NatWest Group plc has announced a “strategic partnership” with the Vodeno Group which will see the creation of a “Banking-as-a-Service” (BaaS) business in the UK.

Vodeno Group is majority owned by private equity firm Warburg Pincus. 

NatWest, formerly known as RBS, said it is committed to making in total a capped commitment of £115 million to enable the establishment of a new UK entity, and a €58 million investment in Vodeno Group to acquire an 18% minority stake.

“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, and NatWest Group’s banking technology and UK banking licenses,” said NatWest.

“Vodeno Group is a European BaaS provider which combines the Poland-based Vodeno Sp Z.o.o (Vodeno TechCo), 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. 

“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 leading supporter of UK business.

“Through its business banking app Mettle, NatWest Group has built a standalone core banking and payments capability, Vodeno’s 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 National Westminster Bank Plc, 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.”

NatWest Group CEO Alison Rose said: “As a leading supporter of UK business, we are committed to investing in digital transformation to provide a simpler and better banking experience for our customers.

“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.

“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.

“It also complements our existing investment in the development of business banking technology within our Mettle business.”

Vodeno Sp Z.o.o CEO Wojciech Sobieraj said: “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.

“We are excited to combine our technology with NatWest Group to offer the next generation of financial services.”