Latest / The Payments Shed / Ep. 55 - From Banking Rails to Digital Dollars: How ClearBank Is Re-Shaping Real-Time Payments

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Ep. 55 - From Banking Rails to Digital Dollars: How ClearBank Is Re-Shaping Real-Time Payments · The Payments Shed

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Welcome to the Payment Shed Podcast, the weekly podcast that
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dives into the big topics, trends and people shaping the
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world's of payments, fintech and business leadership of your two
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Co hosts, myself Grant Evans and Justin Hanna.
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Welcome back to the Payment Shed podcast.
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Today we are lucky enough to be joined by Mark Fairless, Group
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CEO at Clearbank. Mark, thanks for coming in.
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Well, thank you very much for having me.
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I'm very, very glad to be here Tell.
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Us a little bit more about about yourself and and your career
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today. Yeah, sure.
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So I'm currently the CEO, group CEO of, of Clear Bank.
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I'm sure we'll come on to what Clear Bank does in a moment.
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I, I've been the CEO for just coming up to a year.
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I was ACFO before for just over 2 years, but Clear Bank really
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is my first kind of foray into a scale up a kind of challenger
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kind of private equity kind of world.
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Before that I was at much sort of more traditional financial
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service businesses, so M&G, the asset manager insurance
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business. Before that Santander, Barclays
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and solid life as as as many good accountants do at POVC.
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But I really wanted to kind of break away from that and, and
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help build something, have a have a better reason to, to get
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out of bed, innovate in, in financial services and, and the
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opportunity at clear bank was, was so strong.
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I I made the move and haven't looked back.
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CFO to CEO seems like a much more frequent transition now,
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though in the last few years I've noticed that we've we've
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been seeing that journey see safe pair of hands winning as
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CFO I've resumed to to then take that step into the CEO role.
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Yeah, I guess hopefully, I hopefully I'm not just a safe
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pair of hats. But yes, I guess as, as somebody
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in the CFO seat, you're kind of copilot or whatever to the CEO
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in many respects, you, you, you're heavily involved in
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shaping the strategy in kind of understanding all of the issues
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across, across the business. I think a lot of the skills are
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similar, kind of the ability to kind of prioritise, analyse, but
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I but I think there are lots of other things to that as well.
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So things I've actually really enjoyed.
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So stepping out CFO to CEO, but the, the, the agenda is a lot
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more broad. So you, you've, you've got a,
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you've got a much stronger kind of people leadership role, which
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is the CFO you're a lot more kind of fact based and kind of
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analytical on, on numbers. I think that broader people
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aspect is something I, I really enjoy out and about with clients
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a lot more much, you know, much more client facing obviously as
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ACEO than than CFO. And that's something I've, I've
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really enjoyed over the past kind of year.
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And then, you know, get a lot more into the kind of product
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side and, and what are we doing and what's the, what does the
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future look like? Setting the road map for the for
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the future and making sure that clear Bank is as innovative
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IN2345 years as it has been over the last 10.
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Nice. When when we talk about clear
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bank, more of a tech driven bank kind of powering that next Gen.
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infrastructure. How did that vision form and
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kind of evolve into what it is today?
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Yeah. So, so I guess you go back to 10
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years when I guess Clear Bank was was first sort of formed and
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it is our 10 year birthday this year, which we're celebrating
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with a series of events. But, but it was very clear in
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the UK that there was a kind of Fintech revolution coming, lots
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of businesses being kind of stood up that we're looking,
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amongst other things, that how do you improve the client
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experience, make everything real time, right?
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So real time is something that that the broader economy has has
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moved to Spotify is, you know, you can consume music whenever
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you want, wherever you are, same with Netflix, etcetera.
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And that same kind of thing was happening kind of with, with
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financial services and, and, and payments.
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But what a lot of the Fintechs were coming up against was, was
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the incumbent banks using kind of pretty old tech batch
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processing, very, very complicated.
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And so there was a gap there for, for someone to help that
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kind of Fintech revolution that we've sort of now kind of taken
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for granted a little bit to really make sure that that
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experience and that user experience went end to end.
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And so that was the initial kind of concept behind Clear Bank.
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We, we were sort of born in the cloud ground up technology
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platform built in House of API first and, and really kind of
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driving real time payments for the digital economy that that
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was under service and, and was lacking.
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And that's, and that's that's where we started.
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And as we've gone along and really grown that reputation and
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client based and we now have, you know, a significant
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proportion of our clients. We've, we've got more than 250
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now our UK fintechs who, who use us because actually that's, you
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know, that's exactly the problem that they were facing.
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But along the way we've expanded into something called embedded
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banking, which is where we can put a bank account into a, a
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business as alongside their propositions, even though
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they're not a bank. And there's a number of kind of
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examples of that that we, that we could talk about in a
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revolute. One of those Tide Chip.
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There's, there's a number of kind of really exciting kind of
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UK fintechs where we've partnered with them and put
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embedded banking alongside their, their propositions.
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And these aren't small players, right?
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I mean, these these are very, very large organisations in
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their own right now and they've trusted you guys to go on that
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growth journey with them, which is again testament to the
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product and standing up from a scale point of view.
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Yes. So what, what's been really
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great is if you took, if you took sort of Tide, for example,
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we are, that's our longest serving kind of partnership and
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deeper, you know, in many ways kind of deep partnership on
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embedded banking. We, we work together right from
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the start of, of both organisations and, and we've
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grown together. So Tide now have more than 10%
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of the SME market in the UK and they've grown from somewhere
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very small to, to, to that alongside Clear Bank, which has
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been fantastic. But as we've grown, then that
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opens up the likes of, of Revolute, as you say, and, and,
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and Coinbase that we launched towards the end of last year.
