On 19 December 2018, the Banking Competition Remedies (BCR) (the independent body established to implement the ARP) announced that 11 organisations meet the eligibility criteria for the ARP 'Incentivised Switching Scheme'. This follows an announcement by Nesta Challenges on 06 December 2018 of the six winners of the ‘Open Up Challenge’.
RBS Alternative Remedies Package
Please refer to this article for a summary of the ARP, which comprises:
- a £425m Capability and Innovation Fund that will make grants to eligible bodies to help them improve their banking capabilities for SMEs, and
- up to £275m for an 'Incentivised Switching Scheme' that will fund eligible bodies to incentivise RBS’ SME banking customers to move their business current accounts (up to an additional £75m will be made available by RBS to cover customers’ costs of moving).
The announcement on 19 December 2018 relates to the Incentivised Switching Scheme only and confirms that 11 organisations meet the eligibility criteria. These organisations comprise of established banks, challenger banks and other FinTech companies and include two businesses that are yet to launch a business current account offering. Further details of the offers are due to be published on 25 February 2019.
Godfrey Cromwell, BCR’s chairman, said that “it’s very good news that a broad selection of organisations have stepped forward and made a diversity of offers right across the SME client-base. Today’s announcement marks an important milestone for Incentivised Switching.”
It should also be noted that the deadline for applications to Pool A of the Capability and Innovation Fund is 31 December 2018.
The Nesta Challenge
On 06 December 2018, Nesta announced the six winners of the ‘Open Up Challenge’: Coconut, Fluidly, Funding Circle, Funding Options, OpenWrks and Swoop. Launched in February 2017, the Nesta ‘Open Up Challenge’ was introduced by the Competition and Market Authority (CMA) as part of a package of remedies to encourage competition in the UK retail banking market.
The package of ‘Open Banking’ reforms was first introduced by the CMA in 2016 to address competition issues within the SME and retail banking market, specifically in relation to the inability of challenger banks to compete with their well-established counterparts. Nesta’s ‘Open Up Challenge’ uses the ‘Open Banking’ reforms by encouraging FinTech businesses to build innovative products and services in the SME and retail banking market.
This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.