Launching the first new clearing bank in 250 years is a challenge in your home market. But when you’ve proven your model, become profitable and decide to expand, how and where you select your next market is a significant decision.

For a UK firm, the logical step is Europe. But while Europe might be a single market it is still 27 distinct countries, each with their own cultures and nuances. So where should you establish your first office outside your home market?

There are many factors to consider.

Does the country have a reputation for a strong rule of law and fiscal track record? Is there a business environment that encourages and supports innovation? Does it have a strong financial service and fintech base? Is there talent available that will enable you to find the right people to lead and then grow the business across every function? Potentially you might consider whether it’s an attractive relocation option for existing employees.

These, and many other factors, were on our minds when we looked for our European home. It was a decision that had to make sense for the bank today and in the future as the base for the next phase of our expansion.

A pro-business climate, location, a highly educated multilingual workforce and support for digital infrastructure and services were just some of the reasons why we selected the Netherlands as our European home.

Below I’ll explain the factors and our rationale that we hope will be a useful guide to others looking at European expansion.

As a fully regulated bank but with the agility of a fintech, an economy and support structure for innovative companies was critical. We’ve been a little spoilt in London with its vibrant financial services, fintech and start-up ecosystem, so we were mindful of finding a home that had a similar outlook and approach to supporting scaling organisations.

One of the factors behind London’s sustained success is a regulatory environment that actively encourages innovation and is focused on delivering great outcomes for financial services firms and consumers. We’ve been fortunate in that regard, enabling us to build a successful business.

As we began our expansion journey, it was soon apparent that finding the mix of a supportive regulator with a track record of high-quality prudential oversight and strong local market would narrow our options to just a few locations.

We received a lot of positive feedback from fintechs that had previously engaged with De Nederlandsche Bank (DNB) that gave us confidence they would be supportive of our application. Our experience reinforced those views. While a banking licence application is a complex process it was a positive experience from the pre-application engagement through to the ongoing dialogue throughout the various stages.

The Netherlands combines a strong economy delivering a AAA sovereign rating according to S&P, providing necessary stability for a bank, coupled to a track record in technology and innovation, leading the 2023 IMD World Competitiveness ranking to place the country in second spot. It's home to some of the world’s biggest technology companies and exciting scale-ups, from household names like TomTom, financial services giants such as ABN Amro and ING, successfully scaling firms like Adyen and newer entrants including Bunq and Mollie.

Overall, there is a vibrant ecosystem that feels a lot like London. It’s also attractive for more practical reasons too, given its proximity to the UK and major European markets with convenient connections to major capitals in the EU and beyond.

While a supportive regulatory environment, innovation track record and established financial services hub were critical factors, numerous cities and countries fit those criteria. We were also determined to find a market that offered talented individuals that aligned with our values and company DNA supporting diversity, equality and inclusion.

Culture is core to how ClearBank operates its day-to-day business. Everything we do is only possible due to our talented people and ensuring we support them through inclusive and extensive policies.

The Netherlands consistently ranks highly on global social indexes – for example it’s the fifth happiest country in the World Happiness Report, an annual publication from the United Nations Sustainable Development Solutions Network that ranks countries on factors such as GDP per capita, social support, freedom to make life choices and life expectancy.

Its focus on ESG-related policy frameworks and requirements also align to how we’re building the bank. That includes business rules that demand strong corporate governance and principles focussed on sustainable long-term value creation.

As we grow, the ability to find talent at every level, across every function, will be paramount to our sustained success. The Netherlands was also ranked in 5th position in the 2023 Global Talent Competitiveness Index (GTCI), the international benchmarking report is compiled annually by the international business school INSEAD. There are approximately 210k people employed in the financial services sector, alongside respected universities with a focus in technology and engineering.

The Dutch also place a strong emphasis on work-life balance, with companies expected to prioritise the well-being of their employees. That is a belief we share. Building a bank can be hard work, and it can be stressful, but we’re mindful that we support ClearBank employees to maintain and protect that balance.

For all these reasons, we’re excited to be building our European operations out of the Netherlands, bringing our unique model to thousands of clients and tens of millions of end customers.

Charles McManus is ClearBank’s Chief Executive Officer and Executive Director. He is an experienced international banking professional with over 30 years in global investment banking, wealth management and retail banking. Prior to joining ClearBank in 2015, Charles was the Group CFO of RBS Ulster Bank Group until 2013, before which he spent 13 years with The Royal Bank of Canada (RBC). His time with RBC culminated in a role as CFO of Europe and Asia and Global Head of Product Control.