UK challenger banks: who’s who (and what’s their tech)
UK challenger banks: who is who
With so many new entrants trying to muscle into the UK banking sector, FinTech Futures 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.
Last updated: 13 October 2020
AlbaCo
A start-up bank for SMEs, based in Glasgow, Scotland. It plans to provide lending and savings facilities to businesses through its “relationship-based model” once it opens for business in early 2020.
“Alba” is the Scottish Gaelic name for “Scotland”. The bank’s lead investor is Scottish billionaire Jim McColl.
The people behind AlbaCo have plenty of experience in the banking world, with several (such as the CEO and CFO) coming from Airdrie Savings Bank (the bank closed its operations in 2018). CEO is Rod Ashley and he is also chair of audit and risk committee at No1 CopperPot Credit Union in Manchester. Michael Harriman, who oversaw the technology side at another SME challenger, Redwood Bank (see below), is now an IT advisor to AlbaCo.
For its technology, the bank selected Temenos Infinity and Temenos T24 Transact, as well as analytics and payments modules. Temenos is providing full hosting and application management services to Alba running on the Microsoft Azure cloud using Temenos Cloud Services.
Aldermore Bank
This bank was created in 2009 with a key focus on the SME sector. The bank’s HQ is in Reading, Berkshire.
It was initially backed by AnaCap. In 2015, Aldermore was successfully floated on the London Stock Exchange.
For its core platform, it uses Temenos’ T24 Transact system. For digital banking, it has got Backbase’s Omnichannel Banking Platform.
Allica Bank (formerly CivilisedBank)
Originally known as CivilisedBank, the bank received its licence in May 2017, but relinquished it a year later to have more time to develop its technology platform. It then reapplied for a new licence and received it in H2 2019.
The bank plans to offer business current accounts with deposits, transaction banking, overdrafts, FX, investments, savings and loans.
Its main shareholder is PE firm Warwick Capital.
In December 2018, the bank changed its name to Allica, which, it said, reflected its “repositioned digital and relationship offer”. It also ousted the original founder, Jason Scott.
For its software, the bank 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.
Amaiz
A new mobile banking app, which comes with a free Mastercard debit card. Money can be transferred to Amaiz instantly and for free from debit/credit cards, Apple Pay or Android Pay. Users can also top-up by bank transfers, local PayPoint stores or by depositing cash at a post office.
The firm intends to let users access and monitor funds in different bank accounts as well as make payments.
Alongside fund protection and a 24×7 service, the app provides smart analytics to manage and monitor all payments, categorised by tags and create spending reports.
Founded in 2017, Amaiz’s business office is based in London, and the R&D office is in Saint Petersburg, Russia. The company is led by founder and CEO Sergey Dobrovolskiy.
The fintech currently operates in the UK market only.
Amicus
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.
In advance of authorisation, Amicus converted £30 million of the debt currently used to fund its lending activities into equity – to 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.
Atmen
Atmen is a challenger banking service promising to “bring colour to banking”. In September, it announced it was crowdfunding half a million to develop its product alongside an unknown BaaS provider.
The provider is licensed to operate in the UK, EEA, SEPA region and the US, which aligns with the fintech’s expansion plans.
Founded by Marvyn Smith and Dele Abibu in June 2020, the Black-led fintech start-up wants to address some of the “unconscious biases” communities of colour face in the financial industry..
It offers free in-app peer-to-peer transfers, with multi-currency transfers generating the initial source of income – as Atmen intends to act a lot like a remittance service.
In the far off future, Atmen intends to offer small business loans, in order to help Black-led business which struggle to get access to finance.
Atom Bank
A digital bank that was founded in 2014 and opened for business in October 2016.
It has a hefty technology set-up: 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 (it is understood there are no plans by Atom to move into the current accounts market at present). Later in the year, it partnered with Deposit Solutions to offer retail deposits in Germany.
In spring 2018, Atom raised £149 million in the latest funding round, including £85.4 million from its existing investor, BBVA. In early 2019, the bank was rumoured to be up for sale, with BBVA as a potential acquirer.
In autumn 2018, it announced a multi-year tech deal with Thought Machine, a UK-based core banking software start-up.
The bank also chose TruNarrative to help guard against financial crime in May 2019.
It also selected Google Cloud to underpin its application and product development.
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.
Babb
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.
In early 2018, it raised $20 million in funding and was looking to raise another £1.5 million later that year for 1.48% of the business (at a pre-money valuation of $100 million). At the time, it had a community of 50,000 people spanning 173 nationalities.
Babb is regulated as an approved payment institution (API) by the UK’s Financial Conduct Authority (FCA). It plans to become a licensed bank in the UK and/or EU, offering a bank account, payment card, and access to its global peer-to-peer network.
It does not see itself as a “challenger” but as co-operating with existing banks and financial institutions. It works 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 & Clients
Bank & Clients (B&C) was formed in 2014, as a result of a merger of Church House Trust and Ocean Capital (a direct lender to corporates).
Prior to that, Church House was owned by Virgin Money for four years (purchased for £12.3 million), and known as Virgin Bank for two of those (2010-2012). When Virgin Money acquired another UK bank, Northern Rock, in 2012, Church House was given its old name back and the Virgin Group attempted to sell it to SAV Credit (the sale fell through).
Church Trust was founded in 1978, but its origins can be traced back to 1792, when Edward Batten formed Messrs. Batten & Co.
Ocean Industries purchased Church House for £13 million in 2014, and merged it with its Ocean Capital business to create B&C. The bank offers savings, business loans, commercial property financing and mortgages.
In mid-2018, B&C teamed up with Raisin UK to launch two fixed-term deposits. The bank joined Raisin UK’s marketplace and these two products are exclusive to it.
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 applied for a banking licence.
For its technology, it will use Finastra’s 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 started in 2017.
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.
BCS Global Markets
The London-based business of BCS Global Markets (BCS GM) obtained a UK transaction banking licence in autumn 2018 as it plans to offer an integrated investment banking and payment services solution.
BCS GM is the investment banking division of Russia’s BCS Financial Group, the largest independent securities broker on the Russian exchange.
BCS GM says it is entering transaction banking in response to clients’ growing interest in payments. Core functionality is set to be rolled out in 2019, so clients can pay and accept payments from third parties across several currencies.
The integrated solution will be developed with BCS’ existing prime brokerage/custody products. Transaction banking services will be rolled out “gradually” as new tech partnerships are formed.
BCS uses Calypso Technology’s software for asset management, front-to-back office.
Bexhill UK
Bexhill UK, a firm which provides insurance premium funding to brokers under the Orchard Funding Group, applied for a UK banking licence in May 2020.
Founded in 2000, Bexhill UK works with roughly 250 British insurance brokers providing them with both an in-house finance facility, and a more traditional finance model.
The Luton-based firm’s CEO Ravi Takhar says the firm’s activity during the 2008 financial crisis and the pandemic, means Bexhill UK is set up to “robustly” deal with the lending market.
Takhar is also a board director for property development financer Urban Exposure, and sits on Honeycomb Investment’s board as a director too, a firm which invests in credit assets originated by non-bank lending platforms.
Previously, the CEO worked at Investec and at Japanese investment bank Nikko. Bexhill UK’s chairman was the former CEO of two banks – Heritable and Hampshire Trust Bank.
