Fintech: The second wave of challenger banks
The UK has been one of the world’s key testing grounds for new financial technology thanks to London’s status as global financial centre and the UK authorities’ support for new competition to the incumbent banks they had to rescue in the crisis, but the big four banks’ central role as clearing banks has kept truly disruptive innovation away from the profitable core of retail banking, until now.
In the third quarter of this year, if all goes to plan, ClearBank will go into business as the first new UK clearing bank to open its doors to customers for 250 years.
It will provide those customers with the ability to move money along each and every strand of the spaghetti bowl of UK payments systems – Bacs, Chaps, cheque and credit clearing, faster payments, Link, Visa – quickly, easily and at low cost, thanks to state-of-the-art technology.
ClearBank’s core banking technology and API has been developed in accordance with ISO 20022 and is purpose-built for simple access through a single connection to multiple payment options.
What distinguishes ClearBank from the mass of fintech newcomers and challenger banks is that its customers won’t be small or medium-sized enterprises (SMEs) that the big banks refuse to lend to at other than punitive rates; they won’t be looking for working capital finance advanced against invoices to be paid by bigger corporations, neither will they be retail investors looking for a better return on their cash than zero-rate bank savings accounts, or wealthier individuals looking for a low-fee allocation to a mainstream asset class.