I’m hoping that if you are reading this blog, you are already aware of ClearBank (https://clear.bank) and have probably read some articles on-line. To be honest, it’s been a lot of hard work and it was great to finally watch Nick Ogden, ClearBank Chairman, up on stage announcing the official launch of ClearBank on Tuesday.
The title of this blog says it all in some ways. In recent years, we have seen a lot of challenger banks being formed in the UK, partly due to the increase demand for competition from us, the consumer, and partly because of the hard work put in by the regulators to encourage the creation of banks. However, it’s been 250+ years since a new Clearing bank was formed. 250 years! When you think of all the changes this planet has seen in those 250 years, changes such as the first train journey in 1804, the invention of the bicycle in 1816, how about the wright brothers first flight in 1903, and then two of my favourites, 1959, the first man in space and what about the first commercial use of the Internet in 1995, it’s almost unbelievable that there hasn’t been a new clearing bank in that time.
In the UK, until the launch of ClearBank, the UK had just 4 fully fledged Clearing Banks. Back in the 60s, that number was at 16, but due to strategic takeovers, market consolidation, the UK has found itself with just 4, until now, 4 has become 5.
What’s the difference?
You may be thinking what’s the difference between a challenger bank and ClearBank, or a clearing bank in general? Well its quite simple, banks that aren’t clearing banks rely on one of the clearing banks to provide them with some level of clearing services/accessibility to the UK payment networks. That’s every bank you can think of that operates here in the UK with the exception of the big 4, Barclays, HSBC, Lloyds and RBS. That means every bank and FinTech relies on those banks, and therefore those banks IT infrastructure, those banks integration services, operational processes oh and the fact that they are ultimately competitors.
ClearBank is utterly different. The focus is on providing access to clearing services, access to UK payments networks and core banking services to other banks, regulated organisations and FinTechs. The bank isn’t aimed at the consumer banking space, so ClearBank isn’t competing with its customers for customer accounts. The banks entire infrastructure and services have been purpose built, built now on todays technology ready for customers to utilise. As a FinTech, bank or other regulated business, you can finally connect to clearing services and the UK payments network through technology that is designed with this century in mind, via RESTful based services, through a proper SOA! This means ClearBank will be helping FinTechs innovate. As a previous FinTech entrepreneur myself, I know all too well just how restrictive legacy IT from your bank can be, how frustrating it is to your ability to innovate. It’s so frustrating to have an idea, a vision, but to realise that someone else’s technology stops you from being able to deliver.
The impact?
ClearBank will help and encourage market competition, it makes it easier for institutions to access clearing services, it makes it easier and drastically reduces the costs involved for institutions to offer their own current account services, and it makes it drastically easier for FinTechs to innovate and build on banking services that are fit for the 21st century.
The impact is simply massive on the financial services industry, and massive to how banking will be delivered in the UK over the next few years.
Find out more….
If you haven’t done a basic search for ClearBank in your news feeds, Bing, Google or even on Twitter then do so. There are hundreds of articles now available on-line for you to read at your leisure. However, you can learn pretty much everything you need to know from the ClearBank website, https://clear.bank and this short video….Enjoy…
Andrew Smith CTO 
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