How Chip is enhancing the savings experience with ClearBank Embedded Banking
- Embedded Banking delivers direct access to UK payment schemes, supporting instant customer deposits and withdrawals.
- Leveraging ClearBank’s banking licence means Chip limited savings, instant access savings and flexible Cash ISA accounts are FSCS eligible, providing customers with confidence to save on the platform.
- Interest-bearing instant access savings accounts serve 200k customers with £2.7bn in deposits (July 2024).
- Flexible Cash ISA launched in 2024 has gained more than 85k accounts and £1.3bn in deposits in the first five months of availability (July 2024).
- Collaboration continues to deliver new products and services, such as the recent launch of transfers for Cash ISAs.
Chip, founded in late 2017, is a UK fintech designed to make saving effortless through an approach tailored to each individual user. Today, customers can build wealth through investments in real assets, diversified funds with the likes of BlackRock and savings, including easy-access and notice accounts.
Its goal is simple, as CEO and Founder Simon Rabin, explains: “Chip is the wealth app for aspiring mass affluent people in the UK. I founded it with a mission to help people try and do more with their money, put more of their money away into savings. Over that period, Chip has evolved into a full service, wealth proposition for our customers.”
That growth and evolution of its successful savings products, including instant access savings accounts, prize accounts and flexible Cash ISAs has been made possible by its close collaboration with ClearBank.
Chip’s ambition has always been to give the customer a one-stop-shop for growing their money and building wealth. With a growing customer base, Chip recognised that to ensure sustainable growth and create the flexibility to introduce new offerings, meant moving away from used electronic money accounts. While being an EMI had helped build the business, it no longer aligned with the firm’s vision.
“When you start as a fintech, you have to explore the market, see what's out there, and you're kind of limited by what's available to you and what you can afford,” Rabin comments. “We started using an EMI licence but as we scaled you learn some of the issues that you have around scalability and certain lack of protections for customers and so on.”
In 2019, Chip undertook a comprehensive review of the market to understand the various solutions that would meet its ambition to deliver the full range of accounts and services to customers.
“What we were really looking for was a technology-first partner that could help us offer individual FSCS protected, interest bearing accounts for our customers,” explains Corinna Lamberti, Chief Product Officer at Chip. “That’s what customers told us they wanted and needed, which led to us looking for a partner to deliver that.”
After examining the market for a partner that aligned with its vision and ambition, it selected ClearBank. The collaboration began with Agency Banking services that delivered accounts and payment scheme connectivity, before evolving into Chip using ClearBank Embedded Banking to underpin its savings products.
This offered the firm access to UK banking infrastructure in the form of accounts and access to payment schemes without facing the process and costs of becoming a bank themselves. Crucially, it also provides the ability for Chip to indirectly offer Financial Services Compensation Scheme (FSCS)-protected accounts by leveraging ClearBank’s banking licence.
“We needed a banking partner to improve our offering with better security, a seamless customer experience, and provide a springboard for our expansion into the rest of Europe. We found this in ClearBank. It stood out in the market in that we've been able to build our product on core banking infrastructure.”
Chip is setting itself apart by combining a digitally native service that people are used to throughout their daily lives with real-time capabilities such as deposits powered by Open Banking.
“For our customers, the benefit of having a wealth app with savings accounts that sit on core banking infrastructure is when a customer joins Chip, they open an account with ClearBank with account numbers and sort codes,” comments Rabin. “It affords FSCS protection as well and it gives the customer that certain level of confidence and comfort that they're with a provider that stacks up amongst some of the best in the market.”
Through ClearBank Embedded Banking, Chip offers instant access savings accounts to customers that pay interest on deposits. In a highly competitive market, with hundreds of providers and thousands of potential options for consumers, the ability to pass on a higher proportion of interest earned back to its customers is helping Chip to stand out.
The results speak for themselves, with more than 200k customers opening a Chip instant access savings account and deposits totalling £2.7bn, as of July 2024.
