FNZ led a Series A investment in Bondsmith, the fintech providing cash management and savings solutions for the wealth sector.
The investment is part of a wider partnership that sees Bondsmith’s solutions integrated into FNZ’s global wealth management platform.
It will enhance technology that supports more than 650 of the world’s leading financial institutions and 8,000 wealth management firms in 21 countries.
Cash held on platforms tends to generate poor returns for clients due to the difficulties faced by platform providers in finding suitable banking counterparties that both meet risk appetite and offer a good return. .
Moreover, due to the lack of suitable options, savers generally do not invest their cash on the platforms, preferring instead to approach banks directly or use specialized cash savings options.
Bondsmith seeks to address these issues by offering a wide range of savings solutions that seamlessly connect savers, banks and finance companies.
This is to increase opportunities for competitive returns and make cash a more viable option within the wealth management spectrum.
The solution allows savers to easily access competitive interest rates and view all of their cash savings in one place, while maximizing the protection of their Financial Services Compensation Scheme (FSCS).
Bondsmith offers this solution in partnership with a panel of banks including Investec and Cater Allen.
It also offers a treasury platform, as well as treasury advisory services, which helps corporate and institutional clients manage liquidity, diversify counterparty risk and increase interest income.
Bondsmith Treasury Services advises over £3bn of deposits, including several FNZ clients.
By making active cash management easier and more profitable for its clients, FNZ aims to offer more competitive interest rates to end investors.
Bondsmith, which currently operates in the UK and is an FCA Authorized Electronic Money Institution.
It has the ambition to penetrate new global markets and intends to accelerate its international expansion by setting up in Asia-Pacific by the end of the year.
The funding Bondsmith secured was recently used to fund its acquisition of leading UK institutional cash deposit broker, Wells Money Brokers.
Bondsmith Managing Director and Founder, Michael Doyle, added: “This investment is a tremendous growth opportunity for Bondsmith. Our team is growing and we are now looking internationally to Asia-Pacific and beyond.
“We look forward to working even more closely with FNZ, with the excellent solutions we have developed now integrated into their global platform. This will allow us to help millions of people around the world reach their savings goals.
“Our partnership with FNZ could not have come at a better time. The Bank of England’s base rate, like that of other central banks around the world, is as high as it has been since the financial crisis.
“With new FCA Consumer Duty rules coming into effect next year, it’s more important than ever for the wealth industry to focus on delivering great results for consumers. Actively managing cash, which makes up 5-10% of most portfolios, and ensuring consumer benefits is a great way to do this.