FinTech Futures: Top five news stories of the week – 2 February 2024
Here’s our pick of five of the top news stories from the world of finance and tech this week, featuring Santander, PayPal, HSBC, Lloyds and more.
Lloyds to cut 1,600 jobs across branch network
Lloyds Banking Group is set to cut around 1,600 jobs from its branches as more and more customers choose to do their banking online.
The structural overhaul comes amid the group’s claims that more than 21 million of its customers prefer to bank via online or mobile channels, with just 8% exclusively opting for branch-based banking.
As a result of this growing preference for digital banking, Lloyds plans to remove 1,600 jobs from its physical branch network. The group tells FinTech Futures that there will be no role reductions for its most junior staff and it will be offering voluntary redundancy “in some situations”.
It also says that, as part of the restructuring, the group will be introducing over 830 new roles, predominantly within the relationship growth team of its consumer relationships business.
PRA fines HSBC £57.4m for “historic depositor protection failings”
The UK’s Prudential Regulation Authority (PRA) has handed a £57.4 million fine to banking heavyweight HSBC for historic consumer deposit protection failures.
The regulator has handed its second-largest fine to date to the bank’s European holding company (HBEU) and its UK subsidiary (HBUK) for what it says were “failures over many years to properly implement the requirements set out in the Depositor Protection Rules”.
The PRA claims HSBC failed to supply this information or identity deposits that were eligible for FSCS protection correctly, and did not install an overseer of the relevant governance procedures. It adds the “failings occurred for HBEU between 2015 and 2022, and for HBUK between 2018 and 2021”.
As part of its investigation, the regulator says it uncovered that 99% of the beneficiary deposits received by the bank were erroneously marked as ineligible for FSCS protection, and that it could not produce evidence that it satisfied certain requirements of the rules.
The fine was ultimately reduced from its original £96.5 million total following the firm’s “cooperation throughout the investigation, including the early admission of certain rule breaches”.
PayPal to trim workforce by 9% over 2024 in bid to streamline business
PayPal has announced it is set to axe around 9% of its workforce over 2024 in an effort to “right-size our business”.
Alex Chriss, president and CEO of PayPal, confirmed the move – which is expected to affect some 2,500 jobs – via a team-wide letter posted this week.
Roles are to be trimmed “through both direct reductions and the elimination of open roles over the course of the year”, Chriss writes.
Emphasising the action’s intent to “reduce complexity and duplication” and “maximize our reach, scale and resources”, he expects the job cuts to enable the US payments giant to “move with the speed needed to deliver for our customers and drive profitable growth”.
Santander names Petri Nikkilä as new Openbank CEO
Santander has hired former ING exec Petri Nikkilä as the new CEO of its digital bank offering Openbank, effective from May.
As CEO, the group says Nikkilä will “lead the Openbank business in its current markets and continue to promote its international expansion”.
He has also been appointed as head of the non-auto consumer business and the buy now, pay later (BNPL) business of the group’s Digital Consumer Bank unit.
Nikkilä will succeed Ezequiel Szafir as the CEO of Openbank following his departure from the role in December after a nine-year tenure. Nikkilä is also due to join the boards of both Santander Consumer Finance (SCF) and Openbank, subject to regulatory approval.
He will join Santander directly from ING, where he is currently serving as head of global retail transformation following a three-year stint as head of retail banking for Belgium, the Netherlands and Luxembourg.
NatWest’s Mettle names Michelle Prance as new CEO
Mettle, NatWest’s digital-only bank for small businesses and the self-employed, has announced that Michelle Prance will be taking over as its new chief executive officer (CEO).
Launched by NatWest in 2018, Mettle is an app-only banking service that equips sole traders and freelancers with a free business bank account and an array of accounting, bookkeeping, and tax tools to help manage their business finances.
Prance first joined NatWest in 2021, and prior to her most recent appointment, held the role of group director, customer and colleague journeys.
On her appointment, Prance says that the “self-employed have traditionally been underserved by banks”, which has placed barriers in the way for them to get “set up quickly, get paid and be tax-ready”.