Behind the Idea Editor's Choice Europe Open Finance

Behind the Idea: ClearBank

ClearBank is the UK’s first new clearing bank in 250 years. Through its banking license and cloud-native technology, ClearBank is transforming the way payments move between financial institutions, fintechs and other financial service providers, enabling its partners to offer real-time payments and next-generation banking services to their customers.

Charles McManus, CEO of ClearBank

Charles McManus, ClearBank’s CEO, has over 30 years’ experience in global investment banking, wealth management and retail banking. At ClearBank, Charles leads a team of over 250 people – primarily developers – and sets the strategic direction for the bank. Under Charles’ leadership, ClearBank has struck deals with major banks like JPMorgan and market-leading fintechs like Tide. In partnership with the latter, ClearBank won £85m from the RBS Alternatives Remedies Package to improve banking for SMEs. To date, the partnership has delivered digital banking services to 230,000 customers (2 in 40 UK SMEs).

What has been ClearBank’s response to financial technology innovations in the UK?

Fintech was born from a deep-rooted desire to create an alternative to the then-broken financial services industry. ClearBank itself is a response to financial technology innovations in the UK, representing the first new clearing bank in 250 years. As such, innovation and ‘doing things differently’ is at the heart of every product and service that we take to market. From its inception, our business was built to provide our clients with the tools to break the traditional financial services mould, and lay the foundation for the next wave of fintech innovation.

How has this changed over the past few years?

The biggest change is the pace of change. It is unrelenting. Let us look at last year alone. The pandemic saw ten years of digital transformation progress happen in ten months. There is a digital arms race with the pace being set by high growth fintechs and increasingly non-traditional financial service providers. And this race has been accelerated by Covid-19.

Like the Red Queen’s Race in Lewis Carroll‘s Through the Looking-Glass, even if you’re running hard at digital transformation, so is everyone else. So, in reality you’re staying still. You need to run twice as hard as your peers to get ahead.

And traditional financial institutions are starting to respond. In the seven months that followed the first lockdown (March – September 2020), ClearBank received a healthy 147 new enquiries from institutions. The majority of these institutions were incumbents rather than fintechs, who were looking to quickly overcome legacy issues and bolster digital channels as the Covid crisis worsened.

Those which didn’t have digital channels were forced to close branches, their call centres were overwhelmed and simply weren’t equipped to manage demand effectively at all.

Is there anything that has created a culture of change inside the company?

From the outset we have encouraged innovation and transparency as intrinsic behaviours for the business -embedded from top to bottom. In addition, we’ve focused on sourcing talent from outside the financial services industry, especially in our technology teams to ensure diversity of thought. Embedding mechanisms like surveys and all-hands meetings provides regular forums for sharing ideas and knowledge, this ensures we maintain a true focus on changing customer needs and consistently servicing the customer.

This may sound trite but, in a bank, the customer does not always come first. The danger many financial services organisations face is that with all the governance, the regulation and the compliance, it becomes a luxury to focus on the customer.

I’ve spent years creating a culture where it is customer first, solutions first—and everything else comes into play to support that.

What fintech ideas have been implemented?

We believe that a cloud-native, API-first and Open Banking infrastructure is essential to breaking down the barriers to accessing and delivering financial services to boost innovation and competition, and ultimately, create a fairer playing field.

The best manifestation of these ideas in practice is our partnership with Tide. In the last two years, Tide and ClearBank were granted £85 million in two tranches from the RBS Alternatives Remedies Package to help UK SMEs turn recovery from the coronavirus crisis into a growth opportunity as well as challenge the oligopoly that currently dominates the SME banking market. By providing SMEs in the UK with the option of a dedicated and focused banking partner that will help them grow their business, we’re hoping to fortify and grow UK Plc.

What benefits have these brought?

So far:

  • Tide, powered by ClearBank’s infrastructure, is now the second-largest business banking challenger having acquired over 230,000 customers (2 in 40 UK SMEs).
  • While most businesses take one to four weeks to open an account, the average time with CTBB is just two minutes on average.
  • Through the seamless integration of tools via a digital-first business account, CTBB customers are seeing a reduction of approximately 48 days per annum on administration.

Do you see any other industry challenges on the horizon?

Fintech was born from the 2008 financial crisis and has since become an engine room of growth for the UK, creating new business opportunities and transforming the UK’s established financial institutions along the way. The strength of the UK’s fintech sector not only attracts investment, creating jobs and wealth, but makes the UK more resilient.

Fintech has grown to serve millions of customers and handle hundreds of millions of transactions. It has become part of the fabric of financial services. In 2020, that scale coupled with recent scandals and the pandemic revealed gaps in governance and compliance that could threaten the sector’s reputation.

The industry is facing big, short term economic challenges, mainly due to the recession caused by the global pandemic. The combination of mass unemployment, Brexit and prevailing economic headwinds naturally means some fintechs are struggling. Today, there is much greater pressure on fintechs to prove their ability to turn a profit. Investors are looking for unit economics over pure growth, moving away from permanent loss-making companies. Thankfully, ClearBank is a fintech with a clear pathway to profitability, and we are confident we can get there.

Can these challenges be aided by fintech?

As fintech comes of age in 2021, the industry and its regulators need to work hand in hand to ensure regulation can move at the speed of technology and fortify not just fintech’s future but UK Plc’s too.

Banks and fintechs have never been under more pressure to demonstrate that the new technologies and business models aren’t just effective at improving the customer experience, they can improve operational resilience and financial protection as well.

Innovate Finance’s fintech review should underpin the future growth and prosperity of the sector across the UK, and could be what’s needed to help move the needle where necessary.

Final thoughts

2020 was a landmark year for the industry. The pandemic has propelled us forward, pushing established players to transform and applying regulatory pressures to newer entrants who are now reaching maturity. But fintech is at a crossroads.

The same measures that were introduced to create market competition are lowering the barriers to entry to become a financial services provider. The market must strike a balance where innovation helps us take steps forward while still ensuring customer protection remains paramount.

It is critical that we all strive to maintain this balance, and ensure the long-term future of our industry that promises to do so much, for so many.



  • Gina is a fintech journalist (BA, MA) who works across broadcast and print. She has written for most national newspapers and started her career in BBC local radio.

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