“What we do is people and data. We don’t make fridges; we don’t have branches; even our loan documents are electronic. It’s people and data, that’s it,” says Richard Davies, CEO of Allica Bank, explaining his ethos for the London-based fintech.
Allica is an online banking platform with a focus on personalised relationship banking aimed at established SMEs with 10 or more employees. With additional offices in Milton Keynes and Manchester, the company distinguishes itself by pairing advanced digital banking functionalities with dedicated relationship managers with extensive SME banking expertise. Allica Bank provides a full-service product suite for SMEs, encompassing business loans, asset finance, savings, cards, and current accounts.
Allica launched in late 2019 with its first deposit product as a fully authorised bank, having undergone a long journey to secure its bank licence. Since then, the company has undergone substantial growth, building out its tech platform and growing its headcount to 324 employees by the end of 2022. It secured its banking license in 2019 and started issuing loans in March 2020. “We were pretty much born into the pandemic from a go-live point of view,” says Davies.
He joined the company in 2020 from Revolut, where he was Group COO and CEO of Banking, having also previously been the inaugural CEO of OakNorth Bank. Davies has also held a range of key leadership positions at major highstreet banks like Barclays, HSBC, and TSB, gaining expertise in commercial banking, digital transformation, and strategy.
When Davies joined, the company’s tech stack was reliant on a lot of third parties. Based on his experience at Revolut, Davies was keen to bring the company’s technology in-house to allow a level of control that could support the rapid launch and iteration of new products. “We’ve embarked on a journey to really build out quite significant in-house engineering and product capabilities. Since early 2021, we’ve scaled up our in-house tech teams a lot. We’ve got about 150 people now who work in tech. All of our loan processing technology is built in-house because we don’t think there are any great solutions out there to handle the complexity and scale of our target segment.”
Allica’s in-house approach to technology has paid off by providing the company with the infrastructure to scale. To finance its growth, the bank has raised £386m in capital, including a £110m series B in 2021 and a £100m series C in 2022. “Last December, we did a £100m round led by TCV, a premier Silicon Valley growth equity fund. They’ve invested in world-class names like Airbnb, Spotify, and Netflix, validating our tech-driven approach. TCV invest in tech, they do not invest in banks,” explains Davies. TCV’s investment is clearly a significant proof point of Allica Bank’s tech prowess.
While its technology is a point of differentiation, the bank pairs its tech-forward approach with the human touch of experienced relationship managers, catering specifically to the complex needs of SMEs. “Hiring the right combination of people, organising in the right way, with the right ways of working, right architecture, right tooling is what delivers success,” says Davies, emphasising the importance of blending tech and people skills.
Allica has faced its share of challenges. Davies acknowledges, “Banking is regulated, and so the bar and the domain knowledge is higher. You can’t just hire tech people and ignore the banking side of it.” He also mentions that capital raising is always hard and that building the full range of different bank products in such a short span has been challenging but rewarding. Maintaining strategic clarity is a crucial part of the company’s growth journey. Davies believes, “Having total clarity of your target segment and value proposition is really critical. We know we exist solely to provide a full-service alternative to the high street banks for established SMEs.” He also adds that the FinTech is very disciplined in focusing its technology and people investments to drive value quickly and build a sustainable, impactful business.
With a clear strategic focus, tech-driven ethos, and dedication to serving the SME sector, Allica is not just another name in the financial industry; it is meaningfully addressing underserved needs for SMEs. The numbers speak for themselves, and alongside the rapid revenue growth, Allica became profitable in mid-2022 and has won a wide range of customer-voted awards. Davies sums it up, “It’s hard but rewarding when you can feel you’re making some sort of difference to the market, to customers, that make up a third of our economy.”