Santander plans digital fightback with online bank
BANKING giant Santander is working on plans to launch a stand-alone digital bank in the UK, following in the footsteps of RBS.
The Spanish-owned lender is gearing up to launch a business banking service under a separate brand within months, amid intensifying competition in the market.
Santander is also considering whether to bring its digital lending service Openbank to the UK, which already boasts 1.3m customers in Spain.
The business banking venture will be focused on small companies and it is understood it will offer a range of services beyond traditional lending, including help with payrolls and pensions. It comes as smaller banks jockey for an £833m fund carved out of RBS to boost competition in business banking. Santander has controversially been allowed to bid for it, despite being several times larger than the next nearest challengers TSB and CYBG.
Santander and RBS are adopting similar strategies for competing with the threat posed by the rapid expansion of online competitors such as Monzo and Tandem, by building up “flanker” brands in the hope of attracting younger tech-savvy customers.
In a strategy update in October, the Santander Group set out plans to develop four “speedboat” digital firms run by independent CEOS, including Openbank and the business banking service, which The Sunday Telegraph has learned will be based in the UK.
A spokesman for Santander said: “We are working on a project to build an open digital financial services platform for SMES We look forward to sharing more about the platform soon.”