Are there any UK banks that specialise in fintech?

by CromulentSlacker. Posted on Sep 14, 2020    2    12


My startup is split into two parts. The first (which is already in the process of being built) sells a service and the second part is the financial side of things. The problem is that some UK banks do not allow some financial operations when using their bank accounts. The company would be a registered private limited company with the UK government but it would be nice to know that the bank I was going with would at least support my plans and if I was really lucky would be able to offer some advice.

Any help is appreciated.


Comments

AegisAccounting 2

You might need to consider an account provider that isn't customer facing themselves. We encourage new clients to open an account with Coconut (for various good reasons 😊 see here if you're interested in all that) but they use Prepay Solutions as their underlying account technology provider.

I think MasterCard also have some kind of offering, if I recall correctly from a prior life in that field...

  CromulentSlacker 1

Thanks. I've bookmarked that link and will check it out a bit later today. I think you are probably right. The big problem I am facing is that lending with cryptocurrencies is a bit of grey legal area and some of the smaller banks do not have the resources to do due diligence.

dowser_420 2

Transferwise?

  CromulentSlacker 1

That looks like a very interesting option for other purposes I might have but I'm not entirely sure it is what I am after for this specific request. I think what I might do is start trying to contact the big UK banks and just have a discussion with them about what I want to do. It can't hurt I guess. I was just hoping there was something out there with specific expertise in startup tech companies who needed a current account and were dealing with financial applications. Thank you for your reply though.

matthewfelgate 2

Maybe Starling or Monzo?

  CromulentSlacker 1

Just checked both of them and they both disallow the sort of fintech I am interested in unfortunately. The services company is in a completely different market so the Starling account is perfectly fine for that.

  CromulentSlacker 1

I'll look into Monzo. I already have an account with Starling. Thanks for your reply.

programming_unit_1 3

My crystal ball is at the menders this week. What are you trying to do?

I’ll guess that by “fintech” you mean cryptocurrency, am I right?

  CromulentSlacker 1

Sorry. I should have been more specific. Yes cryptocurrencies is one aspect but so is credit in small amounts. Both of these things seem to raise red flags with some banks.

Eazy_s-Sister 2

These things will raise red flags at every bank. Crypto transactions are typically anonymous. Banks are required to know basic information about their clients and customers of their clients. In nearly every country including those with corrupt legal systems it is against local law to fund illegal activities. That would be lending or moving money that was I'll gotten. Also if you are looking to a bank that will help you provide credit to your customers, you have the same previously stated issue. Also the bank will want to know that you have sufficient liquidity and expertise to properly qualify the customers for that credit. If you want more specifics PM as this is fairly nuanced and more details are needed.

I have spent my career in banking with considerable experience in international banking and a few in fintech.

  CromulentSlacker 1

Thank you for the information. I know there are a lot of problems to get over when it comes to cryptocurrencies but governments just haven't caught up with local laws (apart from Switzerland which I believe was just recently the first country to legislate specifically about cryptocurrencies.

Her Majestys Revenue and Customs released some guidance in 2018 which can be found here:

https://www.gov.uk/government/publications/tax-on-cryptoassets/cryptoassets-tax-for-businesses

and I believe I will be able to follow that guidance but since they refer to them as assets rather than a currency there is some confusion on my part as to what specific laws apply. I'm probably being really stupid here so please say if I am but I was just hoping to get things started and then maybe get some guidance when things start taking off. One thing is for certain though; I need a business bank account. Not for borrowing but just for storing my companies money and making company payments on the company debit card.

I'd appreciate any advice you can offer and any corrections you can make to my assumptions as this is a complex affair.

Eazy_s-Sister 1

Your assumptions are correct about the legalities and diligence concerns of crypto. Are you wanting to take payments in crypto? Move crypto? Convert into traditional currency? All of this makes a difference.

You should be able to open a business account anywhere provided you have all the appropriate business documents, registrations, and the business is legal. Some accounts and services require a minimum deposit balance or activity level, but that varies depending on the institution.Those should be your only barriers.

The credit terms available to your business are nearly impossible to discuss since it's still conceptual.

I would start where you Bank personally. I would go in person if an option. Banking is very relationship driven. If they don't offer what you need ask for recommendations for banks that do.

If there are any business that you are aware of that do the same or similar business research them. If any of them have done IPOs that is the best place to start your search. This process requires filing so much information about the business. Also most companies that are public are required to file their credit agreements. I have spent lots of time reading this information as it is usually valuable and the quickest way to learn a new industry or niche. The details in a credit agreement say alot about how the business operates. There are lots of limitations on information publicly available for countries known to be tax havens.

Join trade groups and industry organizations. I will recommend some once I determine reputable and helpful sources.