BFC
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.
B-North (BankNorth)
B-North (also known as BankNorth) is based in Manchester in the north of England. It is the creation of five founders, who mainly come from another challenger bank, Atom (see above). The bank’s focus is on SME lending.
The forces behind B-North are GrowthFunders and G.Ventures (the trading names of UK-based Growth Capital Ventures). It also received funding from Greater Manchester Combined Authority (GMCA).
It applied for a banking licence and plans to open for business in 2020.
The bank will operate “lending pods” in major cities across the UK, the first of which is in Manchester. Each pod will contain people experienced in the lending needs of SMEs, including underwriters with discretion to sanction facilities locally and an in-house valuer. All loan applications will be managed locally, and customers will have access to the local teams and resource in the B-North head office.
According to B-North, this highly localised model will allow lending to be made available to SMEs within ten working days.
For its tech, BankNorth became the first user of a co-created solution by German core banking tech vendor Mambu and a US-based lendtech provider, nCino. The software is hosted in the cloud.
Bofin
London-based mobile banking app Bofin intends to offer users the ability to open a bank account in a country they choose. It was founded in 2016 under the name of Bizfactor, which was changed to Bofin in November 2017.
It lets people open a personal or business current account in under two minutes via mobile – and all “without credit checks, proof of local address, business plans or any other hassle”, it says. It is inviting users to sign up to a wishlist on its website.
At present, Bofin enables users to connect to their money from 16 countries in the app and open a UK personal or business current account from within any EU or EEA country.
The firm is the creation of Mohamed Dafea, a Leicester (UK) based chartered engineer with over 12 years of experience in the oil and gas industry.
In May 2018, Bofin was looking for Android, iOS and Dot Net developers to be based in Chennai, India.
British Business Bank
A government-backed bank for SMEs.
Bunq
After launching in Germany, Austria, Italy, Spain, France, Ireland and Belgium, Bunq is now live in the UK as of October 2019. The challenger bank is now active in all European Union countries, as well as European Economic Area (EEA) countries Norway and Iceland.
The Netherlands-based neobank has some clear differentiators in its technology, which was developed from scratch and took around one year.
Founder Ali Niknam describes bunq as “a bank built by coders”. This was from the database level to the app level, including card processing.
Everything is on Amazon’s AWS cloud apart from the bank’s private keys, which reside in a couple of data centres in the Netherlands. Fundamental to the development was scalability and keeping things simple, he says.
Niknam, born in Canada from Iranian descent and now living in the Netherlands, financed the venture himself without the help of venture capitalists.
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
Cashplus is the product brand of Advanced Payment Solutions (APS Financial). Cashplus is a prepaid card (Mastercard) and current account for individuals and businesses.
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.
Castle Trust
Investment firm Castle Trust revealed its invitation by UK regulators to apply for a banking licence in November 2019. It expects to receive the approval by spring 2020.
Founded in 2012, the London-based company has more than 22,000 customers (Q4 2019 data). It offers a range of investment products as well as mortgages and development finance loans. It says the licence will allow it to launch an instant access account.
“With a new management team, loyal customer base and dedicated staff, we are confident that Castle Trust is building out the systems, processes and market presence required to be a successful and safe specialist bank delivering on its customers’ expectations,” it states.
Centtrip
London-based fintech company specialising in treasury management (including payments and FX) in the corporate, marine and music sectors.
Founded in 2015 and privately owned (with venture capital backing), it is regulated by the FCA as an electronic money institution (EMI). The EMI licence was granted in spring 2018.
Centtrip’s technology operates a multi-currency account, prepaid multi-currency Mastercard and app that allow clients to hold, exchange and make transfers in 15 currencies. Centtrip’s multi-currency account enables financial directors, CFOs and accountants to run, reconcile and keep track of business expenditure in real time.
Centtrip’s card is available with three base currencies to choose from: EUR, GBP or USD.
The company says more than 400 international music artists and 700+ superyachts use it for cashless touring or cruising.
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.
Chetwood Financial
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 full banking licence at the end of 2018. It also obtained a £40 million investment from Elliott Advisors (as part of the latter’s part of a £150 million debt and equity commitment)
Chetwood 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.
Chip
Savings app Chip sees itself as a “challenger bank for savings” in the UK.
The firm was set up in 2016 and in autumn 2018 completed its Series A crowdfunding round on Crowdcube, raising over £4 million.
It had 75,000 account holders as of November 2018, but says it plans to reach a million users within the next four years.
The app uses artificial intelligence (AI) to calculate how much a user can save, and automatically transfers that money to their Chip savings account. This is a new account that a customer opens when he/she signs up with Chip – it is in customer’s name and is hosted at Barclays Bank. Essentially, it’s an e-wallet. The account holder can access their money any time, Chip says.
Chip connects with the following banks in the UK: NatWest, Halifax, Lloyds, Nationwide Building Society, Barclays, HSBC, First Direct, Santander, TSB, RBS, Metro Bank and Co-operative Bank.
In 2019, the company plans to launch a community lending service, ChipX.
It is understood Chip is gearing up for applying for a banking licence.
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.
ClearBank
ClearBank 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 is 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 does 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.
By early 2019, it reportedly had around 20 clients, including Tide (see the entry below), OakNorth (see the entry below), Ecology Building Society, Allpay and Transactive Systems.
In February 2019, it became one of the three recipients of the funds of Pool A Capability and Innovation Fund, set up by the RBS Banking Competition Remedies. It received £60 million.
Coconut (formerly Monizo)
This start-up is a banking service rather than a fully-fledged bank.
It launched the “first” banking service targeted solely at freelancers (and self-employed people) in January 2018. Later that year it launched a limited current account and invoicing tool.
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.
In terms of the back-end technology, Coconut partnered with a Banking-as-a-Service provider.
In late 2018, it crowdfunded on Crowdcube raising around £2 million (its target was £500,000; it raised over £680,000 in the first day alone).
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
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.
In 2018, Contis acquired UK-based Paze Finance. Paze’s consumer credit licence means Contis’ B2B platform clients can offer credit to their customers alongside core banking functionality. Paze’s technology suite also went to Contis, including a consumer lending system with artificial intelligence (AI) analytics to make real-time affordability decisions.
Coombs Bank
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.
Copernicus Bank
A challenger bank founded and backed by Danela Ventures Partners Limited, a London-based advisory firm.
Copernicus Bank will focus on corporate banking.
Countingup
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 also does users accounting; it submits VAT returns, generates a profit and loss report and creates invoices.
In autumn 2018, Countingup raised £2.3 million in seed funding.
It also partnered with HooYu for identity confirmation service and with Hokodo for invoice insurance service.
Cynergy Bank
Cynergy Bank is a rebrand of the Bank of Cyprus UK branch, following its acquisition by Cynergy Capital. The deal, announced July 2018, was closed at a value of £103 million later that year and the new brand was unveiled in December.
The new bank focuses on the UK’s business/SME sector, including the Cypriot community.
Cynergy assumed all aspects of Bank of Cyprus UK including banking business, all assets and liabilities. Accounts, agreements and contracts remain unchanged, as well as day-to-day activities and the management team. The bank’s CEO is Nick Fahy, who was previously with Westpac and Bank of Ireland.
