Andres Baltar: Hello. Good afternoon, good morning wherever you are. My name is Andres Baltar, and I Head the Corporate Bank for Barclays Europe. Look, we're cautious that with so much trouble and so many events being cancelled, there are very few opportunities for us to check in with our clients, I know, for our support. We've all been firefighting in the last months, and we think it's time to look forward and to get on our front foot. We have created this series of events to look forward and explore what life looks like after lockdown.
So these events build on our longstanding Treasurers Forum in London, and we are making these events virtual and global. Please try and keep them as interactive, and participate in Q&A, and the polling, please. That will be great.
The virtual series consists of four sessions, four regions. This is the first one of four. It's related to there's one in Europe, one in the US, one in Asia Pacific, and one in the UK; and four different treasury topics. Sessions are designed globally with a view from all of the regions, as different countries around the world reach different phases of the reopening. This is to say that Barclays is still here. We're ready to support our clients across the globe. So please reach out to your relationship director if we can help you with anything.
So without further delay, let's move to our economic update with Fabrice Montagne, who is the Chief UK Economist. He's going to give us a few minutes on the UK and European economy. Fabrice, over to you.
Fabrice Montagne: Yes. Thank you very much, Andres. I hope everybody can hear me. I'm really delighted to be on this call today, not least because life after lockdown is what keeps me really busy right now in terms of booking my summer holidays. And unfortunately, I haven't been able to find a definite answer on whether we're able to travel or not this summer. But it's definitely one of the very, very relevant questions.
Listen, for this session, what I would suggest doing is try to run through the specificities of the shock, of the economic shock we are facing, using the UK as a base case, as a reference. And then widen a little bit the scope of my thinking, for instance to Europe, but also to some point to the US, to see how that might or might not be different.
Because after all, the virus doesn't know any borders, and that's a true global shock we're facing. But -- so the first order is likely to be very similar from one country to the other. But the policy reaction and cultural differences, et cetera, probably introduce here some divergence and some disparities. So let's discuss this at the end or in the Q&A, if there are some.
So listen, I think what's very interesting in this shock and that's the object of this first slide, is we have no precedent. This is not a war. This is not a deep recession, as we usually know it. We're not correcting any major economic imbalance. And GDP is dropping by maybe 20% or so on a quarter. And that's something totally unprecedented, which will leave, by the way, our charts scarred for life. The scale of this shock is just unprecedented.
So the object of this first slide is to show you some scenarios: best, worst, central; but to show you how dependent this is on the assumptions. And the assumptions we have to make going into this shock is how low are we dropping during the lockdown, how long are we staying in the lockdown, how quickly are we recovering, and what is the landing area in 2-3 years' time. So you basically have four parameters here that help you to draw the shape of the shock.
Now the length of the lockdown, this is something that has been given to us by the government. And so that is not a question mark anymore. The depth of the fall is still up in the air, and for the UK we get April data on Friday this week.
So we'll know how low GDP was in April. For other countries across Europe or in the US, we'll have to wait for quarterly data, which usually comes in a month or 6-weeks after the end of the quarter. And, you know, we still have a long way to go, and to tiptoe in the dark here, before we know how bad the situation actually was during the lockdown. And then that should help us to infer or at least to fine-tune a little bit what the shape of the recovery is.
Regarding the shape of the recovery, I have a couple of slides towards the end of my presentation, which tries to track the recovery more or less in real time.
I think what is very visible on this chart, and I can already now give you the number, is that in the first week after the end of a lockdown, and think about this. The first two weeks, you should be able to recover something like 15 percentage points of GDP. So if you've dropped to 70, let's say, within two weeks you recovery to 85. It then, however, takes another month to recovery 5 percentage points.
So from 85 to 90, it takes perhaps a month or so. And it then takes a full year to recover another 5 percentage points, and you acknowledge that in this process you maybe have 5 percentage points which are lost forever. So that is really the shape of this recovery. You have a bounce, you have a jump out of the lockdown, and then everything becomes a bit more complicated, and the pace of the recovery, it slows very quickly to basically where we were pre-virus forecast then in terms of growth rate.