“The benefits of using ClearBank and something that our customers absolutely love is the ability to earn interest and see their money growing on a daily basis. Then, at the end of the month, when the interest gets paid, we notify them again. We know having that real time feedback of their money growing is something our customers really love.”
Building billions in savings for customers through instant access savings was just the first step in delivering Chip’s vision. In 2024, ClearBank and Chip introduced a Cash Individual Savings Accounts (ISA) that offers customers the ability to save up to the current allowance of £20,000 per tax year tax free.
“The Cash ISA is a big moment for Chip and is the next step in our mission to become a trusted, one-stop destination for building wealth. Rising interest rates have changed the landscape so our priority was to develop a product to give our users a tax-efficient way to get the most out of their money, with all of the convenience that they’ve come to expect from us.”
Developing the Cash ISA product was a collaborative effort, guided by the same core philosophy of passing a large portion of the interest earned to Chip for them to pass on to customers. That was important with new rules that came into force in the 2024/25 tax year, allowing consumers to open multiple ISAs of the same type across multiple providers in the same tax year. Chip’s flexible Cash ISA provides an opportunity for it to offer another savings option to existing customers and deliver a highly competitive product to attract new deposits.
From an operational point of view, they are a complex, regulated product that reinforced the advantages of the ClearBank collaboration, as Lamberti explains: “Offering an ISA product is not the easiest thing. We worked hand in hand with ClearBank to make that happen and we pushed each other to ensure we delivered the best possible product. We came up with the idea, put together a business case, shared it with ClearBank and then basically started working together to make that happen.”
The Cash ISA has proven to be incredibly popular, with more than 85k accounts opened and £1.3bn in deposits in the first five months of availability.
Since launch, the two firms have also continued to iterate the offering, for example, by enabling transfers in from a customer’s existing Cash ISA.
“I’m incredibly proud of what we’ve achieved and the results we’ve already seen. We’re now enabling customers to transfer Cash ISAs that they might have with other providers to Chip. That's been a very collaborative process between the two sides, especially because the process of transferring is quite complex,” Lamberti comments.
With Embedded Banking, ClearBank owns the KYC and customer due diligence process and sets the minimum standards it expects of clients, as it maintains regulatory accountability as the banking license holders. The customer-facing aspects are managed by clients, enabling them to oversee and interact with their customer base in an approach consistent with their existing user experience.
However, each client must adhere to ClearBank’s minimum standards and cooperate with the bank’s oversight requirements on an ongoing basis. For Corinna Lamberti, this model has helped Chip to also build and develop more robust processes
“From a process point and operational point of view, ClearBank helped us step that up. Then in terms of technology they’ve really helped us with a product that is technology driven and we’re still seeing the benefits of that today,” she explains. “The collaboration and the ways of working with ClearBank has massively changed from when we started to where we are now. I think everyone at Chip really appreciates that there's co-creation of products between ClearBank and Chip.”
Chip’s founder and CEO Simon Rabin, characterises the collaboration as one of two innovators determined to deliver meaningful change with both parties pushing each other to deliver on their shared vision.
“We have a strong relationship where we challenge one another to do better and more. It’s not static, we discuss how and when we can evolve. We've been quite clear in laying out our road map and laying out what we want to offer customers what our ambitions are,” he adds.
"I think for any business when you look out to the long term and you've got big ambitions for your company, big ambitions for your customers, you want to make sure you're doing things in the right way. ClearBank has been a fantastic partner for us to do that. It has been fundamental to our growth, and we have been a catalyst for how ClearBank has developed the Embedded Banking proposition.”
With great success to date, the two firms are already working on delivering new products to further broaden the savings options available to Chip customers.
“Ultimately, what we want to be able to do is offer different savings accounts and different ISA accounts that cater for different needs. We’re working with ClearBank to co-create these accounts and enable us to really understand our customer needs.” explains Lamberti. “ClearBank then gives us the ability to build and deliver the products that will cater for those needs.”
To learn more about how ClearBank Embedded Banking can deliver significant benefits to your business – from new profits to improved customer retention – read Forrester’s The Total Economic Impact™ Of ClearBank Embedded Banking.
