Allica Bank launches savings
Allica Bank has become the latest entrant to the savings market and the first to launch in 2020, having quietly launched its first product yesterday.
The Bank has had a difficult journey to market. Originally known as Civilised Bank, it received its licence in May 2017 before handing it back a year later before it went live to the market. Some bloodletting followed with original founder Jason Scott departing, and a new team headed up by ex Harrods Bank CEO and Aldermore Bank Deputy CEO, Mark Stephens, joining to lead the new business. A fresh executive team was put in place including ex Harrods colleagues Sandy Luke, as Treasurer, and Simon Bateman as Chief Information Officer. In December 2018, the firm rebranded to Allica.
In September 2019, Allica received its banking licence with restrictions and announced that ex Kensington CEO John Maltby had joined as Chair. It appointed ex Aldermore Head of Propositions, Lawrence Holland, as head of deposits, to lead its entry in to the savings market.
Primarily funded by Private Equity firm Warwick Parners, Allica has positioned itself as an SME bank intending to offer commercial mortgages to both owner occupiers and investors. It's somewhat of a surprise therefore that it has chosen to initially launch just personal savings with business savings accounts to follow in the future. It has followed the route of Smartsave Bank by launching with just a single product - a 1 Year Fixed Term savings account. The rate is a very reasonable 1.49%, which places it above Marcus by Goldman Sachs, who expanded in to fixed savings earlier in the week at 1.45%, but is behind the market leaders BLME, Hampshire Trust and Vanquis Bank who all offer 1.60%. It's not enough to make the Savings Guru top 10 best buys for the term, sitting in 11th place, but beats anything on offer from the main high street banks.
Earlier today, we applied for an account to see what the customer experience was like. It was a difficult start with two valid email addresses (a .com and .guru) which have both been in existence for several years being rejected at the initial stage as 'invalid email addresses'. There is also no option for joint account holders to apply at present. Having finally beaten the email issue with a less secure .gmail account we were able to continue the application and it was straightforward and easy to follow.
On the plus side, we like the fact that Allica flag up straight away their policy for applicants who are unable to be identified electronically. Their policy is that unless applicants already have certified copies of identification, due to Covid-19 they won't be able to continue their application if not. These are difficult times and having a clear policy upfront saves customers unnecessary inconvenience later. We think the minimum and maximum account limits of £1,000 and £250,000 are good as is the 14 day window to fund the account.
On the downside, the request for National Insurance account number as part of the journey seems unnecessary friction and our nominated bank account failed their online verification - the first time this has ever happened with any bank. We were impressed that a statement could be uploaded to move through that stage quickly though.
In summary, a straight through application with Allica looks like it will be very slick and take just a couple of minutes. Sadly, ours had far too many problems and we must hope that's not the experience of the vast majority of savers.
We will watch with interest to see what other savings products Allica bring to market for personal and business savings.