The way our views have changed in recent months -- sorry, I'm activating the slides here, as I speak. So the way that those changed in recent months is basically we moved away from forecasting, just to stop and go. And we introduced some scarring, and that's the object of this chart.
You see that relative to pre-virus forecasts, what's important to notice is that we are still something like 4% below pre-virus trends at the end of our forecast horizon, which is the end of next year here. And that is very similar from one economy to the other, to be honest. We have some economies dropping less, but rebounding less as well. And net-net, even when you compare to the US or other economies, you want to (ph) think about 3 to 5 percentage points below what we were forecasting before.
And that's what's, in the UK at least, referred as long-term scarring, how much of long-term drag or loss in income do we have to suffer because of the virus. And that relates to all sorts of things that are usually best described as nonlinearity.
If a company goes bankrupt, if somebody loses his job, well, that's less investment, that's less skill being built up over the long term. That's a less healthy economy. Let's put it this way, right? So an important thing and as we went through this crisis, is that we had to take into account more and more long-term losses in wealth in our forecast.
So the tricky thing is that when you have -- you probably have read all these articles about V-shape, U-shape, W, swoosh, or whatever the various names. Well, a V-shape would have been, to recover to the pre-virus levels, and that's not what we're doing. So this looks like a -- I think that the -- I was about to say the technical word, but it doesn't sound right, technical. This is swoosh kind of U-shaped recovery, because you don't recover fully, and you stay a bit lower, for what it's worth.
The next slide is for you to take home. It's not, per se, to be discussed here, first of all because the numbers are very small. But you have -- this is one snapshot here for the UK, which shows you more or less the entire components of the economy. One component that I will discuss next is unemployment, and there's obviously especially from an audience of treasurers, I would say a huge focus on unemployment.
Now, unlike normal recessions, we have to split unemployment into what we usually understand as unemployment, meaning people losing their job, and then -- and that is new in this crisis is people who are not at work, but still on the payrolls.
And that is in the UK called a furlough or the Coronavirus Job Retention Scheme. It is "Kurzabeit" in German. It is "chomage partiel" in France, and it has its equivalent in Spain and Italy as well. It's basically the government footing the bill and giving cash to businesses to keep people on the payroll, even though people are at home, but not working.
Now the benefit of that, it's a bit better -- it's better than just sending people -- just firing people and increasing unemployment benefits, because basically what happens here is the distance between people and their job is minimal. And bringing people back in as soon as the situation improves can be done extremely fast, as opposed to if you fire somebody, you still can call him back like a couple of weeks or months later.
But that person might have gone for another job elsewhere, so it might be less straightforward. So there is some things really attractive in those schemes, which is to keep people very, very close to their full-time job.
There is something very costly for public finance. I'll come back to that. And there's another thing very attractive, is that you actually compensate for losses in income. The loss in income here is just think about 20%, if you're not capped. Well, if you were to fall in full unemployment, it will be closer to a 50% drop or even less, depending on where you are.
So that scheme here protects income a lot to the point that one of the themes that we're discussing very recently is that during lockdowns, when you -- if you believe our GDP forecast that GDP, and with it by the way, consumption dropped something like 30% on a month, or 20% on the quarter, while at the same time income only dropped by much less.
And you know, if you have to estimate the drop in income, you'll end up at 5% or 10% on aggregate. It means that over a quarter, households easily built up a buffer of, call it, 10% or 15% of income, built up a financial buffer of that amount. And the question is now, and behind all the bullishness that has been raised by, for instance, non-farm payroll on Friday in the US, there's a discussion on yes, are households now going to spend this amount or are they going to sit on it for the time being, which would give you a very different shape of the recovery, right?
So this is currently one of the much discussed topics, you know, how much has been saved by households, how much will be spent.
I mentioned that the cost of all these policies is very high in terms of public finance. In the UK, we are hitting post-war records in terms of deficit. So this table is two weeks old, and believe it or not, it sounds like two months.
Because here we're still showing 11% deficit, but we're already at 12 and a bit, and that's taking into account that job retention scheme or the scheme to support income of self-employed has been extended into August. And that comes with extra cost. So we are -- you know, these numbers are there to increase a little bit.
