With so many new entrants trying to muscle into the UK banking sector, Banking Technology has put together a comprehensive list of the known challengers to date and the technology they are using.
We’ll be revisiting and updating this list on a regular basis. If you have any additions to the list, please get in touch with our editorial team.
A digital bank backed by a UK-based private equity firm, AnaCap. The project is in early stages (no banking licence yet).
It is understood that AnaCap is evaluating two potential suppliers: Temenos with its T24, Connect and Insight systems; and Misys with FusionBanking Essence.
This bank was created in 2009 with a key focus on the SME sector. It was initially backed by AnaCap, which is now planning a new digital bank (see the Abacus section above).
In 2015, Aldermore was successfully floated on the London Stock Exchange.
The bank’s HQ is in Reading, Berkshire.
For its core platform, it uses Temenos’ T24 system. For digital banking, it has got Backbase’s Omnichannel Banking Platform.
Amicus Finance, a specialist lender providing short-term property loans, SME lending and working capital solutions, plans to become a bank. It submitted a banking licence application to the FCA and PRA in H2 2016, and hopes to get the licence in 2017.
In advance of authorisation, Amicus will convert £30 million of the debt currently used to fund its lending activities into equity and this will form the capital base of the bank’s operations.
It has also made changes to its senior management team by appointing David Fisher, Alex Shapland and Paul Stevens as non-executive directors to the board. Fisher is the former CEO of Sainsbury’s Bank, Shapland was previously a partner at PwC and Stevens is the former head of Investec Private Bank in the UK.
Amicus was set up in 2009. Its HQ is in London.
A digital bank that opened for business in October 2016.
It has created a hefty technology set-up in its run up to the launch: FIS’s Profile core banking system; FIS/Sungard’s Ambit Quantum and Ambit Focus for treasury and risk management; Iress’ Mortgage Sales & Origination (MSO) suite for mortgage business, front-to-back office; Wolters Kluwer’s OneSumX for regulatory reporting; Intelligent Environments (IE) for front office capabilities; CSC’s ConfidentID system for security; Phoebus Software for secured business lending and account servicing for residential lending; and WDS Virtual Agent for customer queries supplied by WDS (a subsidiary of Xerox).
Atom Bank also acquired a local digital design agency, Grasp.
In H1 2017, it announced it was suspending the launch of current accounts for at least a year.
Later in the year, it partnered with Deposit Solutions to offer retail deposits in Germany.
Axis Bank UK
A subsidiary of India’s Axis Bank. It got a full banking licence in mid-2013.
The bank implemented Infosys’ Finacle core banking system, which is already in use across a number of Axis’ locations worldwide, including India.
London-based fintech start-up Babb App is creating a bank based on a “permissioned” blockchain implementation of a distributed ledger using Ethereum smart contracts.
Babb is currently regulated as an approved payment institution (API) by the UK’s Financial Conduct Authority (FCA). It also applied to participate in the FCA’s sandbox.
In March 2017, Babb signed a deal with Contis Group (see below) to utilise Contis’ white-label licence and banking services infrastructure to provide UK bank accounts, transfer and card payment services.
Bank of Dave
Bank of Dave is a brainchild of David (Dave) Fishwick, a UK businessman. In 2011, he set up Burnley Savings and Loans, a lending company based in Burnley, UK. The company describes itself as “a fair and friendly loans facility to the people and businesses of Burnley and Lancashire, and we’ll do it with genuine personal service for our customers”.
Bank of Dave is currently awaiting a banking licence.
For its technology, it will use Finastra’s (formerly Misys) Fusionbanking Essence core banking system.
Bank of Lambeth
This London-based community bank is the brainchild of Duncan Law at Transition Town Brixton (an initiative that looks to new ways of dealing with climate change, and energy and financial issues).
“Each month lots of money in salaries swills into Lambeth and most of it disappears again without much benefit to local banks. It’s held by banks ‘too big to fail’, who invest in fossil fuels but still won’t lend to local businesses,” says Law.
Transition Town Brixton’s New Economy Group wants to create a “community of community investors” and is looking to inspiration from Community Savings Bank Association (CSBA), another new challenger in the UK (see the entry below).
Bank of Lambeth intends to be part of CSBA and it would like “the first branch to be in Brixton”. Discussions with CSBA are underway.
According to the CSBA, the bank is a “group of activists” who do not plan to form a company to seek a banking licence. (If it’s part of CSBA, it doesn’t need a licence.)
Baroda (UK) Operations
A London-based subsidiary of India’s Bank of Baroda.
The bank was operating a foreign branch in the UK for many years. It received a banking licence from the UK regulator at the end of 2017.
For its core banking technology, Baroda UK uses Infosys’ Finacle, which is Bank of Baroda’s standard core banking solution for international operations.
A subsidiary of the Bahrain Financing Company (BFC) money transfer group. The project went through some stops and starts, but the bank finally received the banking licence in September/October 2016.
BFC opted for an outsourced “bank in a box” version of ERI’s Olympic core banking system. The system is hosted by Blue Chip.
For its anti-money laundering (AML) operations BFC uses the AMLtrac tool from a UK-based provider, iFinancial.
British Business Bank
A government-backed bank for SMEs.
Cambridge & Counties Bank
Another bank for SMEs. It is owned by Trinity Hall, Cambridge and Cambridgeshire Local Government Pension Fund. The bank already has a licence and is in operation.
It uses Phoebus Software’s front-to-back office software. The front end of the solution originates from the now defunct QTS – it now resides with Phoebus and has been integrated into its portfolio of offerings.
Cashplus announced plans to apply for a banking licence in early 2018. It intends to become the “now generation” bank, with its “instant” online decisions, “anytime” banking services and lending products.
