In September we were awarded a grant of £10m from the Capability and Innovation Fund (CIF), part of Banking Competition Remedies (BCR). We’re thrilled to receive this award and will be using it to help even more small businesses with the funding they need to grow.
A condition of the grant is that we’re transparent and accountable for how we use the money. To demonstrate the importance we give to visibility and the public commitments we outlined on the BCR website, we’ve established a Grand Supervisory Committee. This is made up of both internal and external figures with their own varied expertise in the sector.
We’re thrilled to announce that Baroness Susan Kramer, a former banker and Liberal Democrat member of the House of Lords, will bring her experience to the committee. Over the past decade she has been part of the Parliamentary Commission on Banking Standards, as well as a member of the Treasury Select Committee. For a long time she has worked to develop a framework for community banks, making her excellently placed to help us achieve our ambition of supporting more SMEs.
What is the BCR and how are we using the grant?
The BCR is an independent entity, vetted by the Treasury, the European Commission and the Royal Bank of Scotland. It was set up under the Alternative Remedies Package to encourage lenders to develop and improve their capacity to offer banking services and financial products specifically for SMEs. Their aim is clearly aligned with our own: helping small businesses thrive and expand. This is a fantastic opportunity and we believe it’ll give us the tools to help more SMEs in every part of the country.
When we applied to the fund, we had to be clear about what we’d use the money for and how it will positively affect SMEs. We’re committed to fulfilling our promise to offer SMEs more choice through a range of tailored funding solutions, and we’ll use this grant to help develop that. We’re also going to focus on helping younger, smaller SMEs and sole traders access funding, working with even more businesses across the UK. And finally, we’re improving the financial offering available to SMEs by partnering with other innovative fintechs and banks to create well-rounded digital solutions.
We want SMEs to have access to one simple interface with multiple funding solutions that are all easy to use and support different areas of their finances.
Accountability and the Grant Supervisory Committee (GSC)
Essentially, we believe that funding should (and can) be easier to access and better adapted to small business in the UK. Creating better competition for banks is crucial to achieving this on a large scale, which will ultimately help SMEs.BCR is looking for the right innovation and better functionality for SMEs and they’re determined to see it happen. That’s why all the businesses they’ve awarded a grant to must commit to open accountability and proper governance.For our part, we’ve laid out an independent governance structure to make sure our public commitments are upheld, and that we use the money exactly as we’ve promised to. We’ve established two separate committees to check the ways we draw down on funds and report to BCR, along with independent assurance and a control framework.
The first committee – the Programme Implementation Committee – will coordinate decision making on a day-to-day basis (everything from staffing decisions to resource allocation). It’s chaired by our CFO, Tom Stenhouse, along with other members of our leadership team.
This committee is accountable to a Grant Supervisory Committee, which is made up of two internal members of the leadership team, two board members and two external advisors. Their role is to supervise how we use our grant funds. In real terms what this means is that members assess and report on what we’re doing directly to BCR on a quarterly basis. They have the final say on how these funds are used, including over any changes to original plans.
Baroness Susan Kramer
One of the key advisors on our GSC is Baroness Susan Kramer. Apart from her significant career in private sector banking and financial consulting, Baroness Kramer has been a huge advocate of the FinTech industry to both the Government and the Bank of England. Currently she is a member of the EU Goods Sub-Committee, as well as the Finance Bill Sub-Committee. As Liberal Democrat Lords Spokesperson for the Treasury and Economy since 2015 too, she’s a well known and respected voice in all things finance.
When the CBILS was launched, Baroness Kramer was disappointed to see HMRC turn immediately towards traditional banks, instead of working with the fintechs that had been born out of the financial crisis with the ability to inject money into SMEs. In fact, she raised the issue of this funding process being “so painfully slow” on the floor of the House of Lords and continues to vocally support alternative lenders and innovators.
Having turned away from traditional investment banking in the late 80s, Baroness Kramer and her husband created a joint venture with Austrian bank, Creditanstalt. Here they seized an opportunity to support and encourage new businesses following the fall of communism, focussing on infrastructure and including new community-based utilities in Central and Eastern Europe. She sees many parallels with this part of her career and how fintechs operate today. The size, adaptability and appetite to go where more traditional lenders won't show the parallels between what she and her husband established and how fintechs have been operating for the past decade.
According to Baroness Kramer, big banks have now “recognised that the FinTech industry is a serious challenge”. As part of the coalition government, she played a key role in welcoming FinTech into a new era of lending after traditional banks had let so many people down during the 2008 crash.This period of openness allowed fintechs like us to grow and help SMEs where high street banks had failed them. Support like this is important in government and is part of why we’re so excited to work with Baroness Kramer on the GSC.
Both Baroness Kramer’s political and public work have informed her knowledge of the sector and of the people and businesses it supports. The current situation (with COVID-19, Brexit and Black Lives Matter influencing the way businesses operate) has made her reflect. She’s adamant that changes aren’t failures or hypocritical U-turns. In her own words, “when you run your business, events change: you change the way your business runs”.
We’re here to help SMEs to do just that and can’t wait to start making a difference with our BCR grant and Baroness Kramer’s input as part of our Grant Supervisory Committee.