UK regulators set up unit to help bank startups
20 January 2016 | 7190 views | 0
Britain's financial watchdogs have set up a unit designed to help the country's slew of new challenger banks navigate the regulatory waters and win approval to take on the high street giants.
In the wake of the 2008 financial crisis, the government has pushed to create competition in the UK retail banking market, which has long been dominated by a handful of too-big-to-fail behemoths.
In the last couple of years, a host of new digital challengers, such as Atom, Starling, Mondo, Tandem and Secco, have emerged but the process of winning a license and then navigating the regulatory landscape in one of the most highly policed industries in the country is daunting.
In a bid to help new entrants, the Financial Conduct Authority and Prudential Regulation Authority are both contributing staff to a 'New Bank Start-up unit' which has a standalone website, telephone number and email address and will provide information and materials new banks need to navigate the process to launch, as well as resources during the early years of authorisation.
Startups will get named case officers during the authorisation process, access to a helpline, regular capital and liquidity reviews (if appropriate), monthly update emails, and invitations to seminars and events.
Andrew Bailey, CEO, PRA, says: "The New Bank Start-Up Unit builds on the work we have already done to reduce the barriers to entry for prospective banks, which has led to twelve new banks now authorised since April 2013. These new banks are a key part of bringing innovation to the sector, particularly where there is a gap in the market - whether it is the service they provide, the customers they target, the products they sell or the technology they use.
"With the launch of the New Bank Start-up Unit, applicants will now benefit from having a single place where they can get the advice and guidance they need to start a new bank and support once they are authorised."