If approved, the move will allow for £200 million in customer safeguarded funds it currently holds into bank deposits. Alongside its UK credit licence, its intentions are then to expand credit lending to more UK entrepreneurs and serve its existing customer base, which includes nearly 100,000 SMEs.
APS Financial has been around since 2006, operating with an e-money licence. It has issued over 1.3 million cards and processed £4 billion worth of payments to date.
In spring 2016, it received a credit licence from the FCA – enabling it to carry out consumer credit lending (including high-cost short-term credit lending) to micro SMEs, sole traders and consumers.
Charter Savings Bank
A new online savings bank launched by Charter Court Financial Services in 2015, aimed at the consumer market. Charter Court also operates Exact Mortgage Experts and Precise Mortgages.
The group uses FIS/Sungard’s Ambit Treasury Management, plus solutions from DPR Consulting and Phoebus.
In 2016, the private equity firm that owns Charter Court put it up for sale, with a price tag of up to £500 million.
A challenger bank based in Wales, at Wrexham Technology Park and supported by the Welsh government, which provided the bank with a £750,000 business loan.
Chetwood was set up in January 2016. It launched its first digital lending product under the LiveLend brand the following year. The technology behind LiveLend is provided by Yobota, a cloud-based operating platform for financial institutions.
Chetwood received a banking licence at the end of 2017.
It says it uses technology “to make people better off, through the design and manufacture of digital products across financial services”.
The bank is focused “distinct customer segments that are currently underserved by the market”. It emphasises that unlike traditional banking models, it is “not obsessed with customer ownership and cross-selling other products”, but rather focuses on standalone products that are optimal for its customers.
City of London Group
City of London Group (COLG) applied for a banking licence in 2017 as it targets commercial, SME, bridging and development finance. It expects to obtain the licence within two years and raised £20 million in H2 2017 for its plans.
COLG is backed by Delancey and Bard family. It operates two platforms: one focuses on providing finance to the SME sector, including professional services firms, through both lease finance and loan finance, and the other specialises in traditional and home reversion plans in the UK residential property market.
A start-up that received its licence in May 2017, but relinquished it a year later to have more time to develop its technology platform. It then plans to reapply for a new licence.
For its software, the bank originally opted for a packaged solution from local consultancy firm, Tusmor. It consists of Profile Software’s FMS for core banking operations, Dovetail (now Fiserv) for payments, Sphonic for risk management and AML, and Aqilla for accounting system.
CivilisedBank will offer business current accounts with deposits, transaction banking, overdrafts, FX, investments, savings and loans.
It will not have branches but will operate through a network of local bankers working in their local communities. CivilisedBank hopes that this “unique” set-up “will help build one-to-one relationships, without the traditional costs associated with high street banks”.
ClearBank (also known as CB Infrastructure Limited) was set up in 2015 and is registered in Norfolk. It was granted a licence at the end of 2016, and opened for business in autumn 2017.
It is a new venture of Nick Ogden, founder and former CEO of payments processing heavyweight WorldPay.
ClearBank will be a bank for banks, FIs and fintechs, i.e. a clearing bank, offering customers access to UK payment systems and core banking technology to support current account capabilities. It will not offer retail banking services.
ClearBank is the first new clearing bank in 250 years to enter the UK market. Ogden states it “was built specifically to create competition and aims to change the market dynamics radically”. He adds ClearBank users can save £2-3 billion annually on their transactional banking costs thanks to “the improved efficiency delivered by ClearBank’s built-for-purpose technology”.
The bank’s tech is cloud-based, built on Microsoft Azure (a combination of private and public clouds). It has a custom-built, integrated core banking system, known as ClearBank Core, and API developed in accordance with Swift’s ISO 20022 standards.
It launched the “first” banking service targeted solely at freelancers (and self-employed people) in January 2018.
The mobile app-based account comes with a bank account number and sort code, and combines banking and accounting services.
Among its “unique” features is an ongoing real-time insight into how much tax freelancers need to pay. A future plan could be to “hook that” into the HMRC (UK’s tax collection office) so freelancers can pay bills with ease.
In terms of the back-end technology, Coconut partnered with a Banking-as-a-Service provider.
Community Savings Bank Association (CSBA)
Co-operative society CSBA intends to set up a UK-wide network of independent, customer-owned, regional banks. These banks will support local communities and businesses.
“The UK is made up of distinctive regions, each with their own character and priorities,” CSBA states. “Strong regional banks that share those characteristics and have only those priorities is something we’re missing. We used to have it and its time to put it back.”
These banks will “serve the every day financial needs of ordinary people, local community groups, and SMEs”.
CSBA was originally working with an established bank, Airdrie Savings Bank, on this project. Airdrie was going to provide its banking expertise and IT systems to the new banks. However, the bank went out of business in early 2017.
CSBA then inked a tech deal with TCS Financial Solutions, for its member banks to use the vendor’s Bancs core banking system in the cloud.
Once they are up and running, the new banks will own and control CSBA.
Contis Group describes itself as “the home of alternative banking and payment solutions”.
The company was set up as a pre-pay in 2007, received its e-money licence in 2010 and started offering its own debit card products in 2012.
It offers credEcard – a current account for consumers that comes with a Visa debit card, online e-account facilities and a mobile app.
As of 2016, Contis is a full agency bank.
It provides white-label licence and banking services infrastructure for bank accounts, transfer and card payment services to fintechs. It also targets the European credit union market with a payments card product, Engage.
A standout feature of the offering is that Contis issues and processes in-house (unlike many other firms in this space). The company is PCI DSS Level 1 compliant.
Babb and Suits Me are among Contis’ customers.
Another one still awaiting a licence. It is backed by S&U plc, a long-standing niche provider of consumer credit and motor finance. S&U has been in business since the 1930s. It has around 140,000 customers and 800 staff.
It is understood that its choice of system for Coombs is MSS from Sopra Banking Software.