Bank of Cyprus was a long-standing user of Equation and Midas from Finastra (formerly Misys) for core processing, Fiserv (formerly Dovetail) for payments and DPR Consulting for front-end operations, to FinTech Futures’ knowledge. Following the acquisition, Cynergy Bank embarked on its technology review.
Diaspora
A start-up bank that intends to build a trade finance ecosystem where sellers, buyers, and funders can transact international trade and commodity finance deals over the blockchain. Diaspora plans to offer SMEs bespoke funding solutions, including invoice factoring.
Diaspora was founded in 2017 by a group of entrepreneurs and bankers, and is based in London’s Level 39. It also has an office in Den Haag, Netherlands.
Ibrahim Farag is the bank’s MD. His experience includes working as an investment strategist and investment director; and working at FIMBank in Cairo and Union National Bank in Dubai.
DiPocket
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”.
Dozens
Previously known as Project Imagine, this London-based challenger defines itself as a “second generation digital bank” that is “changing the fundamental model of banking”.
“Our income as a business is directly linked to the returns we create for you. We keep a smaller share and pass on the majority to you. Unlike most banks, we are not looking to make money from things like overdrafts, but by helping you save, invest and grow your money,” it says on its website.
The bank is led and was founded by Aritra Chakravarty, who comes from HSBC.
“We want to be a mix of Monzo, Nutmeg and Moneybox, all in one, which means a digital current account, savings and investment all in one, with heavy focus on personal finance management (PFM),” says Chakravarty. “We want to encourage savings and money management, and help people get out of the overdraft/over-spending loop – hence we will offer 3.14% in deposits from the start.”
75% of Dozen’s staff is female. “The core product doesn’t change, but the way we approach the way we talk about it does. It just sets a different dynamic to the process,” he says.
Dozens launched in January 2019, with an e-money licence. Dozens will look to acquire a banking licence in 2020.
In April 2019, it raised £3.8 million on crowdfunding platform Seedrs.
Dzing
Dzing Finance rolled out its beta in March 2020 through the App Store and Google Play. It’s been in the works since October 2018, designed for international students, remote freelancers, overseas workers and travelers.
The neobank promises a “one minute, one click” account-opening process which does not require a UK address.
Its team of 15 includes interim CEO and chief product officer Maxim Kharchenko, formerly a global digital head of fintech at telco VEON, and chief technology officer Pierre Larsson, previously an employee at HM Revenue & Customs, Worldpay and the BBC.
The challenger’s services are divided into three subscription plans. The first is free, then price shifts up to £6.99 per month for an extra £200 in free ATM withdrawals each month and free money transfers throughout Europe within the Single Euro Payments Area (SEPA).
In addition, it offers an “elite” subscription for £50 per month. At a steep price increase, the card is designed for “a small group of customers” – some of whom are already onboard, a Dzing spokesperson told FinTech Futures.
Dzing is authorised by the Financial Conduct Authority (FCA) as an electronic money service under the Electronic Money Regulations 2011 (EMRs), and is working with Wirecard to issue the cards.
FairFX
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.
FCMB UK
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.
Fiinu
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.
FinecoBank
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.
Fire
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.
Founders Bank
Malta and London-based Founders Bank awaits the EU banking licence authorisation in Q4 2019 (following this, it intends to obtain licences in the US and Singapore). The bank is backed by crypto exchange Binance and venture capitalists.
It will offer corporate banking services focused on tech companies including accounts, payments, escrow and credit.
It says it has “its own proprietary banking platform with instant, multi-currency settlement”.
Paula Pandolfino is the bank’s co-founder and chief strategy officer. Kenan Altunis, who has 20 years’ experience at Deutsche Bank, is CEO. Lana Burdei, formerly of HSBC and Barclays, is COO.
On the technology side, Dearg OBartuin is CTO (he was CTO at Challenger.Money, the London Block Exchange and BitPesa) and Ludwig Mallia (ex-Bank of Valetta and MeDirect Malta) is head of IT.
Frost
Co-founded by 33-year-old Pawel Oltuszyk, owner of law firm Optimal Solicitors, the fintech is hoping to solve issues clients of the law firm faced when banking with incumbents.
The Manchester-based start-up is applying for a e-money licence with the Financial Conduct Authority (FCA).
As well as all the current account trimmings, Frost’s ‘smart engine’ helps users get the best foreign exchange rates and slash their energy bills.This feature will rival digital disruptor Snoop.
Oltuszyk’s marketing head at Optimal Solicitors, Edyta Sliwinska, is the other co-founder of Frost. Whilst Oltuszyk did found the law firm back in 2008, his background is in computer science.
Galeo Bank
A UK-based digital banking start-up, founded by Sergey Sukhikh in early 2018. Aleksey Zhdanov is chief design officer. The beta version was expected to be released in Q2 2019.
Galeo says its app will offer a “new paradigm” in banking, “providing free digital banking globally”. It says this includes credit cards, lending, savings and insurance.
It’s based on the Bank-as-a-Platform (BaaP) model. Galeo will provide cost-free basic banking and payment services, while other financial products will be provided by authorised third parties plugged into the platform.
Gatehouse Bank
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.
GBB
Upon launch, GBB says it will offer secured property development loans of between £1 million and £5 million, with 90% of lending supporting regional property developers, small and medium-sized businesses (SMBs) and construction companies.
GBB has raised more than £10 million from investors – most of which are from the North, as the start-up is based in Newcastle. The fintech aims to land its banking licence before the end of 2020.
In June 2020, it landed Monzo’s co-founder Paul Rippon as its non-executive chair. “The combination of leading-edge technology and relationship managers on the ground to provide support to customers is what property developers are in desperate need of,” says Rippon.
The start-up’s CEO, Steve Deutsch, spent 19 years at Lloyds Bank before joining Birmingham-based Wesleyan Assurance Society for 13 years, becoming its CEO.
Gravity
UK-based neobank Gravity is still seeking authorisation to serve SMEs with lending, credit card and deposit services.
In August 2019, the company chose Finastra’s core banking system, Fusion Essence, which is built on Microsoft’s Azure cloud platform.
Gravity chairman, Tim Brooke, has set the bank’s sights on SMEs who feel under-served by major banks, instead offering them an agile platform clear of bureaucracy which can offer them micro-level support.
Griffin
Griffin is is a new wholesale (“infrastructure”) challenger bank, founded in London in 2017 and gearing up for launch in summer 2020.
The “bank as a platform” or “API-first bank” will provide technology to fintechs that need custodial accounts and access to interbank payments. It will also offer integrated compliance solutions for KYC and AML requirements in real time.
It will charge £5 per open account belonging to an individual per year and £20 per open account belonging to a company per year.
Griffin’s systems are built from scratch and mainly in-house, including core banking ledger, customer information system (CIS), payments integration and API front-end. Its tech is written in Clojure (a general-purpose programming language) and uses Kafka (an open-source stream-processing software platform) to support its event-driven architecture.
Its transatlantic founders are David Jarvis (CEO) in London and Allen Rohner (CTO) in Texas.
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.
In late 2018, the bank signed for the MatsSoft low-code development platform to enhance its digital offerings.
Iam Bank
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). Around the same time it was also looking to buy a small UK bank, building society or a credit union with a high street presence.
