More signs of the intense competition – or should that be undignified scramble? – that is the urge to get in to the modern banking space. Our friends at AltFi run a report containing a couple of bouquets – and a brickbat for a leading player:
Open banking provider Yapily has today exposed the range of open banking response times from high street banks by publishing a wealth of data on its own API response times.
Throughout the pandemic, it’s clear from the numbers that open banking rapidly became a top priority of most of the incumbent banks, with their average API response time improving from 1154ms in February to 504ms today.
Fast API response times are important as they enable developers to create apps and services that react quickly and provide a better user experience.
The biggest improvement on the list came from First Direct, which had an average speed of 1577ms in February, compared to a much faster 604ms now.
First Direct was closely followed by M&S Bank which had an average response time of 1314ms in February, down to 632ms more recently.
By far the worst on the list, however, was Santander.
Historical Performance And IFISA Process Guide
That figure is the result of over £20 million of loans facilitated on the site, as we bring individuals looking for a good return on capital together with carefully vetted small companies seeking funds for growth. Bear in mind that lenders’ capital is at risk. Read warnings on site before committing capital.
All loans on site are eligible to be held in a Money&Co. Innovative Finance Individual Savings Account (IFISA), up to the annual ISA limit of £20,000. Such loans offer lenders tax-free income. Our offering is an Innovative Finance ISA (IFISA) that can hold the peer-to-peer (P2P) business loans that Money&Co. facilitates. For the purposes of this article, the terms ISA and IFISA are interchangeable.
So here’s our guide to the process:
The ISA allowance for 2019/20 is unchanged from last tax year at £20,000, allowing a married couple to put £40,000 into a tax-free environment. Over three years, an investment of this scale in two Money&Co. Innovative Finance ISAs would generate £8,400 of income completely free of tax. We’re assuming a 7 per cent return, net of charges and free of tax here.
Once you have made your initial commitment, you might then consider diversifying – buying a spread of loans. To do this, you can go into the “loans for sale” market. All loans bought in this market also qualify for IFISA tax benefits.
Risk: Security, Access, Yield
Do consider not just the return, but the security and the ease of access to your investment. We write regularly about these three key factors. Here’s one of several earlier articles on security, access and yield.