Who are the challengers in the UK banking space and what tech are they using?

Who are the challengers in the UK banking space and what tech are they using?

With so many new banks trying to muscle into the UK banking sector, spurred on by the reduced barriers to entry and calls for competition, Banking Technology wonders: will this boom be followed by a bust?

In the meantime, make hay whilst the sun shines! Here is our guide to who’s who in the UK challengers space, and what technology they are using.

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 just opened for business. 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; WDS Virtual Agent for customer queries supplied by WDS (a subsidiary of Xerox); and Phoebus Software for lending. Atom Bank has also recently 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.

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.

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.

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.

The company started off as a prepaid card business but has moved into current accounts. It offers a no-frills account (and a debit card) and does not carry out credit checks on the applicants. It is now awaiting a banking licence, Banking Technology understands. Ironically, Ffrees describes itself as an “Unbank”.

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. Fidor commenced its operations in the UK last September.

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.

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).

Mondo (now Monzo)
This start-up 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 the bank’s own hardware. There is a team of 16 people working on this.

An established mortgage specialist, Masthaven Finance, has just received a banking licence. The new bank is penned for launch this summer. It 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 an excerpt. The full article is available in the May 2016 edition of Banking Technology. Click here to view the magazine online.

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