ICBC UK
A subsidiary of China’s heavyweight, The Industrial and Commercial Bank of China (ICBC). It was granted a wholesale banking licence in autumn 2014.
ICICI Bank UK
A subsidiary of India’s second largest banking group, ICICI. The bank has been operating in the UK since 2003 offering consumer, business, corporate and investment banking services, as well as money transfers to India.
The bank is authorised by the PRA and FCA.
ICICI Bank UK operates from seven locations in the UK and a branch each in Belgium and Germany. It has around 250,000 customers in the UK.
For its technology, the bank uses Infosys’ Finacle core banking system (as part of a group-wide roll-out). On the risk management and reporting side, it has Wolters Kluwer’s OneSumX solution.
Kestrl
Kestrl is an ethical banking fintech set to launch in Q3 2020, designed for those who want to spend and invest in line with their personal values.
The debit card offering allows users to budget, calculate monthly net wealth, track carbon emissions through open banking and donate to charitable causes through an integrated charity donation platform.
The offering is also Sharia-compliant, making it an option for the UK’s Muslim community.
Kestrl was co-founded by CEO Areeb Siddiqui, and chief operating officer Daeng Termizi who met at Cambridge. Siddiqui comes from a robo-advisory background, whilst Termizi previously worked at Bank Negara Malaysia, the country’s central bank, for five years.
Alongside its debit card launch, which will have a small subscription fee, it plans to launch an investment marketplace in 2020, integrating with the likes of US-based Halal robo-advisor Wahed Invest, and Yielders, an equity based crowdfunding platform for UK property investment.
As well as earning commission off its marketplace, Kestrl is in the process of building its own investment products.
Kestrl has no intention of applying for a UK banking licence, instead using an e-money licence from a third party. In March 2020, the fintech raised £150,000 from undisclosed investors.
Koto Card
Set to launch sometime in 2020, Koto users will be able to apply for a free prepaid card (as with most of challenger banks), but they will also be able to borrow up to £1,000 in credit.
If customers want to borrow under £400, they can do so in one go by paying 25p each day they use the credit plus a monthly fee which is 1% of the borrowed amount. Or, they can spread out credit of up to £1,000 over a 3-24 month period with a re-payment plan that includes a £10 monthly fee.
The Financial Conduct Authority (FCA)-approved consumer credit service was co-founded by Misha Rogalskiy, the brains behind Ukraine’s Monobank, and is headed up by CEO and chief product officer Rob Escott, who comes from an eight-year stint at Vanquis Bank.
ikigai
ikigai, which means “a reason for being” in Japanese, is launching a flat-fee investment account in 2020.
The start-up intends to charge a flat £20 per month fee for all customers, no matter how much they’re investing.
The ikigai platform is two-fold. It offers a basic banking service with a Visa card like many challenger banks. This current account can then be used to set monthly budgets which automatically push savings into an investment portfolio account at the end of each month.
Co-founders Edgar de Picciotto and Maurizio Kaiser worked at McKinsey & Company together for a time before setting up the start-up.
de Picciotto says ikigai is tapping the middle ground between challenger banks’ “overpriced” metal cards and incumbents’ “clumsy” travel insurance bundles.
Investment portfolios will be segmented by category, risk and by shorter or longer timelines.
LHV Bank
Estonia-based LHV Bank entered the UK market in spring 2018, following the regulatory approval to establish a full-service bank branch. This is LHV’s first foray outside its home market.
The bank’s strategic focus is on fintechs (e.g. TransferWise and Coinbase are on its customer list).
LHV Bank was established in the late 1990s, and is a universal bank. It is the fourth largest bank in Estonia, employing 360 people and serving 133,000 clients. It has just two physical branches in Estonia and conducts most of its business via digital channels. It first tested a crypto-wallet back in 2014.
For its technology, the bank uses an in-house developed core banking system.
Lintel Bank
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).
Longevity Bank
Set to launch in 2020, Longevity Bank is targeting the over 60s – starting with users in the UK and Switzerland.
Backed by Hong Kong-based venture capital firm Deep Knowledge Ventures, the neobank intends to expand across Europe, Singapore, Japan and the US by 2022.
Longevity Bank’s co-founder and Deep Knowledge partner Sergey Balasanyan tells FinTech Futures that the neobank “will initially set itself up as a bank attracting net-new customers, but the goal is to also become a third-party provider (TPP) to major banks.”
Focusing on agetech and healthtech, the challenger says one of its features will include offering “tangible” rewards to people just for being healthy.
Through its hybrid profit model, Longevity Bank plans to buck the trend of non-profitable challenger banks by using revenue streams from traditional banking products such as lending and deposits to “supplement” its neobank activities.
LQID Bank
London-based challenger London waiting for a banking licence (as of August 2018). It’s the trading name of Shop & Finance Ltd.
LQID Bank says it aims to “bridge the gap between digital and high street challengers using technology that hasn’t been seen in the UK before”. It will provide consumer and business banking services.
Its motto is to make life and banking “smoother”, with “simple and straightforward” products, “meaningful” budget tracking, local bank services and customer services.
LQID will have a digital and physical presence (via a network of “community branches”).
Marcus
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.
Masthaven
An established mortgage specialist, Masthaven Finance, received a banking licence in late 2016.
Masthaven offers lending and mortgages as well as savings products to retail customers and SMEs that struggle to get service from mainstream banks and lenders.
For its tech, Masthaven implemented 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.
In spring 2019, the bank completed a £60 million equity investment from Värde Partners.
Metro Bank
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.
In February 2019, it became one of the three recipients of the funds of Pool A Capability and Innovation Fund, set up by the RBS Banking Competition Remedies. It received £120 million.
In June 2019, the bank selected Artesian Solutions’s Artesian Risk and Compliance Hub (ARCH) for KYC.
Mettle
A standalone SME digital entity, Mettle, was launched in November 2018 by Royal Bank of Scotland (RBS) and its subsidiary NatWest.
Mettle offers a business current account with a sort code, account number and payment card; instant invoicing; and the option to add receipts to transactions and track expenses from a phone.
Mettle is not a bank, but operates as an agent under an e-money licence held by PrePay Solutions (PPS). Any deposit placed with Mettle will not be Financial Services Compensation Scheme (FSCS) protected.
The project was done with the participation from consultancy firms Capco and 11:FS.
MoneeMint (formerly Ummah Finance)
London-based MoneeMint (formerly Ummah Finance) was founded in 2016 by Hassan Waqar and Martin Luther Maramba.
Initially, Ummah Finance aimed at the UK’s Muslim population (about three million people, or 5.4% of the total UK population), planning to become the first UK-based mobile Islamic bank.
However, it has expanded its scope since to focus on socially responsible and ethical banking, and adopted a new brand identity in September 2018: MoneeMint. The firm took into consideration feedback from prospective investors and clients, Waqar explains, and felt “there was a need to launch a more modern and fresh-looking brand for us to get the right message out”.
MoneeMint’s “fresh banking experience” is aimed at millennials in the UK and Europe.
It says it will be Europe’s first ethical digital bank. To begin with, it will offer prepaid products and services.
In autumn 2018, MoneeMint secured undisclosed “strategic funding” from Ground One Ventures, a UK-based private investment firm.
For its tech, MoneeMint picked the Digibanc enterprise banking suite from Codebase Technologies.
