A full license could come as early as the first quarter of 2021, the release stated. The timeline is consistent with one City of London Group included in a slide deck on its website describing the licensing process.
Recognise was created in 2018 with a mandate to serve small- to medium-sized businesses (SMBs).
In an update published on the company’s website prior to the recent approval of a restricted license, City of London Group stated that an advantage of having a full license — one without restrictions — would be that “A U.K. banking license will allow access to the U.K.’s ($1.36 trillion) retail deposit market, a large and sustainable pool of low-cost funding.”
Phil Jenks, chairman of Recognise, said in the release announcing the awarding of the restricted banking license: “We know that 2020 has been overwhelmingly tough for [SMBs], so we are delighted that Recognise is now in a position to give the support that [SMBs] need to survive, grow and play their part in the recovery of the economy.
“… As a new entrant in the U.K. [SMB] banking market with no legacy book and the latest technology installed, Recognise is strongly placed to deliver on its relationship-based model and differentiated business plan. We have the experience and expertise at our disposal and believe we can play a major role in helping the U.K. small business sector get back on its feet.”
Michael Goldstein, Group CEO of City of London Group, added in the announcement: “This represents a major milestone for the Group in delivering the strategy set out in early 2018. U.K. entrepreneurs will play a key role in creating and supporting U.K. economic growth, and to do so they need a banking sector that is aligned to their needs and way of thinking.”
City of London Group has spent the last few years building a team to run the new bank and preparing its IT backbone, according to a July 2019 PYMNTS report.