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So as we grow and as our reputation has got stronger,
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those larger kind of fintechs and, and, and hopefully soon to
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be sort of corporates are, are, are coming to us and realising,
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you know what it is we can do and.
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And what makes clear bank different from the traditional
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banks from from a technology standpoint?
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So that, so I think the, the, the, the first part of that is
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kind of built cloud native from the start.
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We haven't tried to retrospectively try and do that.
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We've got a, a kind of, you know, industry leading.
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We would, we would view it as tech stack built in house for
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exactly the problem that we've just talked about.
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And, and with partnered with kind of the APIs that we have,
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which we're, we, we think again, a, a real game change.
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As you've got a great deal of transparency, visibility of
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what's happening to your money once you're, you know, going
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through a payment, which, which again, the incumbent kind of
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tech stacks don't, don't provide.
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I think, I think the, the, the technology we have is really
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the, the kind of crown jewels, if you like, is what is what I
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talk about kind of internally for, for what it is that we do
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that's different to, to the other, to other banks.
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We also we're, because we're, we're, we're very focused bank.
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We're so B to B rather than to, to, to consumers.
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But we, we, we do payments and we do embedded banking.
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We don't get into lending. We don't get into doing kind of
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direct to consumer retail propositions.
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We focused on something that that is a kind of our core and,
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and, and, and we focus on doing that kind of really, really
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well. So, so I think we're kind of
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different in a number of ways to a sort of traditional bank.
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How do you balance innovation with being a fully regulated
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bank? I mean, that's something we ask
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a lot of the kind of fintech financial platforms that have
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been on the show because there's the invariably blockers that can
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occur from regulation and you, you have to navigate those
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roadblocks, right? Yeah.
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So, so I guess our reputation kind of picking up on that
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thread, our, our reputation as being a, a, a bank is really,
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really important. So the kind of the regulatory
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obligations that come with being a bank, we take really, really
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seriously. Our reputation is everything.
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And so it's, we're sort of not going to compromise on, you
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know, the, the higher standards of regulatory compliance because
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I think that's, that just makes sense for a number of of
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reasons. And it's, it's really helped
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underpin alongside the innovation and the proposition
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why it is that those larger businesses are, are comfortable
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to come and partner with us for, for the way forward.
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But, but, but you're right, I don't, I don't think if you
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were, if you were looking for case studies in innovation and
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speed of delivery, you'd start with a, with, with the banking
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sector as being where you would learn the most, right.
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So, and we, we try and kind of think of ourselves as a
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technology kind of fintech with a, with a banking licence.
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And whilst we've got all of that regulatory kind of obligation
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and, and, and, and responsibility, we do need to
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make sure that we are continuing to be at the leading edge of
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kind of innovation because, because, because that's, that's
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what we were founded to do and that's what we are continue to
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focus on. And, and since I sort of took on
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the role as as CEO, it's been a big question.
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I've, I've, I've looked at, we've started with ruthless
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prioritisation. So we had a huge what we still
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have a huge amount of opportunity to go after, but
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actually we need to be more focused on what that is so we
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can move more quickly. We also need to focus on
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innovation at our core. And again, that's something I've
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sort of wanted to get back to is we were the first new clearing
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bank for 250 years, which was fantastic, right.
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We were the first to do embedded banking in the UK scale, which
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is fantastic. The first bank in the clap,
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fantastic. What's the next thing right,
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that's going to really keep us at the, the edge of innovation.
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And, and so, you know, I was really pleased to sort of focus
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on getting that partnership with Circle in the EU launched, which
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which I'm sure, I'm sure we'll sort of talk about in more
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detail. But that's one example of where
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I, you know, I've, I've focused and we've prioritised the things
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that are innovative that actually leverage our banking
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capability as well to, to really hit that sweet spot.
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But, but I'm a big believer in focusing on fewer things that
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are really aligned to kind of where you want to get to rather
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than doing too many. And that's lead to the, you
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know, the partnership. We said we also launched
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corporate towards the end of last year.
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So we only, we've been focused on financial services before
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that. Now we can move into corporates.
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We had our first card transaction just before
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Christmas last year, so really moving forward by actually
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focusing on the things that are going to move, move the needle.
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Do you mean from an issuing point of view, your first card
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transaction? Yeah.
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So, so if you think about it sort of from an embedded banking
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perspective, so we, we've we've we've partnered with Visa and
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Marqueta to, to, to get into cards.
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So wouldn't it be great to have as well as the embedded banking
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proposition that we have around savings where you can, you can
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open a savings account with, with Coinbase alongside your
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digital assets, but you know, it's underlying, it's a, it's a
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clear bank account. What about if you get into
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transactional and, and have a card?
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So, so we see that as a really exciting kind of, again,
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innovative thing to do because there's no one really getting
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into that kind of transactional embedded banking space at scale.
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Do you, do you see that the industry momentum pushes you to
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move faster or do it kind of allow you just to maybe stay a
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little bit more cautious? Well.
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I would say I'd hope that we're the answer I'd like to give is
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that is that we would be pushing the industry along.
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With. Right.
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And I think we did that with embedded banking for example,
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and we did it with clearing a new bank.
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You know, there are others in the UK that are now that are now
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doing that in a very similar model that they're, they're
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probably a little bit behind, but welcome that because I think
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having a competitive market is, is, is better for everyone.
