Mobile-first bank Moven has signed a memorandum of understanding (MoU) with financial services provider SBI Group, the Japanese owner of SoftBank.
According to a report in The American Banker, SBI will receive one seat on Moven’s six-member board, and the companies will create a joint venture in Japan. What’s more, Moven is gearing up to separate into two distinct businesses. One, called Moven Enterprise, will be the software company that makes banking software for TD Bank and Westpac and will be part of the Japan joint venture. The other will be Moven’s mobile bank, MovenBank. The financial institution (FI) is currently acquiring a bank in the U.S. to establish itself as a challenger in the country, though it would not disclose which bank.
“We think we can scale much faster with our own [bank] charter and can more aggressively pursue credit services for our customers, distribution partnerships and so forth,” Moven Founder Brett King said.
American Banker noted it is a rare move for a FinTech to acquire a traditional bank, given many don’t have the cash to purchase an FI.
“We’ve spoken with regulators about our intentions,” King said when asked about the regulatory challenges of purchasing a bank. “This process will take a little longer.”
As for its software, the company has gotten requests from other banks about creating a different business model so Moven can work with them as well. According to the MoU, some of the funding the company will receive from SBI Group will go toward the joint venture to sell customized Moven software for Asian banks.
“SBI’s partnerships with more than 60 banks across Asia give us the opportunity to grow Moven Enterprise much faster,” King said. “This does allow us to give a lot more support in the time zone to our Asian customers, and the ability to do rapid deployment and localization. Some cash will go into re-engineering the core product, allowing it to be more plug-and-play and hook into the typical core systems in Asia.”