| Updated:
UK fintech Clearbank has laid out plans to power up its embedded banking services and take on legacy banks on a new battlefield.
The firm said outdated “one-size-fits-all” approaches from centuries-old high street banks were “no longer fit for work” and set out plans to challenge traditional transaction services in areas like travel, hospitality and payroll.
Clearbank’s UK chief executive Emma Hagan told City AM that the company was bringing a “proven model to corporate businesses”.
The fintech specialises in application programming interface (API) payments, a technology in which the firm acts as an intermediary between different entities – such as payment processors, gateways and banks – for eCommerce platforms to process payments.
Clearbank, which has traditionally worked with fintech peers and challenger banks, is now eying corporate businesses as a new market.
The group’s new embedded banking proposition looks to allow non-financial businesses to seamlessly integrate a fully regulated and protected bank account onto their platform.
But it’s an area in which it faces stiff competition as it tries to poach the corporate base from old-school incumbents.
The firm will enter direct competition with Natwest’s banking-as-a-service arm Natwest Boxed as well as fintech giants in the field.
Clearbank expands into booming market
The Business Research Company projects the embedded banking market will reach $67.6bn (£48.4bn) with near 26 per cent average annual growth by 2029.
Hagan said Clearbank’s advantage was that payments and accounts are not “a side offering – it is our core offering”.
She added the company will scout firms that already use API systems but are tired of the tech offered by incumbents.
When pressed on Clearbank’s shrewdness in handing banking capabilities to non-financial companies, Hagan said the fintech works with partners to assure “there’s real clarity over roles and responsibilities”.
She added the model would ensure it “doesn’t dilute, water down or change the core bank standard, compliance controls or resilience that sits around the bank account”.
Hagan listed the payroll and travel sectors as top spots that could benefit from Clearbank’s embedded banking offer.
A travel firm could use the fintech’s API-driven system to provide “certainty of funds” to all parties, Hagan said, with a customer’s payment held in a protected account, whilst hotel and airlines have the guarantee the funds are ready and available.
Whereas she said pay-roll services could use it to set up “save-as-you-earn” schemes.
The latest expansion comes as the firm, which launched in 2017, ramps up its international drive after hitting profitability last year.
In 2024 the firm notched a pre-tax profit of £9.9m after adding over 250 clients, including the likes of Wealthify, Airwallex and Revolut.