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But no, I'd say we would always like to be at the kind of at the
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forefront of innovation, which is why I've had such a big focus
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on what is it we're going to do next?
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What's the, what's the next 2345 year plan that we've got?
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And if you look at the kind of technologies that are emerging
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around digital assets and, and, and stable coins, there's an
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opportunity there. Now we need, you know, we need
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to be in that space because it's a matter of time until everybody
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else's and, and rather of them wait for that and wait for it to
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become kind of mainstream. We, you know, we think it's
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incumbent on upon us going back to the the purpose of why
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Clearbank was was formed to kind of enable real time economy and,
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and, and enable the kind of fintechs and our our clients to,
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to do what it is they want to do.
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We need to give them the latest tools to to do that.
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And so digital assets would be, would be one of those where we
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want to be at the at the edge. And actually other
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organisations, banks, fintechs, whatever corporates, whatever is
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they might be that are, that are wanting to get into that space.
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Is, is only, is only good because actually, I guess in
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that sense, it does sort of keep us always looking forward.
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But we're, we're not, we're not looking at what others are doing
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and, and, and wanting to do that.
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We're we're looking ahead as to what it is we want we want to do
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to, to kind of seize the opportunity.
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Fintechs are growing, you know, more of the digital economy than
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ever before. That's obviously a real sweet
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spot and success story for you as a sector.
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But how do you kind of keep your finger on the pulse around which
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fintech explosion is going to happen next and where you kind
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of put your chips? You know, from a sales point,
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you guys have an amazing roster of customers, right?
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So you've got some great brands behind you that will give trust
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to that next breakout wave of hey, we've done it with this
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fintech vertical. We'll do it with this one.
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You know, how do you how do you kind of?
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So that's not an easy thing to do, right?
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Because I think there's, there's, there's, there's a, a
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thriving fintech sector in the UK and that's fantastic.
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And, and picking the next one that's going to be the next
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Revolute. I think that's a very, very
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difficult job. But I guess if you, if you look
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at who has been successful and the traits they've got in common
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from, from, from our experience, you're looking at the, the
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fintechs that really put the client or the customer at the
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centre of what they do. So if you look what Revolute do,
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it's very clear from their entire proposition.
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The, the, the customer is at the centre of that.
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And then with that, they layer on the latest technology, right?
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And, and being agile and embracing that latest technology
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around the, the, the, the customer experience is what is
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differentiated the others. And if you were to look at Tide,
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you'd see the same if you're an SME using, using Tide, they've
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built a whole ecosystem and been really successful in doing that
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an SME ecosystem around around what they do.
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So being kind of customer centric whilst using kind of the
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latest technology and the latest kind of kind of real time
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payments infrastructure that that, you know, clear bank
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provide is, is a good correlation between those that
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have been successful I I would say and.
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How do you support these rapidly growing fintechs from a from a
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banking perspective? But they still need to keep
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their feet on the ground when it comes to compliance.
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Yeah. So, so, so we, we, we always
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think about kind of our clients as being with a, a partnership.
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And and that's even more the case with with embedded,
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embedded banking as a, as a sort of, we, we, we take our kind of
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regulatory compliance and regulatory standards very, very
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seriously. And we expect our sort of
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clients to to do the same. One, one of the advantages and
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the sort of beauty of, of, of what we do with our, with our
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clients through embedded banking is that we allow them to provide
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banking services whilst not being a bank.
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So, so a lot of the compliance that that comes with that is,
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is, is with us. And actually as, as we've moved
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into corporates, you know, that they're non licensed, whereas
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the fintechs are licensed by the FCA and have certain
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responsibilities themselves that, that, that we can work
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with as we move into corporates. What we're, what we are doing
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then is actually providing the fraud prevention, the KYC, the
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KYB as, as a service from ourselves so that we can really
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help them with that compliance in a, in a much greater way than
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than than before. But it's very, you know, as you
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can imagine, using our banking licence through embedded banking
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isn't something that we, we take lightly.
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So, so we, we absolutely partner with those clients to make sure
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that the, the standards that we operate to are the are the best.
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And, and sometimes we've had clients that want to work with
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us and we've given them some recommendations that they need
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to make before we will they go away, They make, they implement
17:24
those recommendations and then we're then we're good to go.
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So we see. Like certain Emis get into hot
17:29
water with agent models and things like that.
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And the reason those models kind of existed was because the
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fintechs wanted more autonomy to kind of onboard customers
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quicker directly in house, right?
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But you kind of have to, I guess, weigh that demand for the
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speed side of things, which everyone wants everything
17:45
quickly now, right? And onboarding journeys are a
17:47
massive part of that. But you have to kind of keep
17:49
that regulation stuff in, in mind in the background.
17:52
But I guess you're getting pressured to a degree by some of
17:54
those fintechs that want those very, very fast processes and,
17:58
and you kind of have to educate them, I suppose around the
18:01
regulation that sits behind that.
18:02
Yeah, I think, I think, I think that.
18:04
I think that's, I think that's true.
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I think we're very clear on what our kind of risk appetite is,
18:08
what we will do, what we will do, what we won't do.
18:11
And so there's an alignment that you have to have on that.
18:15
But I guess if you, if you look at kind of financial services as
18:18
an industry, there's, there's many, many examples of what
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happens if you don't take that seriously.
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And the number of fines that there are, the number of
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regulatory issues that a number of kind of banks and others have
18:29
have had. You know, we, we, we, we want to
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make sure we're not in that, in that in our space.
18:34
And what role does Clearbank play kind of in enabling that
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financial inclusion and access for it's for it's customers and
18:41
beyond? Yeah.
