This strategic 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 Group’s BaaS technology, NatWest Group’s banking technology, and UK banking licenses.
Under the terms of the agreements, a new UK-based entity will combine the Vodeno Group’s technological and operational capabilities and its cloud platform with NatWest Group’s banking technology and expertise, building on NatWest Group’s position as a supporter of UK business. Through its business banking app Mettle, NatWest Group has built a standalone core banking and payments capability, Vodeno Group’s platform will provide a channel for delivering these capabilities to BaaS clients in the UK.
The new UK entity will be 82% majority owned and consolidated by NatWest Bank, with Vodeno TechCo holding the remaining minority interest. NatWest Group will additionally take a minority interest (initially a 9.9% holding, increasing to 18% subject to certain conditions and approvals being met) in Vodeno Limited, which owns 100% of Vodeno TechCo and Aion Bank.
Vodeno Group is a European BaaS provider which combines the Poland-based Vodeno Sp. z.o.o, a software company providing its 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 Warburg Pincus.
Completion of the arrangements is subject to satisfying various conditions, including:
Licensing, servicing, and other documentation, and obtaining regulatory approvals (including the UK Financial Conduct Authority and National Bank of Belgium / European Central Bank).
NatWest is committed to make in total a capped commitment of around GBP 120 million, to enable the establishment of the new UK entity and a GBP 50.8 million investment in Vodeno Group to acquire an 18% minority stake, investment in each case subject to certain conditions and approvals being met.
Vodeno has performed a survey of 753 senior decision-makers from European retail and ecommerce businesses to reveal their appetite for embedded finance products.
Embedded finance is picking up steam across Europe’s retail and ecommerce sector, with over half (56%) of retailers surveyed intending to either increase their offering (34%) or to start offering (22%) embedded finance solutions in the coming 12 months, research from Banking-as-a-Service (BaaS) provider Vodeno has revealed.
A vast majority (67%) of European retailers said that, in 2021, customers had indicated they would like to see financial products or services integrated into their offering. In the UK, the figure rose to 73%, compared to 71% and 58% in Germany and Belgium, respectively.
Almost two thirds (65%) of retail firms reported noticing more of their competitors offered embedded finance solutions in 2021. Again, this view was more prevalent in the UK (74%) than Germany (65%) or Belgium (57%).
Every day we send out a free e-mail with the most important headlines of the last 24 hours.
Subscribe now