The U.K.’s challenger banking sector shows no signs of slowing down as its next entrant, Allica, is cleared for launch.
A press release issued on Monday (Sept. 9) said Allica has secured its banking license by the Prudential Regulation Authority (PRA), allowing the company to launch banking operations under regulation of the PRA as well as the Financial Conduct Authority (FCA).
In its announcement, Allica described itself as a “bespoke bank for SMEs,” targeting small and medium-sized businesses with cash management and working capital tools including loans, payment services, asset finance products and savings solutions.
“The banking license is an important milestone in our ambition to offer SMEs a genuine banking alternative,” said Allica Chief Executive Officer Mark Stephens in a statement. “We built Allica specifically for businesses to realize their aspirations to advance. Allica will offer hands-on support from finance experts who are fully committed to providing each customer with tailored business solutions.”
Stephens added that Allica will now begin its next phase to launch, having also appointed John Maltby as chair of its board of directors.
“The SME market in England and Wales continues to be underserved, and changing customer needs and behaviors mean that existing banking propositions sometimes are less relevant to owner-managers of SMEs,” Maltby said in another statement.
Last month, the Financial Times reported that investors have provided a combined $2 billion to digital challenger banks across the world, totaling 55 funding rounds in the year ending July 31. Customers have similarly reacted with support, having deposited more than $30 million into these companies.
“We’ve reached an inflection point with the consumers’ willingness and readiness to adopt these products and services,” CB Insights Senior Intelligence Analyst Lindsay Davis told the publication.
In the U.K., many of those challenger banks are targeting small businesses rather than consumers, with companies including Tide and Starling investing in their product offering and back-end infrastructure to compete with traditional banks.