BCR Award: Our Q4 2023 update

07 February 2024

Business Banking

Tom Renwick, Head of Business Banking
Tom Renwick, Head of Business Banking
two mechanics working at a business

The final quarter of 2023 marked the end of a strong year for Atom bank’s support of UK SMEs. We continued to grow our lending book through our standard and UK government-backed lending products and provide support for small businesses through the delivery of our Capability and Innovation Fund commitments.

We are pleased to report that, in the latest quarter, our product and technology teams continued to make positive progress with the integration of our bespoke business lending decision engine into our next generation broker portal. This will allow us to accelerate the application journey for SMEs.

As part of our successful application to the BCR Capability and Innovation Fund, we made nine commitments, and we remain resolutely committed to delivering against all of them. Here is how we are tracking:

1. Bringing innovative smart lending products to market

We are currently reporting delays associated with bringing our business instant access product to market against our business case. However, a number of the key capabilities required for the business product are being delivered through the build of our personal savings variant, which we will leverage as we develop our business instant access product. Recruitment for the associated delivery teams is now concluding as we continue with product discovery.

We continued to enhance our existing lending proposition, focusing on delivering efficiencies to our legal process and automated decisioning.

We determined that we could not build an organic unsecured lending product to add to our existing product inventory in the previously stated timescales, and we have made the decision to instead deliver an unsecured lending product through partnership agreements. The spend allocated to this deliverable will instead be used to deliver further enhancements to our secured lending product range.

2. Commitment to deliver a next generation broker experience

This commitment has been formally delivered and marked as complete. However, our delivery teams remain focused on delivering ongoing enhancements to our next generation broker portal and building technical enablers for future automation deliverables. This resulted in a total of 34 features being released in the last quarter.

3. Address discouraged demand and improving financial wellbeing

This commitment has been delivered. We have continued to work with our existing partners to understand emerging ways for us to use Open Banking cloud accountancy e-commerce data to enhance our decisioning and monitoring processes.

4. Accelerate the net zero transition

The commitment is on track. In Q3 2023, following the closure of the UN’s Climate Neutral Now initiative, we aligned our existing pledge with Race to Zero. In partnership with Alectro, we’ve also recently published our annual carbon report for FY23. The report highlights our key areas of focus in reducing emissions in line with the pledged annual reduction of 5%.

We continue to participate in trials with external providers to account for commercial emissions and gather EPC data to aid the continued development of green lending products. Over the first half of 2024, we plan to deliver enhancements to our business lending policy which will allow us to finance a diverse range of green products and initiatives, from commercial retrofit to habitat restoration and carbon sequestration.

5. Transforming small business banking

This commitment is on track. We continue to deliver timely and affordable lending into the market and provide exceptional, market leading levels of customer service. As of 31st December 2023, we have completed £568m of BCR-attributable secured lending, exceeding our 2024 target by £9m. Over the last year, we have built a strong application pipeline, currently sitting at £194m, with c.£120m under formal offer and now waiting to draw down.

6. Create 70 jobs in the North East

This commitment is on track. To date, 68 people have joined us directly supported by BCR funding, including 11 graduates. There are seven vacancies associated with our BCR programme of work live on our website. All open roles are available to view on our careers page.

7. Partner with innovative fintechs

This commitment remains on track. To date, we have partnered with nine innovative UK SMEs to support us in delivering our commitments.

8. Deliver transparency

We have and will continue to publish BCR Commitment Updates to our website until we have successfully met all of our deliverables under the programme. This includes live updates to our transparent product roadmap, allowing our customers to keep up to date on what we’re building and where we’d like to go in the future.

9. Invest our own money alongside the award

Alongside the BCR award of £10m, we remain committed to invest at least £15m of our own funding. Investment funded by both pools was accelerated over the last quarter of 2023 as we seek to realise our commitments, in particular for automated decisioning and propositional enhancements.