The financial industry is experiencing a shake-up on a permanent basis these days. New fintechs and financial institutions are challenging the status quo and giving established companies a run for their money. Some are information-based, such as Algomi investment software offerings, and others are more finance-based, such as ApplePay. Some say that the real power to change the system though, lies in banking.
In February 2017, the 12 clearing banks in the UK were joined by a 13th – ClearBank. This is the first new, purpose-built clearing bank to be created in 250 years. Nick Ogden is the brains behind the venture. He has spent 3 years putting together this multimillion pound project, which includes all the UK payment systems – Faster Payments, BACS, and CHAPS.
Other team members on the board at ClearBank include CEO Charles McManus, CFO Mark Jenkins, chief risk officer Steve Barry, CTO Andrew Smith, and chief governance officer Philip House. This brings a wealth of experience to the table and drives their credibility. They are some of the main investors in the banks success. ClearBank also secured £25 million from PPF Group and CFFI Ventures.
What makes ClearBank different?
ClearBank will cater to financial institutions, fintechs, and banks. They will not service the public. They employ purpose built technology that uses the Microsoft Azure Cloud system.
This is indicative of a general change in the market that is likely to see significant investment. Algomi CEO said this of cloud technology:
“But using trading tools that are inherently flexible by virtue of their cloud credentials also has significant business continuity benefits. Ultimately, it greatly minimises the risk of system outages and disruption when upgrade work takes place; an advantage that reduces IT risk.”
Algomi investment software innovator, Usman Khan
Ogden claims that “With the improved efficiency delivered by ClearBank’s built-for-purpose technology, between £2 billion and £3 billion could be saved from the annual costs that are paid for transactional banking in the UK”. Given this estimation, ClearBank could be the first truly competitive bank to enter the market in a long while, ClearBank could be unlucky for some of the existing behemoths like RBS, HBOS, and Lloyds.