NatWest, Vodeno Enter BaaS Partnership

NatWest is forming a new partnership with Vodeno to launch a Banking-as-a-Service (BaaS) business in the U.K., according to a Thursday (Oct. 20) press release.

Natwest is a U.K.-based retail and commercial banking group. Vodeno owns the BaaS business of the same name, as well as Belgian neobank Aion.

NatWest said the planned BaaS business will focus on developing embedded financial services products by leveraging Vodeno’s technology and NatWest’s banking systems and U.K. licenses.

Natwest will have an 82% stake in the new entity, with Vodeno holding the remaining minority interest. NatWest will also take a 9.9% interest in Vodeno, rising to 18% subject to certain conditions being met.

NatWest has committed 115 million pounds ($129.4 million) toward the formation of the new company as well as 58 million euros ($56.9 million) for its minority stake in Vodeno.

“By entering into this strategic partnership with Vodeno Group we will be able to meet the evolving needs of our business customers as they look to embed financial products in their own propositions and journeys,” NatWest Chief Executive Alison Rose said. “This strategic partnership presents a strong potential source of fee income in a growing market, and an opportunity to deliver sustainable growth by building deeper relationships with our corporate customers.”

The CEO of Vodeno Group, Wojciech Sobieraj, added that “consumers require high quality and accessible banking products that are end-to-end digital, and Banking-as-a-Service is making this possible. Our fully API-based platform offers a comprehensive suite of BaaS products that enable brands to ‘embed’ financial services directly into their ecosystems to create seamless customer journeys.”

Beyond embedded finance, another major advantage of the BaaS model is its accelerated product development cycle, Meghan Ryan, CFO of Treasury Prime, told PYMNTS recently.

Watch the interview: Banking-as-a-Service Helps Speed FinTechs Time to Market

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