18:42
So, so it's, it's something we take really seriously.
18:46
So and and sustainability is something we look at as well.
18:49
We've, we've got our kind of net, net zero plans, but
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financial inclusion, we sort of bucket under all of that.
18:54
All of that SME banking is, is one example which has been under
19:01
underserved by banks in the UK. And if you're an SME, it's been,
19:05
it's been difficult to get the, the banking facilities, the
19:07
financing that you need. Tide is 1 good example of
19:11
working with them to build an SME proposition that's now got
19:14
over 10% of the market and helping to kind of deal with
19:18
that SME side. We also work with the government
19:21
and, and there's some kind of social aspects to that around
19:26
around payment of Social Security and, and others.
19:29
So it is something that we we actively kind of are involved in
19:33
and, and, and think is important.
19:34
There's been some crazy stuff that's that's gone on we talked
19:37
about previously on the podcast, but I mentioned the the
19:40
pawnbroker sector as an example, right?
19:42
Highly, highly regulated and there's AI won't name them, but
19:45
a couple of High Street banks that really kicked that sector
19:47
to touch recently. And I know that Zemplar as an
19:50
example, went quite heavily into that that space and kind of
19:53
mopped up customers in in that vertical.
19:55
But it kind of baffles me that the traditional High Street
19:59
banks are still choosing in the get in that SMB space.
20:01
Like, oh, we don't want a load of, you know, one man band,
20:04
plumbers, electricians, whatever it might be like.
20:07
But he was driving the decision. It's fairly low risk, right?
20:10
I mean, is it that the cost of per customer to onboard them
20:12
because of their legacy systems versus the value they'll drive
20:15
from that customer? Is that part of the decision
20:17
that's going on in the background there?
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I suspect there's a, a couple of aspects to that and I don't, I
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don't have kind of inside, you know, inside insight into the
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decision making that they're, that they're coming up with.
20:28
But I guess there is a, there is a commercial ends to it.
20:31
I'm I'm sure as to, as to what does that look like the service
20:34
model look like SM ES are a high touch, high touch point customer
20:40
base. Then there is, you know, risk
20:43
appetite around financial crime and you know, do you, do you
20:48
take a broad brush point decision?
20:51
Do you make a kind of nuanced risk based decision in the
20:54
detail, you know, where, where, where do organisations take that
20:57
decision? Is it at a, at a high level, low
20:59
level? So I think, I think it's a a
21:01
mixture of, you know, risk appetite around, around
21:04
financial crime, which which which given I guess some of the
21:09
kind of press and fines and remediation activities there has
21:13
been is, is, is, is in context of that and the commercial kind
21:17
of lens of, of, of, of the model.
21:19
I feel like there's a bit of naivety to all of it though,
21:21
because again, you look at the revolutes, the Monzo's, the
21:24
Starlings, where I think there was kind of originally, you
21:27
know, again, your yourselves within the seats.
21:29
Just look at some of the customers you guys have now
21:31
where, Oh yeah, they, they can, they can go and build that.
21:34
They're no threat to us. There's no risk.
21:36
And then the customer base grows and grows and grows.
21:38
Oh, they're not going to do mortgages.
21:39
Oh, well, yeah, they are going to do more because they've
21:41
they've now got a, a huge proportion of customers driving
21:44
revenue and then they move into new sectors and then they become
21:46
a very, very real risk to the wider banking ecosystem.
21:49
And I just feel like there was always a bit of naivety over
21:52
some of the, the challenger banks, the NEA banks, the Emis,
21:55
even in, in the market. So I think that's only going to
21:59
continue as they continue to scale, right And come publicly
22:02
listed companies in some cases as well.
22:04
I mean, I think the UK has had real like great success with the
22:10
kind of wave of new challenger banks that were promoted and
22:14
with the, with the kind of start up unit kind of support from
22:18
from the FCA and the regulators. It's been a real kind of UK
22:23
success story, which is fantastic.
22:25
And and I guess it would be easy because I think, I think I
22:28
remember earlier in my career when I was working in those kind
22:31
of bigger, bigger banks, at that point, it was the peer-to-peer
22:35
lending. Is that going to be a threat?
22:36
Is that or is that not going to be a threat?
22:38
I think that sort of came and and and went and maybe maybe
22:42
there was a view that that might happen again with with the new
22:45
kind of neo banks and the challenger banks.
22:47
And but I think with the likes of, you know, the success that
22:50
that revolute have had, how large they've become Monzo
22:54
Starling. I think I think the success is
22:56
there to be seen. And I think I think that's only
22:59
I I mean, I agree. I think it's only going to grow
23:02
that competitive landscape, which is exactly, I guess the,
23:07
the, the reason why kind of there was a wave of new banking
23:10
licences issued in, in the, in the, in the, in the sort of 10
23:14
year, 10 year ago period. So I think that they're going to
23:18
continue to grow and I think as they get more full service, I
23:22
think I think we will see that kind of chipping away.
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That's ISX dot Financial and a big thank you to the team at ISX
24:06
for supporting the show. And as another UK host to child
24:11
fintech in your own right. I guess in many ways, do you
24:13
still believe that the UK is the number one kind of Fintech
24:17
incubator? And and you asked this question
24:20
because you guys are at pretty much every event globally that,
24:22
that we see in every region, right, which points to to wider
24:25
ambitions. But do you still think we're
24:26
kind of best in class here in the UK is kind of the the
24:29
Fintech growth hub? I definitely think we're up
24:33
there worldwide, right. So, so I think the, the amount
24:36
of support and success there has been that we've just sort of
24:40
talked about speaks for itself. And I and I think we're now
24:43
flipping from the, the start up phase to the scale up phase.
