The Bank of London has arrived in the city
The Bank of London has arrived! New ‘disruptive’ clearing bank headed by former Barclays tech chief makes its city debut
- New ‘targeted’ clearing bank The Bank of London launched this week
- The group is led by Anthony Watson and aims to shake up the system
- The Bank of London aims to hire 3,000 employees worldwide over the next five years
A ‘disruptive’ new clearing bank called The Bank of London 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 entered the market with a valuation of $1.1 billion, making it the first pre-income bank in history to achieve “unicorn” status on its debut.
Led by former Barclays tech boss Anthony Watson, The Bank of London has become only the second new clearing bank in London in 250 years.
Responsible: Bank of London boss as former head of tech at Barclays, Anthony Watson
Its services will primarily cover global cross-border money transfers, cash management and compliance. The company will also act as a portal where other companies can offer banking services or financial products, without having to become a bank themselves.
Since the 1960s, four major British 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 in 2017.
The group claims that existing clearing banks routinely disappoint corporate clients, adding that it plans to offer cheaper, faster and more streamlined services.
It has set its sights on growth and said it plans to hire 3,000 employees in the UK, Europe and North America over the next five years.
The clearing bank also said it was 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 transactions and clearing banking must be disruptive. Fewer than 100 banks control the flow of money in, around, between and out of the UK, EU and US.
Shockingly, 75 percent of the world’s total disposable money – just under $2.5 quadrillion – is fundamentally managed 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 contentious in the past year, with tech-focused companies and retailers partnering with Visa and Mastercard over fees and market dominance.
Last month, US-based online giant Amazon confirmed it would stop accepting Visa’s UK-issued credit cards early next year, citing high fees.
Watson told The Financial Times: “Amazon asked a very valid question: why are Visa and Mastercard allowed to operate as government-owned utilities? We should call the utility costs, they shouldn’t be as high as they charge.’
Shaking things up: Since the 1960s, four major UK banks, namely Barclays, HSBC, Lloyds Banking Group and NatWest, have dominated the clearing banking industry
Venture capital investors namely ForeLight, 14W Venture Partners and Mangrove Capital Partners have deposited approximately $90 million into The Bank of London in its latest fundraising mission.
Bank of London chairman and former Goldman Sachs chief operating officer Harvey Schwartz said: “The Bank of London is going to tackle a mysterious part of the global financial system: the sleepy worlds of clearing and global transaction banking.”
He added: “Basically, banking is a hugely complex data problem. The Bank of London is the solution. And our unique solution is simplicity.’