Tide rides with ClearBank on UK SME banking market hunt
With Tide’s support, ClearBank has applied for a grant from Pool A of the Capability and Innovation Fund that forms part of the £775 million RBS Alternative Remedies Package, a government-backed competition.
Tide will provide the customer facing side and its digital banking platform, while ClearBank brings its payments infrastructure as they seek to be a “genuine alternative to the high street banks”.
Oliver Prill, CEO of Tide, says: “The RBS Alternative Remedies Package is a golden opportunity to inject competition and innovation into the business banking market. Banks have traditionally viewed serving SMEs as a marginal and low-revenue activity, which is why they have terrible customer satisfaction ratings.”
If the bid is successful, the funds will be used for a variety of plans.
One is to improve the “perceived difficulties” for SMEs to open a new business current account (BCA). Tide reckons opening a BCA is typically a “lengthy and cumbersome process, fraught with the danger of things going wrong and payments being missed”.
It says 4% of SMEs switched their business current accounts in the last year, and 0.4% used the “little-known” Current Account Switching Service (CASS) to do so.
Another is what Tide thinks is a “low awareness of alternative offerings to the high street banks”. It may want to consider advertising.
Anyway, according to Tide, in less than two years, it has gone from zero customers to a 1% market share of the UK’s 5.6 million SMEs, with a new business signing up every eight minutes.
FinTech Futures understands that ClearBank has onboarded around 20 clients, and is growing rapidly. Known clients are Ecology Building Society, Allpay and Transactive Systems.