What is not fully taken into account are a lot of guarantees that have been handed -- guarantees that have been -- loans that have been guaranteed by the government. And if you have some defaults on that, that number might go a bit higher.
What it means for debt, it means that for a country like the UK, debt jumps by 15-16 points of GDP, so from 83 to 100. That's very similar to other countries. And it stays there. There's no credible outlook here to have the debt amount decrease. It drops a little bit in the next year, because deficits correct a little bit, and especially GDP rebounds. But overall, you know, we have a step-wise increase in debt level, and that is a global phenomenon.
Turning to -- before I turn to the recovery, sorry -- let me at this point say a couple of words on Bank of England. The reason why it is not a standalone slide, but has to be seen in conjuncture with public finance, is that the Governor of the Bank of England himself, Andrew Bailey, has linked the size of the quantitative easing package to the size of the issuance.
And what the Treasury told us on one side, is that they would be issuing 180 billion of debt over the first three months of the shock. And what the bank told us is, guess what? We're doing GBP 200 billion QE over the same period. And the bank sees itself as a fiscal enabler, as enabling the policy response of the government.
And that is in order to allow for the economy to survive the shock, and for us to be able to discuss whatever inflation outlook we'll have afterwards. But at least we will have an inflation outlook, as opposed to a completely broken economy.
So all the usual reasoning on where is inflation going to go, is the monetary policy stance accommodative enough, et cetera; have been kind of sidelined in the first instances of the crisis. And the Bank of England has been really just supporting institutions, supporting the fiscal response.
Now it is not that clear in Europe, because of treaties and because of a different approach to independence and to central banking. But it goes without saying that when the ECB intervenes on bund markets, it is there to allow those bund markets to remain open and spreads to remain civilized, and rates in general to continue to reflect low interest rates. And that is exactly the same as saying that the central banks steps in to support the fiscal response, right?
So it might be introduced in different terms. It might have to do with -- you might have to deal with complication from the German Constitution Court or what have you. But fundamentally, you have to see this as a very similar policy reaction.
In terms of recovery, and that's the purpose of those last two slides here, we are very lucky in the UK to have launched recently actually what we call a spend trend. Spend trend is a signal produced by our Barclays card unit. It's basically leveraging all the transactions we are seeing on credit and debit cards across the UK, and I'm talking here about a market share of 20% or so. So it's a good sample.
And what this allows us to do is track on a daily basis, how much and where households are spending the money. And I think I'll just highlight two or three points here in the interest of time, is that first of all, the lockdown has not been a static state of being frozen.
There's a life during the lockdown. And even though consumption dropped something like 30% in the initial stages, in the initial weeks of April, it did recover thereafter, and people started to spend again. Now interestingly, there is spend on very different items. Food grew double-digit on the year. Interestingly, as some items relating to furnishing and housing improvements, or anything that has to do with furnishing inside the house, house maintenance, garden, et cetera; also grew double digits going into May, late April and early May.
That's probably reflective of the fact that we're now all working from home, or because the weather was so amazing that we did keep busy in the garden.
Anyhow, the other chart, the last chart I wanted to show you here on the UK is that the channel of spending has been radically different. People are now spending online, or at least virus compliant, whether that is takeaway, off-store, or online, or whatever the shape or form of it.
While everything that's face-to-face in the traditional sense of the term, struggles. It is recovering, but struggles. We are talking here about a year-on-year drop of 60% and a very slow recovery, while online everything is already above last year's level.
Now I promised you some views on Europe, and the rest of the world. Listen, at least when it comes to Western economies, the shock is fairly similar. It might be presented in different terms. You have examples where the drop may be a bit more shallow, and the recovery a bit faster.
Think about Germany, because the approach, the medical and clinical reaction was maybe better shaped up in a better form or you know, I won't go into the details. You know exactly what I'm talking about. But basically the impact on some economies is a bit less. Impact on other economies, take France for instance, is quite deep, because the policy reaction was very stringent. I mean the lockdown was very strict.
