6 FinTechs that won small grants from BCR’s £20m combined Pool E fund

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Access to financial products and services is a major challenge for SMEs today. This is often due to the complexity, cost, and administrative burden that comes with the Know Your Business (KYB) identity verification checks that form part of obtaining any financial product or service.

The Banking Competition Remedies (BCR) Capability and Innovation fund has been designed to improve the financial products and services available to small businesses. BCR, the independent body established to implement the Royal Bank of Scotland (RBS) State Aid Alternative Remedies Package, attracts applications across many different sectors and is rigorous in the assessment criteria, analysis, and decision-making processes.

The grant, which comes from the Capability and Innovation Fund Pool, is awarded to those who facilitate the development and innovation of financial technology that is relevant to Small and Medium Enterprises. Out of nearly 100 applications, six organisations have received a share of the grant, which has a combined value of £20 million.

1. Onfido

Onfido was awarded a £5 million grant from the Capability and Innovation Fund Pool in a bid to facilitate development and fintech innovation for SMEs. The company is committed to improving digital identity and access, delivering a cost-effective solution that simplifies their KYB obligations, and provides time-efficiency, security, and reliability.

Onfido stated that the grant would enable it to invest in the development of biometric fraud detection, data anonymization, and document fraud prevention technologies. The company aims to simultaneously develop a portable identity (ID) for integration and provision of a service to minimise the impact of the KYB process on SMEs.

Husayn Kassai, CEO and co-founder of Onfido, said, “At Onfido, we’re transforming the accessibility of financial products and services for SMEs. We pride ourselves on leading discovery and innovation of artificial intelligence technologies applied to identity verification and are honoured to receive the grant to further invest in the technologies that are creating a more open and inclusive online world. We view this as a critical issue as we enter a more digitised era where an individual’s identity is the key to access.”

2. Codat

London-based tech company, Codat has been awarded £2.5m by BCR. The funding will be used to open up Codat’s API on a self-serve basis, allowing a larger group of fintechs to build new products and services for SMEs, and join the ranks of the world’s leading FinTechs, insurance companies and banks who already rely on Codat. The £2.5m grant builds on the original £5m Codat received from BCR in 2019. It will help the company to go further and faster in supporting the rapid commercialisation of diverse SME financial services by removing technical and financial barriers to data integration.

The company connects the internal systems of small businesses to banks, fintechs, and other financial institutions, allowing business data to flow back and forth in real-time.

Pete Lord, CEO at Codat, said, “Developers, not bankers, are going to be the people to build the financial products we need for small businesses here in the UK. BCR has recognised that by awarding this money to Codat, they are benefiting potentially hundreds of products instead of just one.” The company is expected to build a self-serve offering along with five additional accounting integrations to reach the highest number of SMEs.

3. Funding Xchange

SME FinTech, Funding Xchange, has been awarded £5 million by BCR as part of the Pool E allocation of the RBS Remedies fund. The company applied for the funding in conjunction with challenger bank, Shawbrook Bank, NACFB, and small business advice platform, Enterprise Nation with the aims of making SME finance more accessible, affordable, and sustainable.

Funding Xchange, along with the other companies, is expected to develop SME and broker finance hubs providing an additional 1.1 million businesses and 2,000 brokers with access to sustainable funding by the end of 2022. The SmartFinance Hub, in partnership with the NACFB, will be available free of charge until the end of 2022 to smaller brokerages. The company will work with Shawbrook Bank to develop a real-time monitoring tool for intelligently assessing the ability of borrowers to manage repayment profiles and hence facilitate intelligent concession management for lenders.

4. Ezbob

London-based FinTech ezbob has been awarded £2.5m as part of the BCR’s (Banking Competition Remedies) £100m Pool E, which it applied for in July.

The company offers digital SME lending for Tier 1 financial institutions. It enables businesses to onboard an SME applicant via a 100% digital process, thus eliminating the need for paperwork.

ezbob’s pioneering technology includes API connectivity to over 40 data services, including KYC, AML, Fraud, Open Banking, and Credit Bureaus. This reduces the time it takes an applicant to complete a loan application to minutes.

The company’s CEO & Founder, Tomer Guriel, said that the new funding would enable it to reduce the investment barrier allowing smaller financial institutions to benefit from our smart onboarding technology.

5. Previse

Digital instant invoice payment company Previse has received a £2.5m grant from BCR Capability and Innovation Fund. The new capital is expected to boost the development of the company’s payment technology and accelerate market adoption.

Previse uses AI technology to help suppliers get paid instantly. Its technology analyses invoice data from large corporates to identify invoices that will need manual oversight, while automatically paying those which do not.

Previse CEO Paul Christensen said, “With the BCR funding and collaboration with the FSB, we will be able to get more SMEs paid instantly: reducing the need to resort to other expensive forms of finance. Our top priority is getting working capital to small businesses to provide the immediate cashflow support they need.

6. Fractal Labs

UK-based Fractal, together with untied announced that its SMART (SMEs Manage Accounts Receivables and Tax) solution has won £2.5 million Pool E bid for the BCR Capability and Innovation fund, designed to improve the financial products and services available to small businesses.

Through SMART, Fractal and untied aim to combine their technology and progressive regulatory changes such as Open Banking and making tax digital to offer a single, SME centric solution that addresses the three levers that have the largest bearing on their working capital needs – revenue, costs, and cash.

Fractal stated that the new funding would enable it to strengthen the SME-focused financial ecosystem, provide invoicing and POS tools to incentivize payment as well as advanced cashflow tools.