Chetwood Financial, which is backed by UK hedge fund Elliott Management, is the latest challenger bank to be granted a full UK banking licence.
The licence award follows a £40 million cash injection from Elliott, part of a £150 million equity commitment made in 2018.
Chetwood launched in late 2016 with a consumer lending product, LiveLend Reward Loan, which amends its lending rates as customers' credit rating improves. It will now look to launch a savings product before the end of Q1 2019.
Based in Wales, Chetwood's CEO and co-founder Andy Mielczarek claims that the newly licenced bank will differentiate from its rivals through the use of data science and technology to offer banking products to specific customer groups currently underserved by traditional banks.
Mielczarek, a former deputy head of HSBC's UK retail bank, also believes that Chetwood's Welsh base and cloud-based platform Yobota has lowered its operating costs in comparison to other challenger banks.
The bank is also looking to move away from the traditional "owning customers" banking model says Mielczarek. To this end, it will partner with existing companies to distribute products rather than rely solely on its own brand and it will also look to licence its core banking platform to other banks.
No financial figures have been released by Chetwood since it began lending in February 2018 but Mielczarek told the Financial Times that the company is "extending millions a week" in loans and expects its balance sheet to extend into the "hundreds of millions of pounds" later this year.
He also forecast that Chetwood will become profitable within 18 to 24 months and self-capitalised within three years.
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