Yet another challenger bank is slated to launch in the U.K.
Diaspora, based in London, has trade finance at the center of its operations as it looks to address the friction of collaboration between buyers, sellers and financiers across borders. Reports in FinTech Futures on Friday (Feb. 15) said that it will target small- and medium-sized businesses with an array of trade finance products, including factoring.
The publication noted that Diaspora also has locations in the Netherlands, though exact details on the firm's launch data remain scarce.
The U.K.'s challenger banking market continues to grow, as more FinTechs pursue licenses in the small business banking space. Last week, two challenger banks secured fresh funding from investors: Starling Bank, which raised nearly $77 million, and OakNorth, which secured $440 million. Both target small businesses in addition to consumers.
In January, another challenger bank, Countingup, launched operations in the U.K. with a focus on freelancers, sole traders and independent contractors. Countingup offers a digital financial services platform that aims to provide a better service fit for these professionals, which have otherwise been too small to use corporate banking products and have been forced to use personal accounts.
Competition in the alternative finance and challenger banking space is, in part, the result of regulatory efforts to address concerns over the nation's largest banks after a string of scandals.
Earlier this month, UK Finance Minister Philip Hammond criticized a proposal aimed at enhancing small business financial support as too lenient on large banks. UK Finance is now creating a working group to develop the details of the proposal, which would open up funds paid out to small businesses that file complaints against their banking providers. Critics of the plan said there should not be a cap on those payouts, reports said in January.