NatWest Boxed launched in 2022 as part of NatWest Group’s move into embedded finance. Now, with its first major commercial partner, The AA, recently going live, the business is shifting from platform development to customer activation and delivery at scale.
In an interview with The Fintech Times, CEO Andy Ellis discusses how NatWest Boxed has taken shape, the thinking behind its partnership strategy and the promise and complexity behind embedded finance.
From internal venture to commercial rollout
NatWest Boxed began within the bank’s innovation unit, building on the technology developed for Mettle, its digital SME bank. From the outset, the platform was designed to be multi-tenanted, laying the foundations for a broader embedded finance proposition aimed at consumer-facing brands.
In 2022, NatWest entered a joint venture with Vodeno, the Polish banking-as-a-service (BaaS) provider backed by Warburg Pincus. The partnership aimed to combine Vodeno’s API-based technology and cloud platform with NatWest’s regulatory infrastructure and banking capabilities. Together, the two teams co-developed products for both UK and European markets.
That structure has since changed. Vodeno’s European business was acquired by UniCredit, and NatWest Boxed is now a fully owned entity within NatWest Group, focused exclusively on delivering embedded financial services in the UK.
Why The AA?
NatWest Boxed’s first public partnership, announced earlier this year, is with The AA, a UK motoring organisation. Through the partnership, The AA will offer FSCS-protected savings accounts and unsecured personal loans, powered by NatWest Boxed’s infrastructure.
“They have a long history of providing financial services to their members,” says Ellis. “They’re big, we’re big, they have over 14 million customers in the UK.”
Ellis says the partnership works on multiple levels. “The brands aligned nicely. We’re both trusted, household names. And there was already a strong institutional relationship across many areas of the bank,” he explains.
He describes the partnership as a long-term one. “We’re not sprinting,” he says. “We want to build a big balance sheet and get it right. There’ll be new products coming out, but we want to get these right first.”
Choosing the right shape of partner
While many embedded finance providers court startups and smaller fintechs, NatWest Boxed is taking a different approach; one that prioritises scale, maturity and customer reach.
“It’s less about sectors, it’s more about shape,” says Ellis. “Consumer brand businesses are good for us because they tend to be quite big, they tend to have lots of customers, and they’re very good at managing those customer relationships.”
The current focus is clear: a small number of large, established partners that can go to market at scale.
The reality of embedded finance
Despite growing interest in the space, Ellis is keen to push back on the idea that embedded finance is easy for his customers to execute.
“It takes quite a bit of build cost if you’re not careful,” he says. “You’ve got to build the digital journeys, bring in financial services capability, and often find some marketing expense.”
And even when brands do want to offer financial services, competing priorities often get in the way.
“Retail brands are under a lot of pressure – tax changes, inflation – they’ve got their hands full before they get to these products, which the industry is still figuring out how best to provide and make money from.
‘What matters is not the label, but the outcome’’
Ellis doesn’t split hairs over terminology or lean into the hype.
“I don’t get excited about the term ‘embedded finance,’” he says. “It might be a useful label for people to categorise a bunch of businesses doing the same thing. But when I look at this market, there are loads of competitors doing very different things.”
He’s similarly dismissive of distinctions between embedded finance and banking-as-a-service. “People ask me, what’s the difference between the two? What matters is not the label but the outcome, finding trusted ways to deliver regulated financial products through customer-centric brands.”
The value of banking infrastructure
NatWest Boxed’s main selling point isn’t speed or novelty, it’s trust, regulatory strength and long-term commitment.
“We have a large balance sheet that we can deploy, and we have the regulatory know-how,” says Ellis. “This stuff’s complicated, particularly around origination and keeping the brand and the consumer safe.”
He also points out that being part of an established bank brings stability. “We’re signing contracts that are longer than most fintechs have been around,” he notes. “If something goes wrong or they want to escalate, they know there’s someone higher up in the bank they can call.”
Focused on delivery
For now, Ellis is focused on getting the existing partnerships right, not chasing a long list of new ones or rushing out new products.
“This is a scale business,” he says. “I need a good number of large customers. I’d rather focus on scale than going out into new product development.”
The platform has flexibility built in, especially around lending, but the immediate goal is activation. “Once you’ve built a lending engine, you can reconfigure it,” he says. “But this is not a business where you just plug in and go.”
Instead, NatWest Boxed works closely with partners to launch, optimise, and support their customer propositions. “You have to work with your customer base to optimise your needs, help them with marketing and activation,” Ellis says. “That’s my focus.”
