What to Look for in Your Agency Banking Partner

As a fintech, you know that launching or extending your current payment services is far from simple. It means navigating different account types, account structures and multi-currency support, as well as payment and clearing schemes across the UK and EU, each with its own complexities and quirks.

Building the accounts and payment scheme connectivity requires substantial investment in technology, compliance and personnel. Moreover, ongoing maintenance and upgrades of these systems further escalate operational costs and demands.

This is where agency banking comes in. Also referred to as indirect access or indirect scheme access, the agency banking model enables firms to offer accounts and payment services to their customers without the resources or costs of joining a payment scheme directly. 

Streamlined access to banking services

Agency banking services include access to payment rails such as the Faster Payment System (FPS) in the UK or SEPA in the eurozone. By using the established infrastructure and regulatory compliance standards of partner banks like ClearBank, firms can focus their resources on innovation and customer experience.

Agency banking services extend beyond transactions – the ability to move money – to also include account offerings that provide different ways to hold money, whether your own or that of your customers. Agency banks also offer different account structures, either ‘real’ or ‘virtual’ and provide the ability for fintechs to issue customer accounts from their own BIC or sort code.    

There’s a wide variety of accounts a firm might use depending on the products and services it offers. The question of real vs virtual then becomes a decision about the best way for you to structure those accounts based on your needs and future requirements.

What should you look for in a partner bank?

Finding a trusted partner who can provide the quality of service you require and meet your customers’ expectations is critical. But what should you look for in a potential agency bank?

Some criteria to consider include:

The breadth of services

Does the bank offer access to the schemes you need? Does the bank offer the accounts you need, the structures to aid operational efficiency and reconciliation? If you transact or have merchants in several markets, can your bank provide multi-currency accounts?

Payment processing flexibility

Your bank should enable you to transact and process payments on behalf of your customers – whether they’re individuals or business entities – through your own BIC or sort code complemented by dedicated virtual IBANs (VIBANs) in each customer’s name.

Integration and time to market

API-based integration provides a simpler path for you to access the accounts and payment schemes that will underpin your services.

Payment performance

Your customers will expect real-time payments. You need to consider the technical aspects of how a provider accesses the payment schemes, and their uptime. For example, while a scheme may run 24/7 365, a provider may not offer the same availability. You should also examine how your partner performs and communicates any updates and monitors payment performance.

Stability and security

 Your service provider should continually test, debug and maintain its services to give you peace of mind that you can offer your customers a great payment experience. Providers should also embed information security in everyday business processes to ensure data is handled securely.

Client service and support

Your accounts and payments must operate efficiently, and your business must receive actionable analysis to optimise your customers’ experience. However, things can go wrong. If they do, your provider needs reactive and proactive support to help solve any issues. When assessing any potential provider, you should review its client relationship and support team. 

Expertise and track record

There are a few ways to understand whether your provider can provide the experience you need, including reference clients and case studies. A final aspect is a partner's stability and longevity. Can you be sure your provider has sufficient funding to operate and support your business for years? For example, do they have the long-term financial stability to invest in their products, services and client support?

The bank purpose built to support you 

Partnering with an agency bank allows businesses to access new markets without the large costs associated with direct access - for example, a UK firm also looking to access SEPA, whether from the UK, or to support EU operations.

ClearBank is a UK and European-based bank, uniquely built to provide the infrastructure fintechs need to launch and scale their businesses. Today, we serve more than 280 clients who rely on us to hold their funds, with all deposits held on their behalf at the Bank of England, DnB and the ECB, as well as access UK and EU payment schemes. With ClearBank, you can go live in a matter of weeks and focus on serving your customers, while we look after the underlying accounts, payments and ongoing compliance with scheme rules.