UBS To Invest Millions In FinTechs Via Corporate VC Fund

As it follows peers in investing in startups disrupting traditional banking, UBS Group AG is dedicating hundreds of millions to back FinTechs. The firm is intending to have a corporate VC fund to make investments ranging from $10 million to $20 million and intends to hold the investments for five years at a minimum, Fortune reported, citing an unnamed source.

The new fund will reportedly seek to invest in bolstering the bank’s underlying functions, customer engagement, and financing and investment platforms. The bank, for its part, is reportedly still working on bringing a team onboard to operate the fund, although it is said to be screening possible investments.

Additional digital technology is said to be an important part of the UBS wealth unit revitalization plan revealed earlier in 2020. The financial firm reportedly seeks to tap into them to reduce expenses and decrease time on administrative work, while rivalry for wealthy customers and a move to less expensive as well as passive investment products impacts profitability.

The pandemic has sped up a move to digital offerings, even though wealth management is a historically high-touch business. As it stands, American banks have been leaders of spending on FinTech per Bloomberg Intelligence, as noted in the report.

In separate news, Banco Santander acquired a 50.1 percent portion of payments platform Ebury, which has been expanding at a fast clip, for $453 million per news in late April.

Sergio Rial, chairman of Santander Brazil and chairman of Ebury, said in an announcement at the time, “The investment in Ebury is a significant strategic milestone for the bank, allowing us to boost our capabilities in an exciting market with high-growth potential.”

The payments platform of Britain’s Ebury is targeted toward offering trade finance services that enable global expansion to small and medium-sized businesses. The goal of the arrangement, announced last November, was to strengthen the international payments business of Santander.