A challenger bank founded and backed by Danela Ventures Partners Limited, a London-based advisory firm.
Copernicus Bank will focus on corporate banking.
A banking and accounting service for small businesses and sole traders. It offers a free business current account that can be opened in five minutes on a smartphone.
The account comes with a UK sort code, account number and a contactless MasterCard.
Countingup’s banking app will also do users accounting; it will submit VAT returns, generate a profit and loss report and create invoices.
DiPocket is not a bank, but a financial app that provides banking for “the mobile generation”. An account can be set up in three minutes on a smartphone.
DiPocket is a financial institution authorised and regulated by FCA. It says it runs “a bank-grade IT infrastructure”.
It offers payments services, underpinned by a Mastercard prepaid debit card. DiPocket is a principal member of Mastercard.
Accounts and cards are currently available in GBP, EUR, PLN and USD, and accounts in CHF. More currencies are to be added soon, according to DiPocket.
International transfers between DiPocket accounts are free.
The app also promises low currency exchange fees (Mastercard rates plus 1% commission); no FX fees for customers visiting the UK, US, Poland or any Eurozone countries; and low, flat fees for withdrawals at foreign ATMs.
The app also offers shared accounts for common expenses, and teenager accounts for financial independence under parents’ supervision.
Distribution Finance Capital
Distribution Finance Capital (DF Capital or DFC) was founded in 2016 and has applied for a UK banking licence.
DFC is focused on providing additional working capital to product manufacturers, distributors and dealer networks.
Its leadership team comes from various businesses of GE.
DFC is owned by TruFin, a new banking and fintech firm in the UK (see the TruFin entry below). TruFin is, in turn, a creation of Arrowgrass, a UK-based hedge fund.
DOS & Co
UK-based advisory firm DOS & Co plans to create “London’s first digital private bank”.
It will rely on a Banking-as-a-Service (BaaS) back-end and relevant APIs to build a private bank suitable for family offices and “complicated domestic” arrangements.
It targets wealthy millennials, sports, music and entertainment stars, family offices, wealthy entrepreneurs and “the other 99% of the top 1%”.
DOS & Co says it will provide its customers with a personal banker and won’t be utilising artificial intelligence (AI) or chatbots as it describes itself as “real” private banking, but “digital first”.
FairFX, a London-based multicurrency payments service, acquired Q Money and its e-money licence in early 2017. Start-up Q Money was going to build a bank for SMEs in the UK, but failed to take off due to the lack of funding. FairFX says the acquisition – particularly the e-money licence – opens up “many exciting opportunities”, including “the possibility of becoming the issuing bank of its own cards and internalising parts of the supply chain” and creating a digital banking offering for SMEs.
In 2017/2018 it also acquired CardOne Banking and City Forex; inked a deal with Alternative Business Funding, a UK-based SMEs lender, to provide FairFX business customers access to lending; and commenced self-issuance of Mastercard branded cards.
The company, which was founded in 2007, reported its first full-year profit for the year 2017.
A subsidiary of Nigeria’s First City Monument Bank (FCMB). The group has been in London since 2009, providing a limited set of financing services, but has now got a full banking licence.
It runs the Bankware core system from a local vendor, i-Financial.
A subsidiary of a high-profile German digital bank. The bank is consumer-oriented and relies heavily on social media. It uses its own in-house developed technology and also licenses it to other financial institutions (such as Penta Bank).
Fidor commenced its operations in the UK last September.
Fidor has recently been acquired by BPCE, France’s second largest banking group.
Fiinu is a new bank that wants “to change the financial services industry and improve the lives of millions of people” and “put people before profit”.
It launched a Seedrs funding round in February 2018 and is aiming for the early 2019 launch (in January 2018, it was more than halfway through the Bank of England authorisation process).
Fiinu says it will spearhead its operations with lending but will also make money from packaged accounts, FX and cryptocurrency trading, card usage and international transfer fees.
Fiinu describes its monetisation strategy as the “Walmart of Banking”. It says its automated lending robot, Fiinuscore, combined with PSD2 and Open Banking will be able to provide “small overdrafts to millions of people within the payday loan price cap”.
In terms of its target market, Fiinu believes it will be “particularly appealing” to millennials and young adults, and consumers with local credit scores. It will also target the wealthier part of the society with its savings accounts and cryptocurrency offerings.
In terms of technology, it will be a combination of in-house development and purchased software.
Unicredit’s subsidiary, FinecoBank, launched in the UK in autumn 2017.
Fineco is a direct banking entity, offering a “one stop solution” – a multifunctional account with no hidden fees – that comes with a GBP or EUR Visa debit card.
Fineco has been around since the late 1990s and today has over 1.1 million clients in its home market of Italy and €55 billion of assets.
The bank claims it is the only entity in Europe to offer traditional banking alongside stockbroking and investing on a single platform
Another differentiator is that instead of standard bank branches it has “shops” where customers can seek help from staff regarding online banking or discuss more complex matters face-to-face with a financial planner. The bank has 350 such “shops” across Italy.
A multi-currency digital account for businesses registered in the UK and Ireland. It comes with a mobile app and a Mastercard debit card that is linked to GBP and EUR accounts.
Businesses can apply online and an account can be opened in just a few days, according to Fire.
Fire was founded in 2008 and is authorised by the Central Bank of Ireland as a payment institution with the licence passported to the UK.
The company says it has developed its own APIs for seamless integration of its business account features with other applications or back office systems.
First Global Trust Bank (FGTB) – licence cancelled in late October 2016
A short-lived start-up, originally set up under the name of Llamabrook in 2011, changing its name to FGTB in March 2016.
FGTB was granted an “authorisation with restriction” licence from the regulators in spring 2016. It was going to be a “simple, narrow wholesale bank”. Investor and entrepreneur Bob Wigley (the former chairman of the collapsed Yellow Pages) was named as FGTB’s chairman.
