London and New York (ots/PRNewswire) - The First Pre-revenue Bank in
History to Attain a $1.1bn Valuation
The Bank of London today launches as the 6th principal clearing bank
of the United Kingdom (UK), with a mission to lift communities and
power the borderless economic infrastructure of the future.
Led by an executive team of industry pioneers and a board of renowned
global leaders, the bank enters the market with a $1.1 billion
valuation, making it the first pre-revenue bank in history to attain
'unicorn' status upon debut.
* The Bank of London received its first bank licence as the 6th
principal clearing bank of the UK - becoming only the second new
clearing bank in more than 250 years.
* New financing is led by ForgeLight, and follow-on investment from
14W Venture Partners and Mangrove Capital Partners, with further
additional investment committed over 18 months.
* Raising $120 million to-date, with $90m in this round,
ranking the bank in the UK's top 10 most valuable fintechs.
* As part of its international growth strategy currently underway,
the bank is in advanced talks with regulators in the European
Union (EU) and North America (NA).
* The company is on track to hire over 3,000 people across the UK,
EU and NA over the next five years. The majority of these hires
will be initially made in the UK.
Anthony Watson, Founder & Group Chief Executive of The Bank of
London, said: "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."
He continued: "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."
Harvey Schwartz, Group Chairperson of The Bank of London, 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-Chief Operating Officer. 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
He continued: "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
1 'Global Clearing & Settlement' - The global financial system is at
a tipping point. The arcane global payments infrastructure: domestic
and cross-border payments, clearing and settlement schemes and
networks are the critical, if not well understood, cornerstone of the
global financial system. But they're costly, fractured, and friction
layered - messaging, payments, and liquidity are all on different
rails - encumbered by a chain of correspondent banks, exacerbated
further by the systemic risk of liquidity intermediation and failed
The Bank of London addresses the principal risk factors across
payments, clearing, liquidity and settlement (Herstatt1) -
in-country, in-region, and cross-border allowing, for the first time,
the continuous transfer, with near-instant irrevocable settlement
finality, and the immediate availability of funds disbursement: 24/7,
365 days a year. The Bank of London is working with the market to
strengthen the current payment networks and bank rails via its
next-generation payment-versus-payment (PvP)2,
payment-versus-delivery (PvD)3 and atomic settlement4 innovation,
evolving the legacy models to mitigate settlement risk and unlock
liquidity by leveraging its patented innovations.
While globally payments bring almost $2 trillion in revenue for
incumbents, according to a 2021 report by LexisNexis, one of the
single biggest and least discussed pain-points for financial
institutions is failed payments - both in-country and cross-border.
Failed payments are estimated to have cost the global economy over
$118 billion in 2020 alone. The payments failure rate for banks or
fintechs in mature markets such as the UK, United States (US) and EU
is a staggering 5%, on average - per company.
2 'Global Transaction Banking' - According to McKinsey, global
transaction banking generates around $1 trillion of revenues every
year for incumbents, and yet global transaction billing is complex
and confusing. There are approximately 2,500 ways to price
transaction banking, creating a gordian knot of costs almost
impossible for customers (for example UK multinationals and SMEs) to
decipher and track. While a rise in an individual fee may be slight,
total fees get higher each year - a financial equivalent of death by
a thousand cuts. Whenever the subject of bank fees arises between
customers and banks, bankers justify bank fees by the complexity of
the billing system, the constant increase in regulation, the cost of
payment factories, and the investments they represent.
The Bank of London is finally democratising the sleepy backwater of
domestic and international transaction banking through
next-generation technologies and new business innovations providing
sophisticated real-time products and services, including leading-edge
global cash management, foreign exchange, treasury, liquidity, and
other related services that are, for the first time free from
intermediary risk, un-necessary costs, and complexity. In addition,
The Bank of London will address the inherent structural failures of
the business banking sector by deploying powerfully simple, yet
premium corporate banking products and services to support businesses
of all types, from SMEs to multi-national organisations and from
start-up fintechs to household names across the UK.
