From start-up to scale-up – an update from Allica’s CFO

Allica has come a long way since we became a regulated bank in 2019. Back then we were just a small group of 10-20 like-minded people with big ideas and a banking licence – but very little else.

Fast-forward just four years and we have thousands of customers, over £1.4 billion lent out to established businesses in the UK, and £1.6 billion earning interest in Allica Bank savings accounts.

It’s quite the story – but how did we get there?

Becoming a bank in the first place is, rightly, a long and challenging process in the UK. We are in a highly regulated environment and the Prudential Regulation Authority (PRA) sets a high bar for those applying for a banking licence, which is what you need in order to take deposits from customers.

It took a lot of hard work. And when we finally got our banking licence from the PRA, it was a very special moment, to say the least.

This was just the first chapter of the Allica story, though. The second chapter was an entirely new challenge: actually building a bank. And not just any bank. But a bank built especially for the underserved established business segment (made up of those businesses with 10-250 employees). A bank committed to meet their needs with human relationships, tailored expertise and powerful technology. Something that had never been done before, but was sorely needed.

Chapter two – building the foundations

Allica first launched to market in March 2020 with business mortgages, followed soon after with savings accounts and asset finance. We spent the following year adapting and expanding these products as we grew our customer base, including acquiring 2,000 SME customers (with their £0.6 billion of loans) from AIB, following their exit from the SME market in Great Britain.

It was 2022, however, that was transformative for Allica. It was the year that we passed both £1 billion in customer deposits and lending. And we also became profitable, making us one of the fastest UK fintechs ever to do so.

We did not achieve this growth at the expense of prudence. Allica is careful to hold capital and liquidity well in excess of the levels required by the UK regulator and we have kept a tight control of our costs.

On top of that, and in a strong vote of confidence in Allica Bank’s strategy and financial position, we received £155 million of additional capital from investors, including the British Business Investments and US technology investor TCV. This was a real achievement in very difficult market conditions, bringing our total investment to date to over £320 million.

What was also so powerful in 2022 was the feedback we received from our customers. Alongside a 4.5-star ‘Excellent’ rating on Trustpilot, Allica was named ‘Best Business Finance Provider’ in the British Bank Awards, voted for by our customers. We also won an unprecedented five awards in the 2022 National Association of Commercial Finance Broker Awards, whose members are key advisers to business owners, and important partners of ours.

Our third chapter – 2023

2023 (and beyond) represents a new third chapter for Allica. Having established proven traction as a business lender, become profitable, and with significant financial backing, we have strong foundations to scale and achieve our long-term strategy of giving established businesses the banking they deserve.

This new chapter will be focused around building out our full-service banking franchise, with our new business current account – called the Business Rewards Account – sitting right at the centre.

Having already been popular with our existing customers after a soft launch in 2022, we plan to launch this to the wider business population this year. It’s designed to turn what business owners expect from their bank account completely on its head. It has no monthly fees, offers cashback rewards on card payments, and includes a Savings Pot with a market-leading savings rate. There’s currently nothing quite like it on the market, and we’re excited to bring some much-needed competition to this space, too.

Our aim is to become the most-recommended business bank in the UK, and I firmly believe that in 2023 Allica will go a long way to achieving that goal.