Monese
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”. As of spring 2019, it had over one million customers.
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. It offers 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, are free of charge, but ATM services and transfers abroad come with a charge of 50p.
It inked a partnership deal with PayPal, to enable its clients to easily manage and use their Monese and PayPal accounts together.
In autumn 2018, Monese secured a $60 investment in its Series B funding round and announced the expansion into business banking.
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).
In H2 2020, it signed for a new core banking system, Thought Machine’s Vault.
Monzo
Monzo was granted a full banking licence in early April 2017. It positions itself as a “mobile first” bank and has an online community forum for its users to “come to help build the bank of the future”. Monzo offers 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.
In 2019, it trialled Monzo Plus, a premium service which charged users up to £13 per month for product bundles which included additional ATM withdrawals, travel insurance, airport lounge access and merchandise discounts. But the product was scrapped within five months and the 11-person team in charge of it replaced.
In H2 2018, Monzo closed a funding round of £85 million and announced plans to raise further £20 million, and to launch a business current account. The following year, it announced a £113 million funding taking its valuation to £2 billion, as it aimed to expand to the US.
It partnered with Thames Card Technology for debit card production and personalisation.
For banking ops, the bank 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 infrastructure is hosted on the Amazon Web Services (AWS) cloud. The bank’s two data centers are for interacting with Mastercard’s systems.
GPS is the processor for Monzo.
Muniy
Yet to launch, Muniy has offices in the London and Manama, Bahrain. It plans to launch in the UK first with an undisclosed bank partner.
In June 2020, it partnered with with regtech HooYu for its know your customer (KYC) capabilities. The same month, the start-up raiseed £200,000 on Crowdcube.
The fintech said the investment was for its pilots in the UK and EU, and for underpinning its core financial services across key markets in the Middle East.
The start-up says it will connect users anonymously to merchants when they pay, and allow merchants to pay a lower transaction processing cost – a cost which it says currently sits at a global total of more than £30 billion.
By lowering the cost for the merchants by up to 50%, Muniy thinks it can drive adoption and and eventually partner with brands to develop personalised reward schemes for customers.
The start-up offers both free and paid personal and business accounts which span from £5-£50 a month, with features including QR payments, instant peer-to-peer (P2P) money transfers, real-time transaction notifications, and contactless cards.
Neuros
Founded in 2016, UK challenger Neuros wants to help the UK’s neurodiverse population bank, starting with autistic people.
The basic account offering will be focused on three features: impulse control, granular personalisation and executive dysfunction.
The banking app will allow users to set certain time limits on spending or money access, and it will integrate a series of mind-calming games into the banking app, designed to clear users’ mindsets before they spend their money.
Neuros users will also be able to change the app’s fonts, colours, and layouts, as well as set up their own budgeting and spending tracks which users can also import from Excel.
There will be a caregiver account feature, so a parent or carer can oversee transactions, and help the user navigate their finances through shared education tools which promote collaboration as opposed to making the user feel out of control.
Founder Soumaya Bhyer plans for an October 2020 launch.
Niyah
Challenger banking app Niyah launched in the UK in January 2020 for the Muslim community. It says it’s “the first fintech Islamic banking app and ethical financial marketplace platform” to launch in the country.
The offering is Shariah-compliant, which means the app will, for example, exclude investments which derive a majority of their income from the sale of alcohol, pork products, pornography, gambling, or military weapons.
The platform hinges on its interest-free products, which include digital bank accounts, debit cards, investments, and small and medium enterprise (SME) financing.
Its aim is to provide “a lifestyle-focused banking experience to the 3.4 million Muslims in the UK”, a population which the challenger says is “financially isolated” and has “had access to a very limited offering” until now.
The challenger is designed to plug into “existing financial service providers” so it can offer the Muslim community what is on offer for everyone, but through its own ethical financial marketplace which makes the services Shariah-compliant.
“Niyah is community-focused, we have spoken to hundreds of customers about their current pain points on banking and finance,” according to the co-founder and head of Islamic banking at Niyah, Safdar Alam, who feels “a one size fits all approach” no longer works.
Nude
The Glaswegian start-up offers first-time home buyers a savings account. It intends to apply for a UK banking licence so it can launch its own mortgage products.
The fintech raised £3.5 million in a seed funding in July 2020. The funding added to its £1.7 million growth capital raise in 2019 and its innovation grant from Scottish Enterprise.
The fintech will make money by taking a share of the interest earned on the savings it helps users accumulate.
Nude is also considering a marketplace model and licencing its proprietary tech to third parties as additional revenue streams.
OakNorth
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).
For payments and agency banking, OakNorth signed for ClearBank’s platform in early 2019, starting with utilising the latter’s real-time Faster Payments infrastructure, allowing for instant payments.
OneSavings Bank
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.
Oxbury
Challenger bank for British farmers Oxbury FS is set to launch in the UK “later in 2020”.
As well as offering savings accounts to the general public and all businesses, the Chester-based challenger says it wants to particularly focus on the British agricultural sector – something it says has never been done before.
The challenger submitted its banking licence last year to the Bank of England’s Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA), and are awaiting the regulatory stamp of approval.
Oxbury wants to help farms with their cash flow, acknowledging that unlike many other small businesses the fluctuation of cashflow is far more heavily dependent on the seasons for farms.
Offering both lending and savings products to farmers, the digital bank will rest on a “cloud-based API-first architecture” and will be driven by a board of directors with “decades” of banking and agricultural knowledge – including ex-head of business banking at HSBC Huw Morgan and former Bank of England adviser Tim Fitzpatrick.
Paragon Bank
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.
FinTech Futures understands that the bank’s deposits operations are outsourced to Newcastle Strategic Solutions, the IT and outsourcing arm of Newcastle Building Society.
PCF Bank
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.
Pennyworth
Pennyworth was founded by two former Barclays executives, Jeremy Takle and Ben Harvey, in 2020. It wants to tap the country’s “aspiring affluent” young professionals and middle managers, who are busy “climbing the corporate ladder”.
The start-up is in the pre-application stages of becoming an authorised UK bank. It sent off its application in March 2020.
An easy-access savings interest rate at Pennyworth sits at 1.5%, whilst the annual percentage rate on a personal loan sits at 2.9%.
The start-up will focus on delivering a “personalised service and financial planning insights”. It will then offer both savings and lending services to support the goals consumers set themselves.
Pepper Money
London-based lender Pepper Money plans to obtain a banking licence. The firm was founded in 2015 and offers residential and buy-to-let mortgages exclusively through intermediaries.
Pepper Money says its mortgages are for “clients whose needs are less straightforward”, such as “those with credit blips, the recently self-employed, a complex income, young credit history, or previous financial difficulties”.
In preparation for the banking licence, in 2018/2019 the company started building its treasury function from scratch, including anti-money laundering (ALM) processes, internal liquidity adequacy assessment processes (ILAAP), and internal capital adequacy assessment processes (ICAAP).
Picnic Bank
The UK start-up is focused on “fintech for good”. It intends to launch its small and medium-sized enterprise (SME) lending platform and payment cards in September 2020, before rolling out its fully licensed banking service sometime in 2021.
In June 2020, the fintech was raising £5.5 million, intending for £3.5 million going towards its licence and bank building operations, whilst the remaining £2 million would be lent out to SMEs straight away.
