking in the House of Commons this afternoon, Cameron emphasised the need for Britain to remain a full member of the EU single market, and walked back on the critical issue of the use of EU institutions by the EU-26, where Britain will “look constructively” at how this can be achieved. However, his statement’s conclusion that Britain can be a “fully committed and influential [EU] member” whilst standing outside these negotiations, reeks of hope over commonsense.

Clearly, Cameron’s domestic balancing act is now between Deputy Prime Minister Nick Clegg’s Liberal Democrats and his own Conservatives. Clegg’s weekend attacks on Cameron were motivated both by party requirements and his personal commitment to the European project. However, suggestions that Clegg will lead the Liberal Democrats out of the coalition into a General Election are fanciful both because of the Lib Dems’ current poll ratings, and because the “bash Brussels” mantra is likely to remain popular. Taken together, an election now would result in an electoral disaster for the Lib Dems. Interestingly, and confirming their distancing, neither Nick Clegg nor Treasury Chief Secretary Danny Alexander were in their normal – and in the case of this debate, natural – seats on the front bench.

As both sides dig in, bridging the divide to bring Britain back into the EU-26 intergovernmental agreement looks like a distant possibility. However, despite the Eurosceptics’ unalloyed delight in the Commons today, it will become clear once their initial euphoria has worn off that there has been no repatriation of powers from the EU/Brussels, no referendum on EU membership, nor does Cameron have any plans to do so. These tensions will not go away, and will continue to complicate both Conservative party management as well as intra-coalition relationships.

Future UK – EU Relations: A Brussels View

Our interlocutors in Brussels have underlined their sense of this being a fundamental UK move – rather than merely another EU crisis. This suggests that there is no quick fix, partly because of the issues at stake, partly because of personal animosity, and partly because of the sense that long-term differences have suddenly boiled over. As one noted: “In the summer it seemed possible Greece would be out of the EU, but in the end it appears to be the UK – what a pity.”

More broadly, Cameron’s move has shocked significant players including the US. A very senior official noted that the UK’s image in Washington has been tarnished by the manner in which the matter was handled, no less than the outcome. Like everyone else, the US had neither expected such an outcome, nor had they been warned by the UK of its possibility. A senior UK official at NATO noted the impact as well, with various states contacting the UK mission seeking reassurances no surprise moves were expected there too.

Reaction

“This is the first veto in history not to stop something. The plans are going right ahead. It was a phantom veto against a phantom threat. Fifty-six years ago Anthony Eden walked away from the founding of the European Union and we paid the price for 20 years. This has been an Anthony Eden moment for David Cameron.” David Milliband MP, Labour Ex-Foreign Secretary

“The reason our brother and sister Europeans are so chronically enraged with the British is that we have been proved completely right about the euro … And for more than 20 years, some of us have been saying that the reason a monetary union won’t work is that you can’t do it without a political union – and that a political union is not democratically possible.” Boris Johnson, Mayor of London

“Nick Clegg’s switch from defending David Cameron’s negotiating stance to condemning it in the space of just two days would appear to have been a reaction to the crowing of Tory Eurosceptics and the Tory press about the use of the veto and the anger that it produced in his own party… Clegg, who’d been pretty upset from the moment he heard about the veto on Friday morning, felt he had to react.” Nick Robinson, BBC Political Editor

However, with the formation of the coalition, the European faultline running through government is if anything more significant than at the time of Maastricht. The Liberal Democrats are avowedly pro-Europe, and see the EU as entirely consistent with their internationalist and regionalist approach – a position that evokes a range of emotions from bewilderment to rage amongst their Conservative counterparts.

Against this backdrop, could last night’s debacle in Brussels destroy the coalition? It is unlikely, as neither party wants to face the electorate with the economy stalling and the austerity cuts beginning to bite. In particular, current polling suggests that the Lib Dems would face electoral oblivion at the polls – they need all the time they can get for economic recovery to vindicate their decision to enter a coalition with the Tories and implement the painful austerity programme.

Could this embolden the Tories to call time on the Coalition? Not unless the Conservative Right can convince the leadership that they can win an outright majority in a snap election – something more likely after the October 2013 boundary changes have taken effect. On balance, we therefore expect the Coalition’s increasingly unhappy marriage to continue in the short term – most likely through to 2015. However, the Conservative’s right wing is likely to continue causing trouble on Europe as the Parliament wears on – aided and abetted by Labour for tactical reasons – resulting in increased coalition friction.

UK – EU Relations

In broad terms, the EU has now split between the UK and everyone else. This is a moment that bears more than a passing resemblance to the 1990s – when John Major was isolated in Europe through repeated use of the veto abroad and Tory rebels at home – except that now the stakes are much higher.

