News: Bank is partnering with Kabbage to offer quick loans to UK companies.
Santander UK could be set to axe a number of senior staff as it looks to free up cash for digital expansion.
The bank has already signalled plans to close up to 450 of its 3467 branches in Spain this year as part of the company’s move to accelerate plans to move to cheaper digital channels.
According to insiders at Santander UK quoted by The Sunday Times, plans to cut jobs in the UK aren’t expected to hit the bank’s 850 branches across Britain and will be limited to its highest-paid managers.
Santander, which currently employs around 20,000 staff in the UK, responded to the claims saying: "We constantly review our operational model to ensure we provide the best services to our customers while at the same time, delivering value to shareholders."
"Driving more operational efficiencies also means we are able to continue our investment whether this be customer-facing or digital innovation such as we announced recently with voice banking."
Competition from smaller, more agile banks that are utilising technologies such as cloud to disrupt traditional financial services has resulted in increasing pressure to innovate.
Banks such as RBS have been turning to technologies such as artificial intelligence to help run parts of their business such as dealing with customer calls.
Investing in new technologies is one way that banks have been looking to stay ahead of their more nimble rivals, however, this has also led to job cuts. RBS for example is eliminating around 448 back and middle office positions that support trading functions and provide technology services.
It would appear then that technology innovation comes at a cost and that is typically the loss of jobs.
Another way to try and stay ahead of the curve is to partner with some of the fintech start-ups. Santander UK is one that has gone down this route by partnering with online lender Kabbage to provide small businesses with quick funding.
The US fintech company, which Santander invests in, speeds up the underwriting process of loans so that businesses can access working capital of up to £100,000 online on the same day.
The service is due to be launched in the UK over the next two months and will mark the first time that a large high street bank in the UK has offered SMBs with such speedy access to money; typically it takes between two to 12 weeks.
While this should come as a boost to UK SMBs, it also highlights Santander’s work to combat the competition from peer-to-peer lenders. The bank partnered with Funding Circle in 2014 as a way to refer small business borrowers to the start-up.
Kabbage works by using risk-scoring determined by Santander, with the fintech company’s own information and external sources of data such as social media.
Nathan Bostock, chief executive of Santander UK, said: "With SMEs comprising 99 per cent of the UK private sector, having fast and secure access to funds would ensure they can continue to make an important contribution to the UK economy.
"Our collaboration with Kabbage aims to provide UK businesses with the ability to draw down funds as and when required, whether this be covering a short-term funding need or enabling them to seize growth opportunities as they arise."