Report demonstrates how the Alternative Remedies Package has shifted the market for SME banking
The directors of BCR have today published the company’s Annual Report for 2022/2023 which highlights the continued impact of the Alternative Remedies Package (ARP) on the provision of financial and related services to SMEs through unprecedented times. The annual report can be found here.
Richard Anderson, the BCR chair, said: “Both SME’s and those seeking to serve them through the small business banking market have faced difficult external conditions throughout the life of BCR: Brexit uncertainty, Covid-19, the war in Ukraine with all that has entailed and now difficult economic circumstances. I am always impressed by the resilience and agility of those we have funded in being able to operate in these turbulent times. I have little doubt that these businesses will continue to provide help in a tough market, and they will be in a good position to support SMEs once better economic times return.”
Progress updates for Pool E recipients
The Board of Banking Competition Remedies Ltd (BCR) today publishes progress updates for Pool E recipients, providing a summary of performance against their public commitments for the period ending 31st August 2022. The external environment continues to throw up fresh obstacles with an increasing number of SMEs now facing cost-of-living challenges which in turn has a knock-on impact on, for example, working capital, advancement and repayment of lending and SME insolvencies. It has opened opportunities for some awardees while delaying others in realising their ambitions. In all circumstances, BCR works with awardees with the aim to maintain momentum for the benefit of UK SMEs and, at this stage, only engages in a discussion around return of funds in circumstances where it feels that it will be difficult to achieve SME benefit in the timelines expected. In one such case, it has resulted in a modest amount of funds being returned by ezbob, which – despite delivering all the functionality it promised – has found demand for technology supporting unsecured lending in the UK to be very subdued against its expectations. While out of time against its business case with BCR, it, nevertheless, continues to explore avenues for distribution and has set itself what it considers to be realistic targets for the next three years based on the two proof of concepts that have been funded.
The public commitment updates this reporting period see the majority of awardees making good progress against delivery of public commitments.
Following the agreement between BCR, HMT and NatWest to continue to monitor awardees post CIF agreement termination in December 2022, BCR continues to support awardees in submitting Revised Business Cases to re-align targets where necessary. In this reporting period, four business cases from Codat, MarketFinance, Funding Xchange and Previse were submitted and these have all been approved. These have all been driven by delays in larger organisations adopting their solutions – the desire is still there to utilise their offerings solutions; however, implementation times have shifted due to those larger companies also responding to market challenges. Codat’s proposal was straightforward in seeking an extension to its timeline to achieve its SME impact targets in 2023 versus 2022. MarketFinance reduced its SME acquisition target up to year-end 2024 and reduced its year-end 2022 target for the number of challenger banks engaged. Funding Xchange revised the delivery timeline of its distribution network and realigned off-track KPIs by extending some of these targets into 2025. In Previse’s business case, the awardee sought reductions to several year-end 2022 targets due to client adoption delays and remains committed to reaching overall targets by mid-2024.
A summary of performance against awardees public commitments can be found in the notes to editors, with links to the full updates provided below:
Pool E eighth quarter update
- Virgin Money UK PLC public commitment progress update
- ClearBank Ltd public commitment progress update
- Ebury Partners Limited public commitment progress update
- MarketFinance Limited public commitment progress update
- Funding Xchange Ltd public commitment progress update
- Codat Limited public commitment progress update
- ezbob Ltd public commitment progress update
- Fractal Labs Ltd (t/a tomato pay) public commitment progress update
- Previse Ltd public commitment progress update
The final formal reporting update for Pool E awardees will be in February 2023. Pool A, B, C, D and F awardees will provide their next progress update in November 2022, with their final formal reporting update also in February 2023. For more details on how BCR monitors CIF awardees see here.