Realistically, a disorderly break-up of the eurozone will only be averted if the package agreed between the Eurozone 17 plus the (now) 9 other non-Euro members (i.e., every Member State but the UK) is judged to be sufficiently credible and likely to stick through the three years it is likely to take to negotiate, ratify and implement. The markets will ultimately be the judge of that.

Beyond this, it is clear that we now have a two-speed Europe, regardless of whether the agreement between the rest of the Member States is formally within the EU institutions or not. In vetoing treaty change, Cameron has denied the rest the use of the Commission and EU officials. This may well have been in the UK’s short term interests; however, the reality is that we have also entrenched a large voting bloc whose interests will inevitably start to converge as they embark on closer union.

Given the dramatic way in which the negotiations broke up, and the rancour directed towards the UK (on top of the existing tensions), it is difficult to see how this will not further limit the UK’s ability to influence the EU negotiations in our favour. It is likely that it will take a decade or more for Britain’s influence in the EU to recover – and any future enlargement of the EU is unlikely to change this – the expectation is that any future Member States will also have to sign up to the new treaty.

Reaction

“I said before coming to Brussels that if I couldn’t get adequate safeguards for Britain in a new European treaty, then I wouldn’t agree to it. What is on offer isn’t in Britain’s interests, so I didn’t agree to it.” David Cameron MP, UK Prime Minister

“David Cameron’s isolation is a sign of weakness not of strength … It is not in Britain’s national interest for decisions to be taken without us even at the table and it’s a direct result of David Cameron spending more time negotiating with his own backbenchers than with our European partners.” Douglas Alexander MP, UK Shadow Foreign  Secretary

“Mr Cameron was right to reject a deal designed by the French, for the French.” The Daily Telegraph

“We do not yet know the impact this new arrangement is going to have on the UK’s ability to secure agreements on sensible regulation, but that is critical. The UK has most of the EU’s financial business, but we have a minority of the votes. The City does business globally but pays its taxes here, so retaining a strong, vibrant, international finance hub here is good for jobs and our economy.” Angela Knight, British Bankers Association

“Britain did not walk out of the EU last night. But let there be no doubt about it: we have started falling out.” The Economist

FOR FURTHER DETAILS FROM FLEISHMAN-HILLARD

Contact Nick Williams, Director of Public Affairs and Corporate Communications on:

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To an audience that included NGOs, business leaders and journalists, Ambassador CdeBaca answered a variety of questions on the meaning, role, and regulation of human trafficking and modern day slavery.

The Ambassador’s introductory speech highlighted a common misnomer about human trafficking: that it is an issue of moving people across borders. In reality, human trafficking occurs a great deal of the time within borders.  It is “modern-day slavery,” which involves the coercion of persons for the purpose of exploitation. Although human trafficking is most associated with sex, it is also prevalent in agriculture, manufacturing and domestic servitude. 

Regarding the prevalence of the trafficking problem, Baroness Goudie placed it behind arms and ahead of drugs on a top-three list of international illegal trades, remarking that “a person can be used more than once.”

The Ambassador emphasised repeatedly that the engagement of the business community is crucial to combatting trafficking in persons, and key to the United States’ current approach to the problem.

In California, new legislation requires any company worth more than $100 million with so much as a $50 presence in the state to register an anti-slavery policy with the government. He explained that all businesses should have a clear anti-trafficking policy, and accepted that convincing business leaders, as opposed to local managers, of their role was a difficult challenge.

On the consumer level, Baroness Goudie showed the audience a new iPad app called Slavery Footprint which estimates users’ “trafficking footprints”, and suggests ways to reduce them.

Consumer demand, the Ambassador argued, is a powerful force compelling business to act against modern slavery in the supply-chain. He highlighted an informed and vocal youth consumer generation as responsible driving pressure on businesses to be responsible on these issues.

In reference to the UK, Baroness Goudie urged consumers to be informed and responsible when purchasing memorabilia at next year’s Olympic Games. Commenting on the British government, the Ambassador was confident that the Coalition remains committed to combatting human trafficking, but again expressed concerns that this must be seen as more than a borders issue, with as much relevance for British citizens as foreign workers.

The following resources provide further information about Human Trafficking:  The US Government’s Trafficking in Persons Report, the Baroness Goudie Blog; and The Body Shop has also recently launched a global report on child trafficking.

The answer according to Treasury sources is that the bank levy is in fact raising £2.5 billion – and no more. We understand this is because the original Treasury estimates of the UK balance sheet (and therefore what rate they would have to set to get their desired yield) were too optimistic and shrinkage in the domestic UK bank balance sheets therefore forced them to increase the rate to achieve their target amount. The bank levy on its previous rate was only going to raise in the region of £2.2 billion, with the result that the extra £300 million was required to achieve the originally predicted yield. In effect, therefore, the Government is looking to banks like HSBC and Standard Chartered to make up for the shortfall from the likes of RBS and Lloyds (who have been forced to reduce their holdings of the kind of ‘high risk’ assets the levy targets).

