The two companies continue to flirt with each other, and this morning announced a new fintech (financial tchnology) joint venture. According to the press release, the joint venture has the potential to redefine and support financial services globally.
Monitise and Santander will each take a 50:50 share in the new venture, the benefits of which are clear for both parties.
By partnering up, Santander will gain access to Monitises world-leading mobile money platform. This includes Monitisesnew cloud-based platform designed to help banks collect and collate digitalinformation for their customers.
Meanwhile, Monitise willbenefit from a multi-million pound upfront licence fee, with further ongoing revenues expected to be generated by the initiative. This is in addition to the companys 50% share of the business and opportunity to work with one of the Eurozones largest banks.
Both parties will commit 10m of capital each to the project over the space of two years. Through upfront fees and ongoing revenue related to the joint venture, Monitise should be able to realise a positive return on investment pretty quickly.
The importance of todays deal between Monitise and Santander shouldnt be underestimated. The two companies have worked together in the past and, as Ive speculated before, a tie-up could be on the cards in the near future.
Santander has long made it clear that the bank is looking to increase its online presence.Santander has 92m retail customers globally, of which only 12.2m do most of their banking with Santander.Management has stated that it wants to hike this figure to 17m by 2017, which the bank believes could add 2bn to 3bn of additional income.
And it seems that Monitise is a crucial part of this growth plan.
So far, Monitiseand Santander have already collaborated on the development of threedifferent mobile money apps for customers. The first was Yaap,Santanders Spanish m-commerce joint venture withCaixaBankandTelefnica.
The second, SantandersSmartBank app designed for students, and lastly, Santander recently released theUKs first standalone ISA mobile app. Once again, the ISA app was designed in conjunction with Monitise.
Santanders relationship withMonitise also gives the bank access to IBMs technology and global presence. Monitise signed a joint-venture deal withIBMlast August, which was once again focused on developing mobile banking solutions for the financial services industry.
Monitises deal with IBM has already started to attract customers.
At the beginning of May, another European banking giant,Socit Gnrale, released a mobile banking app that was developed with the support of IBM and Monitise. Also,Virgin Moneyand Turkeys,Trk Ekonomi Bankas have both recently signed deals with Monitise.
So overall, todays deal between Monitise and Santander is great news for both parties, but Monitise is set to benefit the most:the companyhas locked in a significant revenue boost while strengthening its relationship with a key partner.
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