National Westminster Bank (NatWest) has entered into a strategic partnership with Vodeno Group to create a Banking-as-a-Service (“BaaS”) business in the UK.
Under the terms of the agreement, NatWest will make a total investment of around £115m to support the establishment of the new UK entity.
It will also invest €58m in Vodeno Group, in exchange for an 18% minority stake, subject to certain conditions and approvals being met.
National Westminster Bank will own the majority (82%) of the new UK entity, while Vodeno TechCo will own the remaining stake.
The completion of the transaction is subject to various conditions, including licensing, servicing and other documentation, and obtaining regulatory approvals.
NatWest chief executive Alison Rose said: “By entering into this strategic partnership with Vodeno Group we will be able to meet the evolving needs of our business customers as they look to embed financial products in their own propositions and journeys.”
“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.”
Vodeno Group includes the Poland-based Vodeno TechCo, a provider of API-based financial technology platforms and the Belgium-based Aion Bank.
Aion Bank holds a banking license covering a wide range of banking products, including loans, deposits, and access to EEA payment systems.
The new BaaS business will leverage Vodeno Group’s technological and operational capabilities, along with its cloud platform.
Also, it will leverage NatWest Group’s expertise and technology in the UK banking sector, along with its banking licenses.
The new entity is said to provide UK businesses with embedded financial services products such as payments, deposits, point-of-sale credit, and merchant cash advances.
Vodeno CEO Wojciech Sobieraj said: “Consumers require high quality and accessible banking products that are end-to-end digital, and Banking-as-a-Service is making this possible.
“Our fully API-based platform offers a comprehensive suite of BaaS products that enable brands to ‘embed’ financial services directly into their ecosystems to create seamless customer journeys. We are excited to combine our technology with NatWest Group to offer the next generation of financial services.”
