Masthaven Bank has been granted a retail banking licence by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA).

The new digital bank says it aims to disrupt the market with a “customer-led flexible savings and mortgage proposition” and employee partnership structure.

Masthaven Bank will enable customers to build their own products from launch. Savings customers will be able to determine maturity dates and interest rates, through an online fixed-interest savings range. The bank says this philosophy will also be applied to mortgages, building on the foundations put in place by Masthaven Finance to support mortgage customers who don’t fit neatly into the rigid rules of traditional lenders.

Jon Hall, managing director of Masthaven Bank, said: “In a world of ever increasing personalisation, many people want to take more control of their money and make it work harder for them. We’re determined to buck the ‘one size fits all’ approach to banking by helping retail customers play a bigger role in tailoring products to best suit their needs.”

Masthaven will give share options in the business to its employees. The new bank will be majority-owned by founder and majority shareholder Andrew Bloom (pictured), with the remaining ownership held by the billionaire Pears family and Masthaven’s employees.

Bloom said: “We want our employees to hold a stake in the business that we will be building together, because as a bank we’re only as good as the people we employ. Our new team combines great talent and experiences with a shared vision to change banking for the better, working with our customers to help give them greater control of their finances.”

Economic Secretary to the Treasury, Harriett Baldwin, said: “Incentivising new banks to come to market is a key part of the government’s drive to increase competition in banking. We want to ensure that the UK financial services sector remains the best and most diverse in the world.

“It is great to see Masthaven successfully taking the leap from specialist mortgage lender to a new retail bank focused on digital services – I look forward to seeing how this transforms its offering for UK customers.”