UK challenger banks: who is who
With so many new entrants trying to muscle into the UK banking sector, Banking Technology has put together a comprehensive list of the known challengers to date and the technology they are using.
We’ll be revisiting and updating this list on a regular basis. If you have any additions to the list, please get in touch with our editorial team.
Abacus
A digital bank backed by a UK-based private equity firm, AnaCap. The project is in early stages (no banking licence yet).
It is understood that AnaCap is evaluating two potential suppliers: Temenos with its T24, Connect and Insight systems; and Misys with FusionBanking Essence.
Atom Bank
A digital bank that opened for business earlier this year.
It has created a hefty technology set-up in its run up to the launch: FIS’s Profile core banking system; Sungard’s Ambit Quantum and Ambit Focus for treasury and risk management (Sungard is now also part of FIS); 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; and WDS Virtual Agent for customer queries supplied by WDS (a subsidiary of Xerox).
Atom Bank also acquired a local digital design agency, Grasp.
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.
BFC
A subsidiary of the Bahrain Financing Company (BFC) money transfer group. The project went through some stops and starts, but it is understood that the banking licence is now in the pipeline. BFC opted for an outsourced “bank in a box” version of ERI’s Olympic core banking system. The system is hosted by Blue Chip.
British Business Bank
A government-backed bank for SMEs.
Cambridge & Counties Bank
Another bank for SMEs. It is owned by Trinity Hall, Cambridge and Cambridgeshire Local Government Pension Fund. The bank already has a licence and is in operation.
At the back-end, it uses Phoebus Software’s core system, at the front – a solution provided by the now defunct QTS.
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.
Earlier this year, the private equity firm that owns Charter Court has put it up for sale, with a price tag of up to £500 million.
CivilisedBank
A start-up still waiting for its licence. For its software, the bank has opted for a packaged solution from local consultancy firm, Tusmor. It consists of Profile Software’s FMS for core banking operations, Dovetail for payments, Sphonic for risk management and AML, and Aqilla for accounting system.
CivilisedBank will offer business current accounts with deposits, transaction banking, overdrafts, FX, investments, savings and loans.
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.
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.
Fidor Bank
A subsidiary of a high-profile German digital bank. The bank is consumer-oriented and relies heavily on social media. It uses its own in-house developed technology and also licenses it to other financial institutions (such as Penta Bank).
Fidor commenced its operations in the UK last September.
Fidor has recently been acquired by BPCE, France’s second largest banking group.
First Global Trust Bank (FGTB)
A start-up that has recently been granted an “authorisation with restriction” licence to take deposits by the Prudential Regulation Authority (PRA).
It was originally set up under the name of Llamabrook in 2011, changing its name to FGTB in March 2016.
FGTB describes itself as “a simple, narrow wholesale bank”.
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.
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.
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).
Monizo
This start-up is a banking service rather than a fully-fledged bank.
It is planning to launch the “first” banking service targeted solely at freelancers. It will offer a bank account number and sort code.
Among its “unique” features is an ongoing real-time insight into how much tax freelancers need to pay. A future plan could be to “hook that” into the HMRC (UK’s tax collection office) so freelancers can pay bills with ease.
In terms of the back-end technology, Monizo is looking to partner with a Banking-as-a-Service provider.
Monzo (formerly Mondo)
The wait is over for Monzo as it has recently been granted a banking licence. This challenger bank positions itself as a “mobile first” bank. It will be offering a current account with a contactless debit card and a mobile banking app. The mobile app’s standout features are intelligent notifications, instant balance updates and financial management.
It has partnered with Thames Card Technology for debit card production and personalisation.
For banking ops, it decided to build its own platform. Technology used is mainly open source: Linux, Apache Cassandra distributed database (used by the likes of Apple and Twitter), Google’s Go (golang) programming language at the back-end and PostgreSQL relational database. The system is hosted at two data centres in the UK on Mondo’s own hardware. There is a team of 16 people working on this.
Masthaven
An established mortgage specialist, Masthaven Finance, has recently received a banking licence.
Masthaven will offer mortgages and savings products to retail customers that struggle to get service from mainstream banks and lenders.
For its tech, Masthaven is implementing a banking system from DPR Consulting. This is a new product, front-to-back office, aimed at providing a single, integrated solution for savings and lending ops. Masthaven is among its first takers.
Monese
Another start-up targeting expatriates and immigrants, and focused entirely on mobile. It says people can open bank accounts anywhere in Europe on their smartphone with Monese in as little as three minutes. The account comes with a monthly charge of £4.95.
The bank does not hold a commercial licence, meaning that at this time it can’t offer credit or loans. Instead it hopes to offer low-rate international money transfers as well as the ability to hold a number of currencies in the same account. In-store transactions, Monese says, will be free of charge, but ATM services and transfers abroad will come with a charge of 50p.
It claims to have a waiting list of 56,000 potential customers.
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 cloud-based core banking system at the back-end, and the digital platform from Backbase at the front-end. It is the first bank in the UK to have its core banking system in the cloud (Amazon Web Services).
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).
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.
Banking Technology understands that the bank’s deposits operations are outsourced to Newcastle Strategic Solutions, the IT and outsourcing arm of Newcastle Building Society.
Private and Commercial Finance Group (PCFG)
Awaiting a banking licence. 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, PCFG opted for Temenos’ T24 core banking system and Sandstone Technology’s digital banking/customer onboarding tools.
Secco Aura
A digital banking start-up. The bank is very vocal about high street banks being “broken”, “greedy”, too profit driven and unable to keep up with their customers’ lives.
Secco aims to allow customers to send and receive payments via a messaging service. The bank wants to do away with banking apps as well as branches. It hopes that its users will be able to exchange data as well as currency via “payloads” rather than “payments”. For example, a customer can exchange a “Facebook like and a tip” for a busker’s song or pay for their lunch and receive a recipe in return. At the heart of this messaging system will be a location-based financial social network, named Aura.
Secco describes its systems as a reverse cloud, where the data is stored and owned by the customer on their devices, as well as by the bank. “It’s like a safe with two keys. The bank has one and the customer has the other – both must consent to access the data,” it says.
Starling Bank
Another digital start-up with an ambitious plan to target “millions of users who live their lives on their phones”. The bank’s main proposition is a current account.
It has recently received a banking licence and a $70 million investment from Harald McPike, an American quantitative trader.
Starling went through a major management change in 2014/15, when most of the team departed to set up rival Monzo.
Earlier this year, Starling lost its second CTO, Mark Hipperson (who was also the bank’s co-founder). Hipperson resigned as he disagreed on the way forward for Starling. He is now CTO and executive board director at payments services provider Centtrip.
Tandem Bank
Also a digital banking start-up, now with a banking licence (issued in November 2015). Tandem’s focus will be on helping people manage their money rather than on direct product sales, according to its founders. It will offer current accounts, credit cards, savings and loans. In addition to the digital delivery channels, Tandem will have a “brick and mortar” call centre to deal with customer queries and more complex transactions.
For its technology, the bank has turned to Fiserv and its Agiliti platform. Banking Technology understands that Temenos’ T24 and FIS’s Profile were also in the running for this deal. Agiliti is a shared Software-as-a-Service (SaaS) offering, hosted by Blue Chip. It has around 18 Fiserv and partner applications, including Fiserv’s Signature core banking system.
Templewood Bank
A new independent merchant bank, awaiting a banking licence.
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.
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.
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.