U.K. Licenses Second Digital Bank (Dec. 1, 2015)
A new digital banking startup has received a license in the U.K., adding another challenger to the growing ranks of financial services providers seeking to contest the dominance of established banks. Tandem Bank is just the second digital-only bank to earn a license from the Bank of England, following Atom Bank, which was licensed in June. Set to launch next year, Tandem will offer current accounts, payment cards, savings and loans—all through the mobile and Web channels, with call center support. As a licensed bank,Tandem is regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
The U.K. is seeing a boom in so-called “neo-banks,” which provide financial services like payments, money transfer and savings, without a brick-and-mortar presence. Along with Tandem and Atom, London-based Starling Bank reportedly is in the process of ramping up and applying for a banking license next year. Mondo Bank, also based in London, is looking to join the party, too. The U.K. government is getting behind neo-banks, this week establishing a set of support measures, including launching a new regulatory unit for startups and convening an advisory group to review banking competition. Digital banking also has carved out a foothold in the U.S., with providers including Green Dot’s GoBank and Moven among the leaders in the nascent market.