Frequently Asked Questions

Capability and Innovation Fund FAQs

Pool A, Pool B & Pool C

A: Application forms for Pools B and C were posted on the BCR website on the 29th October and can be found here. The Pool B and C test events are also now live and you can request access by emailing BCR Admin which will allow you to access the application forms on line in the test event.

A: There are specific criteria for each of the Pools which has been available on the gov.uk website for some time (please click here). Where possible, there will be similarity in the application forms’ approach and requests for information.

A: The purpose of Pools A, B and C of the Capability and Innovation Funding is for eligible bodies to (i) improve customer outcomes for SMEs in the UK and/or (ii) expand eligible bodies’ business capacity, product offering and/or target markets in order to improve their offering to SMEs in the UK. This is the main focus of the Capability and Innovation Fund, although BCR will also take into account, in respect of Pools A and B, the likely impact on competition in the mid-corporate banking markets in the UK, which is not a defined term and so has its ordinary meaning.

The definition of an SME is a small or medium-sized enterprise, being a business (including incorporated legal entities, sole traders, partnerships, not-for-profit organisations and clubs, charities and societies) that, in respect of any given financial year applying to it, has annual revenues (exclusive of VAT and other turnover-related Taxes) not exceeding £25million. This definition is carried through to all of the Pools.

[Applicants should also refer to the CIF Rules included as schedule 3 to the Trust Deed.]

A: Pool C is open to those entities who meet the requirements, which include that the applicant, if it is not a Pool A or Pool B eligible body, is an entity:

(a) which is domiciled in the United Kingdom, the European Union, the European Economic Area or Switzerland;
(b) which derives (or, if such body is part of a group, such group derives) the majority of its revenue from the provision of financial services to individuals and businesses; and
(c) which offers, or has expressed an intention to expand its business offering to include, lending or payments services to SMEs in the United Kingdom or international payments services to SMEs in the United Kingdom;

The purpose of Pool C is to facilitate the development of new and existing SME lending and/or SME payments businesses and/or to facilitate the deployment of new technology to relevant markets. Lending or payments applications will be considered on their individual merits for any eligible bodies. Reporting requirements will be appropriate to any successful applicant’s business.

A: Yes. Pool C specifically caters for any applicant which offers, or has expressed an intention to expand its business offering to include, lending or payments services to SMEs in the United Kingdom or international payments services to SMEs in the United Kingdom.

A: Any potential applicant will need to look at the eligibility criteria and decide for themselves what service they are offering to SMEs. Each application will be judged on its merits.

A: These terms are not defined and so should be given their ordinary meaning. Should Applicants be concerned as to how these terms apply to their applications, it is open to them to explain the definition that they have used and why they believe that it is appropriate.

A: BCR’s interpretation of this phrase is that it should be read in the context of “Relevant Business(es)”, and therefore the relevant markets are those used in that definition, i.e. SME lending and/or SME payments markets in the United Kingdom.

A: The Capability and Innovation Fund Agreement includes reporting requirements in respect of “SME business volumes, including, but not limited to, customer numbers, [Business Current Account numbers] and lending and deposit balances” as per Clause 4.1 D of the Capability and Innovation Fund Agreement.

Applicants should be able to demonstrate new gross lending to SMEs resulting from the funds awarded. They should also be able to provide information on their lending stock and net lending as relevant to the investment of any funds awarded and its impact on their SME lending over time.

A: Lending may be considered as an ancillary product for Pool B applicants where it is ancillary to the business current account offering, noting that this excludes an account in which credit funds are held and offset against mortgage debt or a loan (other than an overdraft facility).

A: You will find the permitted use of funds in Clause 3 of the terms and conditions here. BCR will review and assess all business cases on their own merits. We believe the application form gives any entity the ability to demonstrate its projected financial performance over time.

A: It is not simply a subset. 2.5.3 is very specific on information around your implementation costs whereas 2.4.2 (ii) requires applicants to give information on financial analysis in the context of the entire bid. 

A: As part of the application process, initially BCR is seeking confirmation from applicants that they will use the funds for permitted purpose. Thereafter, as part of the reporting responsibilities which can be found in Section 4 of the Capability and Innovation Fund Agreement here, we will look for evidence as to how the funds have been spent within the assessment period and we will also look for specific confirmation that the fund have been used for Permitted purposes only.

We are currently building our reporting suite and this will be shared in due course with successful applicants.

A: These terms are not defined and so should be given their ordinary meaning. Should applicants be concerned as to how these terms apply to their applications, it is open to them to explain the definition they have used and why they believe it is appropriate.

A: The eligibility and assessment criteria were agreed by Her Majesty’s Treasury and The European Union as part of the Alternate Remedies Package. The assessment criteria does not require specific detail around the SME leadership team in place – should an applicant feel it is relevant to their submission and wish to provide leadership context in answering various questions within the application form, they are free to do so.

A: Applicants are advised that the long answer fields in Scout only permit free text responses. Applicants can choose to include pictures and tables in the attachments requested and reference these in the long answer. 

A: It is at the discretion of the Applicant Company as to whether they complete the application in the Excel file or directly within Scout. The Independent Body strongly recommends Applicant Companies to read the Scout RFP user guide to walk through the key functionality of Scout and familiarise themselves with the layout and functionality.

A: BCR can confirm that the award can be utilised for non-employee related operating costs please note there are specific terms and conditions? You can find our terms and conditions on our website here

A: You may, in the market research citations in the foot note add your references – if not you should include your references in the body text of the main application where they will be included within the word count. 

A: Applicants have been given the ability to define what this looks like but our recommendation is to make information supplied as concise as you deem appropriate.

A: Yes – as per Annex 3, this question is specific to the extent to which the Applicant Company commits to purchasing innovation financial services or software from the SMEs in the United Kingdom as part of this initiative. 

A: Banking Competition Remedies will not provide further guidance on the assessment criteria, however, it is recommended for all Applicant Companies to ensure you are up to date with BCR press releases and new content on the website (info here).