3 'Global Agency Banking' - Current 'Platform-as-a-Service' and
Agency market offerings in general are not fit for purpose. They're
friction layered, mostly single-service and carry serial intermediary
risk and complexity. In fact, very few 'Platform-as-a-Service'
providers are banks at all; thus, only as fast, or innovative as the
legacy bank that 'powers' them. Lightyear Capital forecasts embedded
finance will generate $230 billion in revenue by 2025 and balloon
into a $7 trillion industry within the next decade.
The Bank of London is rewriting the rulebook of the legacy
'platform-as-a-service' and Agency bank models of old and helping
non-bank and other fintech brands take a slice of the $7 trillion
"Banking-as-a-Service" industry. The Bank of London effortlessly
powers any company, brand, or non-bank firm to provide end-to-end
bank products and services, in full regulatory compliance, without
becoming a bank. The Bank of London's clients will leverage its
patented next-generation technologies and differentiated bank licence
to offer packages of embedded financial services, from payments to
cards, to multi-currency current, deposit, safeguarding or savings
bank accounts to increasing client competitiveness by enhancing the
customer experience with added value services, whilst generating
Commenting on the bank's launch, Watson said: "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."
He added: "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."
Commenting on the bank's launch, Schwartz said: "For the past four
years, some of the brightest minds in banking, technology, economics,
regulation, and business have come together as part of this team to
transform and simplify clearing and transaction banking, the often
unseen and neglected, yet vitally important, part of our financial
He added: "The Bank of London is uniquely positioned to provide
innovative solutions that enhance a vital portion of the
interconnected global financial system. We are purpose-built,
culturally, and technologically. The Bank of London is innovating at
our financial system's core, so that our clients are best served with
a safer, faster, more cost efficient and effective set of service
NOTES TO EDITORS
1: Herstatt risk - named after the German Herstatt Bank which
collapsed in 1974 due to insolvency. The operations of Herstatt Bank
were suspended in the middle of a foreign currency exchange
transaction and because bank operations were suspended, individuals
who had transferred currency to Herstatt Bank (deutschmarks) never
received the agreed upon exchange currency (US dollars). So, the term
Herstatt risk now refers to the risk of the transactional partner not
settling the exchange.
2 & 3: Payment vs Payment (PvP) models refer to a transaction, such
as a foreign exchange "swap", where there is "simultaneous settlement
finality" transfer of one currency in return for another - and both
are forms of payment. Which is different from Delivery vs Payment or
(DvP) refers to a transaction where there is transfer of some sort of
ownership rights to an asset or other financial instrument happening
simultaneously to the payment settlement finality for that asset
(which may be a cash or other transaction). In both cases, the
operative words are finality, simultaneous and settlement: meaning
that the counter-party risk of one party not settling for a foreign
currency, asset, or instrument they have received is 'mitigated' as
is the risk of the other party not transferring the ownership rights
despite receiving payment.
4: Atomic settlement means that the transfer of two assets is linked
in such a way as to ensure that the transfer of one asset occurs if
and only if the transfer of the other asset also occurs- that is,
settlement is conditional.
5: Anthony Watson is the first - and only - gay person to launch a
bank in the United Kingdom, and currently the only gay Chief
Executive of a British bank.
6: With the launch of The Bank of London, this is the second
billion-dollar plus financial services company Anthony Watson
About The Bank of London
The Bank of London is a leading-edge technology company and the
world's first purpose-built global clearing, agency, and transaction
bank. We leverage our patented technology innovations and
differentiated bank capabilities to lift economies and communities by
powering the borderless economic infrastructure of the future.
Our clients are banks, clearing houses, digital & traditional asset
firms, governments, financial services companies (from local fintechs
to global institutions), payment networks and non-financial brands
seeking to launch fully compliant financial products and services
in-country and across-boarders.
