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UK challenger bank Tandem has amassed a customer base 100,000 strong, with CEO Ricky Knox aiming to match Lloyds Bank within ten years’ time.

Tandem, which launched a cashback card earlier this year, acquired Harrods Bank in January 2018. The deal effectively propelled the bank – which had been on unsteady ground following the loss of substantial funding – into the upper tier of challengers in the UK.

“The response to our products has been incredible. People are using the Tandem App to track their spending, taking our cashback credit card abroad, and putting their nest egg away in one of our fixed savers,” said Knox.

“With new products on the way we’re targeting major growth. There is a lot of noise surrounding the legacy banks moving into the digital only challenger market, which is great. However, we are moving at twice the pace and as a small agile organisation we are accelerating as we speak.”

Swings and roundabouts

The deal granted Tandem Bank a full banking licence, as well as access to Harrods Bank customers and £80 million ($108 million) of capital. The challenger also gained a £375 million ($505 million) mortgage book and more than £400 million ($539 million) in deposits.

Tandem Bank previously had the backing of Chinese conglomerate and House of Fraser owner Sanpower. It had been planning to stump up £29 million ($39 million) to fund Tandem’s capital requirements.

Sanpower eventually pulled out of the deal, owing to increasing government clampdowns in China aimed at stopping capital outflows. The deal falling through caused the bank to slice its staff levels, from 110 to around 80.

Tandem is a current user of Fiserv’s Agiliti platform, having selected it in February 2016. Agiliti is delivered on a pay-as-you-grow model, meaning that new entrants which take the system will have lower start-up costs than those which buy hardware and licence software themselves.

Prior to its full launch Tandem operated a waiting list, which was lifted in February when it launched its first product, a cashback credit card, to the UK public. In April, savers were offered a choice of three fixed saver accounts, with fixed rates for one, two, or three years.