You were not allowed to go and walk in the forest or walk on the beach even if you lived in the middle of nowhere, and that was fully enforced. So there we might have a sharpened dropdown. But interestingly, the rebound out of the lockdown is, if anywhere, much more visible in France. And when we compare this with the UK, I challenge anybody on the call to let me know what are we not able to do -- what are we able to do and what are we not able to do in the current times, because it's very unclear where we stand on lockdown measures.
The last and final point, because I will leave you on a positive note here; non-farm payrolls released on Friday in the US, came with a glimpse of hope that we might have overestimated the depth and the impact of this crisis. We saw the US economy creating some jobs, or at least the unemployment rate being much better than it was expected.
And this, in conjunction with the savings buffer I mentioned earlier, could allow you to build a more positive scenario where households feel relatively confident and willing to spend their savings. And that means the recovery might be a bit stronger.
I mention this because that's new. You know, we've been in depression mode over the past three months, not being able to come up with any upside to our scenarios. And I think for the first time here, we have like a glimpse of hope that, you know, at least if someday that continues to come in constructively, we might have been too pessimistic, and I would be very happy to be caught on the wrong foot here, and to being too pessimistic on my forecast at least.
I've been talking a bit too much, so I'll end here. And I hand right back to Andres.
Andres Baltar: Thank you, Fabrice. Very insightful, thank you so much. So just briefly, before we go into the panel, I'm going give you the results of the survey. So 51% of you think that COVID-19 has had the most notable effect on your liquidity strategy.
So most of you think about that. 86% of you think that COVID-19 has dramatically accelerated the trend toward digital. It's more mixed on the next question, so not as clear. COVID-19 has dramatically accelerated the trend towards real-time payments. So most of you say kind of agree or neither agree or disagree. And finally, a strong agree, 90% of you strongly agree or agree that COVID-19 has dramatically accelerated the trend towards a paperless society.
So with this framing the discussion, let me introduce you to our three panelists today. Daniela Eder is our Head of Payments and Cash Management in Europe. We have Luis Pascual, who is the Group Treasurer of the large infrastructure company, Ferrovial; and Martin Runow, who is our Global Head of Payments on Digital at Barclays. I'll ask, when I ask you the first question, to give you a brief introduction of yourself, if you don't mind.
Martin, maybe the first question is to you, seeing the results of the survey. In terms of digital adoption, what have been your observations during COVID?
Martin Runow: Thanks, Andres. Nice one, and welcome, everybody, or hi, everybody. We had plenty of welcomes. My name is Martin. I am looking after all of the digital stuff across the corporate bank, and in additional actually all of the payments products, and the transactional FX. I've been with Barclays a bit longer than a year, and come from another large transaction bank, and basically spent most of my life somewhere between payments, cash management, Europe and the US.
So digital adoption, we have seen that spike, and I guess that's not a surprise to anyone really, as most of us are sitting at home or have been sitting at home, working with WebEx, Zoom, or whatever else you may have seen. So obviously clients across Europe and in the UK as well have not been writing as many checks as some of them used to.
Cash usage has gone down, and all of the self-service things, the online things, the digital things that we have in scope have massively spiked, right? So that was something that we observed. Again, that's not going to be much of a surprise.
The big question for me is really how much of that will stick. And our assumption, of course, is that we want to double-down on digital, because the assumption is that people, they are getting used to the benefits of doing things remotely, doing things online that haven't done that before, are not very likely to go back, right?
So people that move cashless, that move into the digital space, they're going to mobile; are very likely to want to continue to live with that convenience, even in the future, right? So that's going to be one of the questions. And I think that's what we're going to discuss a little bit in this panel anyway, right? How much of this is going to be around after lockdown?
Andres Baltar: Thank you, Martin. That's very insightful. Maybe Luis, as a follow-up of Martin's question, just an introduction of yourself, and ask you maybe, what have you seen as -- what have been the main challenges for companies like Ferrovial? But in the market, what do you think have been the challenges to adapting to COVID and what is here to stay after COVID? What do you think?
Luis Pascual: Okay, thank you, Andres. And hi, everyone. Well, I mean challenges for COVID, on the business side, you know, especially for a company like ours, basically focused on transport infrastructure assets, as you can imagine. I mean airports and toll roads, well, it has been terrible. I mean the impact has been terrible.
