The Bank of London has become the sixth principal clearing bank of the UK and only the second to launch in the last 250 years.

Barclays, HSBC, Lloyds and Royal Bank of Scotland are the four principle clearing banks, while ClearBank – which underpins, for example, business accounts with Tide – became the fifth to launch in 2017. 

A £68 million raise has seen The Bank of London enter the nation’s 10 most valuable FinTechs – at a valuation of $1.1 billion – and become the first pre-revenue bank to attain unicorn status.

The new financing is led by ForgeLight and includes follow-on investment from 14W Venture Partners and Mangrove Capital Partners, with further additional investment committed over 18 months.

The Bank of London says its mission is to lift communities and power the borderless economic infrastructure of the future. It is in ‘advanced talks’ with regulators in the European Union and North America.

The company says it is on track to hire over 3,000 people across the UK, EU and North America over the next five years. The majority of these hires will be initially made in the UK.

“We’ve spent over four years working quietly in the background, bringing together veteran banking experts, leading creative innovators and visionary technologists to build, patent and validate truly game-changing technologies and innovations to transform the very fundamentals of banking,” said founder and group CEO Anthony Watson.

“We leverage our leading-edge proprietary technology innovations and differentiated bank capabilities to remove unnecessary risk, unlock liquidity and deliver revolutionary products and services at significantly lower costs to enable near instant settlement without a financial intermediary in the flow of funds.”

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Harvey Schwartz, group chairperson, said: “The Bank of London is going to address an arcane part of the global financial system – the sleepy worlds of clearing and global transaction banking. 

“I was honoured to spend 21 years of my career at one of the leading financial institutions, retiring from Goldman Sachs in 2018 as president and co-COO. During the great financial crisis, I saw first-hand how the legacy payments, clearing and settlement processes that are at the heart of the global financial system contributed to bringing the world’s economies to their knees, through their inefficiencies and inherent liquidity risk.

“Fundamentally, banking is basically an immensely complex data problem. The Bank of London is the solution. And our unique solution is simplicity.”

The Bank of London enters the marketplace with three distinct market offerings: global clearing and settlement; global transaction banking; and global agency banking.

Watson added: “The world of global transaction and clearing banking needs disrupting. Fewer than 100 banks control the flow of money in, around, between and out of the UK, the EU and the US. “Shockingly, 75% of the world’s total spendable money – just under $2.5 quadrillion – is fundamentally controlled by a small club of banks. The balance sheet risk they pose so many years after the global financial crisis is as acute as ever.

“Sadly, even very recent challengers have only really focused on overcoming basic and peripheral imperfections, while still subject to the full constraints of the old paradigm. They offer nothing more than incremental improvements in speed, cost, and ease-of-use. 

“These ‘digital’ bolt-ons to analogue legacy systems are the fax machines of finance. They are not paradigm busters.”