24:50
And, and that's a slightly different kind of environment to
24:52
operate. And I think you know what, what
24:55
kind of we are coming up against and, and others are coming up
24:57
against is you, you sort of hit a size and suddenly you're
25:01
treated like you're one of the big, one of the big banks.
25:04
And so how do we make sure that the UK continues to be not just
25:08
great for start for start-ups, but through the whole life cycle
25:11
as you continue to grow that there's the continue kind of
25:15
focus and support on growing those.
25:17
And I think there were a series of announcements at the Mansion
25:21
House speech last year under the Leeds reforms, which, which are
25:24
trying to do exactly that. So to continue to make the UK
25:28
the best place to be. And you know, whether that is
25:32
through kind of the, the changes to the capital rules, whether
25:34
that is to changing the kind of senior manager regime rules, the
25:39
amount of kind of support you get through a creation of a new
25:43
scale up unit. There's, there's a lot of stuff
25:45
happening to make sure that the UK stays at the forefront.
25:50
And I think if you were to look at levels of investment and, and
25:53
capital that are go that are going into funding UK fintech,
25:57
we're, we're, we're still the leader in, in Europe, not by as
26:01
much as we used to be, But so we need, we need to kind of not
26:05
rest on our laurels on that and continue to, to, to focus on
26:09
that. But I do think the UK is still
26:11
a, a very globally competitive place to, to, to, to have
26:14
fintech with a thriving kind of scene.
26:16
I think as we look ahead, we need to kind of make sure that
26:20
we are conscious of the new latest technologies and, and
26:24
capabilities that are coming. So talked about the Circle
26:28
partnership that we we announced last year that is an EU
26:31
partnership under the Mika rules that are that were put in place.
26:37
We're able to partner with Circle and get into minting USDC
26:41
and EURC through our European bank, which is fantastic.
26:45
Our European bank launched towards the end of 2024, still
26:50
relatively new bank, but actually through this
26:53
partnership we'll be at the leading edge and ahead of the UK
26:57
bank in embracing that change. So we need to make sure that the
27:00
UK doesn't miss that opportunity.
27:02
I think, I think there's, there's a, there's a realisation
27:04
that that's important. I think there's been some policy
27:07
announcements in the UK to, to look at how can we, how can we
27:11
make sure that there's a, the ability and capability for, for
27:14
UK for index to, to, to, to get involved at the moment that that
27:19
doesn't apply to, to bank issuers.
27:22
So, so we are unable to, to get involved in that in, in the UK.
27:26
And I think that is something that we would like to kind of
27:29
continue the conversation on because we don't think in in
27:32
terms of, you know, going to your question of is the UK the
27:35
leading kind of Fintech? Yes, but it needs to continue to
27:39
embrace the new the new technology that's coming.
27:42
Embedded finance, it has been a buzzword but now it's businesses
27:46
are putting it into practice and and Clear Bank sits at the
27:49
centre of that. What do you see for embedded
27:52
finance going into 2026? Yeah, So, so, so, so I, I draw a
27:58
distinction between embedded finance and embedded banking
28:01
because I think embedded banking is, is banking accounts, banking
28:04
capabilities, embedded in an organization.
28:07
Embedded finance can mean a number of, of different things.
28:10
But for us, I mean, what, what we're, what we're seeing and,
28:13
and, and what we, you know, expect to continue is the
28:16
continuation of kind of democratisation, if you like,
28:19
of, of, of finance capabilities and, and, and banking and, and
28:23
much more kind of one stop shops and for kind of our partners
28:28
and, and for organizations that want to get involved.
28:30
So, so if you were to look at the, the partnership we
28:35
announced with Coinbase towards the end of 2025, that is
28:40
embedding a, a savings account right alongside your digital
28:44
asset wallet. So that interoperability between
28:47
the digital world and the Fiat world is, is, is, is, is getting
28:52
stronger and stronger. And I think that's going to be
28:55
a, a trend we continue to see in 2026.
28:59
I think people want that interoperability.
29:01
They want it to be easier to move their money in whatever
29:05
form it is between whatever, you know, accounts they have.
29:07
I think that's, that's going to be a critical one.
29:10
But it also think that, you know, as, as we move into the
29:13
corporate segment that there's, there's a, there's a real
29:16
opportunity that, that, that we're seeing in a trend that
29:18
we're seeing where corporates want to be able to offer banking
29:23
capabilities as well. So if they've got a a a customer
29:27
who has a number of different products with them, why not?
29:30
Why not take a a a bank account? They kind of meld together,
29:33
don't they? I think I, I kind of see
29:34
embedded finances. The original incarnation of that
29:38
was merchant cash advances and lending was the prominent one.
29:42
But then you have insurance in there.
29:44
Now you have various other upsells that organizations take
29:48
an embedded banking would would be another one of them, right?
29:51
You know, if you're catching a customer that's looking for
29:54
several things at once in one location and you know, a new
29:57
bank account or service bank account to help them provision a
30:00
different product, IE your circle, your coin base type,
30:04
stable coin, crypto wallets, whatever it might be.
30:08
That is just capturing someone in buying mode at that point.
30:10
And the banking proposition just becomes another one of those
30:13
things that sat on. Owning pay insurance and
30:15
payouts, right, so that that customers depend on youth for
30:18
everything and coupling to coupling we talk about a lot,
30:21
right, But how can you have a business for a lot on youth for
30:23
everything They need to be able to do their job as a business.