However, the bank’s backer, Gordian Knot – the firm that once managed billions of dollars through a structured investment vehicle (SIV) until that vehicle’s 2008 collapse – decided to withdraw the application for FGTB “for the foreseeable future”. It cited the complex regulatory environment and innovation challenges as the main reasons. The licence was cancelled by the regulators in late October 2016.
Authorised in 2008 and based in Mayfair, London, Gatehouse Bank specialises in real estate investment and financing, offering savings products and finance for UK commercial and residential real estate, as well as sourcing and advising on UK real estate investments with a focus on the build-to-rent sector.
It advises funds with approximately $1.2 billion in real estate assets. Its customer service centre is located in Milton Keynes.
In early 2018, the bank launched an Islamic home finance platform, which is underpinned by a bespoke case management solution, based on BEP Systems’ Apprivo2. It uses cloud-based, mobile-ready technology, enabling intermediaries to “effortlessly process home finance and buy-to-let applications from enquiry through to completion”, according to the bank.
The bank has also integrated DocuSign for the electronic signature of customer documentation, Stripe for card payment processing and Landmark Valuation Services for the automation of surveyor panel management.
Hampden & Co
A new private bank, formerly known as Scoban, opened for business in mid-2015 – the first private bank to launch in the UK in the last 30 years.
Its operations are supported by Oracle FSS’s Flexcube core banking system. It is supplied on a Software-as-a-Service (SaaS) basis, with the solution hosted in Oracle’s data centre in Dublin. Initially, the bank was planning to use Temenos’ T24 core system, supplied on a hosted basis by Wipro, but the deal did not go ahead.
Hampshire Community Bank
A new community-focused bank – brainchild of Richard Werner,a professor of banking at the University of Southampton
“We are all fed up with the big banks and their sharp methods. But few people are aware it is possible to build local banks that benefit the local economy,” says Werner. “This is what we are doing with the Hampshire Community Bank.”
The idea of Hampshire Community Bank was first unveiled in 2013. A community interest group – Local First – led by Werner, went public on its plans to set up a locally-owned and run bank.
The bank is modelled on Germany’s local public savings banks and local co-operative banks (Sparkasse and Volksbank). It will provide credit o SMEs and also for housing construction (buy-to-build mortgages).
The bank aims to open for business in late 2016/early 2017. Werner and Local First then plan to introduce these “public-benefit oriented, not-for-profit local community banks” to other UK cities and counties. (The idea is similar to that of CSBA – see above.)
Hampshire Trust Bank
Not to be confused with Hampshire Community Bank above.
Hampshire Trust was created back in 1977, but moved into the banking space in 2014, following the arrival of new owners (a new management team acquired Hampshire Trust in May 2014 with the backing of investment firm Alchemy Partners). It also relocated its HQ to London.
The bank provides asset finance, property finance and commercial mortgages to UK customers. It also offers savings accounts to individuals and businesses.
For its technology, it’s a broad user of Phoebus Software’s products. Phoebus supports Hampshire Trust Bank’s savings and deposit accounts, and origination and servicing of the entire asset finance, property development finance and deposits. The bank also uses Phoebus’ general ledger module.
A challenger bank from the US that describes itself the “Apple store” of banking. It targets millennials with a digital and “brick and mortar” banking proposition.
Its products will include micro-loans, micro-investments and cashback. For the latter, Iam Bank intends to create 21,000+ partnerships with retailers.
In spring 2017, it announced its intention to roll out free learning and therapy-based financial workshops across the UK (and also the US).
It is also looking to buy a small UK bank, building society or a credit union with a high street presence.
A subsidiary of China’s heavyweight, The Industrial and Commercial Bank of China (ICBC). It was granted a wholesale banking licence in autumn 2014.
Ipagoo is the retail brand name of Orwell Group, launched in early 2015.
It is a UK-based electronic money institution offering a full “everyday banking” service as well as treasury and cash management services in the UK, France, Spain and Italy. It also plans to launch to Germany, Poland and Portugal.
Ipagoo provides a current account, which has access to Faster Payment Service, Bacs and Chaps payment systems in the UK, to SEPA and T2 in the EU, and also to global correspondent banking.
The accounts are available in GBP, USD and EUR, and come with a Mastercard debit card.
Ipagoo’s main focus is on corporates and banks, but it also offers services to individuals.
The company says it has its own fully-fledged core banking system, built on open source technology (Kafka, Scylla, microservices etc) and with multi-cloud capabilities.
A start-up waiting for a licence. The bank will be targeting migrant workers and students in the UK. It will offer paid-for current accounts, money transfers, personal and SME loans, and mortgages. The applicants will be able to set up a bank account quickly, with most of the process (including checking personal information) completed before the person arrives in the UK.
On the IT side, the bank says it’s keen to use off-the-shelf software that can be easily deployed (and easily replaced with a better alternative at a later stage).
Loot is not a bank, but a mobile banking service. It was launched in spring 2016, initially aimed at students. In summer that year, it raised £1.5 million in Series A round from Austrian early-stage fund Speedinvest and decided to re-launch its app for a broader millennial audience – “generation Snapchat”.
Loot offers a prepaid Mastercard account. The card is linked to a money management app that lets people track their spending and gives them insight into where their money is going.
Loot uses the aforementioned GPS for processing and Wirecard for issuing.
A newcomer from the US. Marcus is a digital finance platform launched by Goldman Sachs in 2016 in the US. Named after Marcus Goldman (one of the firm’s founders), the platform provides consumer loans of up to $30,000 for periods of two to six years. It aims to rival the likes of Lending Club, SoFi and Prosper.
