NatWest Pays $174M For UK Savings FinTech Cushon

One of the UK’s largest banks is expanding its workplace savings offer.

NatWest announced On Monday (February 13) there was collection Cushon, a UK FinTech offering savings accounts and pensions. It’s a move that comes as banks increase their savings offers amid competition from neobanks.

“The proposed acquisition will therefore provide NatWest Group with a workplace pension and savings offering, 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 press release.

The deal will see NatWest buy 85% of Cushon for $174m (£144m), 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 will initially be offered to the bank’s commercial mid-market customers following a pilot last year.

“Cushon will continue its organic growth ambitions in the workplace pension and savings market, in addition to distributing to NatWest commercial customers,” the release said.

The acquisition comes at a time when savings accounts can help banks compete against neobanks, such as PYMNTS reported last month.

“And if so, the advantage may go to the traditional financial institutions (FIs), which have the installed base of customers, the financial firepower and a number 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 there is a need among younger individuals – crucial to the long-term prospects of financial services – to improve the economy. PYMNTS data shows that most younger consumers are concerned about the rising daily costs of living and their savings.

The report also noted that “the race to increase savings rates on accounts – and to attract deposits – is and has been global in scope.”

For example, Starling, based in the UK, recently launched its ‘Fixed Saver’, which offers 3.25% on deposits between £2,000 to £1 million. But traditional banking giants have not been inactive. JP Morgan Chase has, via Chase UKincreased the rate last month to 2.7% from 2.1%.