From the financial side, I mean obviously it's more interesting for the audience and for this event, it's been challenging, really challenging just working from home for the whole team. I think that the whole team has worked like clockwork, which is good news. So it means that we were well-prepared for things like this, even though we didn't know that something like this could happen.
But in the end, we have managed now to survive and to do the right thing, and not to make any mistake, and to work properly; even though we have all these issues concerning working from home, and not having everybody with proper access to the tools, and so on and so forth. This is the first comment.
As far as we know, or as we have experienced this crisis, really during this past three months, I think that being prepared for the utilization for become more digital and more 24/7 ready to work, and to pay, and to interact, and so on and so forth has been an asset, a real asset for us. Because otherwise, we could have entered in the terrible territory of making mistakes or something like that.
So what we've learned is that we need to improve these type of things, and definitely what we see especially out of this experience is -- and following Martin's comments -- is that for sure, neither the company nor the employees are going to behave the same, or I point to think about certain things, the same as they did before.
The working from home or things like different -- more flexibility when working and the different workspaces is something that is here to stay. So it won't change. I mean it can be motivated or it can happen in one way or another. But in the end, I think that we have a clear transformation that is here to stay. And it will accelerate, definitely accelerate processes and things that we're going to come in any case.
As you probably know, Ferrovial has been deeply and heavily involved in this digitalization process and transformation process, and just trying to face a new era, meaning robotics, 3D printing, Internet of Things, drones, artificial intelligence, big data; I mean all these things were already in place, work in progress, of course, a long way to run and to go, but we were already working with these.
Now what we see is a clear acceleration of all these processes. And moving forward, which means that we need to get everybody adapted to this. And the main challenge is, in my opinion, are going to be not necessarily the tools, not necessarily the technology itself; but also the perception of these technologies, the behavior, the attitude towards these types of tools, rather than the tool itself
I mean it's important, and I can foresee at least in my opinion, a kind of struggle between the IT departments and also the functional areas. Because in the end, we need to change processes, architecture of systems, and things like that; rather than choosing a tool or another one.
So the acceleration is more in the processes, in the procedures, and in the attitude towards this new era, I mean in everybody's mind. I mean as long as the company is concerned, as long as the employees are concerned, the different departments and so on; rather than tools. It's a matter of attitude.
So we have learned how to buy things more online, how to survive and not doing things that we did before, and so on a so forth. Now we need to learn how to work, especially with these new tools, in a different environment.
And it's not a matter of getting new tools or new systems. It's a matter of matching what everybody's expecting from us and the attitude of all people involved, and all the stakeholders, (inaudible) stakeholders. That's my view on this.
Andres Baltar: Thank you. That is really interesting, Luis. And I'll maybe ask Daniela. You were mentioning the acceleration of the digitalization, the tools being there. And what do you think, Daniela, what the new digital tools will have a bigger impact in the future? Because Luis was mentioning that they were already there. We needed to start using them more efficiently.
Daniela Eder: Thank you, Andres. Daniela Eder here. I look after our payments and cash management in Europe. I'm delighted to be here with you this afternoon. I hope everyone is well. I have to echo, of course, what Luis and Martin has said. We've been on a digital journey for quite some time.
Maybe by the time you realize that we were on the journey, and all of the buzz words around blockchain and artificial intelligence and so forth, became very popular; I think many of us were already looking to standardize, optimize, and actually the four buzz words that I reflect on digitalization is speed, efficiency, transparency, and also security.
And we've seen some early adoption, as Luis was referencing already, of some of this emerging technology. I think of cloud services. I think of artificial intelligence, robotics, that will improve our efficiency and processes, and of course the APIs.
And what's interesting to see around the globe is also that infrastructures are changing as well as we see many of the markets around the globe adapting an interoperability and standardization and formatting, the ISO format and so forth, which also has an effect on how we use these tools going forward.
I think every crisis allows us also the opportunity to leapfrog, to jump forward on some of these initiatives and speed, transparency, and efficiency; and compiled with security around that as well. So I think every industry is also in a different space when it comes to this technology. And as Luis has referenced, I think it's also a mixture of technology and human interaction that's necessary.
