The Bank of London has arrived! New ‘disrupting’ clearing bank headed up by former Barclays tech boss makes its debut in the City
- New ‘purpose-built’ clearing bank The Bank of London has launched this week
- The group is headed up by Anthony Watson and aims to shake up the system
- The Bank of London wants to hire 3,000 staff globally over the next five years
A ‘disrupting’ new clearing bank called The Bank of London has launched in the City this week and has ambitious plans to shake-up the ‘sleepy worlds’ of clearing and cross-border payments.
The Bank of London claims it has entered the market with a $1.1billion valuation, making it the first pre-revenue bank in history to attain ‘unicorn’ status upon its debut.
Headed by former Barclays tech boss Anthony Watson, The Bank of London has become only the second new clearing bank in London in 250 years.
In charge: The Bank of London’s boss if former head of tech at Barclays, Anthony Watson
Its services will principally cover global cross-border money moves, cash management and compliance. The company will also act as a portal via which other businesses can offer banking services or financial products, without having to become a bank themselves.
Since the 1960s, four big UK banks, namely Barclays, HSBC, Lloyds Banking Group and NatWest have dominated the clearing market in the City.
The Bank of London has become the sixth clearing bank in the City, preceded by ClearBank, which launched back in 2017.
The group claims existing clearing banks routinely fail business customers, adding that it plans to offer cheaper, faster and more streamlined services.
It has its sights firmly set on growth, and said it plans to recruit 3,000 staff people across the UK, Europe and North America over the next five years.
The clearing bank said it was also in ‘advanced talks’ with regulators in the European Union and North America.
Anthony Watson, founder and group chief executive of The Bank of London, said: ‘The world of global transaction and clearing banking needs disrupting. Fewer than 100 banks control the flow of money in, around, between and out of the UK the EU and the US.
‘Shockingly, 75 per cent of the world’s total spendable money – just under $2.5quadrillion – is fundamentally controlled by a small club of banks. The balance sheet risk they pose so many years after the global financial crisis is as acute as ever.’
The world of global payment methods has become increasingly contested over the past year, with tech-focused firms and retailers locking horns with the likes of Visa and Mastercard over fees and dominance in the market.
Last month, US-based online giant Amazon confirmed it would stop accepting Visa’s UK-issued credit cards early next year, citing high costs.
Mr Watson told The Financial Times: ‘Amazon raised a very fair question – why are Visa and Mastercard allowed to operate like government-owned utilities? We should be calling out the utility costs, which should not be as high as they are charging.’
Shaking things up: Since the 1960s, four big UK banks, namely Barclays, HSBC, Lloyds Banking Group and NatWest have dominated the clearing banking sphere
Venture capital investors, namely ForeLight, 14W Venture Partners and Mangrove Capital Partners, have poured around $90million into The Bank of London in its latest cash raising mission.
The Bank of London’s chairman and former chief operating officer of Goldman Sachs, Harvey Schwartz, said: ‘The Bank of London is going to address an arcane part of the global financial system – the sleepy worlds of clearing and global transaction banking.’
He added: ‘Fundamentally, banking is basically an immensely complex data problem. The Bank of London is the solution. And our unique solution is simplicity.’