ClearBank has become the first clearing bank to enter the UK market in more than 250 years.

ClearBank® is regulated and authorised and is on track to open its doors in Autumn 2017 to financial services providers, FCA-regulated businesses and Fintechs that require access to UK payment systems and core banking technology to support current account capabilities.

The announcement was made on February 28 at a press conference attended by Simon Kirby, Economic Secretary to the Treasury.

Free from the constraints of legacy technology, built on a combination of public and private cloud infrastructure, ClearBank delivers open access to payment, current account and transactional clearing services. Financial services organisations, from banks and building societies through to new challenger banks and Fintechs, will be able to process payments and offer new competitive transactional banking services more cost effectively, efficiently and quickly than ever before possible.

Principal clearing banks move money between different individuals and organisations via UK payment systems such as Bacs, CHAPS and Faster Payments. They are often the only banks providing agency banking services that have full and direct access to all of the UK payments infrastructure. The majority of banks and financial services providers must use agency banking services from a clearing bank to process payments or offer current account and sort code based services.

Before ClearBank, there were four principal clearing banks: Barclays, HSBC, Lloyds and Royal Bank of Scotland. ClearBank is the fifth UK clearing bank and the only one that does not offer services direct to the consumer. As a result, it offers a truly neutral and independent banking service to the financial services market and does not compete with its own customers.

ClearBank was founded by Nick Ogden, fintech entrepreneur and founder of WorldPay, who is Executive Chairman at ClearBank. Former CFO of RBS Ulster Bank and CFO of Royal Bank of Canada Europe and Asia, Charles McManus, is ClearBank CEO and leads an executive team of high-profile industry figures including Chief Financial Officer Marc Jenkins; Chief Risk Officer Steve Barry; Chief Technology Officer Andrew Smith; and Chief Governance Officer Philip House.

Nick Ogden, ClearBank Executive Chairman, said, “There are thousands of new fintech startups and challenger banks improving choice, but the industry will never truly move forward while it’s constrained by the challenges of legacy operational structures. ClearBank was built specifically to create competition and aims to change the market dynamics radically. Figures from the Cruickshank Report indicate that, with the improved efficiency delivered by ClearBank’s built-for-purpose technology, between £2bn and £3bn could be saved from the annual costs that are paid for transactional banking in the UK. This represents a substantial boost to the UK economy delivering better operational processes without any impact on the way that commerce is operated in the country. We are delighted to share the result of more than three years of regulatory, operational and technology efforts, bringing true competition and a new level of transparency to UK banking. That is the ClearBank difference.”

ClearBank CEO Charles McManus said, “There are two things that make ClearBank unique. Firstly, ClearBank is the first UK clearing bank to offer services that intentionally complement its customers’ market activities, driving choice and competition in the wider market. From our own customers through to the consumers they serve, we believe the benefits ClearBank offers will help develop greater choice, and more inclusive service offerings. Secondly, we’ve built ClearBank on cloud technologies from the ground up, meaning that our customers can access faster, more efficient and more cost-effective solutions and payment processing. It’s our mission to bring open competition, transparency and efficiency to the agency banking services market. The right technology and regulatory environment and demand for open competitive pressure now exist to support us in achieving that aim.”

Simon Kirby, Economic Secretary to the Treasury, said, “I am clear that UK financial services should be the most competitive and innovative in the world, which is why we are creating the right environment for new banks to enter the market. That is why I am so pleased to see ClearBank launch today – it will play an important role helping challenger banks access the services they need to do business, so they can compete effectively with the big players and deliver the benefits of greater choice and value for consumers and businesses.”

ClearBank’s leading edge technology platform has been built on a combination of public and private cloud infrastructure. It is specifically designed to handle core banking, clearing and settlement services, in a ground breaking partnership with Microsoft and other technology providers. Built from the ground up on Microsoft’s Azure cloud platform, and benefiting from Microsoft’s cyber security shields, ClearBank has been developed to meet the needs of the UK banking market now and in the future.

Cindy Rose, Chief Executive of Microsoft UK, said, “By embracing Microsoft’s cloud services, ClearBank is rewriting the rules on how financial services can be delivered in the UK. Through the power of Microsoft Azure, ClearBank has been able to create a robust banking infrastructure that is able to overcome substantial barriers to entry in a fraction of the time it has traditionally taken, and at minimal cost. Furthermore, by utilising Microsoft’s UK data centres, not only can ClearBank be confident that it has access to cloud services that offer world-class reliability and performance, it can also be assured that its data residency and regulatory requirements are fulfilled.”

ClearBank secured an investment of £25M from PPF Group and CFFI Ventures in addition to investments from the founding management team. All members of the ClearBank team participate in a share programme.

The ClearBank graduate programme, which screened more than 3,000 applications when it was launched late last year, has already started with six graduates in house and offers a two-year Professional Retail Banking Certification.