Santander Set to Build Digital Bank In The United Kingdom

By Francisco Fernández Jiménez from Wikimedia Commons

Today, Santander, a Spanish banking group, announced that it is building a standalone digital bank in the United Kingdom in a move that is aimed at improving its online presence.

The announcement comes amid the intense competition in the market with the increase of digital investment advice that is provided by robo-advisers and fintech platforms including Tandem Money and Monzo.

The flagship Openbank product is also said to be introduced by the Spanish lender to the United Kingdom. Openbank is a fully digital service of Santander in Spain. according to the Spanish Banking Association, the said service amassed over 1.35m accounts by the end of 2016.

The standalone digital bank is anticipated to be built during the next few months and will concentrate on smaller companies and cater to services that are beyond traditional lending, including advice on pensions and payrolls.

A spokesperson from Santander stated: “As we announced at our group strategy
update in October last year, we are working on a project to build an open digital financial services platform for SMEs. We are excited by opportunity to help more SMEs to prosper and we look forward to sharing more about the platform soon.”

Santander is expected to be developing four innovation hubs that are sponsored by country heads and led by its independent CEOs.

The four platforms will  be: Open Bank – a digital challenger bank that is initially serving the Spanish market serving as a blueprint for a new IT architecture; Super Digital – a digital account aimed for the unbanked population in Latin America; One Pay FX – a international money transfer service that is based on blockchain; and an open digital financial services platform that is intended for SMEs.

The said plans arrive at a time when smaller banks, such as Santander, are competing for a £833m fund that is earmarked by RBS. Last year, RBS agreed to spend £833m to pay business customers to shift to smaller rivals and help fund the objectives of rival businesses to increase competitiveness.