It's not one or the other. And so change of mindset is very important, the psychological aspect of having these tools available, but without a threat of losing your job, because of robotics or artificial intelligence. So there's a lot of psychological effects involved in implementing these tools, and making sure that it's a joint journey, as well.
But I think at least for these four emerging technologies that are already much in use today, I think there's no way of stopping it. And I think there's much to gain from them, and I do believe the crisis will accelerate that as well. Back to you, Andres.
Andres Baltar: Yeah. Makes a lot of sense, Daniela. So you mentioned security. Maybe a question for Martin again, so what do you think has been happening to the cybersecurity fraud prevention area? What have you seen in the last months?
Martin Runow: Yeah, we were actually a bit concerned when this started, because a lockdown happened. I mean we could all see it, but it all happened in a bit of a rush at the end of the day. So we made as a firm, and I'm sure that's true for a lot of us out there, we all made a lot of concessions relatively quickly. So for example, we went ahead and basically rushed through our electronic signature program that we had running anyway.
We just went and accelerated it massively. And all of a sudden, we are accepting DocuSign and other means for electronic signature, because we were just not able to, or it was very inconvenient to move paper. So we did that with a lot of control around and trying to make sure that no one takes advantage of that.
What we have seen, of course, is that across a lot of the government programs in Europe, across the UK, et cetera, where a lot of payments were generated quickly; there was heightened fraud risk. And we've seen more cases there. But I will say generally speaking, for the corporate time space, we have, despite our concerns, we have not seen fraud numbers go up massively.
Just I mean for all of us, we still have the same issues around. So we have impersonation CEO fraud. We've seen a couple of cases of invoice fraud. But in general, sort of levels of cybersecurity are relatively the same. We have obviously seen way more usage of biometric devices like our fingerprint (ph) readers or other things around the globe. So in general, electronic payments and digital payments or digital access means are more secure than sending faxes or other things. But we've caught a few things where people were taking advantage of unsecured means of payment like faxes.
But overall, our concerns largely have not been met so far, and we've taken obviously quite a lot of interest in making sure that our fraud detection engines that run basically on all the payments that go through our systems are running nicely. So there's probably more to come.
Maybe just to touch on one thing, in the UK we've just -- we are going live with something that's called confirmation of payee. We see different -- or we see similar, sorry -- things and initiatives happening across Europe as well. We've seen in the Netherlands, we have something like that where when you enter a payment into an online screen, it will actually go and ping the other bank through an API, and do a name-number check.
And then it comes back and gives you sort of green everything's fine, or don't know, or a red, this is not right. So there is more convenience and more consumer protection built in, and some of our corporate clients are also seeing that.
So net-net, it's okay. We've seen in certain corridors more fraud attempts happening, but it's not been sort of as bad as we had feared really.
Andres Baltar: Okay, thanks. Martin, thank you so much. It makes a lot of sense. Luis, what are you seeing in that space? Have you seen an increase in fraud or have you been worried? What have you been seeing in the last couple of months? Luis? We might have lost him.
Okay, so let's move to another question for Daniela. How do think the relationship between treasurers and banks will change in the future after these two months, three months lockdown period?
Daniela Eder: Thank you, Andres. This is a different scenario than we had --
Luis Pascual: Can you hear me now? Sorry, sorry.
Daniela Eder: Ah, Luis, you're back. I would like to give the floor back to Luis.
Luis Pascual: Sorry. Sorry, it's my fault, because I was on mute. Sorry. And I didn't realize about that. Sorry about that. It's my fault. Sorry, Andres.
Andres Baltar: And then my question was around -- we were talking about (inaudible).
Luis Pascual: Yeah, yeah. Yeah, I heard you. I heard you. And yes, no I was talking, but you couldn't hear me, and I didn't realize that I was on mute. Okay, no, yes of course. We've seen a tremendous amount of attempts of several attacks. We've been under attack quite a few times over the last three months. All of them have been properly countered.
Precisely, no, as I said before, because we were prepared for things like this, which is good. But we need to be cautious. And of course, all these things have accelerated again, not only the consciousness and awareness of these type of things, but also security measures.
