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OakNorth lines up payments tie-up with ClearBank

The British digital lender said the partnership will allow it to use the clearing bank’s instant payments network.

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OakNorth has announced a tie-up with ClearBank that will see the business lender use the clearing bank’s instant payments network.

The British challenger bank said it will trade on ClearBank’s real-time Faster Payments infrastructure, allowing it to make instant payments to its more than 36,000 savers.

OakNorth, founded four years ago, is expected to post its second annual profit of £21.2m, more than double the £10.6m it reported in 2018, when its results are published next month, boosted by a jump in small business lending.

Its profits are an achievement in a sector dominated by young fast-growing rivals - such as Revolut,Funding Circle and Monzo - who report losses. Oaknorth, which has lent more than £2.7bn since its launch, is led by its 43-year-old co-founder and chief executive Rishi Khosla (pictured).

OakNorth chief operating officer Amir Nooriala said: “We were looking for a partner to provide us with real-time payment capabilities, and after speaking to a number of providers, we felt ClearBank was the best fit for our needs. Their API [application programming interface] and virtual account support capabilities are best-in-class and in them, we’ve found a long-term, strategic partner who will enable us to provide an even faster and more seamless experience for our clients.”

ClearBank, which was launched in 2017 and bills itself as the first clearing bank to launch in Britain for 250 years, runs a technology platform that is built on a combination of public and private cloud infrastructure, and is specifically designed to handle core banking, clearing and settlement services. It is led by executive chairman Nick Ogden, who is the founder and former chief executive of payment processing giant Worldpay.

ClearBank chief executive Charles McManus said: “Since OakNorth’s launch just a few years ago, it has established itself as one of the fastest-growing and most successful fintechs in Europe and as a key enabler and supporter of businesses. We look forward to working with OakNorth as it continues to build its offering and customer base across the UK.”

Last week, ClearBank and rival digital business bank Tide won £60m from the first round of the Royal Bank of Scotland's (RBS) fund aimed at increasing banking competition.

The RBS fund, which totals £775m, is part of European Union conditions attached to its £45bn Government bailout a decade ago at the height of the financial crisis.  

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