A: 1) No, when typing your response directly into the Scout tool, text formatting such as bold, italicised and underline is not maintained, however, where requested within the Application Documents, Applicant Companies can format text within their attachments.

2) No, when typing your response into the Scout tool, tables cannot be inserted, however, where requested within the Application Documents, Applicant Companies can insert tables within their attachments. 

The Independent Body strongly recommends Applicant Companies to read the Scout RFP user guide, which is available here, to walk through the key functionality of Scout and familiarise themselves with the layout and functionality. 

A: 1) In question 2.3.1, Applicant Companies should include all the ‘underpinning assumptions’ which the Applicant Company has considered when putting together their initiative. This includes but is not limited to market, cost and customer switching assumptions.

2) In question 2.3.2, Applicant Companies should include all the ‘underpinning assumptions’ which the Applicant Company has considered when putting together their initiative. This includes but is not limited to the build of the product and wider market assumptions.

3) Yes, in question 2.3.3, the Independent Body is seeking for both a quantitative and qualitative analysis but primarily the former.

A: This question is already addressed in Question 40 in the FAQ section for Pool D.

A: Applicant Companies are free to choose which information is relevant to answer this question. As a minimum, the Independent Body expects to see what percentage of your SME customer base is using any relevant product.

A: As long as you meet the eligibility criteria (ii) – i.e.: “the Applicant Company must be a deposit-taking entity which is authorised by the PRA to take deposits” – ahead of submitting your application for Pool B and can evidence that you do meet the criteria, BCR will consider your organisation to be eligible.

A: You should take your own legal advice on the terms of the CIF agreement, but your options, if you do not comply, would be to breach the contract or to repay the Funding Amount plus interest in accordance with clause 7.1(b) so that the CIF agreement terminates under clause 10.1(B).

A:  You should take your own legal advice on the terms of the CIF agreement but no, this clause applies irrespective of which company is applying for funding. The successful applicant is responsible for procuring compliance with the clause. The contractual termination rights are set out in clause 10.

A: You should take your own legal advice on the terms of the CIF agreement but no, these clauses apply irrespective of which company is applying for funding. The successful applicant is responsible for procuring compliance with the clauses by its group. 

A: You should take your own legal advice on the terms of the CIF agreement. There are a number of decisions and determinations that BCR has the power to make. For example, clause 7.1 sets out the right for BCR to determine that a Material Breach has occurred and clause 5.7 allows for BCR to decide in its sole discretion whether to accept an Updated Business Case or a Revised Business Case. Clauses 8.4 and 8.5 make it clear that those decisions and determinations can be exercised by BCR at its own discretion without recourse under the CIF agreement.

A: Based on the applications received for Pool A, BCR will be making a change to the Capability and Innovation Fund Agreements (“CIF Agreements”) for successful Pool A applicants as follows:

•  Update to Clause 10.1 (A) to reflect the termination of the CIF Agreement as being on “the earlier of (i) the date as agreed between The Commissioners of Her Majesty’s Treasury, the Independent Body and The Royal Bank of Scotland Group plc on which the winding up process of the Independent Body shall commence; and (ii) 25 April 2022.” 

This change has been made to better reflect applicants’ anticipated timing for deploying the Pool A CIF funds. 

In respect of future pools, BCR will assess whether it is appropriate to make similar changes to CIF Agreements entered into with successful applicants. While the application for CIF funds suggests a 3-5 year delivery timeline, it is down to each applicant to advise their own respective deadlines for delivery which, in some cases, may be less than 3 years. Once the successful applicants have been selected, BCR will determine the appropriate amendments, if any, that need to be made to the CIF Agreements and CIF awards will be conditional upon successful applicants accepting those changes.

Pool D

A: All applications will be reviewed based on their own merits. Baringa, an organisation with expertise in procurement and tender management across multiple sectors, are assisting Banking Competition Remedies in the evaluation process. If you review the Pool D application form here, you can see what information we are requesting to enable us to evaluate each application. The assessment criteria can also be found here.  

A: The pool timeline has been set by Her Majesty’s Treasury and the European Union as part of Alternative Remedies Package. It is up to each potential applicant to decide when to submit their application.  There is no advantage or disadvantage on the timing of the submission, although note that questions will continue to be answered up until 1 February 2019 and the responses may impact upon your application.

A: The eligibility criteria were agreed between Her Majesty’s Treasury and the European Union as part of Alternative Remedies Package. The definition of a Pool D Body makes it clear that applicants need to have raised at least £1m of capital in the three years prior to submission of the business case and, if this cannot be met, your application would be rejected. 

A: It is stressed that it is down to the applicant to look over the assessment criteria and decide whether they think they are eligible. All applications will be assessed on its own merits and BCR are fully expecting that within Pool D we are expecting a diversity of applications. 

A: BCR would ordinarily expect the capital to be raised as equity. If this is not the case  BCR will consider on a case by case basis any other structures such as convertible loans or subordinated loans, and will need to be satisfied that the proceeds of these structures are genuinely available to the entity and are equity-like, e.g. are subordinated to other liabilities. If this is not the case applicants must be very clear in their submission the nature of the source of funds and BCR will consider these on a case-by-case.

A: Yes, this is the way the project has been structured so applicants need to be thinking of the best way to deploy £5m.

A: Pool D eligibility criteria includes “which has raised capital of at least £1,000,000 in the three years prior to the date of submission of its application (“Pool D Body”).” This means that you need to have raised £1,000,000 in the 3 years preceding the date on which you submit your business case.

A: Pool D eligibility criteria is covered here. A Pool D applicant must be an entity:

(i) Which is domiciled in the United Kingdom, the European Union, the European Economic Area or Switzerland;

(ii) Which (a) provides or develops financial products or services predominantly to or for SMEs in the United Kingdom or (b) provides products or services to the businesses described in (a): and

(iii) Which has raised capital of at least £1,000,000 in the three years prior to the date of submission of its Business Case (“Pool D Body”).

The eligibility criteria was set for BCR and is clear that, at the time of the application, the applicant needs to either be providing or developing financial products or services for UK SMEs or providing products or services to businesses who do so.