And two or three, for instance, we have put together different -- or we have taken different actions. For instance, if you remember, we were working on a (inaudible) tool or a scheme, and in the end this is something which is crucial also for security reasons as well, because we are going to concentrate users duly trained in order to make payments in a centralized way, and with additional security measures.
We are also double-checking things, and implementing digital ID systems now which are different from what we had before, as also Martin mentioned in a way. We are running double-checks on also coming up with a black list, in some cases of suppliers and some other clients, and some other story (ph) is the holders.
We suffered from attacks and attempts of fraud using the Outlook system and the Google as well, and email, the email (inaudible), trying to replace the right person and in a very difficult way to identify, which is very scary in a way. But now we know how to avoid these types of things.
So I think that definitely we of course now have experienced now this increase, in especially attempts, of several attacks, fraud or whatever. But you need to react on this. I think we are doing it through all these things.
Then we have the IT guys also working on reinforcing or enhancing the IT security systems. But it also has to do with attitudes and behaviors, as I said before. Some things that leads me to mention the training courses or training actions we are taking with all the employees in order to make them aware of the necessity of being more cautious and taking more measures, not only in terms of our technical staff like payments or central payments, or whatever which is something else, as I mentioned before; but also in the current exchange of emails, for instance.
Because we have identified these attempts and these problems. So we need everybody aware of this situation, and the training courses now have been put together very quickly, and all the employees are now or have been warned about this, and also trained about how to react and how to proceed, and how to inform immediately whenever something like this happens.
I think that the things, like for instance, and I mean just trying to link this comment to my previous comment, I think that we were putting together or whatever new technologies and so on; the distributed ledger, for instance, or technology like a blockchain or whatever you can all it; I think it's important as well in order to enhance the security.
But this is something that is more difficult for me to foresee coming very quickly, because it requires a lot of development. But it's important, because a lot of intermediate layers and a lot of people -- and people should be removed, not only for efficiency reasons, not only efficiency reasons not only, because companies need to reduce cost, not only because of the awareness of a world which will become more paperless, as said also in the poll, and also because of this new era with less contact, physical contact, but also because it's philosophically more logical and more secure, in my opinion.
But it's going to take time. Some other things not, like training, double-check, payment concentration, digitalization and so on. But other things like the distributed ledger applicable to something more ambitious and strategic is going to take longer, in my opinion. But it could be crucial for the future. That's my view, and sorry for that -- for delaying (inaudible).
Andres Baltar: Thank you so much. And Martin, we have a question -- a question of time, we've got seven minutes left. We have a question on the future of fraud, considering the push towards digital during the COVID era in countries like Germany, where the usage of credit cards is still lower compared to the rest of the regions.
Someone is asking us, wanted to know if you have seen an increase in the shopper's option of credits cards as a means of payment. That's a question for you, Martin.
Martin Runow: Yeah, happy to take that, right? So I mean we are seeing a big trend shift for the COVID (ph) that is still relatively low use of credit card for Germany. I mean that has not fundamentally shifted at the moment. But obviously people are shopping way more from home, so you are seeing wallets used more.
You are actually seeing credit cards used more a bit. But in countries like Germany, it's relatively low and in the UK that would be quite different. You are also seeing obviously contactless, so credit cards and debit cards being used way more across many countries actually, as in the UK and also in Germany and some other countries, the industry has reacted and has increased the contactless amounts, right? So you can pay higher amounts with a tap without having to enter you pin. So that has had quite an impact.
What we are seeing is some of the more modern, so real-time payments. We had a few topics about that earlier. We are seeing, if I look across COVID impact across payment volumes, we're seeing high value payments (inaudible) payments in general taking quite a hit across basically every country in Europe. Faster Payments in the UK is the first one that we see really coming back.
And I actually haven't seen (inaudible) instant numbers. It will be interesting to see. But Faster Payments obviously is much more mature and has been around longer. So that's the first of this payment class that has fully -- or is not fully recovered, that would be a dream -- but is actually recovering already.
And since we're totally running out of time, I'm going to just say one thing. Luis, you are spot on, right? Training and making people aware on the whole fraud topic is super, super important.