In September 2017, Goldman Sachs unveiled its plans to move into the UK retail banking market with Marcus, stating with savings and deposits. Loans might be added at a later stage. It will be a greenfield site, although Goldman Sachs does not exclude a possibility of buying an established book of deposits, if the opportunity came its way.
For its technology, Marcus uses Infosys’ Finacle core banking platform.
An established mortgage specialist, Masthaven Finance, has recently received a banking licence.
Masthaven will offer mortgages and savings products to retail customers that struggle to get service from mainstream banks and lenders.
For its tech, Masthaven is implementing a banking system from DPR Consulting. This is a new product, front-to-back office, aimed at providing a single, integrated solution for savings and lending ops. Masthaven is among its first takers.
When Metro Bank opened for business in spring 2010, it became Britain’s first new high street bank in over 150 years.
The brainchild of US entrepreneur Vernon Hill, Metro Bank is a full-service banking entity, which aims to attract the disillusioned clients of established financial institutions.
At the outset, the bank placed a major focus on physical branches – or “stores”. They are open seven days a week, and have longer working hours than other high street banks. They also have coin-counting machines and are dog friendly.
Customers applying for a current account in store can start using it the same day and get their back card and chequebook printed there and then.
The model was largely based on a similar venture created by Hill in the US, Commerce Bancorp (acquired by TD Bank in 2007), which gained the nickname of “McBank” as Hill applied his knowledge of the fast-food chain business to the bank.
Metro Bank’s co-founder Anthony Thomson left in 2012 to set up rival Atom Bank (see above).
Metro Bank has implemented Backbase’s Omnichannel Banking Platform for its digital banking front-end. It also uses FIS/Sungard’s Ambit Asset Liability Management solution, and outsources its mortgage processing to BancTec.
For back office processing, the bank has been using Temenos’ T24 core banking system from the outset. The system is supplied on a hosted/application service provider (ASP) basis, with Metro Bank being Temenos’ first ASP customer in the UK.
The bank also rolled out Glory Global Solutions’ Vertera 6G teller cash recyclers (TCRs) across its stores.
Metro Bank is also connected directly to the Faster Payments system.
Monese was originally launched targeting expatriates and immigrants. It says it is “building the world’s most inclusive banking service and provider of 100% mobile current accounts”.
People can open bank accounts anywhere in Europe on their smartphone with Monese in as little as three minutes, Monese says. The account comes with a monthly charge of £4.95.
The bank does not hold a commercial licence, meaning that at this time it can’t offer credit or loans. Instead it hopes to offer low-rate international money transfers as well as the ability to hold a number of currencies in the same account. In-store transactions, Monese says, will be free of charge, but ATM services and transfers abroad will come with a charge of 50p.
It claims to have a waiting list of 56,000 potential customers.
Monese initially used Contis Group’s white-label infrastructure to provide bank accounts, transfer and card payment services, but has now switched to another provider, PrePay Solutions (PPS).
Monzo (formerly Mondo)
Monzo was granted a full banking licence in early April 2017.
This challenger bank positions itself as a “mobile first” bank. It will be offering a current account with a contactless debit card and a mobile banking app. The mobile app’s standout features are intelligent notifications, instant balance updates and financial management.
It has partnered with Thames Card Technology for debit card production and personalisation.
For banking ops, it decided to build its own platform. Technology used is mainly open source: Linux, Apache Cassandra distributed database (used by the likes of Apple and Twitter), Google’s Go (golang) programming language at the back-end and PostgreSQL relational database. The system is hosted at two data centres in the UK on Mondo’s own hardware. There is a team of 16 people working on this.
GPS is the processor for Monzo.
German-based mobile challenger bank N26 plans to enter the UK market in H1 2018.
UK customers can register on the company’s website to get “early access effective immediately”. They will receive a GBP current account with an individual N26 account number, sort code and Mastercard.
The firm says the account opening process is “completely paperless”, and can be done from a smartphone. Within the app, customers can lock and unlock their card with one tap. Customers also receive real-time push notifications with each transaction made with their account.
N26 has been taking its business fully across 17 European countries, including Spain, Italy, Greece, Ireland and Slovakia.
N26 works with TransferWise on cross-border money transfers. It also partnered with Raisin – to enable N26 customers to save money and choose interest rates from banks across Europe. It also integrated Vaamo into the N26 app allowed customers to invest their money and manage a customised investment portfolio.
For its back office processing, N26 uses Mambu’s core banking system, supplied on a hosted basis.
A start-up focused on lending to SMEs. It has also regulatory approval to accept deposits and make savings products available to individuals and small businesses.
The bank uses Mambu’s core banking system at the back-end, as well as the Sage and Almis systems. For the middle office, it has Ncino. It also uses Facebook Workplace for internal operations. At the front-end, there is an in-house developed solution.
Oaknorth is the first bank in the UK to have its core banking system in the cloud (Amazon Web Services, AWS).
A result of bringing together a number of financial services businesses owned by US-based private equity firm JC Flowers. OneSavings Bank has a balance sheet of £3 billion. Other OneSavings constituents comprise Kent Reliance (residential mortgages and savings products), Interbay Commercial (commercial mortgages), Prestige Finance (secured loans), Reliance Property Loans (property financing) and Heritable Partners (development finance).
United, OneSavings Bank provides savings, loans and investments.
For its tech, the bank uses Phoebus’ lending platform to service mortgages (back office operations) and a DPR Consulting solution at the front-end. Phoebus replaced a bespoke development based on a legacy processing system, Bastion (originally built by IBM).
The Kent Reliance business uses Sandstone Technology’s digital banking and customer onboarding software.
A banking subsidiary of a well-established specialist finance provider, Paragon Group. The bank was launched in early 2014. It offers savings and loans (including development and asset finance) to individuals and SMEs.
Banking Technology understands that the bank’s deposits operations are outsourced to Newcastle Strategic Solutions, the IT and outsourcing arm of Newcastle Building Society.
