Latest new UK bank launches virtually

Challenger financial services firm Charter Savings Bank has been launched, taking advantage of the lower cost of a virtual presence

Challenger financial services firm Charter Savings Bank has been launched, taking advantage of the lower cost of a virtual presence.

The online-only bank, which was awarded a banking licence in January, is part of Charter Court Financial Services (CCFS). It is one of many new banks to apply for licences to take on the traditional banks.

These companies have an inherent IT advantage over traditional banks – they are not reliant on legacy technology, which is expensive and complex to upgrade. Like other challenger banks, Charter Savings Bank is employing new technology to compete with existing banks without needing to invest heavily in bricks and mortar, offering online services. 

“The online and telephone-based proposition, which removes the cost associated with a physical presence on the high street, is set to launch in early 2015 and will be a UK bank for UK savers,” the bank said when it was granted a licence.

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Charter Savings Sank will focus on savings accounts, which were launched today.

“When we launched Charter Savings Bank, our vision was simple: to create straightforward savings accounts with competitive rates, backed by reliable service, to help savers meet their financial goals,” said Ian Lonergan, the bank's CEO.

Regulators want competition and have changed the rules for setting up a bank.

There is good reason for a challenger bank like Charter Savings to get its IT right, and put it at the centre of the business, rather than seeing it as just a cost. A recent survey of 2,000 people by banking software supplier Fiserve revealed that 80% of people would trust a bank if it had the right technology in place. More than half (56%) said a new bank would have an advantage over its rivals if it had reliable IT.

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