A: This question is already addressed in both Questions 19 and 27 in the FAQ section for All Pools and is already included within the Scout FAQs. We urge all applicants to look at FAQs prior to submitting questions.

A: This is already dealt with in All Pools -FAQ 19 on the BCR website and is already included within the Scout FAQs. We urge all applicants to look at FAQs prior to submitting questions.

A: If an applicant is a supplier on another applicant’s bid, it can apply for a grant provided it meets the eligibility criteria. 

A: The definition of an SME is a small or medium-sized enterprise, being a business (including incorporated legal entities, sole traders, partnerships, not-for-profit organisations and clubs, charities and societies) that, in respect of any given financial year applying to it, has annual revenues (exclusive of VAT and other turnover-related Taxes) not exceeding £25million. This definition is carried through to all of the Pools.

A: These terms are not defined and so should be given their ordinary meaning. Should applicants be concerned as to how these terms apply to their applications, it is open to them to explain the definition they have used and why they believe it is appropriate.

A: We assume in your question you are referring to 1.2.1 and 1.2.2. of the Pool D application.

Applicants will need to provide evidence of domicile e.g. link to company details on Companies House or appropriate national register.

Applicants should provide evidence of their live product and service offering to SMEs e.g. link to offerings on company website or alternative medium.

A: These terms are not defined and so should be given their ordinary meaning. Should applicants be concerned as to how these terms apply to their applications, it is open to them to explain the definition they have used and why they believe it is appropriate.

A: Pool D eligibility criteria is covered here. A Pool D applicant must be an entity.

(i) Which is domiciled in the United Kingdom, the European Union, the European Economic Area or Switzerland

(ii) Which (a) provides or develops financial products or services predominantly to or for SMEs in the United Kingdom or (b) provides products or services to the businesses described in (a): and

(iii) Which has raised capital of at least £1,000,000 in the three years prior to the date of submission of its Business Case (“Pool D Body”).

The eligibility criteria was set for BCR and is clear that, at the time of the application, the applicant needs to either be providing or developing financial products or services for UK SMEs or providing products or services to businesses who do so. 

A: It is for the Applicant Companies to ensure the content of their application is clear and describes correctly their proposal, however in this scenario, Banking Competition Remedies expects the status of the FCA approval to be made explicit.

A: These terms are not defined and so should be given their ordinary meaning, however, in your responses to the Governance section please ensure you are clear about how you intend to deliver on your public commitments e.g. if in your business case if you have a substantial element of CapEx or marketing cost you will need to demonstrate to BCR, on an ongoing basis, how you are tracking your implementation approach.

A: Section 2.1.2 is an opportunity for applicant companies to attach a summary overview of the business case in formats specified. It is for applicants to decide if this is relevant to their individual applications.

A: Banking Competition Remedies has not defined specific mechanism to flag sensitive / private information, this is for Applicant Companies themselves to define themselves. If the applicant company believes specific information is confidential or commercially sensitive they could highlight this at the relevant point in the application form. 

A: A Pool D Body must have raised at least £1m of capital in the three years prior to submission of the business case. The terms and conditions which can be found here state in 2.1. (D) (iii) which has raised capital of at least £1,000,000 in the three years prior to the date of submission of its business case.

A: It is expected that any successful applicant will only receive one award from the Capability and Innovation Fund and therefore in the event you are awarded a Pool D Capability and Innovation Fund, your application for Pool C will not be considered as any successful applicant will only receive one award.

A: Applicant Companies must refer to the distinct purposes of each pool as listed here and ensure their proposal fulfils the Pool’s requirements. If the Applicant Company judges a similar proposal fulfils both Pool C and Pool D, Banking Companies Remedies does not see any reason why this would not be acceptable.

A: Applicant Companies must refer to the eligibility criteria for Pool D which is covered here and ensure their proposal fulfils the Pool’s requirements. In this scenario, Banking Companies Remedies does not see any reason why a lending product would not be acceptable, however, BCR is not in a postion to comment on its advantages against other applications. Every application will be assessed based on their own merits.

A: These terms are not defined and so should be given their ordinary meaning, however, in this scenario, Banking Competition Remedies expects to see as a minimum, the predicted impact of how the initiative will facilitate the commercialisation of financial technology on SMEs in the United Kingdom either directly or indirectly.

A: No, there are no specific KPIs that the Financial Analysis should cover, however, Applicant Companies are expected to supply KPIs which align to their individual business and reinforce their public commitments and implementation timeline. 

A: As per the assessment criteria which is covered here, Banking Competition Remedies shall have regard to, and will therefore assess, the amount (if any) of its own funds that such Pool D Body is proposing to invest in relation to the proposals outlined in its Business Case

A: The requirements for the use of the funds are set out in the CIF terms and conditions which you can find here. In particular, condition 3.3 explains the purposes for which the funding can be used. You will see that the requirements are essentially that the use of the funds focuses on ensuring that the Fintech Product or Service is improved or developed in the United Kingdom. BCR’s interpretation of this requirement is that, provided the use of funds improves the Fintech Product or Service for use in the UK, the actual expenditure does not need to be exclusively within the UK. So, in your example, employees could be outside of the UK provided that they are working on improving the Fintech Product or Service for use in the UK.

A: It is not clear precisely how you envisage using the CIF funds but the requirements for the use of the funds are set out in the CIF terms and conditions which you can find here. In particular, condition 3.3 explains the purposes for which the funding can be used as well as a list of specific purposes for which the funds cannot be used. It is not permitted to, among other things, use the CIF funds to repay any existing liability or to provide financing directly to customers.

A: No, on the information day held on the 27th of September 2018, which has been published here, BCR has publicly stated there is no read across between schemes and Pools. All applications will be assessed on their own merits for awards within Pools. 

A: BCR gives no preference to any type of market analysis. All applications will be reviewed and assessed based on their own merits. As a reminder, the list of the assessment criteria for Pool D is covered here.