PCF Bank is a new name for Private and Commercial Finance Group (PCFG). The bank got its licence in early December 2016 and fully launched for business in mid-2017, once it had its banking licence restriction lifted.
PCFG has been around since the early 1990s offering loans to individuals and companies for vehicles, plant and equipment. It has 14,000 customers and a finance portfolio of over £100 million. The company is London-based and employs 45 people.
For its tech, PCF Bank uses Temenos’ T24 core banking system and Sandstone Technology’s digital banking/customer onboarding tools.
Not a bank but a prepaid MasterCard. Pockit has been around since 2013, focusing on the “financially excluded” Britons, who rely on cash in the absence of bank accounts. By October 2016, it had 100,000 customers, with £100 million transacted on Pockit.
Pockit’s products have account numbers and sort codes, thus having “all the attributes of an online current account”, Pockit says. It takes two minutes to open an account. “There are no credit checks, just a simple, online form, and a one-off payment of 99p”. There are also 99p charges for a contactless Pocket card, paying in with cash and withdrawing money from the UK ATMs.
Pocket added direct debits and remittances abroad at the end of 2016. In 2017, it plans to start offering overdrafts and insurance products.
Pockit uses GPS for processing and Wirecard for issuing.
Prepaid Financial Services (PFS)
As the name suggests, PFS offers a prepaid account that it markets as “a complete current account offering to our customers in the UK and anywhere within the Eurozone” – an alternative to traditional bank accounts.
The accounts come with a mobile app, prepaid Mastercard debit card and an IBAN number.
The company is authorised as an e-money institution and is also a European Payments Council Scheme participant.
It is also a paytech provider, including issuing solutions, e-wallets, prepaid cards, account switching service, merchant accounts and mobile tech/apps.
PFS was set up in 2008. It’s based in the UK, with offices in Ireland and Malta.
An SME bank challenger that received a banking licence in spring 2017 and opened for business in late August 2017.
The entity behind it is Acorn Financial Partners (AFP), owned by Acorn Global Investments (AGI). AGI is controlled by David and Jonathan Rowland, who have experience in the banking and finance sectors. Its other major investor is a local authority, Warrington Borough Council.
The bank is headquartered in the Hertfordshire county.
It offers secured SME lending products to owner occupied businesses, as well as to commercial and residential property investors. It also provides business deposit accounts.
Redwood runs on a cloud-based core banking system from DPR Consulting, hosted in a Microsoft Azure cloud environment. This is the first instance of such implementation in the UK and the first cloud site for DPR’s tech.
Revolut is a payments and fintech start-up launched in mid-2015. It is based in Level39, a financial tech incubator in London.
The offering is a mobile money app that includes a prepaid Mastercard debit card, currency exchange and P2P payments.
A free current account (with an IBAN) is also available in the UK. It can be opened in three minutes, without a proof of address or credit check, according to the company.
Revolut says it currently supports spending and ATM withdrawals in 90 currencies and sending in 23 currencies directly from the mobile app.
The majority of its services are free of charge.
It’s “the only account for your global lifestyle”, the company says. Revolut is “beyond banking”. As of June 2017, it has 660,300+ customers that have made 29.4 million transactions worth $3.3 billion in total.
In 2017, Revolut applied for a European banking licence, which it expects to be in place by H1 2018. The company says it will then “immediately begin offering deposit and credit services in selected markets; including overdrafts, personal loans and term deposits”. The banking licence will also enable Revolut to protect customers funds up to €100,000 under the European Deposit Protection Scheme.
GPS is Revolut’s processor, but Revolut is building its own technology to move this function in-house. This is anticipated to happen in 2018.
Scottish National Investment Bank
A new bank for SMEs planned by Jim McColl, one of Scotland’s richest men. It will support small businesses with loans of up to £5 million.
A public consultation about it was launched in October 2017.
While it has not been revealed how much McColl is looking to raise, he told the Scottish Parliament’s Economy, Jobs and Fair Work Committee that £340 million which has been proposed as initial capital for the Scottish National Investment Bank was “not enough by a long shot”.
A digital banking start-up. The bank is very vocal about high street banks being “broken”, “greedy”, too profit driven and unable to keep up with their customers’ lives.
Secco aims to allow customers to send and receive payments via a messaging service. The bank wants to do away with banking apps as well as branches. It hopes that its users will be able to exchange data as well as currency via “payloads” rather than “payments”. For example, a customer can exchange a “Facebook like and a tip” for a busker’s song or pay for their lunch and receive a recipe in return. At the heart of this messaging system will be a location-based financial social network, named Aura.
Secco describes its systems as a reverse cloud, where the data is stored and owned by the customer on their devices, as well as by the bank. “It’s like a safe with two keys. The bank has one and the customer has the other – both must consent to access the data,” it says.
Shawbrook Bank was formed in 2011 via the merger of Whiteaway Laidlaw Bank, Link Loans and Commercial First and owned by RBS Equity Finance. It is a specialist lending and savings bank that focuses primarily on SMEs.
It employs 550 people and has a head office in Brentwood, Essex.
It has an asset finance arm, Shawbrook Asset Finance (formerly Singers Asset Finance, acquired by Shawbrook in 2012) and an asset-based lending business, Shawbrook Business Credit (formerly Centric Commercial Finance, acquired by Shawbrook in 2014).
Shawbrook went for an IPO in 2015.
Among the bank’s tech software and services providers are Sandstone Technology for digital banking front-end, Target Group for business process outsourcing (BPO) and Brightstar with its EasySource sourcing and case management system.
For its core platform, Shawbrook uses Sopra Banking Software’s Mortgage and Savings Suite (MSS). At the front-end, Sandstone Technology provides its digital banking and customer onboarding software to the bank.