30:27
Yeah. And it, and it goes to kind of
30:29
consumer kind of wants and, and, and, and I guess experience, but
30:33
it goes to the loyalty and stickiness of the customer for
30:36
the, for the corporate. I mean, I guess we saw
30:39
supermarkets move into banking with that in mind and and then
30:42
move out because actually being a bank is, is a really kind of
30:45
large undertaking and not. And that and that that's the
30:48
kind of thing where embedded banking is a really interesting
30:51
proposition because, because actually you can offer the same
30:54
kind of products, but without, without having to run a bank.
30:57
Most of them are hold out now, haven't they?
30:59
This evening? There's not many left.
31:00
Yeah, that's interesting. I guess that that's a good segue
31:03
into a question of what mistakes do companies tend to make when
31:05
embedding financial services products into their stuff?
31:09
Yeah. So we, we did a report on this
31:12
last year where we looked at that and, and, and, and what we
31:16
kind of found is the majority of businesses see the opportunity
31:20
there. But I also think the majority, I
31:22
think it was sort of 60% of, of, of the 200 people, kind of
31:26
C-Suite people that we, that we surveyed are worried about.
31:31
How do you integrate it and make the most of it without, without
31:35
becoming kind of a financial service business, right?
31:38
So how, how do you make sure that the, the end to end
31:43
experience is right? Because if it isn't, then, then
31:47
it's not going to do what you want it to do.
31:50
And, and it's easy to underestimate the work that's
31:54
involved in doing that because actually it is it, it, it's not
31:57
an easy thing and it's not something to do lightly to embed
32:00
financial services into your, into your proposition, into your
32:03
offering. And I, and I think that's
32:07
probably the, the, the kind of biggest mistake.
32:09
And maybe it goes to that example of, of why they, they,
32:12
they went for it and then they pulled out again.
32:15
It it's underestimating kind of what's involved in doing that
32:18
and the commitment that you you need to make to do it.
32:21
Do you think it's maybe misunderstood when businesses
32:24
are trying to move into that world?
32:27
I think, I think probably the kind of the nature of the
32:30
relationship needs to be is a partnership.
32:33
It's not a transaction. That's, that is, you know, it's
32:37
an easy thing to say, but it's, it is exactly how we, we treat
32:40
the embedded banking deals that we have because, you know, it,
32:44
it needs to be symbiotic because it's our banking licence and,
32:47
and, and they, you know, we all have responsibilities under
32:49
that. So it's a real partnership and
32:52
we want them to do well. And, and so we actively look at
32:55
ways to kind of support what it is they're trying to do and, and
32:58
grow with that. I think it, it, there's no
33:00
one-size-fits-all. Every, every kind of partnership
33:04
is unique and different and, and, and tailored to to what it
33:08
is that, that, that, that is needed.
33:12
So. So I guess, yeah.
33:17
Partnerships. Yeah.
33:19
And we we've talked a little about partnerships, obviously
33:21
we've talked about the Circle partnership that you guys have
33:24
put in place that's obviously, you know, they're going great
33:27
guns as an organization. And there's we've talked about
33:31
stablecoins summer over the last 12 months as well.
33:35
And everyone was talking about stablecoins before they were
33:37
talking about a genetic commerce linked to AI.
33:39
But you know, the the timing of it for you guys, why was
33:44
partnering with a stablecoin issuer like a Circle?
33:47
You know why was this the right time for you guys to go into
33:49
that space? Yeah.
33:50
So, so, so it's, it's, it's really important for us that we
33:57
adopt, adapt to the latest technology capabilities that are
34:02
in the market and we've been watching it for some time.
34:06
What's happening with stablecoins?
34:08
How's it growing and the momentum is clear, right?
34:12
So the, the, the, the pace of growth, the transaction volumes,
34:15
the, the liquidity, it's, it's, it's all rapidly, rapidly
34:19
growing. And in wanting to provide our
34:23
clients with, with the, with the latest capabilities, looking at
34:28
how we can support kind of cross-border payments to be real
34:31
time stepping away from kind of the, the legacy kind of the,
34:35
the, the, the complexity of SWIFT and other payment, payment
34:38
schemes. And to get them battered at the
34:41
moment I want to use them as their example you.
34:44
Don't want to say bless them, but you want to say bless them?
34:48
But, but you know, we, we saw what circle were doing, the
34:51
success they were having and it made sense for us to partner
34:54
with them in order to take our offering to the next level.
34:58
We, we did that in the EU because that's where we can do
35:02
it under the Mika rules, in the Mika legislation.
35:06
We'd love to do that in the UK as well.
35:08
And hopefully at some point in the future we can.
35:10
But, but it made sense for us to do it when we did it last year,
35:14
just because the technology is at a point now where I think
35:17
it's been proven. I think the use cases are there.
35:20
The, the, the, the logic for us is clear in, in what it is we're
35:24
here to do on our mission. And you know, if if you wait a
35:28
year, two years, everyone else will be in there in that space.
35:32
So, so we want to be at the front.
35:34
Is there settlement advantages there as Clearbank being a fully
35:37
licensed bank? So I think from from being a
35:40
fully licensed bank, I think that gives that gives the kind
35:43
of users the reassurance that the the money is safe.
35:48
Going back to the conversation we had about the regulation of
35:51
being a bank, I think I think there is a preference by from
35:54
consumers to to use banks rather than kind of other licences
36:00
organisations. So I think you partner that with
36:04
our kind of technology integration toward payment
36:07
schemes real time, then I think actually it's a really nice kind
36:13
of combination. There was that very much like a
36:15
a send them thing with Fiat and stablecoin originally as well.