This explains why the Treasury altered the rate, but does not itself make clear why the £300 million featured as an additional scoreline in table 2.1 of the Autumn Statement. The answer here is that at some point previously the forecast was revised down in line with the lower yield expectations – and the Treasury therefore needed to revise its forecast up again and publicise the extra £300 million in the Autumn Statement.

What does this mean? If the Treasury are serious about raising £2.5 billion every year, in future, we can probably expect further changes to the bank levy rate in order to hit the £2.5 billion total. This is potentially serious for banks who are looking to reinforce their balance sheets with those most secure ‘tier 1’ assets which are outside the scope of the levy – as their doing so will inevitably shrink UK balance sheets for these purposes, thereby forcing the Government to increase the rate if they want to collect the same amount of money. In that respect, Vickers is likely to accelerate this tendency.

In addition, the odd notification in the scorecard also suggests that this might have been one of the later measures in the package – possibly to plug some unexpected hole. This might explain why it is a rather awkward fit with the Government’s wider approach.

Randall Stephenson, CEO and President of AT&T being awarded CEO of the Year at the World Communications Awards 2011

I recently attended the 13th annual World Communications Awards (WCA) as a guest of Total Telecom. The evening, which was held at The London Hilton on Park Lane, brought together over 55 global key telecom players to celebrate high standards of innovation within the communications and telecoms industry. Total Telecom, one of the most influential UK telecom publications, organised the event and presented 18 awards throughout the evening.

The crème de la crème of the telco world, including AT&T, Orange Business Services, ZTE, SingTel and BT, dressed in black tie, sipped champagne and cheered on colleagues and competitors. This was my first telecoms awards experience and I was inspired to see the real diversity that makes up the current global telco landscape. Nominees ranged from multi-national corporations to niche cloud specialists as well as green and renewable energy organisations.

With all the current hype surrounding the cloud it was no surprise that Best Cloud Service was a popular new entry for 2011. Other highly anticipated categories were Best Global Operator, Best Mobile Operator and Best Operator in a Developing Market. Fleishman-Hillard’s client, AT&T, was awarded the highly coveted CEO of the Year award. Although Mr. Randall Stephenson was not able to attend in person, he was able to share his thanks via video and Andrew Edison, Regional Vice President, AT&T Europe, Middle East & Africa accepted on his behalf.

I personally work with clients across the telecoms industry; events like these are invaluable for us to be able to provide insight into current trends and not to mention a great networking experience with journalists and fellow peers. This year we’ve seen much debate over operator strategies for the mobile cloud, the consumeriation of IT and the growing demand of ‘bring your own device to work’ phenomenon, needless to say, 2012 should make for an exciting year in the telco industry!

According to the Update:

• The majority of people in all age groups, apart from those aged 75 or more, had used the Internet.
• There were decreases in the numbers of non-users in all age groups, apart from the youngest. 
• The largest decrease [of non internet users] was amongst those aged 75 and over, where there were 164,000 fewer non-users by 2011 Q3, compared with Q2, with the percentage of non-users in this age group decreasing from 76.3 per cent to 72.4 per cent.

Boomers may be the fastest-growing demographic on social networks, but seniors are gaining traction in terms of internet usage. What does this mean for businesses currently using traditional, offline marketing plans? What online opportunities exist to drive offline behaviour among a generation thought to only trust brick-and-mortar channels?

Download the full Update here.

Meanwhile, a recent study by VibrantNation about “Boomers and The Vibrant Mom” highlights the growing influence and purchasing power of women over 50. The study leverages data compiled from 13 different countries (82% from the United States) may cause marketers to re-think their business strategy when trying to engage Mum (or their adult children).

According to the Study:

• 59% [of women over 50] pay for adult children’s mobile device
• Over 40% of moms influence their adult children’s banking, mortgage, and insurance decisions.

If ‘Mom’ is footing the bill for many of her adult children’s needs, where is she getting her information and who does she trust? What kind of purchasing decisions will be made with that data and how will it impact her household?

New studies about digital adoption are emerging daily about the older UK demographic, highlighting where they get their information and what they do with that information. More importantly, it demonstrates how the world of Marketing and PR is forever changing as ‘niche’ markets join the mainstream and converge online.

 More information about the VibrantNation study can be found here.

GP leaders are concerned that changes to the fiendishly complex NHS resource allocation formula will see large variations in income for some GP surgeries.  But that is to miss the point.  As things currently stand, those surgeries tend to be located in healthy, wealthy areas of the country, or to put it another way there are not enough GPs where they are needed most.  And this depressing fact comes after a decade of record funding in the NHS which saw spending double in real terms and GP salaries rise to well over £100,000 per annum.