The lending platform is an unusual mixture of institutional investments and crowdfunding, and will rest on white-labelled technology – CEO Zoe West said the start-up was looking at Tribal Bank for this.
The fintech’s advisory board includes former Swift board member, Tony Fish, ex-RBC/Coutts exec, Mark House, and eToro’s managing director, Iqbal Gandham.
Once the bank is built, the start-up will look to offer three account tiers focused around eco-friendly living, overdraft help and debt rebuilding.
After the start-up has set up shop in the UK, it plans to go straight to the Netherlands and the Nordics, before launching in Brazil, India, and Mexico.
Pockit
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.
RCI Bank
A subsidiary of France’s RCI Bank and Services (RCI Banque; formerly known as Renault Crédit International), RCI Bank was launched in the UK in 2015. In March 2019, it obtained a full banking licence.
RCI Bank is based in Rickmansworth, Hertfordshire. It focuses on the savings market and offers two products: a fixed-term savings account and an easy access savings account. It provides its services via digital channels and also has a call/support centre
The bank employs 300+ people and has over 75,000 savings customers.
Its CEO, Jean-Louis Labauge, explains the UK banking licence is an opportunity “to strengthen our roots in the UK” and assures the bank is “committed to being here for the long term”.
Rebank
Founded in January 2018 and becoming a Y Combinator graduate the same year, Rebank offers a platform which can consolidate real-time money transfers across multiple connected bank accounts held by businesses into one place and be used to initiate payments.
The start-up charges a subscription fee for its business customers to use the service starting at $50 per month.
In December 2019, the challenger secured a $2.8 million seed funding round led by long-term tech investor ADV.
Recognise
A new bank for SMEs, founded by Jason Oakley, the former MD of Metro Bank’s commercial and mortgages lending business. According to Oakley, the name “Recognise” is designed to “reflect the lack of recognition and dedication to SMEs from the big banks” and “no relationship, no contact, no recognition of the vital role they play in our economy”.
The bank runs a variety of services from cloud banking firm nCino, including biometrics, video conferencing, due diligence checks, and open banking initiatives, as well as the vendor’s Bank Operating System.
It also signed for Mambu’s core banking system, supplied on a hosted (cloud) basis.
The bank applied for a banking licence, and expects to open for business in 2020.
Redwood Bank
An SME bank challenger that received a banking licence in spring 2017 and opened for business later that year.
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.
Revverbank
Revverbank is a Manchester-based new bank for regional businesses and savers in the UK.
In July 2019, it selected Finastra’s Fusion Essence in the cloud to power its end-to-end core banking capabilities, underpinned by Microsoft’s Azure platform.
Revolut
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 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, although it also offer premium accounts and services, which come with a fee.
It’s “the only account for your global lifestyle”, the company says. Revolut is “beyond banking”.
In 2017, Revolut applied for a European banking licence. In December 2018, it received a “specialised” European banking licence, facilitated by Lithuania’s central bank. It also then unveiled plans to receive licences across multiple countries worldwide.
In April 2018, it raised an additional $250 million in Series C funding, which saw the fintech valued at $1.7 billion – a five-fold increase in less than a year. Later that year, it unveiled plans to raise $500 million in a Series D round.
Earlier in 2018, it fully launched its open API – allowing users to integrate Revolut for Business accounts with third party software and in-house systems.
On the regtech side, it works with ClauseMatch and BearingPoint.
Over the last year, Revolut was rocked by compliance and culture criticisms, and saw a senior management shake-up, including the departure of the CFO and the appointment of a new CRO.
Samie
Samie Bank is a London-based challenger with plans to tap South Africa, the US, and wider Europe.
It is currently developing its platform ahead of a far off 2025 launch.
Unlike most challengers, Samie is waiting for a full banking licence instead of operating initially on an e-money licence and partnering with a licensed bank.
Its product suite will address personal and business banking, multi-currency transfers, investing, and insurance.
Founded in 2015 by Luqmaan Samie, the start-up claimed it hit the 500,000 future customer mark in mid-2019. It also claims to have £589 million in future deposits.
Of this half a million, 356,891 will supposedly be personal account holders, 117,217 will be business account holders, and 25,892 will be investment and insurance customers.
Shawbrook Bank
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.
Soldo
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.
Starling Bank
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. The following year, It announced its first international location, Ireland.
In 2019, it unveiled its new product – a dual currency card with allows personal and business customers to spend in pounds and euros through one debit card.
On the technology side, 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.
In February 2019, Starling became one of the three recipients of the funds of Pool A Capability and Innovation Fund, set up by the RBS Banking Competition Remedies. It received £100 million.
In June 2019, the bank partnered with PelicanPay and newly launched paytech, Tribe, to provide more businesses with the latest payment services.
By autumn 2019, the bank had raised £263 million in funding/investment, with the latest round of £30 million announced in October. It also said it was nearing a one million customer milestone (of these, around 80,000 are businesses) and £1 billion in deposits.
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.
Sumo
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.
sync.
The start-up is consolidating fintech services such as open banking, cross-border transfers, security and reward-linked current accounts. In addition to the UK, it hopes to tap the entire European Economic Area (EEA).
As well as managing all their bank accounts under one roof, users can also spend via a sync. bank account connected to a debit card. This is powered by Global Processing Services (GPS).
The card’s invisible strip allows users to change their CVC security code as many times as they want. They can also create virtual cards for online shopping, much like disposable card issuer Privacy.com.
Users can send other sync. users – at home or abroad – money for free. There is also a marketplace which offers cashback deals from the likes of Booking.com, linked to users’ sync. bank account.
In August 2020, it revealed a £5.5 million investment from unnamed investors, which counted as both pre-Seed and Seed stage funding round.
Tally
Tally, the banking app offering a currency equivalent to milligrams of gold, launched the second version of its app and current account in January 2020. The new accounts are connected to the UK Faster Payments (FP) network.
Initially known as Lionsgold, Tally is a stable coin which is linked to the physical commodity, gold. This means it is not a cryptocurrency, because it’s linked to a tangible rather than a digital asset.
Tally now defines itself as a “reserve banking platform and physical asset currency that operates with the fiat currency fractional-reserve banking system”. The system keeps customers’ savings on its own platform, and says it gives consumers “full ownership and control of their money” because the physical gold attributing value to it is held outside the banking system.
“Tally is money designed to hold its value over time rather than being devalued by inflation, and to be protected from bank lending and systemic risk,” says co-founder and CEO Cameron Parry.
One Tally equals one milligram of gold which is stored in a “secure vault” in Switzerland according to the challenger bank. British sterling and euros can be converted into the Tally currency at the global spot price and customers can spend it through a Mastercard-powered debit card.
The neobank says there are no foreign exchange (FX) fees when using Tally abroad and ATM withdrawals are free. Users can send Tally through peer-to-peer transactions, and it can also be converted back into pounds or euros.
It costs users a monthly fee of 0.1% of the average monthly holding to use Tally. The fintech says the charge covers storage, security, insurance and operational costs.
Tally initially launched its beta app in June 2019, and now hopes to add additional features such as savings “safes”, statements and the opportunity to “gift gold”.