A: As per the assessment criteria which is covered here, Banking Competition Remedies shall have regard to, and will therefore assess, the amount (if any) of its own funds that such Pool D Body is proposing to invest in relation to the proposals outlined in its Business Case.

A: The example should demonstrate to the Evaluation Team that the Applicant Company has delivered a significant change project which is comparable in complexity and scale of their business case submission to the delivery of the Capability and Innovation Fund.

A: As per question 2.5.1, Applicant Companies should define themselves the governance and controls they would put in place. In addition this should include how the applicant would enable monitoring by the Independent Body.

A: The domicile of an entity is the place of its incorporation and, therefore, a company registered in the Channel Islands – Jersey/Guernsey is not eligible to be a Pool D body irrespective of where its main office or place of business is located.

All Pools

A: You can find our eligibility criteria on our website here

A: The eligibility criteria and timelines for the Capability and Innovation Fund can be found on our CIF Homepage. Only applications that meet the eligibility criteria on the closing date for a pool eg 31st December for Pool A applicants can be considered for a grant.

A: Each potential applicant should consider the eligibility criteria for each Pool for which it wishes to be considered. It must then make a separate application to each Pool and reference which awards in the Pool it wishes to be considered for. As an example, if in Pool A, an applicant wishes to be considered for any of the 3 awards, it will need to make this clear and provide supporting information to enable the Banking Competition Remedies to evaluate its application in respect of the awards. It is expected that any successful applicant will only receive one award from the Capability and Innovation Fund. 

A: The purpose of the Capability and Innovation Funding is for eligible bodies to (i) develop the capability to compete with RBS in the provision of banking services to SMEs and/or (ii) develop and improve the financial products and services which are available to SMEs.

Each Pool has various eligibility and assessment criteria and, within this, all applications from eligible applicants will be assessed on their own merits. Information around eligibility criteria can be found here and assessment criteria here

Furthermore, in respect of Pool A, the Capability and Innovation Fund assessment criteria require BCR to give a preference to Pool A Beneficiaries with an established Business Current Account offering.

A: There are a number of occasions where funds might be repayable and these are set out in the Capability and Innovation Fund Agreement at clause 7. In summary, these occasions are:

  • In the event that an applicant is not able to use the funds in accordance with the business case that was submitted and any subsequent updated business case is not approved. In this instance, Banking Competition Remedies may request the repayment (in full or in part ) of the Funding amount in which case the Company will be expected to make the repayment (together with interest at an annual interest rate equal to 8% above the Bank of England base rate, compounded quarterly and accruing from the date Banking Competition Remedies paid the Funding Amount to the Company until the date of repayment) within 5 business days of the date of the demand.
  • In the case of a Material Breach which is not capable of remedy or the Company has not provided Banking Competition Remedies with evidence to our satisfaction that the Material Breach has been remedied within the period specified by Banking Competition Remedies. Material Breaches are any material breaches of the Capability and Innovation Fund Agreement and include i) failure to use the Funding Amount for Permitted Purposes or in accordance with the business case or ii) use of the Funding Amount for Prohibited Purposes. In this instance, Banking Competition Remedies may request the repayment (in full or in part) of the Funding Amount in which case the Company will be expected to make the repayment (together with interest at an annual interest rate equal to 8% above the Bank of England base rate, compounded quarterly and accruing from the date Banking Competition Remedies paid the Funding Amount to the Company until the date of repayment) within 5 business days of the date of the demand.

If there is a change of control of the company such that the Company’s parent undertaking or another subsidiary undertaking of such parent undertaking is a bank with an SME market share in the UK of more than 14%, the company shall within 10 business days of such change of control return to Banking Competition Remedies any part of the Funding Amount which it has not spent as at the date that the transaction which would give rise to the Change of Control is announced. 

A: The assessment criteria that applications will be measured against is found here. The application forms for Pools A and D are currently on our website and can be found here

Pools B and C application forms will be added during the week of 22nd October 2018.  The application form is clear in what it is seeking for each criteria.

There is no required form for a business case and it is for applicants to come to their own conclusion as to how to best present their submission.

A: If you meet the eligibility criteria you can apply for any pool – remembering that where applicants are successful there will only be one award made per company.

A: No but that isn’t to say we aren’t looking for benefits both direct and indirect. We will have a diversity of applications so applicants should stress in their application how they will deliver benefits and also how they will measure them. 

A: Business cases that deliver a benefit sooner will be viewed more favourably. As part of your application, you should consider if successful,  in what time frame you will spend funds and a realistic time frame in which you will derive benefits from the funds for SMEs. We expect that this will be individual to each applicant and will also depend on the size of any award. If your application is successful, you will be also be required to publish public commitments. If you fail to meet the milestones you have promised, you risk having funds clawed back so it is important that you are comfortable with the timelines in your submission.

A: We will be publishing our reporting requirements online so you will be able to find them on our website.  Monthly MI for successful applications will be based on the core information required in the application form which is outlined clearly within section 4 Reporting Obligations of the Capability and Innovation Fund Agreement and any additional KPIs the successful applicant provides as part of the business case.  

A: As per section 2.8 of the Capability and Innovation Fund Terms and Conditions, “Applicants should seek their own legal, financial, tax, regulatory and/or accounting advice before making any decision to apply for funding from or to participate in the Capability and Innovation Fund.”

A: When the agreement is signed, funding will either be released in full within 40 days which is the default approach or can be, on request, released in tranches up to a maximum of six months from the signing of the Agreement. 

A: Section 3 of the Capability and Innovation Fund Terms and Conditions which can be found here extensively addresses the Use of Funds for any applicant. You should review these ahead of making any submission to the fund.

A: Applicants should look at the eligibility criteria for each Pool and, if they believe, they meet the criteria, they are able to apply for various Pools and awards within Pools. All applications will be assessed on their own merits for awards within Pools.

A: Business cases that deliver a benefit sooner will be viewed more favourably. As part of your application, you should consider if successful,  in what timeframe you will spend funds and a realistic timeframe in which you will derive benefits from the funds for SMEs. We expect that this will be individual to each applicant and will also depend on the size of any award. If your application is successful, you will be also be required to publish public commitments. If you fail to meet the milestones you have promised, you risk having funds clawed back so it is important that you are comfortable with the timelines in your submission.

