Capability and Innovation Fund
The purpose of the Capability and Innovation Fund is to encourage eligible bodies to:
- develop and improve their capability to compete with NatWest in the provision of banking services to SMEs; and
- develop and improve the financial products and services which are available to SMEs.
The Capability and Innovation Fund comprised a total of £425 million which was divided into four pools. BCR was responsible for evaluating the applications and disbursing the funds. All fifteen grants were awarded in 2019.
Since then, in early 2020, two awardees Metro Bank Plc and Nationwide Building Society, each returned £50m to BCR after their own internal strategic reviews indicated a change in business direction. BCR subsequently announced the redeployment of £100 million under a Pool E. In April, some 238 organisations were consulted to provide views on award sizes with 100 responses. Pool E was run as two application windows with 6 awards totalling £20m being announced in August 2020 to D Bodies and 4 awards totalling £80m being announced in September 2020 to A, B and C Bodies.
In January 2021, one of the Pool E awardees Onfido Limited (a D body) returned its £5m award after a strategic review resulted in a change to focus away from UK SMEs and in June 2021, a further Pool E awardee, Ebury Partners Limited (a C Body) returned £7.5m its award after reducing the scope of their business plan to focus on investing in scalability and an improved user experience for UK SMEs.
As a result, BCR ran a Pool F round in August 2021 and funds were distributed in October 2021. The award winners are Cashplus Bank (£5m), Codat Limited (£5m) and Swoop Finance Limited (£5m) and their Public Commitments can be found here.
To understand how BCR makes CIF grant decisions, see here.
As of today, BCR is monitoring delivery of 26 awards across six pools. How BCR monitors Capability and Innovation Fund awardees can be found here.
Pool A
Purpose:
To facilitate the development of more advanced business current account offerings and ancillary products for SMEs in the UK giving preference to beneficiaries with an established business current account offering.
Pool B
Purpose:
To facilitate the modernisation of existing business current account offerings or the development of new business current accounts or ancillary product propositions for SMEs in the UK.
Pool C
Purpose:
To facilitate the expansion of business offerings to include, lending or payments services to SMEs in the United Kingdom or international payments services to SMEs in the United Kingdom.
Pool D
Purpose:
To facilitate the commercialisation of financial technology that is relevant to SMEs.
Pool E
(Application Period One)
Purpose:
To facilitate the commercialisation of financial technology that is relevant to SMEs.
(Application Period Two)
Purpose (Pool A Bodies):
To facilitate the development of more advanced business current account offerings and ancillary products for SMEs in the UK giving preference to beneficiaries with an established business current account offering.
Purpose (Pool B Bodies):
To facilitate the modernisation of existing business current account offerings or the development of new business current accounts or ancillary product propositions for SMEs in the UK.
Purpose (Pool C Bodies):
To facilitate the expansion of business offerings to include, lending or payments services to SMEs in the United Kingdom or international payments services to SMEs in the United Kingdom.
Pool F
Purpose (Pool A Bodies):
To facilitate the development of more advanced business current account offerings and ancillary products for SMEs in the UK giving preference to beneficiaries with an established business current account offering.
Purpose (Pool B Bodies):
To facilitate the modernisation of existing business current account offerings or the development of new business current accounts or ancillary product propositions for SMEs in the UK.
Purpose (Pool C Bodies):
To facilitate the expansion of business offerings to include, lending or payments services to SMEs in the United Kingdom or international payments services to SMEs in the United Kingdom.
Number and value of grants (February 2019):
£100 million – Starling Bank Limited
£70 million – Metro Bank PLC*
£60 million – ClearBank Ltd
*£50 million returned by Metro Bank PLC in February 2020
Number and value of grants (May 2019):
£50 million*
£15 million – Investec Bank plc
£15 million – The Co-operative Bank
*£50 million returned by Nationwide Building Society in April 2020
Number and value of grants (August 2019):
£10 million – Atom Bank PLC
£10 million – iwoca Ltd
£10 million – Modulr Finance Limited
£10 million – The Currency Cloud Group Ltd
Number and value of grants (June 2019):
£5 million – Codat Limited
£5 million – Fluidly Limited
£5 million – Form3 Ltd
£5 million – Funding Options Limited
£5 million – Swoop Finance Limited
Number and value of grants (August 2020):
£5 million – Funding Xchange Ltd
£5 million*
£2.5 million – Codat Limited
£2.5 million – ezbob Ltd
£2.5 million – Fractal Labs Ltd
£2.5 million – Previse Ltd
*£5 million returned by Onfido Limited in January 2021
Number and value of grants (September 2020):
£35 million – Virgin Money UK PLC
£25 million – ClearBank Ltd
£2.5 million – Ebury Partners Limited*
£10 million – MarketFinance Limited
*£7.5 million returned by Ebury Partners Limited in June 2021
Number and value of grants (October 2021):
£5m – Cashplus Bank
£5m – Codat Limited
£2.5m – Swoop Finance Limited
While the latest CIF agreement expires in December 2022, there will be ongoing monitoring of awardees with outstanding business case spend and/our public commitments.
