New online UK bank CivilisedBank to join 'challenger' banks to take on majors

A new online UK bank due to be launched later this year after securing a first phase of funding,  will join several other so-called ''challenger'' banks that aim to break the dominance of the UK's big five lenders, seeking to benefit from lower costs, new technology, no legacy issues and encouragement from politicians.

According to the bank, it would not have branches but operate through a network of local bankers backed by a technology platform being rolled out for the first time in UK.

Banks using the software platform would include BNP Paribas and Alpha Bank, it said.

According to the bank, it would initially target owner-managers of medium-sized UK businesses by offering business current accounts with deposits, transaction banking, overdrafts, foreign currency exchange, investments, savings and loans. At a later date it planned to target UK retail market with specific savings and investment products.

The bank has Gordon Dow, the former head of private banking at Santander as its chief executive with brand consultant Jason Scott as its non-executive director.

The bulk of small business banking in the UK, to the extent of 85 per cent was under the control of Barclays, Lloyds Banking Group, HSBC Royal Bank of Scotland and Santander.

Regulators and politicians had tried to make it easier for new firms to break that stranglehold, and recent years had seen the launch of Metro Bank, Aldermore, Shawbrook and OneSavings.

There were also more than 20 other firms such as Atom Bank applying for licences. Many were looking to operate in specific regions or cater to niche clients.

Most challenger banks had been planning to operate online and use new technology that allowed a quicker and cheaper platform.

CivilisedBank's chairman Chris Jolly, had in the past held senior roles in real estate and at Merrill Lynch, Commerzbank and Societe Generale.