A: Section 3 of the Capability and Innovation Fund Terms and Conditions which can be found here extensively addresses the Use of Funds for any applicant. You should review these ahead of making any submission to the fund.

A: BCR will consider each business case on its merits and does not intend to supplement the CIF terms and conditions with other restrictions on the use of funds, for example, by preventing applicants from using funds to acquire another business. However, BCR expects it to be difficult for an applicant to demonstrate that acquiring another business is (i) consistent with the Overarching Principles and the purpose of the Alternative Remedies Package, (ii) sufficiently certain that the applicant can deliver the transaction, yet (iii) is not capital expenditure that would be made by the applicant in any event or has been included in the applicant’s business plan prior to the application. 

A: Each application will be evaluated on its own merits. The Independent Body is expecting that in all cases, there will be one eligible entity as the applicant and that entity will need to satisfy all of the eligibility criteria. It may be that, in order to deliver on the relevant business case, another entity is critical to the application, and therefore the Independent Body would want to understand the relationship that the applicant has with that entity.

However, the applicant will need to ensure that the CIF funds are used for Permitted Purposes only (and not Prohibited Purposes) (each as defined in the CIF agreement), and so will need to take this into account when defining its relationship with the other entity.

A: BCR will consider, in light of the applications received, the appropriate scope and frequency of information to be made public.  Once the Capability and Innovation Fund agreements have been signed by successful applicants, their public commitments will be published on the BCR website. BCR is also required to publish a public report on the progress made in achieving the Alternative Remedies Package objectives and the use of funds annually.  

A: Use of funds as a capital reserve required by a regulator is not considered an appropriate use of funds. Section 3 of the Capability and Innovation Fund Terms and Conditions which can be found here extensively addresses the Use of Funds for any applicant. You should review these ahead of making any submission. 

A: During the application window, the Independent Body is entitled to request additional information and clarification of information, request one further iteration of the Business Case submitted by an Applicant Company, request face-to-face meetings and access to personnel, and make all enquiries it considers necessary or desirable in relation to the application and the Independent Body’s assessment of the application. For clarity and practicality given the volumes of applications expected, the Independent Body is looking for business cases to be as comprehensive as possible to enable evaluation to proceed without further contact. Where this is required, the first option will be contact via the Scout tool. Face to face meetings and further follow up are only envisaged in exceptional circumstances.

A: Section 3 of the Capability and Innovation Fund Terms and Conditions which can be found  here extensively addresses the Use of Funds for any applicant. You should review these ahead of making any submission. 

A: BCR recognises that applicants will need to provide confidential information to BCR in connection with the application process. BCR will use reasonable endeavours to keep that information confidential. BCR may share confidential information where required by applicable law or regulation. In addition, BCR may share confidential information with its employees, advisers, contractors, the monitor, HMT, the monitor’s and HMT’s employees, advisers and contractors, but will use reasonable endeavours to ensure that the recipient owes a duty of confidentiality in respect of that information.  In addition, on announcement of the successful applicants for grants, their public commitments will be published on the BCR website.

A: All applications will be considered on their own merits. It is for applicants to form their own conclusion, as part of their wider business case submission, as to what level of commitment they are comfortable making around purchase of innovative financial services or software from SMEs in the UK. All the assessment criteria that BCR will evaluate is found here.

A: Our expectation is that applicants should be able to provide an audited balance sheet showing the investment but, if the investment occurred since the last balance sheet date, a management balance sheet showing the receipt of the investment and a confirmation from a director and the company’s auditor that the investment was in fact received/undertaken in that amount.

A: Successful applicants to the Capability and Innovation Fund will be required to submit reporting on a quarterly basis. The first of these reports will be required within ten business days of the end of each three-calendar month period, beginning three calendar months immediately following the signature of the Fund Agreement. Successful applicants should be prepared to enter into a Fund Agreement in the form provided on the website promptly following being awarded the grant. BCR may also request additional reporting where it considers it is appropriate. Reporting templates will be made available on the BCR website prior to Pool application windows closing.  Reporting will end in line with the termination of the Fund Agreement.

A: This question is already addressed in both Questions 19 and 27 in this FAQ section and is already included within the Scout FAQs. We urge all applicants to look at FAQs prior to submitting questions.

A: This question is already addressed in both Questions 19 and 27 in this FAQ section and is already included within the Scout FAQs. We urge all applicants to look at FAQs prior to submitting questions.

A: In your business case submission, you have the opportunity to create milestones for various aspects of your application. BCR would expect to see a realistic milestone plan for implementation of initiatives.

A: This is partially addressed in the All Pools Q6 in the FAQs which sets out the assessment criteria. All applications will be assessed on their own merits against these. It is expected that for most KPIs, they would naturally come with a timeline attached.

A: It is for the applicant company to make their own assessment of the relevant importance of fintech partners in delivery of their submission and they should complete the relevant sections in question accordingly.

Incentivised Switching Scheme FAQs

A: Applicant Companies who do not currently have a BCA offering should submit with their Application, a Switching Proposal and Customer Offer for the offer which will be made available in the future.  They should clearly state:

  • The launch date of their BCA offering to all customers
  • The effective date of the Incentivised Switching offer (the date on which they will be in a position to start accepting Incentivised Switching Eligible Customers)
  • A clear explanation of how their BCA offering to all customers differs from the offer made to Incentivised Switching Eligible Customers

This information should be provided within the Incentivised Switching Application Pack documents and no special or separate correspondence is required.

Should these Applicant Companies be successful, the timing of publication of their Customer Offers will be considered and discussed on a case by case basis in light of the timing for the launch of their BCA offering.

More details on this process will be shared in due course.

There is no deadline by which BCA offers must be available so long as the criteria are met. Of course, the term of the scheme and the availability of funding remaining should be a consideration.

