20th Oct 2022 09:54
(Alliance News) - NatWest Group PLC on Thursday said it has entered into a strategic partnership with Vodeno Ltd to create a Banking-as-a-Service business in the UK.
The Edinburgh-based bank said it will own 82% of the new entity, while Vodeno holds 18%.
Vodeno Group is a European BaaS provider which combines the Warsaw-based Vodeno TechCo, a software company providing its application programming interface, or API-based technology platform and the Belgium-based Aion Bank, which has a banking license covering a range of banking products, including loans, deposits and access to EEA payment systems. Vodeno Group is majority owned by private equity firm Warburg Pincus LLC.
NatWest said the partnership will enable businesses to "embed financial services products such as payments, deposits, point-of-sale credit and merchant cash advances directly in their ecosystem by leveraging the Vodeno's BaaS technology, and NatWest group's banking technology and UK banking licenses".
Under the pact, the new entity will combine Vodeno's technological and operational capabilities and its cloud platform with NatWest's banking technology.
NatWest Chief Executive Alison Rose said: "This strategic partnership presents a strong potential source of fee income in a growing market, and an opportunity to deliver sustainable growth by building deeper relationships with our corporate customers. It also complements our existing investment in the development of business banking technology within our Mettle business."
Mettle is NatWest's business banking app.
The bank added that it will make a capped commitment of about GBP115 million to create the business, and a EUR58 million investment in Vodeno to buy an 18% minority stake.
Earlier this month, NatWest said it is closing 43 bank branches across the UK in the latest move to transition its banking services online. Several branches in Scotland, including in Edinburgh, Glasgow and Aberdeen, are among the fresh wave of closures.
NatWest shares were up 1.0% at 233.45 pence each on Thursday morning in London.
By Xindi Wei; [email protected]
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