NatWest Bank Launches Digital Lending Platform ‘Esme’ to Compete with FinTech Startups

| Updated
by Polina Chernykh · 3 min read
NatWest Bank Launches Digital Lending Platform ‘Esme’ to Compete with FinTech Startups
Photo: Chris Sampson / Flickr

Royal Bank of Scotland’s National Westminster Bank is launching a new platform that will offer quick loans decision and almost instant funding.

Chris SampsonThe UK-based National Westminster Bank (NatWest Bank) has announced the release of the new lending platform that promises almost instant loan decisions for small to medium-sized enterprises (SMEs) in an effort to compete with increasing fintech startups.

As Computer Weekly reported, the new platform, called Esme Loans, will provide unsecured loans to SMEs of up to £150,000. The service was developed at the bank’s innovation unit together with fintech company Ezbob.

NatWest is targeted at SMEs with a turnover of maximum £25,000. Businesses also need to be limited companies and must have been trading for a minimum period of 18 months.

In view of the growing competition within the lending industry, traditional financial services providers are working to improve their own digital systems not to lag behind emerging fintech startups.

“We’ve already broadened choices for customers, but we wanted to go one step further and create our own alternative lending platform,” said Alison Rose, CEO for commercial and private banking at National Westminster Bank.

With the new technology, successful applicants will be able to obtain their money in just an hour.

NatWest has also revealed that it is going to spend £70 million on providing the best digital experience for non-personal banking customers over the next five years.

Later this year, the bank projects to roll out an automated robo-advice service that will help clients select suitable investments by answering online questions. The technology will give investors advice at much lower cost than visiting a financial adviser face-to-face.  The customers will be asked about income, appetite for risk, outgoings, and will then help users make a decision whether to make an investment.

NatWest is not the only bank that have designed its own digital lending system. Thailand’s biggest bank by revenue, Kasikornbank Pcl, has recently revealed that it is going to launch a new fintech platform by the end of 2017. The project is expected to produce lower-cost and faster online banking transactions.

A few days ago, Dutch bank ABN AMRO partnered with invoice management firm InvoiceSharing to create a new fintech solution for SMEs. The tool will provide small business owners with a 24/7 access to their accounting information. The partnership is a part of ABN AMRO’s innovation unit, Econic, and the companies are now piloting their technology with 20 firms.

In general, banks are actively exploring new technologies, such as bitcoin’s blockchain, in order to keep the competition in the financial industry.

According to the last year’s research by IBM, which interviewed 200 global banks, about 15% of banks could be using the blockchain technology in 2017. Another 65% said they plan to develop distribute ledger solutions over the next three years.

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Polina Chernykh

Polina is an undergraduate student at Belarusian State Economic University (BSEU) where she is studying at the faculty of International Business Communication for a degree specializing in Intercultural Communication. In her spare time she enjoys drawing, music and travelling.

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