Explore more insights

Banking’s Nirvana moment draws near

What starts as a trickle can rather quickly turn into a flood.

Ollie Maitland Jul 11, 2019

Once the banks’ monopoly is properly busted, a renaissance of business banking and lending will occur. That’s why we were excited by Mark Carney’s recent Mansion House speech.

In his speech, the governor of the Bank of England said tech companies and non-banks could soon be given access to the BoE's balance sheet, affording them the same privileges as the big, legacy banks. The Bank will consult next year on providing an “appropriate” level of access to its 500 billion pound balance sheet.

So why is this important? Well, it would give fintech upstarts access to the inner sanctum of finance. The balance sheet is, as the BoE explains, “the ultimate means of settlement for all transactions in the economy”.

Access to this balance sheet means banks can hold interest-bearing deposits or reserves at the UK’s central bank overnight. Historically, this access has been limited to the big banks, and it’s basically a superpower, providing them with a competitive advantage over everyone else.

Being able to park cash at the BoE overnight is risk-free, and means fintechs don’t have to rely on commercial banks. It’s all very promising news, not only for the UK’s fintechs but the UK as a whole.

Nirvana moment


A new economy of peer-to-peer connections

In 2016, Carney noted that: “The economy is reorganising into a series of distributed peer-to-peer connections across powerful networks – revolutionising how people consume, work and communicate”.

Carney was right then, and his words ring even truer now. And with his Mansion House speech, he looks to be taking his own words seriously.

The networked economy is blossoming right now, and what firms need is more support from the government. Reform shouldn’t end here: the entire financial sector needs to be opened up, with appropriate regulation, of course. Only once competition flourishes, on a fair footing, can the financial sector offer real consumer choice.

Beyond 'alternative'

When Nirvana crashed into mainstream consciousness with ‘smells like teen spirit’, it was a culmination of an alternative movement. Nirvana didn’t invent grunge, and for a long time, the genre was locked out at the fringes.

Grunge developed its own momentum, and when it burst onto people’s screens and blared over the radio, it overpowered popular music and launched a cultural movement. Just like that, what was once the ‘alternative’ became mainstream.

Finance and banking is waiting for its Nirvana moment. It’s coming, that’s a guarantee, it’s just a matter of when. When that happens, fintechs will stop being the alternative and become the norm. At Capitalise, we can’t wait. 

alternative finance
invoice finance
case study
trade finance
contract finance
working capital
startup loans
fashion finance
merchant cash advance
future accountant
product of the month
women in funding
partner of the month
business tips
live session
international women's day
covid19 coronavirus
corporate finance
accounting firm
asset finance
hire purchase
business funding
business credit score
south africa
small business
business loan
property finance
commercial mortgage
credit imporvement
spring budget 2023
small businesses
spring budget
credit score
commercial mortgages
trade debtors
cash flow
truck finance
late payments
lorry finance
building a financial safety net
trade debtor days
bridging loan
credit checks
interest rates
balance sheet
bad debt
company credit checks
debt collection
credit control
check company credit
business loans
instant offer
credit scores
credit review service
Follow Us
Sign Up to Receive Updates

Signup to our newsletter

Have insights about the accounting community sent straight to your inbox. Sign up to our newsletter.