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Home > Prudential Regulation Authority > New Bank Start-up Unit > New Bank Start-up Unit - Challenge session

New Bank Start-up Unit - Challenge session

Pre-application Initial meeting | Feedback meeting | Mobilisation and operational risk meetings | Challenge sessions

Why is the challenge session important? 

The challenge session is the culmination of the pre-application process and should take place just before you submit your application. At this stage your Business Plan should be fully developed and will form the basis of the discussion at the challenge session where we will offer an honest and open assessment of your plans. The challenge session gives you the opportunity to outline and justify your business model to senior representatives from both regulators.

During the challenge session you can expect rigorous challenge on your proposed business model from senior representatives from both regulators (as appropriate). The aim of the challenge session is to test your business model and identify any remaining issues that need to be addressed before you submit your application. The challenge session is of benefit to both you and us as we can share priorities and concerns, and is an important part of forming a good working relationship between us.

At the end of the challenge session we will provide feedback on your readiness to submit an application. Any issues identified at the meeting will also be summarised in a formal feedback letter. We will expect you to address all the feedback points before you submit your application.  This should help you to submit as complete an application as possible; minimising delays that could be faced during the assessment period.

On this page you can find out more about the challenge session including:

You may also find it useful to refer to the After Application page which includes information on Internal Capital Adequacy Assessment Process (ICAAP) and the Internal Liquidity Adequacy Assessment Process (ILAAP).

What do you need to know and do?

You will need to have a fully developed Business Plan which you will need to be able to discuss in detail, including:

  • business plan – details of products, delivery channels and target market;
  • business viability – competitive advantage, market research and how the bank will make money;
  • financial resources – financial projections (for five years), capital (Internal Capital Adequacy Assessment Process - ICAAP) and liquidity (Internal Liquidity Adequacy Assessment - ILAA), as appropriate;
  • sources of funding – proposed funding model;
  • owners and controllers –proposed owners and controllers;
  • corporate governance – structure, board, senior management and governance arrangements;
  • risk management – risk management and control framework;
  • customer journey – products, pricing, complaint handling and on-boarding arrangements (including  Anti-Money Laundering/Know Your Customer processes);
  • outsourcing - details of key outsourcing arrangements;
  • IT – IT infrastructure and systems and timescales for implementation and testing;
  • recovery and resolution – recovery plans, if appropriate;
  • policies and procedures – operational and regulatory policies and procedures;
  • business continuity – business continuity plans, if appropriate;
  • scope of permissions – details of the regulated activities you wish to undertake; and
  • mobilisation plan – project plan for mobilisation, if appropriate.
The application forms and the supporting notes are a helpful resource when preparing your Business Plan.

Depending on whether you plan to take the mobilisation route or not, the level of detail required in your Business Plan when you submit your application can vary. Your case officers will discuss with you which of the above will need to be more or less developed for your challenge session. If you plan to be fully operational at authorisation all of the above will need to be in a near-final state before the challenge session.

What needs to happen before the meeting?

You must send us the challenge session materials a minimum of 15 working days before the meeting so that we have time to review them and ensure we have as valuable a discussion as possible. If you cannot meet this deadline, we will reschedule the meeting.

What will happen at the meeting?

The challenge session will be attended by your case officers along with senior representatives from both regulators. We expect several of your executives and, where possible, non-executives to attend. You should expect the meeting to last about two hours.
You can expect rigorous, detailed challenge on any aspect of your Business Plan (including your ICAAP and ILAA) as we assess whether you are ready to submit your application.

What are the next steps?

At the end of the challenge session, we will discuss next steps and actions with you and within 10 working days of the meeting we will send you our formal feedback in a letter. If you go on to submit an application, you should finalise your Business Plan and incorporate responses to our feedback from the challenge session.

To find out more about the pre-application meetings click on the boxes below.

Mobilisation and operational risk meetings
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