So why all the continued focus on general practice, you may ask?  Well, astute policymakers know that healthcare systems which are orientated towards primary care more likely to deliver better health outcomes and greater public satisfaction at lower costs.  International studies show that an increased number of GPs are associated with improved health outcomes for cancer, heart disease and stroke, with increases in life expectancy; and self-rated health.  GPs are good for us.  And getting more of them into areas of deprivation will save money and lives, so that’s good for everyone.

The problem now is that the Government is looking to GPs to take the lead with one set of reforms – clinical commissioning – while at the same time trying to corral more of them into working in poorer, unhealthy parts of the country.  An additional complicating factor is that GPs aren’t really part of the NHS family.  They operate on a small business partnership model, employing other staff such as practice nurses, receptionists while retaining a proportion of the practice profits for themselves.  So this is pretty difficult stuff.

The original proposal which highlighted the lack of GPs in areas of deprivation suggested that the complex NHS funding formula should be simplified and small businesses (GP practices) be financially incentivised through a ‘patient premium’ to provide services to deprived populations. Controversial it might be, but similar incentives worked before 1997, so there’s no reason why they shouldn’t now.

This damning judgment of Andrew Lansley’s recent plan to curb the UK’s obesity problems comes from Jamie Oliver, the international poster-boy of responsible, healthy-eating. The Health Secretary’s ‘call to action’ includes asking the food and drinks industries to take greater action to encourage healthier eating and cutting the calorie count in their products. In addition, he will attempt to persuade people to exercise more.

While ostensibly sensible, these ideas have been criticised for being superficial and remarkably weak. Many believe that food companies will be loath to encourage people to purchase less of their goods and it is manifestly clear that getting people to exercise more requires greater robustness than simple encouragement.

Currently, a chunky 60% of the adult population and around one third of children are either obese or overweight, costing the NHS £5.2 billion per annum. If recent figures are extrapolated, almost 50% of men and 40% of women will be obese by 2030. To curtail the burden on the NHS, as well as improve the well-being of the population, public health experts believe that the Secretary of State may need to consider more stout actions such as a ‘fat tax’ or legislatively compelling the food and drinks industry to lower the sugar and fat content in their products.

Mr Lansley cannot afford more public opprobrium after his proposed NHS reforms attracted much criticism. With the BMA asserting, ‘We do not feel the [obesity] strategy has gone far enough’; the Children’s Food Campaign declaring, ‘This is a deeply disappointing and utterly inadequate response’; and Mr Oliver’s scathing comments smeared across the broadsheets and tabloids, it seems that for the Health Secretary, the proof of his reforms really will be in the pudding.

Held in the impressive Armourers’ Hall in the City of London, the walls adorned with coats of arms and historic artwork, the division between the ‘adults’ and the ‘young people’ (a diverse group of 19-26 year olds) was apparent from the offset. The audience, from members of the BBA to other PRs and journalists shuffled to their seats, glasses of wine in hands, ready to give the youngsters a grilling.

The Daily Mail recently began campaigning to get compulsory personal finance education into schools through a petition which was kicked started by Money Saving Expert’s Martin Lewis. While you might assume that school children would roll their eyes and turn their noses up at such an offering, the response from the CSFI panel was perhaps unexpected. Almost the entire panel said that they would have appreciated having financial education at school, such as a one hour compulsory lesson a week.

These young people were frustrated at the current economic climate and felt that if this education had been introduced earlier, the country would not be in its current state of disarray. They questioned whether they would be able to live the same kind of lifestyle as their parents did at the same age; the majority said that they would like to own their own home but did not anticipate this happening until their 30’s at the very earliest. They considered that their parents had made their wealth through property, which they did not see as a valid option for them in today’s society. All members of the panel were either renting with other housemates or still living at home with their parents. Those renting did not see a problem in living with friends as they see this as an extension of their university life rather than a need to live alone or settle down with a partner. What they did begrudge was the cost of renting for young graduates, particularly in London. They perceive paying rent as a waste of money when their parents were putting this money into a mortgage at their age.

What surprised me the most was the fact that the majority of the panel were not sold by the latest technology in the financial sector. Most said that they would feel uneasy making a purchase on or with their mobile phone due to security worries and there was a unanimous dislike of the recent introduction of ‘Secure Keys’ to online banking. Many of them still regularly use their local bank branch which should raise alarm bells to those banks that are reducing their High Street presence.

Working with clients across the Financial Services sector, events like these are invaluable for us to be able to provide insight into customer perceptions and preferences. The younger generation is a demographic that many financial businesses are not focusing their attention on, either through marketing or even the products and services they offer. What I learned from the evening is that this age group is switched on, know what they want and don’t want, and as such, to disregard them could be a fatal error.