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Challenger bank ready to get its banking licence back

CivilisedBank is reapplying for a banking licence after giving it up to focus on its technology

Cloud based CivilisedBank, which relinquished its banking licence to refocus on its customer offering, has reapplied to the Bank of England.

The bank, which plans to serve small and medium-sized enterprises (SMEs) with loans, savings and cash management products, originally received regulatory approval in May 2017, with a plan to launch in 2018.

But in April 2018, it gave up its licence to work on the technology platform that underpins its model.

CivilisedBank plans to use a network of local bankers to serve SME customers with a turnover of up to around £25m cloud-based technology underpinning its services.

At the time it relinquished its licence founder, Chris Jolly said: “For us, it is essential that we can deliver an optimal customer offering, so we prefer to delay this stage of our development and have more time to get it right.”

It has used this time to develop its technology platform. In an increasingly competitive fintech space, getting the technology right is vital for challenger banks to differentiate themselves.

The bank now plans to launch in the first half of 2019.

Read more about challenger banks

Mark Stephens, CEO at CivilisedBank, said: “It was really important that we took the time earlier this year to make sure that, when we come to market, it is with the optimal offering to customers.”

He added that the market has changed and the additional time has also allowed the company to develop its proposition in line with customer demand: “Resubmitting our banking licence application is a key step towards a full launch next year.”

As well as offering loans, asset finance, savings and payment services to SMEs provide savings accounts to consumers.

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This article piqued my interest in the company.  I've done a little digging around in the publicly available documents.  

The company was started in 2011, and none of the original Directors appear to be Directors of the Company now. LinkedIn identifies the Founder, though it's not Chris Jolly, who was only appointed in March 2015, which is four years after the company was formed. It appears that Jolly is not, nor has ever been, a shareholder, which is a very odd position for a self-proclaimed founder. 

Civilised Bank were awarded their banking license in May 2017, yet handed it back in May 2018, months after they appeared to say they'd launch. How on earth did they fail to do so? Especially when several other challenger banks launched in that time and are now enjoying huge success?

Also, the turnover of Civilised Bank directors at Companies House is extraordinary over the past 18 months or so. Some of the filings there are also most odd, perhaps even inconsistent with each other. 

The control and shareholdings now registering show huge changes in this company, not necessarily explained by the desire to deliver the best IT platform.

When one digs around a little (as journalists used to do) one finds that a recent investor in Civilised Bank is none other than the pension fund of BAE Systems. Since when is climbing into bed with an arms manufacturer considered 'Civilised"?

If I had more time I'd love to look into this further, it has the makings of a fascinating story.
I've just noticed something else - it's a shame that the original offering appears to have changed. They appear to have ditched business current accounts, which was the one thing that differentiated this bank from all but a select few and made it a real prospective challenger.

I'll definitely be watching this one as it unfolds...