# Britain’s digital banks need support amid banking turmoil – trade body
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-03-31
Category: BANKING
Category URL: https://financedigest.com/category/banking
Meta Title: UK Neobanks Need Support Amid Market Fallout
Meta Description: British digital banks require support to navigate market fallout after the collapse of Silicon Valley Bank, says UK fintech trade body. Learn more here.
URL: https://financedigest.com/britains-digital-banks-need-support-amid-banking-turmoil-trade-bodyhtml

![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-03-31t122559z2lynxmpej2u0i5rtroptp4britain-fintech-1736814219990-compressed.jpg)

By Elizabeth Howcroft

LONDON (Reuters) – Britain’s digital banks will need support over the next few weeks and months to help them cope with the market fallout from the collapse of Silicon Valley Bank, a trade body representing UK fintechs said on Friday.

Investor confidence in the global banking sector has been shaken in recent weeks by the demise of Silicon Valley Bank, the collapse of a large U.S. regional lender and the emergency rescue of Swiss giant [Credit Suisse](https://www.financedigest.com/mitsubishi-ufj-to-postpone-at1-bond-issuance-in-credit-suisse-fallout.html "Mitsubishi UFJ to postpone AT1 bond issuance in Credit Suisse fallout").

Silicon Valley Bank’s UK arm, which had focused on tech start-ups, was bought by HSBC in a [deal facilitated by the UK government and the Bank](https://www.financedigest.com/seven-out-of-ten-uk-adults-aged-25-44-never-seek-advice-on-dealing-with-debts-despite-depending-on-the-bank-of-mum-and-dad.html "Seven out of ten UK adults aged 25-44 never seek advice on dealing with debts despite depending on the bank of mum and dad") of England after more than 250 UK tech executives warned that its failure would pose an “existential threat” to their sector.

Industry, government and regulatory bodies must now work together to protect customers and businesses amid “a concern that there may well be more disruption coming our way from across the finance ecosystem,” Janine Hirt, CEO of trade body [Innovate Finance](https://www.financedigest.com/innovations-in-finance.html "Innovations in finance"), said in a statement sent to Reuters.

Neobanks are not immune to the current market conditions, and it is [important that steps are taken to ensure](https://www.financedigest.com/42-of-retailers-say-payment-over-time-solutions-are-very-important-to-ensuring-future-digital-innovation.html "42% of retailers say payment-over-time solutions are ‘very important’ to ensuring future digital innovation") they have the support over the course of the coming weeks and months,” she said. A neobank, or [digital bank](https://www.financedigest.com/how-to-enhance-banking-services-with-digital-performance-intelligence.html "HOW TO ENHANCE BANKING SERVICES WITH DIGITAL PERFORMANCE INTELLIGENCE"), is a bank whose services are accessed via an app or website as opposed to having physical branches.

Hirt did not elaborate on the type of [support needed](https://www.financedigest.com/banks-need-to-digitise-financial-wellbeing-support-to-help-young-people-manage-through-this-recession.html "Banks need to digitise financial wellbeing support to help young people manage through this recession").

The CEO of [hedge fund](https://www.financedigest.com/what-is-a-hedge-fund.html "What Is A Hedge Fund") Man Group told a conference in London last week that the banking turmoil sparked by the collapse of Silicon Valley Bank is not yet over, and he believed a significant number of banks will fail within two years. He said that [challenger banks](https://www.financedigest.com/open-data-represents-the-biggest-challenge-to-banks-in-a-generation.html "Open data represents the biggest challenge to banks in a generation") – lenders which are usually smaller and newer than the big high-street banks – in Britain could be at risk.

Hirt said that [Innovate Finance has been offering “close support” to challenger banks](https://www.financedigest.com/knowing-your-customers-needs-is-essential-for-banking-innovation.html "KNOWING YOUR CUSTOMERS’ NEEDS IS ESSENTIAL FOR BANKING INNOVATION") to help them navigate the “turbulence” in the sector.

The Bank of [England](https://www.financedigest.com/bank-of-england-fines-former-tsb-executive-over-2018-it-failure.html "Bank of England fines former TSB executive over 2018 IT failure") and the British government have said that the country’s banking system is well capitalised and funded.

BoE governor Andrew [Bailey told lawmakers this week that the central bank](https://www.financedigest.com/boes-bailey-says-bank-reforms-worked-but-questions-about-liquidity-buffers.html "BoE’s Bailey says bank reforms worked but questions about liquidity buffers") was on alert amid the global turmoil, but added that Britain was not experiencing stress linked to the demise of Silicon Valley Bank.

(Reporting by Elizabeth Howcroft; Editing by Mark Porter)


---
This blog is powered by Superblog. Visit https://superblog.ai to know more.
---