Tandem
Tandem was founded in the UK in 2013 by Ricky Knox (CEO) and Michael Kent (who now holds a non-exec role; he is also a founder of money transfer company Azimo). In November 2016, it started inviting its community of 10,000 “co-founders” to be its first customers.
The bank’s focus is on helping people manage their money rather than on direct product sales, according to its founders. It offers savings, cards and loans products.
In addition to the digital delivery channels, Tandem has a “brick and mortar” call centre to deal with customer queries and more complex transactions.
The bank’s journey hasn’t been smooth. In early 2017, UK retail chain House of Fraser pulled its planned £35 million investment, resulting in the existing investors pumping £3.6 million emergency cash into Tandem (in return for a hefty discount for Tandem’s shares). Tandem also had to give up its deposit-taking banking licence, which it acquired in 2015.
In 2017/18, it acquired a small UK-based bank – Harrods Bank – which brought £80 million of capital from Harrods’ current owners and a new banking licence. It also bought Pariti, a UK-based money management app with around 95,000 users.
For its technology, Tandem uses Fiserv and its Agiliti platform, 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. However, this is understood to be under review.
In 2019, Tandem announced the migration of its initial IT infrastructure to the Amazon Web Services (AWS) cloud.
It also works with AI tech start-up Personetics for personalised insights and advice, and with Form3, a UK-based cloud technology provider of Payments-as-a-Service processing for banks and financial institutions.
In 2019, it announced the migration of its initial IT infrastructure to the Amazon Web Services (AWS) cloud.
Also in 2019, it unveiled its plans to expand to Hong Kong. This would be the first overseas location for Tandem. The announcement follows from the earlier $15 million investment by Convoy Global, a Hong Kong-based financial adviser.
Thinkmoney
Thinkmoney is a digital banking services provider based in Manchester. Its main product – the thinkmoney Current Account (which comes with a Mastercard prepaid debit card) – is designed to help customers budget well and stay on top of their finances.
The account automatically splits customer’s money into two separate pots – one for bills and one for spending money. It uses information about customers’ incomes and Direct Debits to ringfence the money they need for bills and other important payments. The money left over is then available to spend on the customer’s debit card.
Thinkmoney released new customer-facing digital services in 2019 in collaboration with low-code provider Outsystems. This allowed the company to launch a new mobile app with 13 more features than its predecessor after just 14 weeks of development.
For its back-office processing, Thinkmoney uses Fiserv’s Signature core system.
Tide
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.
In early 2019, Tide announced a deal with ClearBank (see entry above) for its clearing and payments infrastructure.
In H2 2019, Tide received a £44 million investment from Japan-based SBI, bringing its value to £200 million. By then, Tide had 150+ employees and 100,000+ members.
It also released its first paid plan – Tide Plus – offering SMEs working hour phone support, a 24 hour legal helpline and 20 free transfers a month for £11.99 a month.
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.
Together Money
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.
Triodos Bank
An ethical bank with HQ in Bristol, UK. It is part of a Dutch ethical banking group, Triodos, and had operated in the country under the EU “passporting” regime since 1995. In April 2019, it converted into a wholly-owned subsidiary company, with its own UK banking licence, in readiness for the UK’s potential departure from the EU.
It also relaunched its current account and as a result (as well as due to increasing awareness of climate change), it has seen a 26% increase in its UK customer base in the last three years.
For its technology, the bank uses the bespoke platform developed for Triodos’ operations in the Netherlands. For regulatory reporting, it has Wolters Kluwer’s OneSumX.
Triodos Bank in the Netherlands uses a methodology, Platform for Carbon Accounting Financials (PCAF), from a group of Dutch financial institutions to calculate the greenhouse gas emissions of loans and investment portfolios. PCAF covers a number of relevant asset classes, including listed equity, project finance, mortgages, commercial real estate, project finance and corporate debt.
The group also has banking activities in Germany, Spain, Belgium and France.
TruFin
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).
U Account
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.
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.
United Trust Bank
United Trust Bank is a specialist bank offering a range of secured funding facilities for individuals and businesses and deposit accounts for individuals, businesses and charities.
It describes itself as “an entrepreneurial and pragmatic specialist lender”, providing asset finance, professional loans, bridging finance, development finance, specialised mortgages and structured finance.
The bank’s history dates back to 1955. It was bought out in 2003 when it had just ten staff and a balance sheet of around £20 million. Today, it has a balance sheet in excess of £1 billion and nearly 200 staff.
For its technology, the bank uses the Aurius core banking system supplied by local vendor Sword Apak.
Unity Trust Bank
Birmingham-based Unity Trust Bank provides specialist banking services to trade unions, charities and other organisations that operate in the not-for-profit sector in the UK. It also services profit-with-purpose businesses.
The bank was founded in 1984, with a vision “to enrich society as a whole”. Historically, it was majority owned by individual trade unions and federations (73%), and Co-operative Bank (27%). It became a fully independent bank in December 2015, when it bought back the share from the Co-operative Bank and raised £8 million in new share capital.
In 2012, it committed to a new “double-bottom line” strategy, assessing sustainable financial returns alongside social impact.
The bank states it remains true to its founding principles and its ambition is to become the bank of choice for socially minded organisations in the UK.
For its technology, Unity Trust Bank is a long-standing user of Sword Apak’s Aurius core banking system.
Ursa Finance
A challenger based in Manchester, set up in 2017. The bank does not have a banking licence yet and is not operational.
Once launched, it will focus on business banking.
The bank looks to “humanise” its operations rather than focus on complete automation. It explains: “We have seen more and more banks treat business customers like numbers instead of people. We have seen more and more automated messages, automated decisions, automated rejections.
“At Ursa, we feel that when you pick up the phone, you should be answered by a person who knows your name and understands your business. We feel that decisions should be made by people, with both numbers and relationships in mind.”
Viola Black
A start-up based in Wales. Viola Black is not a bank, it’s a money management app and a prepaid Mastercard card.
It is expected to launch in early 2019. It will offer the usual money management app features – such as tracking day-to-day budgeting, send funds overseas and digitally store receipts.
There is a monthly fee of £4 for using the account.
Viola Black is part of the Viola Group, a privately held company that was first established in Vienna in 2012. Now it has offices in the UK, US, Dubai, and India, with planned expansion into Brazil, Canada, South Africa and Australia.
Also in the group is ViolaCard. This has a separate website and offers a prepaid debit card for money transfers, currencies, and money management. The card is issued by AF Payments.
Virgin Money UK (formerly CYBG)
Virgin Money UK is a holding company that owns the Virgin Money banking operations in the UK, plus Clydesdale Bank, Yorkshire Bank and the app-based banking service B (together comprising CYBG). Following CYBG’s acquisition of Virgin Money (a £1.7 billion deal) in summer 2018, the entire group embarked on an enterprise-wide rebrand under the Virgin Money name.
The combined bank offers banking products and services to consumers and businesses. It has six million customers and a balance sheet of almost £70 billion. It is the UK’s sixth-largest bank by assets.
All operations are being moved onto CYBG’s existing core platform, FIS’s Profile. The migration is phased over three years.
A bit of CYBG’s history: it was formed by National Australia Bank (NAB) in February 2016. The two banks’ individual histories date back over 175 years. B was launched in mid-2016, becoming the first major product launch by CYBG since its demerger from NAB.