Silicon Valley Bank (SVB)
SVB came to the UK from the US in 2012 (and was the bank’s first international branch).
SVB, which describes itself as a “high-tech” bank, says its UK business “sits right at the heart of London’s exciting technology community and works with some of the most innovative businesses in the UK and Europe”.
SVB UK has done around $3 billion (£2.3 billion) of financing since its launch, focusing on lending to technology companies (including start-ups) and providing services to venture capital and private equity firms that invest in technology and biotechnology.
It operates as a branch of its US parent, under a full banking licence from the UK regulators. SVB has a full commercial bank offering, including business current accounts, loans, corporate credit cards, foreign exchange, UK/EU payments and so on.
The bank runs Oracle FSS’s Flexcube for its core processing and ACI Worldwide’s software for online banking.
A prepaid debit card (Mastercard) and a mobile app, available in the UK and Italy. It is a multi-user spending account, designed to enable and control the flow of money inside a group of multiple users, e.g. a family or a company.
Soldo is based in London. It was founded by tech veteran Carlo Gualandri, one of the founders of Italy’s first ever web portal, Virgilio.it. The company says it does not intend to compete with banks, but will rather complement their services. It plans to seek formal partnerships with banks and co-branded arrangements.
It runs its own in-house developed technology, which is cloud-based. GPS is Soldo’s processor and Wirecard is the issuer.
Soldo holds an electronic money licence and is regulated by the FCA.
A mobile-only bank targeting “millions of users who live their lives on their phones”. Starling offers a personal current account, a business account and a Marketplace, which provides its customers with in-app access to a range of third-party financial services providers, such as insurers, pension providers, investment platforms and mortgage brokers.
Starling Payment Services provides payment solutions to other banks, fintechs and payment services providers.
Starling received £48 million ($70 million) of investment in 2016 from Harald McPike, an American quantitative trader, and gained its banking licence in summer 2016. It is now looking for £40 million of investment to fund its overseas expansion. It announced its first international location – Ireland – in summer 2017.
The bank has developed its core banking platform and mobile apps from scratch in-house. It says its systems are entirely cloud-based running in Amazon Web Services (AWS) and Google Cloud Platform (GCP).
It provides direct access to BACS, Faster Payments Scheme (FPS), STEP2 and Target2 payments schemes and Mastercard debit cards using GPS for card processing and Bottomline Technologies for payments operations.
State Bank of India UK
State Bank of India, the largest bank in India, has had a presence in the UK through a dedicated branch in London – State Bank of India UK (SBIUK) – for many years.
SBIUK works with consumers and corporates, and provides savings/deposit accounts, lending and remittances.
In 2017, SBI formed a new entity in the UK – a subsidiary (rather than a branch) – and received a banking licence for it.
For its core banking software, SBI is a major user of Infosys’ Finacle across its international network, including in the UK.
A mobile banking app from Thomas Cook Money and Ferratum Group, designed specifically for holidays.
Sumo launched in Sweden at the end of 2017, and will launch in the UK in 2018.
It is a fee-free multi-currency account that comes with an “intelligent” contactless debit card that can automatically identify the local currency at point of sale.
The app currently supports seven currencies (including SEK, GBP and EUR) and allows customers to make four fee-free ATM withdrawals at home and abroad per month.
In addition, Sumo offers a range of savings accounts, an overdraft facility, and customers can send money to friends and family via SMS to cover shared holiday expenses.
Ferratum uses Mambu’s core banking solution to support its SME lending services in Finland and Sweden, while its subsidiary bank in Malta runs Finastra’s Fusionbanking core system.
A digital banking start-up, which was issued a banking licence in November 2015. Tandem’s focus is on helping people manage their money rather than on direct product sales, according to its founders.
It plans offer current accounts, credit cards, plus savings and loans. In addition to the digital delivery channels, Tandem will have a “brick and mortar” call centre to deal with customer queries and more complex transactions.
In November 2016, it started inviting its community of 10,000 “co-founders” to be its first customers.
For its technology, the bank has turned to Fiserv and its Agiliti platform. Banking Technology understands that Temenos’ T24 and FIS’s Profile were also in the running for this deal. Agiliti is a shared Software-as-a-Service (SaaS) offering, hosted by Blue Chip. It has around 18 Fiserv and partner applications, including Fiserv’s Signature core banking system.
In December 2016, a UK retail chain, House of Fraser, announced a planned £35 million investment in Tandem and a partnership to start offering Tandem’s financial solutions to House of Fraser’s customers in 2017. However, a few months later the investment was pulled (except the initial £6 million injection).
As a result, Tandem had to shelve its plans to offer savings products and temporarily gave up its deposit-taking licence. However, it assured the market that the setback wouldn’t delay its launch to the market in the course of 2017.
The existing investors pumped £3.6 million emergency cash into Tandem – in return they received a hefty discount for the bank’s shares.
In August 2017, Tandem announced the acquisition of Harrods Bank, which is expected to bring £80 million of capital from Harrods’ current owners and a banking licence. The acquisition was completed in early 2018.
A new independent merchant bank, awaiting a banking licence.
An independent financial services provider based in Salford, UK, with about 1,000 staff.
The company focuses on helping people with “money worries”. Its flagship product is a managed personal account service, Thinkmoney Personal Account. It comes with a MasterCard card.
Thinkmoney says its offering is “a smart alternative to a current account” and is “like two current accounts in one”. It has around 100,000 takers.
The idea is simple: a customer pays in his/her salary, benefits, pension, etc and Thinkmoney keeps enough in the customer’s “salaries account” to pay all the bills he/she has set up. Once the bills are taken care of, the rest of the money is moved over to the customer’s “card account”.
Intelligent Environments (IE) provides Thinkmoney with front-end applications, including self-service online/mobile banking software, for current accounts, deposits and pre-paid cards.
