CivilisedBank joins a handful of other so-called "challenger" banks aiming to break the dominance of Britain's big five lenders, seeking to benefit from lower costs, new technology, no legacy issues and encouragement from politicians.

CivilisedBank said it will not have branches but operate through a network of local bankers backed by a technology platform being rolled out for the first time in Britain. Banks using the software platform include BNP Paribas (>> BNP PARIBAS) and Alpha Bank (>> Alpha Bank S.A.), it said.

The bank said it will initially target owner-managers of medium-sized UK businesses by offering business current accounts with deposits, transaction banking, overdrafts, foreign currency exchange, investments, savings and loans. At a later date it plans to target the UK retail market with specific savings and investment products.

Barclays (>> Barclays PLC), Lloyds Banking Group (>> Lloyds Banking Group PLC), HSBC (>> HSBC Holdings plc) and Royal Bank of Scotland (>> Royal Bank of Scotland Group plc) have long dominated British banking, and Santander (>> Banco Santander, S.A.) now rivals them on the High Street. Those five control more than 80 percent of the personal current account market and over 85 percent of small business banking.

Regulators and politicians have tried to make it easier for new firms to break that stronghold, and in recent years Metro Bank, Aldermore, Shawbrook and OneSavings (>> OneSavings Bank PLC) have launched and there are more than 20 other firms such as Atom Bank applying for licences. Many are targeting specific regions or niche clients.

Most challenger banks are planning to operate online and use new technology allowing a quicker and cheaper platform.

CivilisedBank's chairman is Chris Jolly, who has held senior roles in real estate and at Merrill Lynch, Commerzbank and Societe Generale. Its chief executive is Gordon Dow, previously managing director for private banking at Santander.

(Reporting by Steve Slater Editing by Jeremy Gaunt.)