The fraud that we do see happening is because people did something in good faith that in hindsight was maybe a bit naïve or could have been prevented, right? So that's just my advice to everyone is just make sure that you sensitize people, right?
Back to you.
Andres Baltar: Yeah, thank you. Yeah, I agree with you. Training is hugely important in these circumstances. So maybe Daniela, a question for you. So a comment is made. You've had mixed real-time payments and real-time reporting. While we see a strong towards real-time reporting, we see no change for real-time payments. What's your opinion there, Daniela?
Daniela Eder: Thank you, Andres. That's a really good point that was called out from the audience, and that largely has to do with the fact that many of the low-value systems around the globe are not open to B2B type of transactions yet, or there are still restrictions around the rulebooks and so forth.
But actually real-time reporting with real-time payments does go hand in hand, but one supports the other. But absolutely depending on which industry you're in, you might not feel the positive effects of real-time payments just yet, because you're in the B2B space. But definitely the peer-to-peer and obviously the B to consumer and so forth, every time there's a consumer involved in real-time payments nowadays, there's also real-time reporting, right? When I have a debit to my account, I'm also notified immediately of that debit.
We do see, and a lot of what we're developing in the future and a lot of things that Martin has mentioned on the digital journey are geared at how these rulebooks and how these schemes will open up, and how we've seen already in the crisis just speaking out of my own experience, being based in Germany, how the contactless pay limits for consumers has gone up within just a couple of weeks, what was unthinkable just a couple of months ago. So a lot of things are being expedited, and there's going to be a lot of lobbying going forward to open the real-time value payments also to wider businesses.
And take advantage of the immediately settlement and the immediate reporting that's associated with that as well.
So while our question might have been a little bit in advance of what we see in the future coming, the one is very closely associated with others. And then we get into digital receivables and so forth.
And there's a lot of tools around that that we can use in the future as well, to really have a clearer view of our positions, the cash flow liquidity, which as we've seen in the crisis, is so important. And those industries that have already jumped ahead into the digital era and is using a lot of these tools, obviously has an advantage during this time. So real-time payments is the automatic extension of real-time reporting as well. Thank you.
Andres Baltar: Okay. Maybe, I think we've got time for one more question to answer, and then we'll close it. So Martin, maybe the last one for you here. So someone is telling us, Barclays has been very proactive on digitalization around the use of DocuSign and the updates for trade finals on the iPortal. What's next? What is Barclays doing internally to make sure that e-signature is more widely across the bank?
Martin Runow: Yeah, I saw that one, and that's a good one, right? So I kind of mentioned that earlier just a little bit, right? So we did a lot of things sort of tactically. And now the trick for us is to actually get it back into a proper roadmap and make it just a complete standard digital front to back. And that's -- for those of you who know me, I mean I'm talking about this quite a lot.
Make sure that every product, every solution, every service that provide is a digital journey all the way through, and it's not just digital on the front end. It looks nice and then it hits the STP, straight to print, on our end. So for me, we're already working on making these tactical changes that we did to support us, our clients and us through COVID, long-term strategic and have it on the digital change agenda.
In general, we are committed to and we're on a journey to -- a multiyear digital transformational journey to bringing all of our services into iPortal, since it's mentioned, and other means like APIs or SWIFT for corporates, or whatever else there may be out there that is interesting, right?
So we are definitely on the journey and we are working hard to sustainably keep these things -- these achievements I would say -- around. And they are definitely part of my roadmap.
Andres Baltar: Okay. Thank you, Martin. Question of time, so we've still got a couple of questions to answer, but I will get back to you regarding the questions, and we'll go back to you directly. So thank you so much.
So look, there will a replay of this session, in case you want to see it. Thank you for taking the time. We have another session next Thursday. We'll be discussing managing risk with geopolitical uncertainty. And our host will be Lauren Franklin Hogan, joined by a few FX economists and public (inaudible) research, The Treasury or Coca-Cola and Marsh and McLennan. So an invitation will follow very soon.
Please feel free to share any feedback or suggestions for things you'd like to see in the future, and I will be delighted to address them. So thank you so much, and have a nice rest of the day.