OakNorth is a pioneering digital bank and fintech platform specialized in serving the financial needs of small and medium-sized enterprises (SMEs) and individual savers. Here’s a comprehensive overview of what OakNorth does and its key features:
Mission and Focus
OakNorth was founded in 2015 by entrepreneurs Rishi Khosla and Joel Perlman, who experienced firsthand the challenges of securing business loans from traditional banks despite their company’s profitability and commercial success. This led to the creation of a bank that is specifically designed for entrepreneurs by entrepreneurs, aiming to address the unique needs of SMEs and savers.Key Features and Functionality
SME Lending
OakNorth specializes in providing tailored loans to SMEs, avoiding one-size-fits-all solutions. The bank uses its proprietary ON Credit Intelligence (ONCI) suite, which is powered by extensive commercial loan data and employs advanced data analytics and machine learning. This suite includes components such as:- ON Portfolio Insights: Segments the portfolio and rates loans based on vulnerability.
- ON Credit Analysis: Offers a 360-degree view of borrowers with instant financial forecasting, sector insights, and peer analysis.
- ON Portfolio Monitoring: Tracks industry trends and sets early warning alerts for potential covenant breaches.
Deposit Acquisition and Savings Products
OakNorth offers competitive savings products that help customers achieve their long-term financial goals. The bank has attracted over 254,000 savers and has raised significant deposits, which are used to support the growth of SMEs, creating jobs and strengthening the economy.Technology and Data-Driven Approach
OakNorth leverages big data and machine learning to redefine SME lending. The platform is hosted on Amazon Web Services (AWS), allowing for rapid deployment, enhanced security, and compliance. This setup enables OakNorth to release software updates weekly, significantly accelerating innovation and efficiency.Customer-Centric Approach
The bank prioritizes customer satisfaction and delight, offering products and services that are highly tailored to the unique needs of SMEs. This includes providing relationship managers and credit analysts with intuitive and simple user experiences through the ONCI suite.Business Banking and Transaction Services
OakNorth has expanded its services to include transaction banking, partnering with companies like Marqeta to offer commercial cards and other payment solutions. This helps SMEs manage their financial transactions more efficiently and flexibly.Economic Impact
Since its inception, OakNorth has made a significant economic impact by lending over £11 billion, creating over 47,000 new jobs, and contributing to the construction of over 29,000 new homes.Unique Selling Points
- Profitability and Efficiency: OakNorth achieved profitability in its second year and maintains a cost-income ratio significantly lower than most European banks.
- Global Reach and Partnerships: The bank has partnered with various financial institutions and fintech companies globally, including early bank partnerships in the US.
- ESG Initiatives: OakNorth is committed to environmental, social, and governance (ESG) initiatives, reflecting its mission to support community growth and job creation.