Bespoke bank for SMEs granted banking licence | moneyfacts.co.uk

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Derin Clark

Derin Clark

Online Reporter
Published: 11/09/2019

Allica, a bespoke bank for SMEs, has been granted a banking licence by the Prudential Regulation Authority (PRA) and will be dually regulated by the PRA and the Financial Conduct Authority (FCA).

The bank, which has the aim of enabling SMEs to advance their business by providing tailored support and financial expertise, is currently planning for a full launch of its products. It is expected to offer small business owners a range of products including loans, savings, payment services and asset finance.

Commenting on gaining the banking licence, Mark Stephens, chief executive officer at Allica, said: “The banking licence is an important milestone in our ambition to offer SMEs a genuine banking alternative. We built Allica specifically for businesses to realise 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. I’m very much looking forward to the next exciting phase of launch."

Business banking market

Allica will join a competitive business banking market in which there are already many providers offering savings, loans and other business banking services to customers. The business savings chart is currently being topped by Cambridge & Counties Bank offering 2.50% on its 5 Year Business, Trust and Charity Bond Issue 5 on a £10,000 deposit. The business loans chart also includes many well-known banks including Bank of Scotland, Barclays Bank UK, HSBC and Lloyds Bank. This means that it will make it challenging for Allica to make an impact within these charts, however its bespoke offering to SMEs could help it to stand out from the competition.

Rachel Springall, finance expert at Moneyfacts.co.uk, said: “It’s encouraging to see a new brand granted a licence to enter the banking arena, particularly at a time of economic uncertainty. SMEs may well be looking at alternative brands that can provide them with a more tailored service, so any new competitor to enter the market is positive.

“As we can see from the present rate tables, challenger banks are offering some of the most competitive savings rates for business deposits, so the more unfamiliar brands are worth considering.

“If Allica were to offer a business bank account with a competitive tariff, it would be a welcome addition to the market, which is dominated by high street banks. Even if this was a digital offering, it may still suit SMEs who prefer to use digital platforms for their businesses – especially if they offer something innovative. The business banking market is clearly becoming broader thanks to the challengers weighing in to get a slice of the sector and competition is good news to SMEs.”

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