New UK banking licences since 2013
(Updated May 2018)
New banks are being licensed in the UK. Most of them are boutique or corporate, but there are some interesting ones on the retail side. FCA in July 2015: “It brings certainty for these firms and as a result 14 new banks have been authorised in the UK since 2013. Another 20 are in the pre-application stage.”
New licences since 2013:
- early 13? - Goldman Sachs - private banking
- Apr 13 - Axis Bank UK - corp banking for large cos and buy to let lending
- Sep 13 - FCMB (UK) - corp/institutional banking and Nigerian equity stockbroking
- Sep 13 - UBI UK, now Union Bank of India UK
- Feb 14 - Paragon - loans and savings. Parent co is a buy to let lender. See also.
- Feb 14 - UBA Capital (Europe) - corp/institutional banking and African equity stockbroking etc
- Jun 14 - Hampden (previously named Scoban) - private banking
- Jan 15 - Charter Court Financial Services - savings, has 0.5bn deposits, parent co does mortgages
- Mar 15 - Oaknorth, now Oaknorth Bank - lending to businesses and property development finance
- Jun 15 - Crossco, now Atom. Has 135m in capital, 45m of which from BBVA in Nov 2015. Launching Dec 15 according to their marketing emails.
- Jul 15 - Habib AG Zurich UK - corporate (and private?) banking
Nov 15 - RNM Financial, trading as Tandem - looks like it will be a digital-first bank like Atom etc. Their announcement here.Cancelled in Apr 17 after they changed business model, but have since returned in Jan 18.
- Nov 15 - Ikano bank - sister company to IKEA.
- Apr 16 - Masthaven Bank - savings, (bridging loans?,) mortgages, digital only, aims to launch summer 2016.
- Apr 16 - First Global Trust - “a simple, narrow wholesale bank”, non-retail banking for investors like pension funds and insurance cos.
- Jul 16 - Starling Bank - “It hopes to launch in January 2017, and plans to offer only one product — a current account”, and which, like Atom, is excited about its logo. “A smarter bank for an ever-changing world”. Raised 48m capital in Jan 2016.
- Aug 16 - Monzo bank, previously called Mondo - “Finally, a bank as smart as your phone”. Notable for having already launched a service (1m spent by 3,000 testers in 4 months using pre-paid debit cards) and having crowdfunded 1m in under 2 minutes in March 2016. Has since grown to 30k pre-paid cards in use and is working more openly than most other neobanks.
- Sep 16 - BFC Exchange - money transfer and currency exchange.
- Apr 17 - Redwood Bank - “The future of banking is Civilised” - banking for SME businesses.
- May 17 - Civilised Investments Limited - banking for SME businesses. Though in April 2018 it said it would cancel its licence to give its technology platform “more time”.
- Jul 17 - Lloyds Bank Corporate Markets Plc - non-ringfenced investment banking subsidiary
- Jul 17 - HSBC UK RFB Limited - don’t know what this one will do. Perhaps the same as the Lloyds one above.
- Aug 17 - SBIUK Operations Limited, renamed State Bank Of India (UK) Limited in Sep. Retail and corp banking.
- Dec 17 - Chetwood Financial Limited - vague but “design and manufacture digital products across financial services [for] customer segments that are currently underserved by the market”.
- Dec 17 - Baroda (UK) Operations Limited - retail and corp banking, “India’s leading Public Sector Bank”.
- Jan 18 - Tandem bought Harrods Bank (which had a banking licence) and has rebranded (see 12 above).
- (I’m trying to find the lists for Feb and Mar 2018. Apr-May 18 - no new ones.)
Of the new retail banks, Atom, Monzo, Tandem, Starling have launched products. And obviously some (several?) already-licensed banks will launch new services and approaches to banking (Shawbrook, Aldermore, Renault-owned RCI Bank etc).
Applying for a new UK banking licence:
- Virgin money
- Ipagoo - “freestyle banking”(!). Currently “authorised and regulated by the FCA in the UK as an Electronic Money Institution and as such is excluded from the Financial Services Compensation Scheme (FSCS)”
- Burnley Savings and Loans (aka “Bank on Dave”).
- Lintel, ”our target market is migrants, anyone coming to the UK”
- Tide small business banking
- 20 or so others?
Not applying for UK licence (?) but new and interesting:
- Fidor - German, internet banking with a community emphasis. Deposits not protected by UK’s FSCS but by Germany’s EdB.
- Holvi - Finnish banking/payment service for businesses, has ”Payment Institution Licence authorised for operations across Europe by the Financial Supervisory Authority of Finland (FIN-FSA)”
- Monese - “banking on demand”
Some of these may trade in the UK with European licences and deposit guarantees.
Who or what wins?
Possible dimensions on which 20+ new banks may be compared with several existing banks: capitalisation, deposits or number of customer accounts (Jan 18), product breadth (current, saving etc), product quality, product value (market-leading deals), open-ness (Monzo), quality of insight/data provided to user, technology stack (Monzo and Lintel building their own?), brand/voice (Monzo and Tandem), quality of marketing. But probably not: logo (Starling, Atom). Expect a fair bit of consolidation in the next few years. Perhaps BBVA will buy the rest of Atom, and so on.