CivilisedBank has been given the green light from the City watchdog, paving the way for its launch next year as a digital lender focused on serving small businesses.
The branch-free bank, which will roll out “local bankers” to forge relationships with businesses across the country, has received regulatory approval from the Bank of England’s Prudential Regulation Authority.
Led by former banker Chris Jolly, the digital lender will serve established companies – rather than start-ups – with a turnover of up to about £25m, by focusing on relationship-banking in a model akin to Sweden’s Handelsbanken.
Mr Jolly, who has held roles at a number of banks including Bank of America Merrill Lynch, said: “We’re very clearly of the view that the sector is underserved by the existing banks, particularly in the way they handle relations.”
“With modern technology, you don’t need a branch network,” said Mr Jolly. “A local banker can have a laptop, a phone, and all the systems that go with that.” Civilised plans on having up to 80 bankers over the next five years in most of the major towns across the UK.
The bank, which is planning to launch next year, will start by offering savings, loans and overdrafts, and will then aim to roll out business current accounts.
Mr Jolly said: “This is all about having a relationship, so a business current account makes big difference. It also helps to see cash flow, which is very important for credit assessment.”
In order for businesses to make cash deposits and do basic branch banking activity, the new lender is striking a partnership with a traditional high street bank.