A: Incentivised Switching Eligible Bodies can obtain aggregate data on Williams and Glyn customers direct from RBS (upon signing their Non Disclosure Agreement). Details on this and the data itself can be obtained by contacting jon.simpson@rbs.com or nick.perkins@rbs.com. 

Participating banks will be able to accept or reject customers at their own discretion, however dowry will obviously only be passed to participants for those accepted switched customers.
Also, per clause 3.18 (B) of the Incentivised Switching Agreement:
…the Company shall, at its own cost, provide to the IB in writing:
if applicable, a list (amalgamated by reason(s) for rejection and by Turnover Band) of Target Customers who have been rejected from becoming customers of the Company during the relevant calendar month and an explanation (in reasonable detail) of the reason(s) for such rejection(s).

In this case an applicant should submit the application under its holding company. The holding company or wholly-owned subsidiary named in the application must meet the eligibility criteria to be considered for Incentivised Switching.

A: BCR can confirm there will be no per institution basis reporting publicly. However, information received by BCR may be disclosed by BCR (i) where required by applicable law or regulation, or (ii) to its directors, officers, agents, employees, advisers, contractors, RBS, the monitor, HMT and RBS’s, the monitor’s and HMT’s directors, officers, agents, employees, advisers and contractors, although in the case of (ii) BCR will use its reasonable endeavours to ensure that the recipient owes a duty of confidentiality in respect of that information.

A: The Incentivised Switching Communication Framework is available on the Reports, Publications and Documents section of the BCR website. Details on the Minimum Information Security Standards or ‘Minimum Information Security Requirements’ can be obtained by Incentivised Switching Eligible Bodies direct from RBS (upon signing their Non Disclosure Agreement) by contacting Jon Simpson or Nick Perkins

A: This relates to information provided by RBS and as such has been confirmed by them. Clause 12 of the IS Agreement applies to all Personal Data (as defined in the IS Agreement with reference to the relevant data protection legislation) of in-scope customers passed by RBS to a relevant challenger bank and this will include certain details contained in the ‘consent file’ in relation to each customer sent via secure FTP. 

Where the relevant sub paragraph of clause 12 refers to “other information relating to Target Customers” or “other information relating to customers of the Group”, this captures data which RBS has also passed to the relevant bank (via the secure FTP or otherwise) which may not meet the definition of Personal Data but still relates to customers and to which a duty of confidentiality is owed. Clause 12 of the IS Agreement does not apply to any data (personal or otherwise) which the relevant challenger bank obtains directly from an in-scope customer.

RBS and BCR appreciate that the drafting of clause 12 of the IS Agreement may be interpreted more widely and will consider in due course to what extent a technical clarification may be required.

A: Details of Operational Readiness will be shared in due course. In the meantime, all Applicant Companies should expect to be able to demonstrate Operational Readiness in line with the nature of their offer and when it is proposed for launch. Both these pieces of information should be provided in their application as per Incentivised Switching Q2 above. 

A: BCR have the right to clawback any dowry already paid out if it believes there has been a ‘Material Breach’ as defined in the Incentivised Switching Agreement.

A: Applicant companies that have their offers rejected will be notified individually. Applicant companies who have been successful will be publicly announced on 19th December 2018.

A: BCR will consider submitted applications as final. You should therefore ensure your application is accurate and complete before you submit.

A: The deadline for submission is final and cannot be extended.

A: BCR will aim to respond to all queries within five business days although this may take longer if the query is complex. You will not receive an automated response in the ISS data room, but we will get back to you.

A: No, it is the responsibility of the applicant to comply with the requirements of the form (including the word limit).

A: Yes, a version marked as redacted should be provided along with the application (even if no redactions have been made within) in order for the application to be compliant. Redacted content should be clearly marked as “[REDACTED]”.

A: You may only provide additional information which is directly requested in the application form. You should not attach files or provide URLs as part of your answers.

A: Only in certain circumstances. The process and application form is designed in such a way to reduce or avoid the need for clarifications. Applicant Companies are strongly urged to submit clear and complete applications early to allow time for BCR to raise and resolve and clarifications. Where bids are unclear and submitted close to the application window closing, BCR can only process clarifications on a best efforts basis.

A: RBS have set-up a dedicated Customer Support Team (CST) (Opening hours: Monday to Friday 8am – 6pm, excluding bank holidays) who will answer calls for our Business Banking customers – RBS: 0800 151 2980 / 0345 050 2978 / 0161 933 8108 (Live on April 2018) and Natwest : 0800 151 2991 / 0345 050 2989 / 0161 933 8119.

A: No, Applicant Companies should ensure they download the latest version of the Application Form (currently v1.2) and should note the two minor changes which have been implemented since 16th October:
• Field 5.1 in the Authorisation section has been de-coupled from Turnover Band 5 in the Offer Description. This was an error which meant that content typed into one field would replicate in the other. This has now been resolved.
• The confidentiality clause (7th bullet in the Terms of Application) has been updated to provide greater clarity.

A: ‘Rejection’ means any Target Customer who has either signed an application form or submitted an online application to open a Business Current Account and have been notified that their application has been rejected by the Applicant Company.

As per clause 3.18 (B) of the Incentivised Switching Agreement:

…the Company shall, at its own cost, provide to the IB in writing:

if applicable, a list (amalgamated by reason(s) for rejection and by Turnover Band) of Target Customers who have been rejected from becoming customers of the Company during the relevant calendar month and an explanation (in reasonable detail) of the reason(s) for such rejection(s).

A: Participating in CASS means to be a member of the Current Account Switching Service.

The criteria for eligibility is assessed at the time the application is submitted. This criteria has been set and is not variable at this stage.

A: The indemnity set out at Clause 9.2 of the Incentivised Switching Agreement covers a limited series of specific categories, all of which are within the control of the Company.

In the context of the Incentivised Switching Scheme, and in particular the roles played by the BCR and RBS, the indemnity is reasonable as neither BCR nor RBS should bear liability for matters within the Company’s remit.