36:20
And I think this is more an example of banks and, you know,
36:24
digital asset companies coming together and working more
36:27
collaboratively rather than seeing themselves as complete
36:29
competitors in the market based on the trailblazing in that
36:33
space. Yeah.
36:33
So we think kind of there needs to be a bridge between kind of
36:37
digital asset world and the and the Fiat world.
36:39
I think we've we've looked to try and see how we can position
36:44
ourselves in that, in that space.
36:46
I mean, we've, we've been doing the agency banking for Coinbase
36:51
for some time and we do have several kind of digital asset
36:55
platforms businesses on our books.
37:00
It it's logical to then look at kind of the embedded banking
37:03
relationship there, which we which we've done and then move
37:07
into actually how do we get directly involved in the stable
37:10
coins as well. So that, that kind of bringing
37:14
together of the old and the new, I think is, is something that we
37:18
is, aligns nicely with our, our mission.
37:20
And I and I think inevitably there's going to have to be a, a
37:24
greater shift in that direction. And I think what that's what
37:28
we'll see. I guess if you, if you looked at
37:29
the EU, you see 99 banks come together in a joint venture to
37:35
get involved in stablecoins. So I think those barriers are,
37:38
are, are breaking down kind of more and more.
37:41
And I think if and when there's the ability to do that in the
37:44
UKI think you'd see the same. I don't think we we can't talk
37:47
about stable coin and and Fiat without talking about regulation
37:51
unfortunately or fortunately. Which regulatory models do you
37:55
see are kind of the most progressive right now to to help
37:57
enable you guys as as you continue to push forward?
38:01
Yeah, so, so, so I think there's a lot of good stuff happening in
38:03
the UK. So we'll start, we'll start
38:06
there. So, and the kind of support for,
38:10
for start-ups was very strong in the, in the sort of 1010 years
38:15
ago moving to scale UPS now we've got the Leeds reforms
38:20
scale up units built. I think I think there's a lot of
38:22
moves to support kind of continued growth of, of fintechs
38:29
and financial services in the UK, which which is fantastic.
38:32
And, and, and, and hopefully that will kind of continue to be
38:35
the case because I think that will keep us in our kind of
38:38
world leading position. I think though, if you look at
38:42
what's happening in the US and what's happening in the EU,
38:45
there's, there's, there's, there's possibly a sort of
38:47
greater embracing of, of digital assets and stable coins and
38:51
where that can go. The, the, the US obviously with
38:55
the Genius Act has, has really propelled digital assets and,
39:01
and raise the bar in standards of what it is that, that
39:04
actually involves. And, and, and what it is a
39:05
stable coin has to be, which is, which is great because I think
39:08
you need regulatory certainty and you need, you need to know
39:13
that it's a safe thing to, to get involved in.
39:16
I think the, the Mika also also does that as well, which, which
39:22
is great. And again, with the regulatory
39:23
certainty you have there that enables us to pursue the
39:26
partnership with Circle and, and all the things we've got planned
39:29
for this year, which is, which is really, really exciting.
39:34
I hope that the UK will also will also get there.
39:37
There's some valid debates and arguments that are that are out
39:40
there in terms of what does it do to lending in the real
39:45
economy? What does it do to economic
39:48
growth as a, as a, as a consequence of that.
39:50
And I think there's some very valid conversations there.
39:53
I think part of being a progressive environment is maybe
39:57
to look at some of the different business models that there are.
40:01
So if we're just looking at Clearbank and distinguishing
40:04
Clearbank from from the incumbent banks, there's been
40:07
recognition of that through kind of the Leeds reforms and, and,
40:10
and looking at how regulation can can reflect the different
40:14
business models. You know, Clearbank doesn't do
40:17
lending. Clearbank, we hold all of our
40:19
cash at the central bank. Whether that be the Bank of
40:22
England or the ECB. And so actually if we if we get
40:28
involved in stable coins as a bank, there's no impact on
40:30
lending or what have you. So it's a greater recognition
40:34
perhaps on the different business models we would
40:36
welcome, but we'll continue the the debate and conversations
40:40
around whether the UK can embrace stable coins in the same
40:44
way. And the Genius Act is a great
40:45
example of the government getting out of the way.
40:47
But where do you think governments are sort of
40:49
unintentionally getting in the way of fintech innovation at the
40:52
moment? I, I think that I think they're
40:54
all actually trying to get out of the way.
40:59
A, a, a good example of where perhaps there was a, a, a sort
41:02
of move that, that, that concerned a few businesses.
41:07
And that that was then resolved was with the, the PSR and the
41:14
introduction of the APP limits, which initially were, were kind
41:20
of several hundreds and thousands, but through kind of
41:24
sensible conversation and discussion, they were, they were
41:26
moved to to 85,000. So, so I think, I think there is
41:33
a, a recognition that the, the, the regulation that in the wake
41:40
of the financial crisis was, was emphasising of safety, which is
41:46
entirely logical and understandable and reasonable.
41:49
I think they're now, and you've heard it from the government
41:52
that you know, themselves and and the the Leeds reforms, a
41:57
recognition that maybe maybe there's an opportunity to get
41:59
out of the way a little bit more.
42:01
And that and that's certainly what we're seeing in the tone.
42:04
And now that that's not to say it's going back to kind of the
42:08
regulation that used to be. I don't think that would be
42:10
appropriate, but I do think there is a a desire and intent
42:16
and some actions that demonstrate it that to, to, to,
42:19
to, to get out of the way sounds.
