BankTechFintechPolitics & Money

Bank of London takes launch, as other banks close branches

The Bank of London has officially received its first bank license as the sixth principal clearing bank of the UK, only the second new clearing bank in the past 250 years, according to a press release.

The fintech-turned-bank also announced $90 million in new funding led by ForgeLight and is now valued at $1.1 billion, making it the first pre-revenue bank in history to reach the “unicorn” mark before debut, according to Bloomberg.

The bank has now raised $120 million to date. It is set to use the funding to hire over 3,000 people across the UK, EU and North America over the next five years. While the majority of those hires are expected to be in the UK, the bank says it is already focusing on its international growth strategy and is in advanced talks with regulators in the EU and the US.

Former Goldman Sachs executive Harvey Schwartz will chair the new bank and lead the planned charge to use technology to “shake-up transaction banking,” according to Financial News London.

“”The Bank of London is going to address an arcane part of the global financial system – the sleepy worlds of clearing and global transaction banking,” Schwartz stated in the release.

“Fundamentally, banking is basically an immensely complex data problem. The Bank of London is the solution. And our unique solution is simplicity,” he said.

As the Bank of London earns the newest clearing bank license in the country and gets set to launch its digital strategy across the country and abroad, other traditional banks are struggling.

TSB Bank, a large retail and commercial bank in the UK, announced today it would be closing another 70 branches across the country, according to The Guardian. The news follows a wave of previous closures over the past two years, meaning that by June 2022 the bank will only have 220 branches left of the 475 in early 2020.

TSB says that the branch cutting is a result of decreased usage, with the average number of transactions falling since January 2019 and “no prospect of branch transactions returning to pre-COVID levels.” More than nine in 10 transactions are now carried out digitally, according to the Guardian.

In other recent fintech news, Temenos launched its new open marketplace to connect banks and fintech solutions. Thought Machine also raised $200 million to further its goal of bringing legacy banking to the cloud.

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