It can be beneficial to support new businesses through a dedicated pre-regulated service and operating account, through to a fully licensed bank.
This approach can provide cost-effective “access to Faster Payments (FPS) – offering all the advantages of the UK’s faster payments infrastructure to its end customers, without incurring the costs of being a direct scheme member.”
As explained in a blog post by ClearBank, the Confirmation of Payee (CoP) “provides customers with an additional layer of payment security as the bank builds its footprint.”
With these types of implementations, we have flexibility “to add CHAPS and Bacs later in the year through its existing, single API integration.”
As noted in the update from ClearBank, StreamBank is “a new specialist Bank founded in 2021 that received its full banking licence in February 2023.”
The Cardiff-based bank aims “to serve the specialist property market, providing a range of short to medium-term funding solutions initially in bridging and development finance together with commercial mortgages while also offering a range of competitively priced deposit products.”
Customer requirements
While establishing the bank and applying for its full licence, StreamBank determined that it would be “an indirect market participant rather than looking to clear funds itself.”
That decision was primarily driven by it wanting “to focus on building a sustainable business and the costs associated with applying for direct access to UK schemes.”
As a result, it examined the market “for a technology-focused banking partner that could support the business while it applied for its license and beyond as it scaled as a fully regulated firm.” That led it to ClearBank.
StreamBank is looking to establish itself by “serving specialist property and savings customers with fixed and variable rate savings products and various commercial lending products, including development finance and bridging mortgages.”
ClearBank began working with them in early 2022, “supporting its development with our pre-regulated service offering, where we set up an operating account for the business as it established operations.”
After assessing its requirements, we then “provided the bank with our embedded Faster Payments service, with the additional flexibility to add CHAPS and Bacs when required.”
With ClearBank handling all push and pull payments, StreamBank can focus “on what matters most – running its business, establishing its brand and looking after the needs of its growing customer base.”
In addition, they’re providing StreamBank “with a Confirmation of Payee (CoP) service, which checks payees’ details in real-time before a payment is made.”
The service aims to “bring peace of mind when sending money, all while reducing fraud and misdirected payments.”
With its banking license obtained in early 2023, and with confidence in “the effectiveness of the innovative accounts and clearing products provided by us, it can now turn to the next stage of its journey as it looks to increase its volumes and launch new products.”
Steve Pateman, CEO of StreamBank, said:
“By partnering with ClearBank and utilising its banking infrastructure, customers will benefit from ‘Confirmation of Payee’, which provides an additional layer of security and trust when customers transfer funds from their current account into their newly created StreamBank account. As a newly authorised bank, which is relatively unknown to our target customers, having this technology provides peace of mind to them, knowing that the funds are going to their intended destination quickly and safely.”
John Salter, Chief Customer Officer at ClearBank, said:
“We’re proud to support StreamBank as it establishes itself as a challenger in the market. There has been a great cultural fit from the outset, and we’ve formed a strong and cohesive working relationship. By leveraging our integrated banking infrastructure, StreamBank can focus on continuing to grow and expand its banking footprint.”