A: Yes, and RBS will also waive break costs as long as Customers switch their Primary Business Current Account under the Incentivised Switching Scheme. RBS has produced the Customer Reimbursement Policy which reflects and implements the ‘Fees Waiver Schedule’ referenced in the Incentivised Switching Agreement. Incentivised Switching Eligible Bodies can obtain the Customer Reimbursement Policy direct from RBS (upon signing their Non Disclosure Agreement) by contacting Jon Simpson or Nick Perkins.

A: RBS will not comment or advise on whether an Applicant Company’s offer is suitable for the purposes of the scheme. BCR will receive and evaluate all applications and Customer Offers and will comment on their suitability.

A: No, the definition of a rejection can be found on Q25 of the FAQ section of the BCR website and only refers to applications for switching after the offer goes live. 

A: Yes, as Clause 12.16 of the Agreement states; The provisions of this Clause 12 shall survive the term of this Agreement.

*Please note this answer is no longer current and has been superseded by the answer to Q51*

A: Yes, as Clause 12.16 of the Agreement states; The provisions of this Clause 12 shall survive the term of this Agreement. 

*Please note this answer is no longer current and has been superseded by the answer to Q52*

A: Applicant’s should take their own legal advice on the meaning of the provisions in the Incentivised Switching Agreement. The clause in question requires the prior written approval, except where required by Applicable Law, of RBS where the announcement relates to a Data Security Breach which would lead to the identification of RBS or any member of the Group. Data Security Breach is defined in clause 12.13.

A: An Applicant Company is expected to provide clear evidence that it “has publicly stated its intention to launch” a Business Current Account offering. This evidence should demonstrate that the statement has been made in a public forum and that this statement has firm intent and commitment.

A: The text provided within the offer template is at the discretion of the Applicant Company subject to the applicable template guidelines, law and regulations. Please bear in mind however, RBS has stated that it will not be using the term ‘Dowry’ in its communication to customers on the grounds that the ‘Dowry’ is paid to the Applicant Company not the customer.  

A: Clauses 6.1-6.5 of the Incentivised Switching Agreement afford the opportunity to amend offers subject to the agreement of Banking Competition Remedies Limited. This includes changing the range of segments offers are proposed to. 

A: RBS have stated that, on entering the microsite, Target Customers are asked to select the sort order of offers by choosing either A-Z or Z-A, ahead of the offer listing relevant to them being displayed. They can then easily filter these offers by selecting features of the offers that are important to them and/or by selecting the Eligible Body brand logos shown across the top of the screen.

A: Yes, BCR can clawback in full (or in part) the dowries paid to successful Applicant Companies as stated in Clause 6.7 (B). In exercising its discretion, BCR will take into account all the circumstances and it is only likely to clawback dowries that have already been paid in exceptional circumstances.

A: Clause 13 refers to payments between BCR and participating banks. Applicant companies should take the responsibility of determining the tax treatments on any transactions between the Company and Switching Customers in line with its usual course of business.

A: Applicants should take their own legal advice on the IS agreement.

12.1 is an acknowledgment by the Company that is a controller. 12.4 is an acknowledgment by the Company that RBS is also a controller. As two parties can both act as controllers in relation to the same data, there is no conflict.

12.1 goes on to acknowledge that RBS and the Company are not “joint” controllers. It follows that, to the extent they process the same data, that they must be independent controllers. Again, there is no conflict with clause 12.4.  

A: Please contact Nick Perkins or Jon Simpson if you would like to request RBS approval for transferring personal data provided by them under the Incentivised Switching Scheme outside of the EEA.

A: Applicants should take their own legal advice on the agreement. The intent of this clause is that the applicant is responsible for ensuring that other members of its group comply with the provision.

A: Applicants should take their own legal advice on the agreement. The intent of this clause is that the applicant is responsible for ensuring that other members of its group comply with the provision.

A: As set out in Clause 21.1, this is applicable where the Company has applied for participation in the IS Scheme in whole or in part for other eligible group members. If this is not the case, then it is not applicable.

A: Applicant Companies should ensure that the evidence provided clearly demonstrates its intention along with significant or reasonable commitment to deliver its expressed intention to expand its business offering to SMEs in the United Kingdom.

A: In the event that the Applicant Company is unable to comply with the necessary steps identified by BCR in 7.5 (c), then clause 7.5 (b) is likely to apply.

A: RBS has stated that if the data is being processed after the Target Customer has in fact switched to a participant bank, then it would not be Personal Data for the purposes of clause 12 of the IS Agreement and clause 12.6 would not apply.

A: RBS has stated that if the data is being processed after the Target Customer has in fact switched to a participant bank, then it would not be Personal Data for the purposes of clause 12 of the IS Agreement and clause 12.13 would not apply.

A: Applicant companies should take the responsibility of determining the tax treatments on any transactions between the Company and Switching Customers in line with its usual course of business.

A: The IS Agreement sets out all termination rights. There is no express right for an applicant to terminate for business exigency.

A: All applications will be considered on their own merits. It is for applicants to form their own conclusion as to how they meet the criteria set.

A: BCR will pay dowries as set out in the Dowry Calculation Schedule. It is the Company’s responsibility to determine when payments are made to customers.

A: Applicant Companies should state as part of their application “any phasing or conditions attached to any cash amounts to be paid”. There is no limit imposed.

A: Pg 10 of the ISS Terms & Conditions clearly defines the Primary Account as:

‘…where a Target Customer has more than one Business Current Account within the Perimeter, that account or accounts of a Target Customer through which an aggregate of 50% or more of the Turnover of that customer has been processed in the twelve months prior to their transfer to an Incentivised Switching Beneficiary’

In regards to Loan dowry, any Loan Product equates to a dowry, per Clause 1.1.(B) of the Dowry Calculation Schedule:
‘…if such Transferring Target Customer has transferred any of its Loan Products from RBS to the Company (the “Loan Element”)’

As per above, there is only one primary business account that qualifies for Incentivised Switching Scheme.

A: Dowry Calculation Schedule, Clause 1.1 ‘…three calendar month period (beginning on 01/03/2019) …’ refers to the first three calendar month period (“Relevant Period”) following the Incentivised Switching Commencement Date of February 25th, 2019. Within thirty Business Days of the end of this period indicates when dowry payments will be made to eligible bodies and BCR report to eligible bodies on their individual dowry payments.

