Allica Bank chosen for new Scale-up Unit to supercharge growth

Allica Bank has been named as one of a handful of first wave firms selected to participate in the Prudential Regulation Authority (PRA) and Financial Conduct Authority’s (FCA) newly launched Scale-up Unit, in a move which supports the firm’s bid to grow its presence in the SME lending sector.

The Scale-up Unit, announced last year by the Chancellor as part of the UK Government’s Financial Services Growth and Competitiveness Strategy, is designed to provide fast-growing financial services firms with resources to support their growth ambitions by helping them navigate complex regulatory challenges. 

Since opening its doors in 2020, Allica has focused specifically on serving established SMEs with between 5 and 250 employees, and its total outstanding lending to this sector has now reached £3.5 billion.

Named the UK’s fastest growing company in 2024, and the fastest growing UK fintech ever in 2023, Allica is targeting a 10% share of the established SME market by 2028.

The challenger bank has been at the forefront of calls from across the fintech and challenger banking sector for the creation of a Scale-up Unit and has engaged closely with both the PRA and the FCA on its design.

 Participation in the Scale-up Unit will enable Allica to access regulatory support across key areas including out-of-cycle capital reviews, early-stage engagement on new product launches and regulatory processes, and enable the lender to provide views on policy proposals that impact challenger banks as they grow.  

Richard Davies, CEO of Allica Bank, said: “Allica are delighted to be included in the initial Scale-up Unit cohort, having led the call for a dedicated regulatory unit to support firms as they scale.

“The Unit should provide banks like Allica with more capital certainty and more regulatory support to boost lending to the established SMEs that power the UK’s real economy.

“Done well, the Scale-up Unit can support the government’s objective to make the UK the location of choice for financial services firms to invest, innovate and grow.” 

Allica is one of six firms to be accepted into the first cohort – the others are ClearBank, Monument Bank, Nottingham Building Society, OakNorth Bank and Zopa Bank – with the regulators saying they will be open to expressions of interest from a second cohort of firms later this year. 

PRA and FCA officials will meet directly with the firms, both as a group and individually, throughout the coming months.

Charlotte Gerken, executive director for UK Deposit Takers at the PRA, said: “Welcoming the first cohort to our Scale-up Unit is an important milestone.

“It shows our commitment to helping firms grow in a sustainable way that benefits the financial services sector and wider economic growth.”

Jessica Rusu, chief data, information and intelligence officer at the FCA, said: ‘We look forward to working with the first cohort as we deliver on our strategy to support growth and UK competitiveness. Our joint Scale-Up Unit enhances the support available to firms as they move from start-up to scale up, helping them to grow successfully and sustainably.”