Exploring NatWest Boxed's foray into the world of Embedded Finance

Tuesday 7 November 2023 10:54 CET | Editor: Mirela Ciobanu | Interview

Andy Ellis, the CEO of NatWest Boxed, discusses the bank’s venture into the EmFi space, its benefits for customers, and its approach towards partnerships.

What are the significant trends and developments that are driving the growth of Embedded Finance and BaaS? Additionally, who are the primary adopters of Embedded Finance and which industries are showing the most adoption and demand for it?

The digitalisation of customer experience across all industries has changed the way consumers want to pay, lend, and spend across all platforms. With the evolution of internet marketplaces, customers are spending more time online with higher expectations of having an 'omnichannel' experience that is seamless. Therefore, retailers are increasingly exploring how Embedded Finance can help them create an integrated and value-added experience that will entice prospective customers and keep the existing ones coming back to their stores.

Combined with the evolution of new cloud-native technologies and the ability to both onboard and analyse customer data in real-time, this has allowed for an exciting period of innovation in reinventing 'frictionless' consumer experiences. From paying for coffee through an embedded wallet to breaking up purchases into split instalments, every industry has the potential to see the benefits of Embedded Finance.


Can you share NatWest`s experience with Embedded Finance and Banking-as-a-Service? What is NatWest’s role in the Embedded Finance space, and where does it fit in the value chain?

Strong compliance and regulation in protecting customers are key to getting Embedded Finance right. That’s why NatWest decided to enter into this area, as the bank has the strongest licensing credentials, a trusted brand, and a modern technology platform that integrates easily into customer journeys regardless of the industry or brand. Our value in this space is not only our experience in providing financial services across a wide set of products but also our engineering capabilities to provide modern consumer financing at speed with compliance at its heart.


Which products and services are included in NatWest’s Embedded Finance offerings?

Natwest Boxed will offer a wide range of products launching with Payments, Savings, and Cards in 2024, followed shortly by a full lending suite including loans and Buy Now, Pay Later capabilities. Key to the proposition will be the ability to provide end-to-end customer journeys including the onboarding, maintenance, and customer support of the accounts as well as access to the Natwest Group balance sheet to supply capital where needed. This means customers will be able to provide a wide range of embedded banking propositions to their customers without the need to contract multiple vendors – serviced by a single entity: Natwest Boxed.


How does NatWest approach partnerships with fintechs, BaaS platforms, and other companies to offer Embedded Finance solutions? How does NatWest measure the success and effectiveness of these partnerships?

Partnerships are key to our strategy in being able to provide the appropriate platform for fintechs and other suppliers to launch Embedded Finance propositions. We have a unique curation programme to both work and integrate with other fintechs to fulfil our proposition as well as partner with providers who can enhance value to our end customers. In terms of success, we measure the overall satisfaction of every aspect of our business to ensure we are delivering value to both customers and employees. We also work closely with external partners to validate our propositions. Overall, the success of a strong Embedded Finance partnership is the activation and engagement with the products from launch.


What impact do you expect Embedded Finance to have on NatWest over the next 3 years? How will NatWest monetise the reported USD 7 trillion market opportunity?

We believe Natwest Boxed is perfectly positioned to capture the growing Embedded Finance opportunity and become one of the leading providers in the UK market. We believe NatWest Boxed will provide a material and sustainable new revenue stream for the bank and will allow us to build deeper relationships with our corporate customers by embedding services into their customers’ everyday experiences. This will create new opportunities for our broad set of customers and help drive the sustainable growth we’re targeting.


As more businesses enter the realm of Banking-as-a-Service, it naturally leads to greater competition for traditional banking institutions. What opportunities exist for banks in this space?

While credit is still where most banking revenue comes from today, in the future we believe BaaS will provide more opportunities. Banking-as-a-service is a way of ‘future-proofing’ a bank’s business. People are already making financial decisions and buying financial products differently – they just don’t go to banks anymore. It’s quite usual to pay for your coffee with your loyalty card or buy a sofa with some sort of Buy Now, Pay Later plan. Banks need to embed their products and services into various customer journeys with large corporate brands to ensure they stay relevant. And by the way, banks have a very important value proposition in this space: they have a banking licence. They can offer an end-to-end solution that perhaps some fintechs in the BaaS space cannot.


This interview was first published in The Paypers' Embedded Finance and Banking-as-a-Service Report 2023, which is the latest comprehensive market overview and analysis focusing on the key products and players within the Embedded Finance and BaaS ecosystem.     


About Andy Ellis

Andy Ellis is CEO of NatWest Boxed, a partnership between Vodeno and NatWest offering banking-as-a-service. Following an early career with Accenture and a long stretch running banking strategy team, Andy was, until recently, CEO of Mettle, a digital banking app.




About NatWest Boxed

NatWest Boxed is a partnership between NatWest and Vodeno, offering banking-as-a-service to large corporate companies in the UK.

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Keywords: banking, BaaS, embedded finance, embedded payments, BNPL, digital payments
Categories: Banking & Fintech
Companies: NatWest
Countries: World
This article is part of category

Banking & Fintech


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