At the back-end, there is Fiserv’s Agiliti – a hosted solution that is an amalgam of around 18 Fiserv and partner products. For its core processing, it has Fiserv’s Signature core system.
The core banking project started at Thinkmoney in spring 2014. The go-live was scheduled for early 2016 (making it the first go-live for Agiliti).
Another banking service, rather than a bank. It is aimed at SMEs and is currently in the private alpha testing stage. It aims to open for business this autumn.
Tide will offer a “nimble small business current account”, with a swift set-up and no monthly frees. It claims to be among the “world’s first” mobile-first banking services for SMEs.
Tide’s proposition is a fully featured current account and business MasterCard, plus SME-oriented finance apps, accounting capabilities and interaction with Tide’s community online.
The Services Family
This digital bank will cater for the UK military personnel, veterans and their families. It plans to open for business by Q4 2016 and introduce products and services in a phased manner. To begin with, it will commence trading as a mortgage provider. By 2017, it hopes to become a fully licensed retail bank.
On the tech side, it will be underpinned by Sopra Banking Software’s core banking system, Sopra Banking Platform, and digital channels software. The solution will be delivered on a managed services basis.
A new name, but the operations behind it have a 40-year old history. Together Money is a new brand of Jerrold Holdings Group, which unites Auction Finance, Blemain Finance, Cheshire Mortgage Corporation and Lancashire Mortgage Corporation.
Together Money’s focus is on residential and commercial mortgage loans to niche market segments underserved by mainstream lenders.
It is understood that it has applied for a banking licence.
TruFin, a creation of independent AIM firm Arrowgrass, started trading on the AIM of the London Stock Exchange in February 2018.
TruFin is a holding company comprising three fintech and banking businesses – Distribution Finance Capital (DFC – supply chain finance), Satago (invoice finance) and Oxygen Finance (dynamic discounting). It has 100 employees, and offices predominantly in the UK and a small team in the US.
In addition, TruFin owns a 15% minority stake in Zopa, a UK consumer P2P lender, which operates independently (see the Zopa entry below). DFC and Zopa are pursuing UK banking licences.
U Account started off as a prepaid card business, operating under the name Ffrees Family Finance Ltd and targeting those who are under-served by traditional high-street banks.
In November 2016, it evolved into U Account, a current account that aims to help its users to improve their financial wellbeing, offering direct debit payments, budgeting tools and more.
U Account was launched in partnership with Wirecard, Global Processing Services (GPS) and Bottomline Technologies.
Ummah Finance aims to be “the first UK born Islamic bank solely set up and operating from London”, with a fully digital proposition.
Ummah Finance says it is building a “safe and user-friendly mobile bank”. It will incorporate all features of a standard bank but will be fully compliant with the Islamic principles.
The service will be available on the iOS and Android devices.
Its parent company is HWK Group, which also has the National Association of Pakistani Entrepreneurs under its umbrella.
Union Bank of India (UK) Limited
A subsidiary of one of India’s largest banks, now with a UK banking licence.
For its tech, Union Bank of India (UK) uses Infosys’ Finacle. Its parent is already an established user of the Finacle core banking system across its international locations.
Russia’s second largest banking group, VTB, is looking to launch a retail banking business in the UK and has applied for a UK banking licence, to enable it to take retail deposits.
VTB is not new to the UK – the bank has been operating in the country via its multinational investment banking arm, VTB Capital. However, it hasn’t been involved in retail banking.
For its technology, it will use Sopra Banking Software’s Sopra Banking Platform, supplied on a hosted basis.
A peer-to-peer (P2P) currency exchange platform founded in 2010.
WeSwap enables customers to swap currency directly with other travellers. While banks and bureaux buy their currency from a wholesaler/broker/etc and then pass on the costs to customers, WeSwap says it “matches up people travelling in opposite directions, which cuts out the middleman”.
It offers a flat rate of 2% on 18 currencies.
It comes with a mobile app and a card that has “some clever tricks up its sleeve” on the spend side. It will detect the correct currency based on where users are spending, and attempt to draw on the funds from that particular wallet; if no funds are found, it’ll then draw on the user’s balance from their home currency, and complete the swap as part of the transaction.
Users can swap currency in-app. The firm’s swapping tech analyses all incoming swaps and ensures they are fulfilled at the best time for the customer, based on their swap type (instant, three-day or seven-day). It also groups and aggregates swaps to maximise the possibility of a P2P swap, remove the impact of market fluctuations where possible and increase operational efficiency, WeSwap says.
The company is now building a data-driven budget planner – using data from its users, the planner calculates how much money individuals would need to take for their holiday and provide a bespoke budget for that destination and user.
Wyelands Bank is small entity previously known as Tungsten Bank and before that as FIBI Bank.
FIBI Bank was purchased by Tungsten Corporation from First International Bank of Israel in mid-2014 for £30 million. In late 2016, it was sold to Wyelands Holdings (part of Gupta Family Alliance/Liberty House Group) also for £30 million.
It will relaunch in 2017 with a new identity and focus as a specialist provider of financial solutions to commodities, steel and engineering enterprises. Sanjeev Gupta, executive chairman of Liberty House Group, says the acquisition is part of the group’s strategy to support the UK manufacturing.
Wyelands Bank will also have a new core banking system to replace its legacy Misys’ Equation core. This is understood to be ERI’s Olympic.
The world’s first peer-to-peer (P2P) lender, Zopa, made an application to the PRA and FCA for a banking licence in H2 2016. It expects to receive the licence in 15-24 months.
Zopa’s bank will offer deposit accounts and overdraft alternatives to borrowers, in addition to the lender’s existing suite of investor and borrower products.
Jaidev Janardana, CEO of Zopa, says existing Zopa customers will get the “first opportunity” to try out the bank’s new products and provide their input in shaping these.