Talking tech: Clear Junction's clear advantages for the fintech sector

Read time: 6 minutes

Teresa Cameron, Finance Director at Clear Junction, discusses how her fintech provider is making life easier for established banks and their customers.

What is Clear Junction and how does it differ from other payment providers?

Clear Junction is a global banking and payments solutions provider that offers end-to-end regulated electronic money services based on proprietary in-house technology and our own processing system. Founded in 2016 by a veteran team, with many years of experience in cross-border payments and banking, Clear Junction is composed of a group of more than 80 professionals working from offices in multiple locations.

We help banks and other financial institutions access clearing schemes and payments services that traditional service providers cannotor - are not willing to - unlock. Our team focuses on developing close working relationships with our clients to ensure our solutions are tailored to meet their requirements and help them overcome the challenges they face.

We pride ourselves on always providing excellent customer service and our business is licensed and regulated by the Financial Conduct Authority.            

What is your relationship with banks and what business issues are you helping them to overcome?

We have built up a client portfolio of more than 300 institutional clients across the UK, Europe and countries from five continents, including the US, Singapore, Israel and various nations in Africa. We provide services to a wide range of different financial businesses, including banks, allowing them to reach wider audiences by building safe and compliant currency transfer services for EU and non-EU countries.

We use in-house technology to screen payments real time, based on industry-standard external metrics such as sanction screening, PEP screening and Dow Jones Index watch lists. We also do internal scanning for fraudulent activity or words. That means we can work in what's deemed to be high-risk areas. We also work with crypto exchanges, which are financial institutions, providing them with payment services.

In these industries, payments move very fast, and systems can be open to fraud. This is one of the reasons why the major banks shy away from working with other financial institutions or crypto exchanges. You must check these payments are not fraudulent or against regulations and a lot of big banks don't have the technology to do that real time. They rely on manual KYC themselves or rely on their clients to do KYC with their customers.

While we expect our clients to do due diligence, we rely on our own system to screen every single transaction we process. We can be very fast to react to changes and we can update the system in real time. A lot of the banks don't have the infrastructure to do that.

What benefits can you offer when it comes to cross-border payments?

We can offer banks access to local clearing networks in the UK and mainland Europe via correspondent accounts and/or virtual bank account numbers. This enables them to access local clearing, providing an efficient and cost-effective method of making cross-border payments.

They tend to connect via API, because these are considerable bulk payments, and send their payment messages directly through our payment rails. One of the main areas where we see a use for this is in supporting migrant workers within the UK and Europe to send money home more quickly and cheaply and with less risk.

Specifically, how are you helping make lives easier for migrant workers in the EU and UK?

Migrant workers in the EU and UK often need to send money home on a regular basis. Many of our clients are remittance and money transfer businesses who help migrant workers send money home faster and cheaper. We enable these companies to perform this important function. A cross-border payment might take a couple of days to arrive. There might be fees deducted from the amount that the recipient receives. 

If a bank uses our payment rails, the payment will be instant. And there'll be no fees deducted from the amount that the recipient receives. We receive our fee from the bank or the financial institution. If it's a remittance company, this is a cost of them doing business.

How are you able to minimise risk in these situations?

Many traditional banks see cross-border payments as high-risk activity. However, using our proprietary systems and integrated risk mitigation technology enables us to confidently service these needs for our clients and their customers. Fraud is a huge problem, especially with crypto exchanges.

What do you think will be the key trends to watch out for in the banking and fintech sectors, and why?

One of the major topics of interest now is digital currencies and how best to utilise the technology from an institutional perspective. We currently service many crypto exchanges and their customers, but it will be interesting to see what central banks and traditional banking giants do to make the best use of the innovations involved.

There is increased talk of central bank digital currencies and stablecoins, including within the UK. It will be fascinating to see how challenger banks, fintechs and more traditional providers come together to better serve the public and businesses interested in digital currency and blockchain technology.

Finally, we have been able to work with some local banks in Ukraine to help them access funding from the UK and mainland Europe. There are many migrant workers who need to send money home or support their friends and relatives and Ukraine. We've been able to work with the banks there to help them keep money flowing within the country during Russia’s ongoing war.

Do you need support with digital strategy? Get in touch with your local BDO advisor at plugdin@bdo.co.uk.