Case study: how Allica Bank delivers SME current accounts with ClearBank
- Cost-effective access to all UK schemes, provides the widest range of payment options to SME customers without the cost and overheads of building and maintaining direct connectivity.
- Faster time to market to launch current accounts for SMEs, a critical element of the bank’s vision to be a full-service bank. By December 2023, it already had more than 2,000 current account customers.
- Virtual accounts provide Allica with the flexibility to efficiently support its customers without the operational cost and complexity of servicing thousands of individual accounts.
Allica Bank is on a mission to give established businesses in the UK the banking they deserve. It offers no-nonsense business banking built especially for firms with 5-250 employees, providing dedicated relationship manager support backed up with modern technology. Alongside its current account, it offers savings accounts and a range of tailored lending products.
It was recently revealed as the fastest-growing fintech in the UK ever in the Deloitte UK Technology Fast 50, while also announced in 2022 that it had become profitable. Allica is on a mission to become the most-recommended business bank in the UK.
Allica initially launched to market in 2020 with a range of lending and savings products. However, the intention was always to build a business current account, allowing it to offer established businesses a full range of banking services.
It would build its business current account especially to meet the needs of established businesses, which have typically been underserved by the incumbents, offering great rewards, competitive savings rates, and the support of a dedicated relationship manager.
“We want to develop deeper, more meaningful connections with our customers. Business current accounts and transactional banking naturally provides more touchpoints with our customers, enabling us to cultivate and grow relationships with customers” explains Nida Sattar, Head of Product - Payments at Allica Bank. “Our business current account is an important product for us, and we wanted to partner with someone to deliver this, using best in class connectivity options with low operational overhead, taking the pain of direct connectivity away from us.”
That meant finding a partner that could support a seamless go to market launch and grow alongside the bank as it expands. The bank needed to collaborate with a proven provider that shared its growth objectives and could help it scale quickly. As a result, they chose ClearBank as their partner.
“ClearBank is a leader in its field and was an obvious partner for Allica because we’re aligned in many ways. We’re both API-first and focused on speed and execution. Our philosophies, values and culture are similar. It makes it easy to work with a partner when you've got a shared vision for how things should be delivered and run.”
Established SMEs have found themselves stuck in the middle. Their needs are too complex to be met by a bank geared towards micro-SMEs, but they’re too small to be afforded the kind of service they need from a big bank. They also require agility to execute their plans quickly.
It was important for Allica Bank to build and launch the bank account in the most efficient way possible. Working with ClearBank, they could quickly set up a test environment to understand how the different payment schemes would work for their customers.
It launched its business current account externally to established businesses in 2023, offering cashback rewards, no monthly fees and dedicated relationship manager support, along with an integrated Savings Pot with market leading interest rates. Through ClearBank, it provides SMEs with the broadest possible deposit and withdrawal options including Faster Payments System (FPS), and CHAPS, as well as credits via Bacs Direct Credit and access to outbound Bacs Direct Debits.
In less than a year, Allica Bank had opened accounts for more than two thousand established SME customers.
“The advantage working with ClearBank has given us is that we could launch the account and get the product to market faster. The API integration also means it’s flexible in the sense that we can overlay quite a lot of other services. As a result, we’ve been able to focus on those value-added services for SMEs and not have to worry about the infrastructure.”
By collaborating with ClearBank, Allica Bank can offer all the benefits of payment schemes to its current account customers, enabling Allica to focus on building relationships with customers and offering value added functionality in the product. Partnering with ClearBank also protects customers like Allica from upgrades in scheme connectivity, as ClearBank is responsible for building, testing, maintaining and upgrading connections.
“ClearBank excels at building, maintaining and updating the connectivity. For example, when the CHAPS upgrade to ISO20022 occurred that was a huge piece of work, and we didn’t have to really think about it at all. When you’re growing a business, the ability to focus completely on where you can add value is critical,” Sattar comments.
To deliver its current account, Allica Bank decided to use ClearBank’s Virtual GBP Account solution. These virtual accounts are built for flexibility with the freedom to open millions of accounts, each with its own addressable vIBAN (virtual International Bank Account Number), with no limit on the number of logic layers that Allica Bank can create within its ledger.
The ClearBank API enables financial institutions to open virtual accounts any time, day or night, 365 days of the year – each with its own vIBAN. Our strong foundation of cloud-native technology and unique API means that ClearBank clients can be confident that every virtual account is opened in real-time, every time.
“Growing at the pace Allica has been, you need to work with partners that you can rely on. Our experience working with ClearBank so far has been fantastic,” Sattar explains. “ClearBank have supported Allica with accounts and payments infrastructure, meaning our team has been able to focus our energy on what we do best: building a relationship-focused bank, powered by modern technology, that gives established businesses the banking they truly deserve.”
