By Oliver Smith on Tuesday 30 November 2021
As ClearBank and Starling reach 7% market share among UK SME banks.
Today, the Banking Competition Remedies (BCR) fund celebrated its third annual report, with details that over 1,173 jobs have been created due to the £775m it has redistributed.
It is made up of £275m allocated to the Incentivised Switching Scheme to encourage SMEs to switch banking providers, and £425m as part of the Capability And Innovation Fund for banks and other firms to build features that help increase competition in the SME banking market.
Today the BCR said grant-winners had gone on to raise £1.9bn worth of private investment on the back of their funding, and would create another 580 jobs by 2025.
Both have now achieved or are near 7 per cent market share of SME banking accounts due to their funding.
“In February 2019, Starling received a £100m CIF award and that award has been transformational for Starling and I would go further and say it has been transformational for the SME Banking market as well,” said Starling’s chief corporate affairs officer Alexandra Frean.
“The whole point of this exercise was to bring about change in the small business banking market and I really think it has succeeded certainly in Starling’s case.”
The BCR is independent of RBS and the UK Government and is governed by an independent board of directors.
However, not everything has gone swimmingly, as several awardees were forced to return their grants or scale back their public promises due to the Covid pandemic.
In turn, the BCR had to redistribute funds across new pools of applicants, albeit in far smaller pot sizes than had initially been envisioned.