FinTech Bud’s Funding Shows Big-Bank Coopetition Motives

Bud, a FinTech startup based in the United Kingdom, said Monday (Feb. 4) that it has grabbed $20 million in funding.

This latest round, the company said, was co-led by HSBC and Goldman Sachs. And it comes as a partnership (as, after all, the banks are co-investors) that gives a nod to the ties that bond amid banks and FinTechs.

The company’s platform helps banks give access to financial products from rival companies, notes CNBC. The connectivity would let banks connect their offerings to FinTech firms and to other financial services enterprises.

The Bud platform, which in turn lets banks update their app-based offerings, helps categorize spending data, and also can help those users find financial products that may be more cost efficient for them to use.

Other banks that have joined the Series A include ANZ, based in Australia, and Investec’s INVC fund (via South Africa), and InnoCells (which TechCrunch notes is the corporate venture operation run by Banco Sabadell).

The collaborative nod comes as Open Banking picks up steam, along with PSD2, which amid new data compliance rules also seek to foster competition for consumers’ share of mind and wallet.

Bud Co-Founder George Dunning told TechCrunch in an interview that Bud has “built a number of data enrichment features using transactional data to make people’s lives that little bit easier. Connection and aggregation of people’s accounts is the standard now, so we focused on things like increasing financial literacy. ‘Smart Balance’ is a feature that shows users what they can safely spend and ‘Goals’ help them plan ahead. Our advanced regular payment finder filters and tracks bill payments and if you can save money Bud connects you to a service that will make it happen.”

Beyond the mechanics of what Bud does, the roster of far-flung banking investors seem show the blurring between proprietary products and offering what might be seen as a continuum of services across a continuum of banks and apps. Perhaps this may be viewed as a strategic move, one that anticipates and at the same time seeks to harness that disruption.

The road ahead may be marked with similar co-investment events as banks embrace Open Banking even more actively. It has been roughly a year since Open Banking debuted, and the U.K. has proven ground zero, so to speak, even amid the uncertainties of Brexit. Data released toward the end of last year via Splendid Unlimited found that while 9 percent of adults have used APIs, only 22 percent of the roughly 2,000 people surveyed have heard of open banking as a concept at all.