Incentivised Switching Agreement, Clause 3.14 ‘…three calendar month period (beginning on 01/04/2019) …’ refers to the three calendar month period after the first quarter date following the date of the Agreement (January 18th, 2019). The end of this period indicates when BCR is required to report to eligible bodies on aggregate dowry information. As this will not be available until after all the dowry payments have been made the differing of these dates is necessary.

A: The unique customer reference identifier will be the main identifier of a customer. The dowry will be paid when the customer becomes a Transferring Target Customer i.e. a Target Customer that closes its Primary Account(s) with RBS and has opened a BCA with an Applicant Company, i.e. they have successfully switched their account.

A: BCR does not have a specific need to approve the customer materials of Eligible Bodies and RBS has confirmed the same. Eligible Bodies are expected to consider the Incentivised Switching Scheme legal documentation when engaging in communications e.g. the Incentivised Switching Communication Framework and the Incentivised Switching Agreement.

A: The ISS Terms & Conditions state that ‘…The Applicant Company may only use the Dowries it receives in connection with Incentivised Switching in accordance with its Switching Proposal’. 

Therefore if any Dowries paid to Eligible Bodies have not been used in the manner outlined in the Switching Proposal these will need to be reported to BCR in the normal cycle of reporting and Eligible Bodies will be required to repay those Dowries to BCR. These may include:

– Dowry to be paid out as cash.
– Dowry for direct incentives other than cash.
– Dowry retained for indirect incentives.

Updated guidance on reporting will follow nearer the time here.

A: This should be reported as an additional dowry paid as cash in the ‘PROPORTION OF THE RELEVANT DOWRY PAYMENT PAID DIRECTLY TO CUSTOMERS (AS CASH)’ column of the EB Monthly Dowry Report.

A: a. Details on this report can be found under the ‘BCR Target Customer Report’, ‘Requirements’ on the reporting guidance page found here. It is envisaged this will be a high-level report without details of individual Eligible Bodies or SME customers.

b. RBS will provide BCR with this information.

A: Eligible Bodies should use the process set out in clause 6 to make a change to their Switching Proposal and/or Company Offering. This should be used regardless of whether the update is in relation to an amendment which BCR has made under clause 3.9 or whether it has been instigated by the Eligible Body independently of an amendment under clause 3.9. In all instances BCR will retain discretion as to whether to accept the updated Switching Proposal and/or Company Offering. However, in practice, updates which are evidently required to bring the offer in line with changes under clause 3.9 are not likely to be rejected.

BCR will communicate more details on the process in due course.

A: Eligible Bodies are expected to fulfil the incentivised switching offers which are current at the point that customer select them on the microsite. It is not envisaged that the dowry amount will change. In the unlikely event that this does occur, then BCR will provide Eligible Bodies with guidance on how this will take place so as to ensure that no Eligible Body is disadvantaged. 

A: As stated on the ‘Guidance’ tab under the section ‘PROPORTION (£) OF THE RELEVANT DOWRY REMAINING AMOUNTS APPLIED FOR THE BENEFIT OF CUSTOMERS’, you are required to report in this section ‘…any amount of the relevant dowry received from BCR which has been retained (i.e. amount not paid or planning to be paid out in direct cash or non-cash related incentives) which has been or is planning to be applied for the benefit of Transferring Target Customers…’, with an explanation as to how this has been applied for this purpose.

BCR will then determine the benefit of any incentives to Transferring Target Customers provided here in line with Clause 5.1 of the Incentivised Switching Agreement by analysing the information on a case by case basis.

A: As per the ISS Reporting Guidance for each dowry payment you are required to state any amounts that were planned to benefit customers in that Assessment Period which were unable to be used. These should be reported under ‘PROPORTION (£X.XX) OF THE RELEVANT DOWRY UNABLE TO BE USED TO BENEFIT CUSTOMERS’ in the EB Monthly Dowry Report with an explanation.

The relevant details for repayment of those amounts from Eligible Bodies to BCR will follow. 

A: The evidence and other information will be dependent on the Assessment Information received in each Assessment Period from Eligible Bodies and will be requested by BCR prior to the period it is required for. BCR envisages the main requirement for this will be to satisfy that the Eligible Body has complied with its requirements in the Incentivised Switching Agreement, however further clarity will be given to the Eligible Body as part of ongoing compliance monitoring if such a request is made by BCR.

A: As per Clause 3.1 of the Incentivised Switching Terms and Conditions:

The Applicant Company will, if its application is successful, be entitled to communicate Incentivised Switching to Target Customers through its usual general marketing, communication and advertising channels, but shall not be permitted to communicate directly with or to Target Customers without the prior consent of RBS.

In practical terms this means that you can communicate that you are part of the Incentivised Switching Scheme via your normal marketing channels but not the specific detail of the offers. These should instead be accessed by Target Customers via RBS’ website where significant effort has been invested by your organisation (and other participants), RBS and Banking Competition Remedies Limited to ensure all offers are fairly and compliantly expressed.

FAQs relating to CIF & ISS

The Senior Management Function (SMF) serves as an accountable person within organisations participating in either the Incentivised Switching Scheme or the Capability and Innovation Fund. Even if the individual in the SMF post changes, there should be continuity of this role from the point of application through to termination of the Agreement.

A: We do not have this facility available on our website. We will be updating FAQ’s regularly and other information as required. The Scout Tool, which will be used to manage the application process, does have an alert capability and this will be deployed.

A: The SMF (for both CIF and ISS) should be the accountable point of contact for BCR from the point of application through to the termination of the Agreement (see Q2 of the FAQs relating to CIF & ISS on the BCR website). This accountability covers submission of an Application Form, entrance into an Agreement (if successful) and delivery of and reporting on the Company’s obligation within the Agreement (if successful). The Applicant Company’s Board is ultimately accountable and should establish its own governance accordingly, including accountabilities of parties within the organisation.

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