Challenger banks are setting the pace when it comes to offering the best interest rates and there are some new names expected to join the fray in the coming months. Here, we give you the lowdown on the ones to watch:
CivilisedBank is the latest of the challengers to receive its banking license and is offering both personal and business banking, but with a bit of a difference.
The bank will not have branches like the traditional high street set-up, instead you will have locally-based bankers who visit customers at their premises. Each of these bankers will also ‘take an oath’ – The Bankers’ Oath - to put the customer’s needs first.
So far, it has nothing available in terms of accounts – but CivilisedBank aims to start serving customers in early 2018, so watch this space.
Redwood is focusing primarily on small and medium-sized businesses in the UK and has been backed to the tune of £30m by Warrington Borough Council, which reportedly has a 33% stake in the company that owns the lender.
Although it is not yet offering products to customers, it has a team of heavy hitters behind it. Its director of Marketing & Savings is Kelvin Godhard, who led the development and launch of RCI Bank, the start-up challenger bank owned by Renault’s global banking group.
Its co-founder and non-executive director is Jonathan Rowland, the famous property developer who has been partly responsible for the Rowland Family businesses over the last 25 years and was involved in the restructuring and recapitalisation of Kaupthing Bank Luxembourg, which is now Banque Havilland S.A.
Although the company is based in Hertfordshire, it is reported to be opening a branch in the Warrington area.
Monzo finally got its full, unrestricted banking license on 5 April this year and is in the process of bringing current accounts to its customers, initially via a small group of users who are running ‘live’ accounts.
It expects to expand the number of customers over the summer, but Tom Blomfield, CEO of Monzo, says this is a “process we will be taking quite slowly”.
It has already signed up to the Women in Finance Charter and plans to have at least 40% female representation in both its Executive Committee and its board by 2020.
Amicus already has a pedigree in finance, having lent more than £950m in short-term property loans to SMEs and providing working capital, but it has also now applied for a banking license to enable it to take deposits and diversify its funding sources, which will help its future growth.
Amicus is led by John Jenkins, the former head of GE’s UK financial division and hopes to attract older retail savers with notice and term-style accounts. It may also offer bonds and will consider an ISA product, Mr Jenkins is reported as saying.