Banks refusing to fund rival tech startups
28 October 2014 |
UK banks are blocking the rise of the fast-growing financial technology sector by refusing entrants standard bank accounts.
Crowdfunding platforms and digital payment start-ups are being refused banking services because the big four banks fear disruptive technology, claim payment entrepreneurs. The “fintech” industry raised the issue at a meeting at 10 Downing Street, calling for banks to meet their needs. This is despite Chancellor George Osborne calling for the UK to become a “fintech hub”.
HSBC and RBS have imposed a ban on doing business with disruptive payment services such as bitcoin exchanges, because of anti money-laundering rules and other regulatory concerns. Barclays and Lloyds take a looser approach, opening accounts on a case-by-case basis.
But the real reason, says lobbyist New Finance, is because high-street banks do not want to support disruptors that could take away their business.
Ernst & Young estimates that the UK fintech sector generates about £20billion in annual revenue. Coinfloor, the London bitcoin exchange, has warned that Britain risks being left behind because no British bank will accept its business.
“The [British] banks are very conservative and not very interested in something that could be very innovative and disruptive to what they do,” Coinfloor CEO Mark Lamb told the Financial Times.