The Bank of London is a principal clearing bank of the United Kingdom
authorised by the Bank of England's Prudential Regulation Authority
and regulated by the Financial Conduct Authority and the Bank of
England's Prudential Regulatory Authority. Our Financial Services
Reference Number is 930379.
We're headquartered in London, with offices in New York.
For more information visit online: thebankoflondon.com, or visit us
on twitter and Instagram at: @thebankoflondon.
About Anthony Watson, Founder & Group Chief Executive of The Bank of
Anthony Watson, a veteran of both Wall Street and the City of London
and one of less than a handful of people in the world to successfully
launch financial disrupters in both the US and the UK, has a
distinguished career as an entrepreneur, inventor, philanthropist,
and leading Lesbian, Gay, Bisexual & Transgender ("LGBT") rights
Prior to founding The Bank of London, he was one of the pioneers of
the digital asset industry when, as the Founding President & CEO of
Uphold (multi-billion-dollar market cap), he led and built that firm
into one of the world's largest digital asset firms. Previously, he
was the Global Chief Information Officer ("CIO") of Nike Inc., the
Managing Director & CIO of Europe, Middle East and Global Operations
of Barclays Bank, and the Senior Vice President & Global Head of
Technology Services for Wells Fargo & Co. Watson spent his formative
years at Microsoft and started his career at First-e (Europe's first
Formerly, he was the first non-American citizen (and first British
citizen) appointed to the board of directors of GLAAD, the world's
largest LGBT media rights organisation. Anthony has also served as
the Chair and Head Judge of The European Diversity Awards, Europe's
largest independent awards that recognise commitment to equality and
diversity. Currently, he's a patron of Diversity Role Models, a
leading UK anti-LGBT bullying charity.
He was named number 19 in Fortune Magazine's "40 under 40", number 1
in the Telegraph newspaper's "Top 100 Most Influential LGBT Business
Leaders in the UK", number 4 in the Financial Times "Top 100 Most
Influential LGBT Business Leaders in the World", number 9 in Business
Insiders "Top 23 Most Powerful LGBT Executives in the World", amongst
similar honours in Der Spiegel, Economist magazine, the independent
newspaper, the Guardian newspaper, and many others.
About Harvey Schwartz, Group Chairperson of The Bank of London
Harvey M. Schwartz is an American business leader, investor, and
philanthropist. For the past 30+ years, Harvey's professional focus
has centred on tackling highly complex financial and business
challenges, innovating, and strengthening financial markets.
Schwartz joined the Board of Directors of Sofi Technologies Inc, a
mobile-first, American personal finance company, upon its public
market debut in 2021. He also serves on the Board of Directors
OneMind, a mental health and brain research non-profit organisation.
Schwartz retired from Goldman Sachs Group, Inc. following 20+
distinguished years at the company where he oversaw sales and
trading, finance, technology, and operations. He completed his tenure
as the firm's President and Co-Chief Operating Officer. He joined
Goldman Sachs in 1997 and subsequently held numerous senior
leadership positions including, Chief Financial Officer, Global
Co-Head of the Securities Division, amongst other positions. He
additionally served as a member of the firm's Management Committee
and co-headed its Risk Committee, Steering Committee on Regulatory
Reform and Finance Committee. Mr. Schwartz established the firm's
Investment Policy Committee on which he also served as a member.
Prior to Goldman Sachs, Harvey spent a decade working at several
other financial firms including at Citicorp from 1990 through 1997.
As both an investor and advisor, he is currently involved in a range
of investment and philanthropic endeavours focused on physical and
mental health management and developing future business leaders,
including women and young people seeking a career in finance. Among
his efforts, Harvey founded and supports a pioneering program for
students at Rutgers University that provides them with real-life
financial services experience through internships, professional
networking opportunities and mentorship.
Fair dealing and Fair use statements
Certain third party reference or data points in this press-release
are used under the United Kingdom's 'fair dealings' provisions, as
governed by Sections 29 and 30 of the Copyright, Designs and Patents
Act 1988, and under the United States 'fair use' provisions, as
governed by Section 107 of the Copyright Act.
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