Digital Bank Chetwood Acquires Yobota to Expand BaaS

Digital bank Chetwood Financial has acquired core banking provider Yobota in a bid to expand its Banking-as-a-Service (BaaS) operations, the company announced in a Thursday (March 24) press release.

Based in London, Yobota has a cloud-native core banking platform that lets companies create, run and manage financial products. Yobota was founded alongside Chetwood in 2016 and has developed as its own entity. The two companies have worked together in the past.

“Chetwood and Yobota have common shareholders and shared purpose, and there is pre-established trust from knowing and working together,” Chetwood CEO and Founder Andy Mielczarek said in the release. “The acquisition is set to bring greater value to investors as well as strengthen our existing BaaS proposition, helping clients create better end-to-end journeys for their customers by handling both the regulatory and technological complexities involved in embedding financial services into existing propositions.”

Chetwood said in the release the acquisition will “create a more collaborative and compelling BaaS proposition” as the company takes on new customers. It will let businesses develop their own financial offerings using the company’s regulated infrastructure.

“Following the acquisition, Yobota will continue to deliver the core banking system (CBS), on which businesses can run fully compliant financial services whilst leveraging Chetwood’s banking license,” Chetwood said in the release. “The combined strength of the businesses will increase operational efficiencies and facilitate the delivery of a full end-to-end BaaS offering with greater ease.”

Chetwood said Yobota will operate as a separate brand under the Chetwood umbrella, with Yobota’s current partners and customers unaffected by the deal, while Chetwood will keep operating its consumer-facing products, including Wave, LiveLend, SmartSave and BetterBorrow. Meanwhile, Yobota CEO and Founder Ammar Akhtar will step down, while existing Yobota management will remain in place.

PYMNTS looked at the benefits of BaaS earlier this month with i2C President Jim McCarthy. Data shows BaaS can slash the cost of customer acquisition, from between $100 to $200 down to $5 to $35. There’s value in outsourcing infrastructure to a platform, while focusing on user experience.

Read more: Banking-as-a-Service Paves Way for New Revenue Streams, Financial Super Apps