U.K. Fintech Firms Stand to Lose From Big Bank De-

This article was originally published by International Business Times.

There is a contradiction at the heart of the payments industry. While the government and regulators have been driving hard to ope m2m iot n up competition and access into banking and payments, beneath the surface there are very few banks that actually provide transactional banking services for the likes of fintechs and other non-bank payment service companies.

Such banks are reducing the number of companies that can use their current account banking services for managing their basic trading operations. They are either not allowing new companies to open accounts or are telling current customers to move their accounts elsewhere. This is referred to as de-risking.

There are a number of factors driving de-risking policies at big banks. For example, there have been many regulatory changes in the US, which is affecting correspondent banking relationships for UK and European banks handling companies doing business that involves US Dollars. "Contrary to what you might think given the advent of much-vaunted challenger bank culture, the general trend is of banking closing down rather than opening up. Combined with Brexit, this constitutes a real threat to the UK's thriving fintech ecosystem," says Ton Vending Telemetry y Craddock, Director General of the payments industry's leading trade association, the Emerging Payments Association (EPA).