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February 28, 2017updated 01 Mar 2017 12:58pm

Built on Microsoft Azure, the first clearing bank in 250 years enters UK market

ClearBank set to play an important role helping challenger banks access the services they need to do business.

By Tom Ball

Nick Ogden, founder of Worldpay, has officially launched ClearBank, the first new clearing bank to enter the market in 250 years.

A clearing bank is a commercial bank that is part of a network of banks that can clear cheques for its clients regardless of whether or not the cheque originates from the same bank.

This historic announcement has an important meaning for fintech startups, as ClearBank will provide access to crucial banking technology necessary for progression.  ClearBank is officially regulated and is intended to go live as soon as Autumn 2017 to providers of financial services.

Worldpay founder Nick Ogden at the launch of ClearBank.

ClearBank is intending to bring greater opportunity for open competition for financial services providers, FCA-regulated business and Fintechs. The bank also aims to achieve substantial improvements in making transaction banking faster and more cost effective.

The technology that ClearBank intends to use is a central differentiating factor focussed on by Ogden, as the service is set to utilise both private and public cloud infrastructure. Microsoft is at the core of this technology, with cloud computing platform Azure being put to use throughout. Ogden said that that there has been ‘a close working relationship with them since 2013’.

The bank also claims to be the first UK clearing bank that is equipped with a purpose-built, integrated banking technology system, with an application programming interface (API) designed to support easier connection. The API was developed in accordance with ISO 20022.

At the launch event attended by CBR, Nick Ogden also commented on the global concern surrounding cyber security, saying that ‘we are very, very concerned about cybercrime’. In light of this Ogden said that ClearBank will be utilising an array of technologies as security measures to increase levels of certainty.

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Continuing to speak about the precautions taken to prevent cybercrime, Ogden explained that the safeguards set to be implemented are none negotiable, with the Executive chairman naming voice technologies, visual technologies, and Fujitsu’s vein technology as just some of the security measures undertaken by ClearBank.

Ogden said that banks that use these services can ‘authenticate their customers when they enrol them’, reducing the grey area around this identity aspect. Ogden said:

“We want to be able to authenticate accurately and correctly, and see who has authorised every transaction we make…there can be no question or discussion later.”

MP Simon Kirby, Economic Secretary to the Treasury

Economic Secretary to the Treasury, MP Simon Kirby also spoke at the launch of ClearBank, saying: “Competition – it’s a fundamental and uncontroversial principle if you want constant innovation, and you want competition in the marketplace.”

“[ClearBank] will play an important role helping challenger banks access the services they need to do business, so they can compete effectively with the big players and deliver the benefits of greater choice and value for consumers and businesses”. In commenting on the beneficial effects of the presence of ClearBank in the market, Kirby noted fintech as an area that would be supported.

ClearBank CEO Charles McManus, said: “There are two things that make ClearBank unique. Firstly, ClearBank is the first UK clearing bank to offer services that intentionally complement its customers’ market activities, driving choice and competition in the wider market. From our own customers through to the consumers they serve, we believe the benefits ClearBank offers will help develop greater choice, and more inclusive service offerings.

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