ClearBank is a purpose-built, technology-first clearing bank providing faster, safer, more reliable banking infrastructure. It was the first new, full-service clearing bank in the UK for more than 250 years. It was founded on the core principle of innovation. The bank itself has evolved from an agency banking partner to a BaaS partner and today, a leading preferred Embedded Banking partner.
Through its banking licence and intelligent, robust technology solutions such as its API which integrates with a client’s operating system, ClearBank enables institutions to offer real-time payment and innovative banking services to their customers. ClearBank is the only fintech bank that delivers direct access to all bank payment schemes including Bacs, cheques, CHAPS and Faster Payments, all allowing transactions to clear rapidly and over a secure platform as well as offering Financial Services Compensation Scheme protected bank accounts.
As well as Agency Banking, ClearBank offers Embedded Banking; enabling regulated financial institutions to use ClearBank’s licence to offer fully-regulated accounts and savings products, without incurring the cost of becoming a bank themselves.
There is a lot of noise about Embedded Banking and BaaS, arguably because of poor definitions but also because of misunderstandings of the roles that participants play.
The landscape has broadened, with Embedded Banking players picking niches, functions and sectors. ClearBank is the infrastructure and bedrock on which banking innovation is built for all of these and allows the experts to find their space.
The industry is now at an inflection point where compliance, risk and resilience are the most paramount factors in Embedded Banking providers. Developments and trends to be aware of include:
The industry is nervous because of US consent orders.
The EMI model that is popular in Europe comes with limitations and is also under the regulatory microscope.
BaaS providers are pivoting business models to work only with banks.
Banks with BaaS have struggled with the new business model.
ClearBank was founded to address that gap in the market around reducing friction in clearing and allowing for greater innovation for fintechs. It set out to remove the barriers in banking for pioneering fintechs, and enable them to integrate innovative banking services without the cost and complexity of acquiring a banking licence. ClearBank’s Embedded Banking proposition came when banking infrastructure slowed down meaningful progress. Opening and managing accounts was tedious and clearing payments in real time was impossible. ClearBank realised that each client needed individual banking products and new propositions that they could, in turn, take to their customers through a model where those clients leverage our banking licence and embed bank-grade processes for onboarding, KYC and ongoing due diligence.
Through our banking licence and innovative financial technology, we enable financial institutions to offer secure accounts, clear payments in real-time and enhance their banking propositions for their customers.
Technology is the cornerstone of ClearBank’s offering and out of the company’s total employees today, around 20% are software engineers. All the IP ClearBank uses is owned and built by its team. With a consant flux of regulatory requirements underpinning financial transactions, the industry demands an agile platform like ClearBank’s which ensures compliance and best-in-class delivery.
ClearBank delivers a resilient, financially sustainable, and low-risk proposition, never lending any customer funds to third parties and all sterling deposits held securely at the Bank of England. It offers the stability and security of a fully regulated bank and the agility and technology-first model of nonbank providers. Our latest report, ‘The Total Economic Impact Of ClearBank Embedded Banking’, produced in collaboration with Forrester, examined the return on investment (ROI) firms can realise with our Embedded Banking proposition.
ClearBank’s combination of fully licenced banking services and innovative financial technology has allowed it to grow across every segment and business line, attracting high-profile customers including Raisin and Tide as well as enabling the launch of a market-leading Cash ISA product with its Embedded Banking partner, Chip.
As ClearBank’s first three Embedded Banking customers, Tide, Chip, and Raisin, saw an average transaction volume exceeding 10 million per month in 2023 and 1.2 million customers now hold FSCS-protected accounts through them. ClearBank’s model enables highly competitive interest rates to be passed along to embedded banking clients’ customers.
This editorial piece was first published in The Paypers' Embedded Finance and Banking-as-a-Service Report 2024, which is the latest comprehensive market overview and analysis focusing on the key players and products within the Embedded Finance and BaaS ecosystem.
Paul Staples is Group Head of Embedded Banking at ClearBank and has had a 20-year career founding, building and scaling tech and business platforms across multiple industries. Paul’s been involved in Banking as a Service and Embedded Banking for many years and is an active commentator and advocate for safe and well-regulated Embedded Finance. Before joining ClearBank in 2023, he was formerly a founder of HSBC’s Global Embedded Banking business. `
ClearBank launched in 2017 as the first new, full-service clearing bank plugged directly into the UK’s banking and payment infrastructure for over 250 years. For decades, payment clearing remained unchanged and unchallenged, and so ClearBank found a way to change it, making banking infrastructure faster, safer and more reliable.
ClearBank works with over 250 companies, including financial institutions, banks, some of the UK's largest fintechs, and credit unions.
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