Fintech buys traditional bank

At a time when many banks are looking to invest in fintech companies, the open banking fintech Raisin is taking the road less travelled by buying MHB Bank of Frankfurt, its long-time service bank. The Berlin-based fintech will thus be able to expand its areas of operation as well as its value chain.

“As one of the leading fintechs in Europe, we believe in making sustainable changes to the financial system in order to make the needs of customers and partners paramount,” Raisin cofounder and CEO Dr. Tamaz Georgadze said. “Together with MHB, we can continue to develop — and seamlessly integrate — the services we offer customers, partner banks and distribution partners.”

Raisin recently closed a €100 million financing round. In 2017 Raisin took over the firm of PBF Solutions of Manchester, which today successfully runs Raisin’s UK branch. The acquisition of the shares in MHB by Raisin is still subject to final approval by German Federal Financial Supervisory Authority (BaFin) and the European Central Bank (ECB).

Today Raisin’s more than 165,000 customers can choose from over 250 products offered by nearly 70 European banks on the fintech’s seven platforms. As its service bank in Raisin’s largest market of Germany, MHB Bank handles aspects of the value chain related to account management, customer identification and financial transactions, all the preserve of licensed financial institutions. In the past few years Raisin has greatly expanded the services it provides customers and banks, particularly with respect to the range of offers and the availability of its products in the entire European Economic Area. The new acquisition will expedite this growth.

Raisin will also be able to streamline the onboarding process for deposit banks as well as distribution partners like o2 Banking of Telefónica Germany and N26.

“With the changes this takeover makes possible, we will be able to offer better services more sustainably to our customers and partners,” Dr. Georgadze said. “We want to grow ‘deposits as a service’ into a widely-accepted market standard for banks across Europe.”

MHB Bank Chairman Reiner Guthier clarifies what the takeover will mean for MHB.

“We know the business models and challenges of both sides, fintech and bank. Through this more extensive collaboration with Raisin we will be able to add to our technical expertise along with making important investments in our team. These changes enable MHB even better to support the digital business models of our current partners as well as new ones. This move thus allows us to take the strengths of our current position in credit fronting and expand them further into payments and ‘banking as a service’.”

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