FNZ leads Series-A investment in fintech start up Bondsmith

• FNZ’s investment forms part of a wider partnership that sees Bondsmith’s market-leading solutions integrated into FNZ’s global wealth management platform, further enhancing its cutting-edge technology, improving functionality and offering greater customer choice.

FNZ, the global wealth management platform, has led a Series-A investment in Bondsmith, the fintech providing innovative cash management and savings solutions for the wealth industry.

The investment forms part of a wider partnership that sees Bondsmith’s market leading solutions integrated into FNZ’s cutting-edge global wealth management platform, further enhancing the technology that supports over 650 of the world’s leading financial institutions and 8,000 wealth management firms in 21 countries.

Cash held on platforms tend to see poor returns for customers due to the difficulties platform providers face in finding suitable banking counterparties that meet both risk appetite and that pay a good yield. In addition, due to a lack of suitable options, savers typically do not invest cash assets onto platforms, preferring instead to go direct to banks or utilise specialist cash savings options.

Bondsmith seeks to address these problems by offering a wide range of savings solutions that seamlessly connect savers, banks and financial companies, to increase the opportunity for competitive returns and make cash a more viable option within the wealth management spectrum.

The solution allows savers to gain easy access to competitive interest rates and view all their cash savings in one place, whilst maximising their Financial Services Compensation Scheme (FSCS) protection and taking advantage of investment and pension tax wrappers. Bondsmith delivers this solution in partnership with a panel of banks including Investec and Cater Allen.

Bondsmith also offers a treasury platform, alongside treasury advisory services, that helps corporate and institutional clients manage liquidity, diversify counterparty risk, and increase interest income. Bondsmith’s treasury services advise on over £3 billion in deposits, including several FNZ customers.

By making active cash management easier and more cost effective for its customers, FNZ will facilitate more competitive interest rates for end investors, lower cost and increase customer choice through the addition of cash savings as an investable asset class.

Bondsmith, which currently operates in the UK and is an FCA authorised Electronic Money Institution, has ambitions to enter new global markets and intends to accelerate its international expansion by establishing operations in Asia-Pacific by year end.

The funding Bondsmith has secured will support this expansion, further develop its innovative product roadmap, initiate further job creation, and was recently used to fund its acquisition of leading UK institutional cash deposit broker, Wells Money Brokers.

Michael Doyle, Founder and CEO at Bondsmith added: “This investment is a brilliant growth opportunity for Bondsmith. Our team is expanding and we are now looking internationally towards Asia-Pacific and beyond. We are looking forward to working even more closely with FNZ, with the great solutions we have developed now integrated into their global platform. This will enable us to help millions of people worldwide to achieve their savings goals. Our partnership with FNZ could not come at a better time. The base rate of the Bank of England, as with other central banks worldwide, is as high as it has been since the financial crisis. With the new FCA consumer duty rules coming into place from next year, it is more important than ever for the wealth industry to be focused on delivering great consumer outcomes. Actively managing cash, which makes up 5-10% of most portfolios, and ensuring the consumer benefits, is a great way to achieve this.”

Din Mustaffa, FNZ Group Chief Strategy Officer, said: “Our investment in Bondsmith, and the integration of its solutions into our global wealth management platform, will further improve functionality and customer choice as we seek to deliver on our mission of opening up wealth.

“Generally, cash that is not actively managed results in savers seeing negative returns, as interest gains are offset by fees. The partnership with Bondsmith will allow FNZ’s customers to offer their clients a new asset class, make active cash management more accessible, provide greater opportunity for competitive returns and allow for more holistic financial planning.

“This will help savers get the most out of their cash, which is particularly important at a time when household finances are being squeezed and every basis point counts.”