Global wealth management platform FNZ has led a Series-A investment in Bondsmith, the fintech cash management and savings solutions provider for the wealth industry.
The total sum of funding was not disclosed.
Bondsmith, which currently operates in the UK and is authorised by Financial Conduct Authority as an electronic money institution, has ambitions to expand globally and intends to accelerate its international push by establishing operations in Asia Pacific by year end.
The funding Bondsmith has secured will support the growth plans, further develop its innovative product roadmap, initiate additional job creation, and was recently used to fund its acquisition of UK institutional cash deposit broker Wells Money Brokers.
The investment forms part of a wider partnership that sees Bondsmith’s solutions integrated into FNZ’s platform.
The firms said that 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”.
Also, 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 range of savings solutions that connect savers, banks and financial companies, to increase the opportunity for returns and make cash a more viable option within the wealth management market.
As part of the deal, FNZ will assist with more competitive interest rates for end investors, lower cost and increase customer choice through the addition of cash savings as an investable asset class.
Michael Doyle, founder and chief executive 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, added: “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.”