Royal Bank of Scotland (RBS), which is gearing up to launch a new digital bank, has acquired a 25 percent stake in Loot, a U.K. FinTech.
According to a report in Financial Times, citing Royal Bank of Scotland, Loot offers customers a current account and pre-paid debit card. What makes Loot different is that users can set controls and receive spending insight on purchases they made with the debit card to help younger consumers save more.
RBS told Financial Times that it invested an additional £2m in Loot after investing £3m last year. The investment was made via Bó, the digital bank it is launching later in 2019. The deal is the first move of this unit of RBS, which plans to partner with other FinTechs. The digital bank will cater to consumers who live paycheck to paycheck and have little in the way of savings.
“Loot is a really exciting brand and one that we’re proud to be associated with,” Mark Bailie, chief executive of Bó, told Financial Times. “Through its innovative use of technology and intention to change the status quo, it’s quickly built a following of loyal customers, with potential for rapid future growth.” The report noted that Bó is undergoing private beta testing with plans to move to a public beta during the first half of 2019.
The investment on the part of RBS comes as the bank aims to take on Monzo, the U.K. digital-only bank that is exploding. In October, Reuters reported that Monzo raised 85 million pounds and now has a valuation that is higher than $1 billion. Reuters noted at the time that Monzo would use the proceeds of the fundraising found, which was led by Accel Partners and General Catalyst, to double the company’s workforce. Monzo Chief Executive Tom Blomfield told Reuters at the time that Monzo has 1.1 million users and that about 100,000 new accounts are opened monthly.