CYBG was floated on the London Stock Exchange and Australian Securities Exchange in early 2016 and was valued at £1.6 billion (approximately 40% of book value). NAB paid £420 million for Clydesdale Bank in 1987 and £900 million for Yorkshire Bank in 1990.
Vive
Vive says it’s helping those with poor credit scores “revive” their finances. It secured a restricted banking licence from the Bank of England in January 2020 and plans to open for business in the course of the year.
Vive will offer personal loans, a fixed rate savings account and an open banking-based money manager app. Note the lack of a current account offering.
“We want to address a different segment of the market,” CEO Nick Anthony told Altfi. “It’s just not difficult to get a current account, so we want to focus on serving our customers with what they really need”.
Anthony is an ex-Royal Marine officer who went on to spend a year in the Ministry of Defense before joining Barclays as one of its chief operating officers. Before heading up Vive, he also spent years specialising in investment banking and risk advice.
Purposefully “kept very quiet”, the bank was founded back in 2017. Two investors have funded the challenger so far: Turkish businessman Kasim Garipoglu and British financier Robert William Hanson.
VTB
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 opted for Sopra Banking Software’s Sopra Banking Platform, supplied on a hosted basis.
WeSwap
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
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 relaunched 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 also implemented a new core banking system – ERI’s Olympic – to replace its legacy Misys’ Equation core.
Xace
Xace claims to be the first gaming friendly digital bank to land a licence from the Financial Conduct Authority (FCA).
The fintech offers a banking account linked to casinos, bookmakers and gaming operators.
This account link means users can send and receive payments directly, hence bypassing traditional banks in the transaction process.
Active in both the UK and wider Europe, the start-up uses Faster Payments for GBP transactions, and named IBANs via SEPA for Euro transactions.
Xace also provides account solutions for casinos licensed out of Curacao, adding a business-to-business (B2B) element to its offering.
Yolt
Yolt is ING Bank’s UK-based smart money app offshoot, set up by the Dutch bank in June 2017, and had 900,000 registered users by H2 2019.
It is works with simplesurance, MoneySuperMarket, Anorak, Wealthify, Pensionbee and Raisin. The latter partnership was signed in autumn 2019 and links Yolt’s app with Raisin’s pan-European savings marketplace – providing its users access to saving deposit rates from Raisin’s partner banks, directly through the Yolt app.
Additionally, Yolt also announced support for Payvision, a Netherlands-based global acquirer and payment processing platform (in 2018, ING bought a 75% stake in Payvision), and Funding Options, a UK-based small business funding comparison platform (there is also an ING connection as Funding Options launched in the Netherlands in 2019, following investment by ING Ventures).
Zopa
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 was granted the licence in late 2018.
Zopa’s bank offers deposit accounts and overdraft alternatives to borrowers, in addition to the lender’s existing suite of investor and borrower products. It describes itself as the “world’s first hybrid peer-to-peer and digital bank”.
It is understood Zopa’s core banking solution is an in-house development, which took around 50 developers and 18-20 months to complete.
According to Zopa’s CEO speaking at the 2019 Sibos conference, the homegrown solution enabled the bank to do multiple releases a day if required and provided flexibility to launch new products and features “in days rather than months”. The solution is based on microservices architecture, cloud-based (AWS) tech stack, and is mainly on Java and “a bit of .NET”.
The firm received £140 million in funding on the eve of its licence expiring in December 2019, enabling it to continue operations as a bank by meeting the minimum capital requirements.
Some Indian Banks are not listed. Is this because they do not have the licence to operate?
A lot of overseas banks, including Indian banks, operate as foreign branches and do not have a banking licence. Many of them have been in the UK for decades with niche operations targeting a niche customer base (e.g. remittances) and are not considered to be in the challenger banks space.
Hi Tanya,
What definition have you used to describe banks as a challenger, in the context of the list above (e.g. was technology a central theme)?
Thanks
It is a new bank or banking service that is challenging the established players. Technology is not a central theme, although nowadays technology plays a major role, particularly as the majority of challengers are digital/mobile only!
Hi Tanya
This is very well written. Precise yet has depth.
Was wondering if you could expand on what are the top 3 considerations for a bank to choose a core banking vendor. The same would only be applicable to the newer banks since the offshoots of an existing bank would ideally go with the parent’s core banking system.
Thanks!
Umang.
Thanks! I think if a bank has a choice (i.e. not forced to go with its parent bank’s system) then the top considerations should be: future-proof technology (how old is the underlying tech of the solution? How compatible is it with all the digital-driven initiatives of today and tomorrow); functionality/capabilities of the system; and the costs (but it’s important to remember that the cheapest option might not mean the best), including maintenance, further developments and so on.
Hi Tanya,
Would you also able to share similar list or URL for NBFI/companies authorised by UK regulators in last few years.
Regards
Rajesh
Monzo is a well publicised user of Amazon Web Services (AWS). The report states that they utilise their own hardware across two data centres. This might be the case but is not their primary network infrastructure.
Good stuff. How do we get access to regular updates on this challenger bank list? Seeing thru the hype to understand which banks are really doing what they say, is key here.
Hi wanted to check how come ICICI Bank UK PLC is not featuring in the above list.
Good point! Now added to the list.
Great exhaustive work. Would love to see more from you. More interested in online/mobile only banks. Nod of appreciation.
Interested in your view as to when a bank can be considered to have moved from the Challenger category to Mainstream? e.g. Aldermore, now on the LSE – is this still a Challenger, do you think?
Hey,
Your statement about Monzo’s infrastructure is incorrect
> 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 Monzo’s own hardware. There is a team of 16 people working on this.
They host their infrastructure in Amazon Web Services (AWS), and those two data centers are purely for interacting with Mastercard’s systems. Stating there is a team of 16 people working on it is misleading, it leads you to think that’s the whole company – there is possible a team of 16 people working on their platform infrastructure, but their number of engineers is many many more than the number 16.
We’ve updated the article, thanks for the info!
Very good summary of a rapidly changing landscape
I don’t think Centtrip is wholly privately owned. There are a number of investors including capital and venture funds are the shareholder register. I know one of them.
Thanks for the info! We checked and updated the story.
Fantastic article! Just to let you know Contis are not a bank and neither is dozens. They’re both EMI.
Hi Sam, yes, you are absolutely right. The article features companies that provide banking services too (but are not technically banks).
Madam Tanya Veey analytical and informative series.
Pl also arrange for such analysis covering Indian Banks and start up payment system including Universal banks,Payment banks and small finance banks operating im India
We’ve now got a list of challenger banks in India: https://www.fintechfutures.com/2019/09/challenger-banks-in-india-whos-who-and-whats-their-tech/
Excellent list, thank you. Small addition: Zopa CEO confirmed during SIBOS 2019 they had built a core banking solution in-house; said it took around 50 developers 18-20 months to complete so not necessarily cheaper or faster TTM than an off-the-shelf solution would have been – but enabled them to do multiple releases a day when necessary and gave them flexibility to launch new products and features “in days rather than months”; flexible microservices-oriented architecture “enabling pricing in 10 secs”, tech stack AWS + mainly Java and “a bit of .NET”.
Very useful info, many thanks!
What about Modulr? It’s a PaaS and BaaS provider? I would like to see your thoughts on them