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ClearBank Finds 33% of Fintechs Have Faced “Regulatory Intervention” Because of Their Bank

ClearBank, the cloud-based clearing bank, has announced a report that reveals 33% of fintechs have faced regulatory intervention due to agency banking resiliency failures. The report ‘How well are fintechs served by banks? The state of agency banking across the UK and Europe’ explores how well served European fintechs are by their banking partners.

The report reveals fintechs, particularly larger fintechs with more sophisticated needs, are underserved by their current banking partners. The scale of these issues, including severe outages and operational failings, are not only detrimental to the success of the fintech industry but the financial services sector as a whole.  

Agency banking is when a fintech offers its customers a service that is provided and managed by a licensed bank as the “agent” of that service. Common examples of these services include access to payment rails like Faster Payments in the UK or the provision of customer accounts. By working with bank partners, fintechs can offer more, often highly regulated services, without investing the time and money to acquire & maintain the licenses themselves. Recently, there has been a rise in licensed banks offering digital banking services embedded in the products & services of fintechs via APIs, a model known as Banking-as-a-Service (BaaS).

ClearBank’s research is based on an independent survey of 100 fintechs across the Netherlands, Lithuania, Sweden, Switzerland and the United Kingdom. These are the five leading fintech markets in Europe. The research aims to understand how well served fintechs are by their agency banks and the impact of agency banking services on fintechs.

Key findings from the report include:

Banks are critical to the success of fintechs but aren’t meeting their needs

More than 50% of fintechs see banks as mission-critical partners which help them maintain regulatory compliance, unlock new revenues and reduce operational expenditure. However, nearly half of respondents (49%) don’t believe their agency bank has helped their business. A quarter of fintechs are not satisfied with their agency banking services especially access to payment rails like CHAPS (38%) and operating accounts (35%). Fintechs felt their bank is more focused on offering loans and debt products than on facilitating payments and helping them manage their accounts. 

The bigger the fintech becomes the less well-served it is

71% of larger fintechs use a traditional high street bank for agency banking services. Larger fintechs report missing out on important elements of agency banking, where 50% of respondents don’t have reconciliations logged in real-time. Just 30% of large fintechs are offered access to real-time payments and 66% of larger fintechs require at least 2-3 days to open a customer account. Overall, 42% of large fintechs are ‘indifferent’ about their agency banking partners. 

Agency banking resiliency failures are creating major problems for fintechs

One third (33%) of fintechs have faced intervention from the regulator because of an issue with an agency banking partner. One in 20 fintechs have suffered unforeseen rises in agency banking costs, lost revenue or seen services go down due to their agency bank. 15% of fintechs have delayed the launch of a new product/service because of their agency bank. 

“Every fintech needs to work with an agency banking partner and the nature of this relationship is coming to define our industry,” said Charles McManus, CEO at ClearBank. “These partnerships are critical, yet as they stand agency banks have not been meeting the needs of fintechs. Firms are losing out. There is also a reputational impact and the potential for hefty fines as operational resilience becomes an increasingly bigger priority. Providers need to do better and unless things change, the fintech sector will not reach its full potential.”


  • Polly is a journalist, content creator and general opinion holder from North Wales. She has written for a number of publications, usually hovering around the topics of fintech, tech, lifestyle and body positivity.

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