“Opening up to the UK’s growing FinTech sector will offer businesses an unparalleled choice to try out innovative alternatives tailored to their needs after years of being underserved by the high street.”
The package, offered by RBS as a means of boosting competition following the receipt of state aid and failed divestment of Williams & Glyn, is partly open to challenger banking providers, but a technical definition has resulted in over 90% of the package being set aside for banks alone. This locks out e-money institutions like Tide that have been at the forefront of change in the UK banking sector.
Avoiding true competition, the most important parts of the package (the Incentivised Switching Scheme and pools A & B of the Capability and Innovation Fund) are open only to those authorised by the Prudential Regulatory Authority (PRA), and includes the likes of Santander and TSB. Fintech challengers like Tide are voicing concerns that the package, intended to give small businesses greater choice, will fall short of its intended positive effect.
Tide believes the minor update to the eligibility criteria required would be in keeping with the intentions of the UK government and EU Commission, and will allow the competition for funds to proceed within the proposed timeline.
Oliver Prill, CEO of Tide, says;
“Expanding the package’s eligibility will make the most of the once in a lifetime opportunity to shake up SME banking by introducing real competition. Opening up to the UK’s growing FinTech sector will offer businesses an unparalleled choice to try out innovative alternatives tailored to their needs after years of being underserved by the high street. Without this change, the oligopolistic structures that have served small business so poorly in the past are likely to persist.”