42:21
Like you're, you're working with the regulators obviously help
42:24
encourage the growth without compromising safety at the same
42:27
time. Yeah, I think you can have both.
42:30
And obviously the regulators had a, a secondary objective added
42:33
around competition not not too long ago.
42:37
The directive from the government is to, is to look at
42:41
how we can drive the growth agenda.
42:43
I think the regulators are responding to that in a, in a,
42:46
in a sensible measured way. And, and, and, and the evidence
42:51
of that is, is, is out there. It's.
42:53
Obviously 12 months in, enroll now as as CEO your your
42:57
anniversary, but what do the next couple of years look like?
43:00
Clearbank, where are you going next?
43:02
Yeah. So, so there's, there's a lot of
43:04
opportunity and I'm really excited.
43:06
So if we were to take, we got our EU licence in 2024-2025 was
43:13
a year of really getting off the ground.
43:15
And I think over the next couple of years, the opportunity we've
43:18
got there across the whole of the EU, where the market is, you
43:21
know, five times the size of the UK, taking our offering to, to,
43:27
to more businesses, more clients who've got the same challenges
43:30
that those in the UK had is, is, is really exciting.
43:34
I think the digital asset partnership with Circle that's
43:37
really going to get going in 2026.
43:39
And, and, and, and over the next couple of years, I, I think we
43:43
should see that Clearpank is at the centre of, of that ecosystem
43:47
in Europe and, and hopefully in the UK through through growing
43:51
into Europe. What we're, we're also seeing is
43:54
we've now become a regional, a regional bank.
43:56
We're not AUK domestic bank and we're able to offer larger
44:00
businesses the capabilities they need on a, on account of UK and
44:04
EU basis. So we're going to see a lot more
44:08
kind of blue chip names, I think in, in our, in our customer
44:12
base, which is absolutely fantastic.
44:13
Our pipeline is, is really, really exciting and.
44:17
I think and then in in the UK there's an awful lot still to
44:21
do. We've we've expanded into
44:23
corporates. There's a, there's a, there's a,
44:25
there's a lot more corporates in the UK than there are fintechs,
44:29
but they've got a number of the same challenges in the banking
44:33
infrastructure capabilities they've had.
44:35
So, so we're really excited about kind of helping them to,
44:38
to do more and embedding finance, embedded banking more
44:42
in their offering too. And then I mean, I, I don't
44:44
think we want to stop at the UK and Europe.
44:46
So we're looking at where's next geographically.
44:50
Well, well, well, domination, your words.
44:53
But I think we think that actually there's no one offering
44:57
what we offer on a, on a global basis.
45:01
So actually there's an opportunity there to be not just
45:04
the only scale player doing it in the UK, you know, in the EU,
45:07
but someone doing it more widely than that.
45:10
And so we're, we're looking at what, what, what might that look
45:12
like? Exciting times ahead.
45:14
So Mark, the final part of the show that every guest gets put
45:18
through is the the shelf for showing where we ask you to
45:21
nominate something in business, banking, payments, whatever it
45:24
might be, something that really grinds your gears.
45:26
What's your nomination going to be for us today?
45:30
So, OK, Room 101 style, is there a lever?
45:33
Yeah, kind of it. Will be.
45:35
It will be in or out. We'll cast a vote.
45:38
I would put fraudsters in on the shelf or in room 101 or whatever
45:45
it is. I think it I mean, it speaks for
45:49
itself. But I think there's, there's,
45:51
there's an awful lot of focus that, that clear bank and, and
45:55
all banks and financial services have to put into preventing kind
46:00
of successful fraud. And it has always become a, a
46:05
kind of industry on its own. And so rightly it's taken very,
46:10
very seriously. But but customers, consumers
46:13
that they're losing money and all of the effort we put into
46:18
trying to kind of deal with that takes away from kind of giving
46:23
customers more of what they want and driving the innovation
46:27
agenda. So I think for, for, for, for,
46:30
for for the shelf I would put fraudsters.
46:34
And scarily, the number still seems to grow every year in
46:36
most, most areas of fraud. We think we're going to be
46:38
getting to a point where we're chipping away at it and reducing
46:41
those numbers, but that's sadly not always the case because the
46:43
fraudsters. Get smart, game isn't.
46:45
It right it is you close you, you know, you identify ways of
46:48
and then and then they they respond back in kind.
46:51
But I think there's some really kind of innovative stuff going
46:53
out there. I think Revolute have have
46:54
recently announced kind of Geo tagging of where it is you log
46:59
in like have safe space. So, so there's a lot of effort
47:02
going in and continual innovation in that space.
47:05
So nature of the beast with things like AI as well, right?
47:08
It's care what you wish for because everyone's AI to make
47:10
life easier, but actually data is actually getting could do
47:14
just so much harm as it's doing good for any business, right?
47:17
Yeah, no. Well, and and you just do it
47:18
with the sort of deep fakes and the rest of it maybe, maybe that
47:21
face scan isn't going to be enough in the future, So it'll
47:24
have to continually evolve. Yeah.
47:26
Terrifying. So Matt, where can I listen to
47:29
this? Find more about yourself and own
47:30
Clearbank. They can find all about our
47:34
website clear dot bank. We also attend every large
47:40
fintech and banking events. Monday 2020 Fintech festival.
47:46
Wherever, wherever those events are, you'll find us.
47:50
Amazing. Thanks so much.
47:51
For your time today, yeah. Thanks for having me.