One of the U.K.’s largest banks is expanding its workplace savings offerings.
NatWest announced Monday (Feb. 13) it was acquiring Cushon, a British FinTech that provides savings accounts and pensions. It’s a move that comes as banks are adding to their savings offerings amid competition from neobanks.
“The intended acquisition will therefore provide NatWest Group with a workplace pensions and savings proposition, enabling the group to offer a new suite of financial wellbeing services to its commercial customers and, consequently, to their employees,” the bank said in a news release.
The deal will see NatWest acquire 85% of Cushon for $174 million (£144 million), with Cushon management retaining the remaining 15%. The acquisition is subject to regulatory approval and is expected to be completed later this year.
NatWest said Cushon’s services would be initially offered to the bank’s commercial midmarket clients following a pilot last year.
“Cushon will continue its organic growth ambitions in the Workplace Pensions and Savings market, in addition to distributing to NatWest commercial customers,” the release said.
The acquisition comes at a moment where savings accounts can help banks compete against neobanks, as PYMNTS reported last month.
“And in that case, the advantage may go to the traditional financial institutions (FIs), who have the installed base of clients, the financial firepower and a host of complementary and adjacent revenue streams that the digital-only upstarts just don’t have,” PYMNTS wrote.
Research from the latest Digital-First Banking Tracker® Series, “Personalization Beyond Traditional Banking To Build Financial Wealth,” shows that 25% of consumers would switch to a new bank for savings accounts.
The research found that there’s a need among younger individuals — crucial to financial service firms’ long-term prospects — to improve their finances. PYMNTS data shows that most younger consumers are worried about the rising costs of daily living and their savings.
The report also noted that the “race to boost savings rates on accounts — and to lure deposits — is and has been global in scope.”
For example, Starling, based in the U.K., recently launched its “Fixed Saver,” offering 3.25% on deposits between £2,000 to £1 million. But traditional banking giants haven’t been idle. J.P. Morgan Chase has, via Chase U.K., last month boosted its rate to 2.7% from 2.1%.
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