FinTech SME Challenger Bank — UK FCA Authorised Embedded Finance

Embedded finance architecture

ClickMasters built the SME challenger bank API platform that enables third-party ISVs (Independent Software Vendors) to embed banking services.

API products

• 1Embedded Current Account (ISV creates business current account in-app — no bank redirect),
• 2Embedded Payments (ISV initiates BACS/Faster Payments from business account),
• 3Embedded Card Issuing (ISV creates Mastercard commercial card for business customers — Marqeta card issuing API),
• 4Business Lending Signal (ISV shares cashflow data → bank assesses pre-approval — no manual application),
• 5Accounting Software Integration (Xero, QuickBooks, FreeAgent — bank transaction categorisation synced to accounting software).

ISV onboarding

API key + webhook configuration via ISV developer portal (Stripe-inspired developer experience).

Business KYC and Companies House Integration

Business KYC (Know Your Business): more complex than consumer KYC — must verify the business AND its beneficial owners.

KYC workflow

• 1Companies House search (company name/number → Companies House API → registered name, registered address, SIC code, status),
• 2director verification (all directors listed at Companies House → Onfido identity verification for each director),
• 3beneficial owner check (PSC — Persons with Significant Control — Companies House API → UBO identification),
• 4AML screening (ComplyAdvantage — all directors and UBOs screened for PEPs/sanctions/adverse media),
• 5source of funds (business bank statements or HMRC SA302 for sole traders).

Enhanced due diligence

high-risk SIC codes (gambling, crypto, adult entertainment) → senior compliance officer manual review.

HMRC Making Tax Digital Integration for SMEs

• HMRC MTD (Making Tax Digital): all VAT-registered businesses must file VAT returns digitally via HMRC API.
• Bank-native

MTD

• 1transaction categorisation (bank statement transactions → VAT category — standard rate, reduced rate, zero-rated, exempt),
• 2MTD VAT return (categorised transactions → VAT calculation → HMRC MTD VAT API submission),
• 3MTD ITSA (Making Tax Digital for Income Tax — from April 2026 for businesses with > £10,000 income) — bank transactions → quarterly ITSA updates → HMRC MTD ITSA API.

Value proposition

businesses using embedded bank account for all transactions → 100% transaction capture → fully automated MTD VAT and ITSA.

Accountancy software sync

Xero/QuickBooks via Open Banking bank feed (TrueLayer AISP → accounting software → MTD filing).

FCA Consumer Duty for SME Banking

FCA Consumer Duty PS22/9 —

SME threshold

Consumer Duty applies to SMEs defined as businesses with fewer than 50 employees and less than £10M annual turnover. 84% of UK businesses are within Consumer Duty SME threshold.

Consumer Duty SME banking design

• 1fee transparency (all fees displayed in plain English — no hidden charges — FCA PS22/9 zero tolerance),
• 2fair overdraft pricing (unarranged overdraft — FCA PS22/9 bans unfair unarranged overdraft charges),
• 3business account switching (7-day Current Account Switching Service — CASS — for business accounts),
• 4complaints (SME complaints handled under FCA DISP — not just ombudsman — ClickMasters builds DISP-compliant complaint workflow),
• 5vulnerable business identification (businesses experiencing financial distress — Consumer Duty requires supportive engagement).