{"id":570753,"date":"2025-08-04T12:52:55","date_gmt":"2025-08-04T11:52:55","guid":{"rendered":"https:\/\/ibsintelligence.com\/?post_type=leadership-interview&p=570753"},"modified":"2025-11-05T12:54:16","modified_gmt":"2025-11-05T11:54:16","slug":"the-theory-and-practice-of-baas-george-toumbev-chief-commercial-officer-natwest-boxed","status":"publish","type":"leadership-interview","link":"https:\/\/ibsintelligence.com\/leadership-interview\/the-theory-and-practice-of-baas-george-toumbev-chief-commercial-officer-natwest-boxed\/","title":{"rendered":"The theory and practice of BaaS, George Toumbev, Chief Commercial Officer, NatWest Boxed"},"content":{"rendered":"
\"\"
George Toumbev, Chief Commercial Officer, NatWest Boxed<\/figcaption><\/figure>\n

Banking-as-a-Service (BaaS), providing retail banking customers with financial products and services at the point of need, is being touted as the future of banking. IBS Intelligence speaks to George Toumbev, Chief Commercial Officer of NatWest Boxed<\/a><\/em><\/p>\n

NatWest\u2019s Banking-as-a-Service business, NatWest Boxed, recently announced a seven-year partnership deal with Saga, the leading UK provider of products and services primarily tailored for the over-50s. In this partnership, Saga Money will use Boxed\u2019s embedded finance platform to launch a suite of savings products to millions of Saga customers, as well as attract new savers.<\/p>\n

The partnership with Saga is Boxed\u2019s second deal this year, following news in Q1 that The AA is using Boxed\u2019s embedded finance platform to offer instant access savings and unsecured personal loans to personal breakdown and insurance members, as well as the wider market.<\/p>\n

IBS Intelligence asked George Toumbev. Chief Commercial Officer of NatWest Boxed whether we should draw a distinction between embedded finance and embedded banking? \u201cEmbedded finance is more of an umbrella term, and it can encompass different products and propositions. Embedded banking, as I would define it, is embedded financial products with a full banking licence and balance sheet behind them and all the banking processes that wrap around that.\u201d<\/p>\n

What prompted NatWest to create its own BaaS solution?<\/strong><\/p>\n

\u201cThere are a couple of big trends driving this, but the first and most obvious one is that consumers are increasingly going to engage with banking products away from the banking channel. Most retail banking revenues, let\u2019s say post-2030, will be away from the banking channel. Banks need technology to embed themselves where consumers want to engage with a product. Why? Firstly, they need to find growth and protect their market share. Secondly, banking or financial products are already heavily regulated and very complex\u2026 and likely to get more expensive and more complex as we look to protect the consumer. Banks are best placed to be the manufacturer of these products, but they need this technology to embed themselves and remain relevant.\u201d<\/p>\n

Are there limits to what even a big brand can do in terms of embedding a service?<\/strong><\/p>\n

\u201cIf you take the simplest view of what BaaS is, which is a brand that wants to use a financial product and the provider, in this case, NatWest Boxed, what the brands bring to the party is commercial viability and scale \u2013 they\u2019re the ones that find the consumer. As with any product, there needs to be a key problem to solve, a clear need.\u00a0 What\u2019s very important for these brands is they need to integrate the products in a coherent way to their core strategy. Take Nike, one of the biggest brands in the world, it\u2019s not coherent for it to offer a savings product. The limits of these brands are what they\u2019re going to do with embedded finance and how it adds value to their core strategy. Also, they need to do it in a way that is scalable. If you don\u2019t scale it, you\u2019re not going to make it commercially viable in the longer term and it will just wither on the vine.\u201d<\/p>\n

Is there a trade-off in opting for FinTech technical excellence or banking credentials?<\/strong><\/p>\n

\u201cYou need both. Technical excellence is important to have scalability, speed of service and interoperability. I\u2019m using generic terms here, but effectively, you need the thing to plug in and work, and it needs to be available around the clock and work quickly and well for consumers. In terms of balance sheet strength and regulatory approval, those are the ingredients that allow you to be sustainable and safe in the long run and achieve your potential.<\/p>\n

\u201cGenerally, you need, especially with lending, to have access to a large balance sheet \u2013 cheap cost of capital \u2013 to allow you to be competitive in the market. And of course, you need to do it safely. The focus on consumer duty and customer outcomes is greater than ever.<\/p>\n

\u201cAs these products proliferate and it\u2019s easy to embed them in APIs, plug them in everywhere, you can imagine risk proliferating in the
\nmarket where the distributor of the products is going to be less and less \u2018au fait\u2019 with the regulatory construct. So, there needs to be a
\nmechanism and a framework to ensure that proliferation happens safely because it is happening and it will happen. So, that\u2019s why you
\nneed a partner that can give you the assurance that these products are designed, manufactured and distributed in the right way.\u201d<\/p>\n

How is the revenue generated between the banking partner and the brand?<\/strong><\/p>\n

\u201cIf we start with the brand, firstly, there is, especially for large consumer brands, the business case around incremental sales. By having this proposition, they\u2019re either going to increase basket size,\u00a0 increase conversion or drive revenue. It\u2019s a cross-sell game. \u201cClearly, there\u2019s a revenue share aspect between the two parties, generating a new revenue stream. Finally, there are matters of efficiency and cost avoidance. We know it\u2019s expensive to run regulated products.<\/p>\n

\u201cUsing a BaaS provider allows companies to accelerate certain things in terms of roadmaps and crucially it means they don\u2019t need to have a risk management or compliance function because that\u2019s been outsourced. So, that also creates value. For the providers themselves, there is growth in terms of the balance sheet, more assets
\nand liabilities or interest income, which is shared with the brand. It depends on the commercial construct. And there\u2019s fee income around
\nrunning these platforms as well.\u201d<\/p>\n

Is it really possible to create a unique range of products for each brand client?<\/strong>
\n\u201cFor embedded finance to scale, you need standardised products. Typically, customisation is the enemy of scalability and profitability in most financial services business models, not just embedded finance. The way to think about it is you can create differentiated propositions for brands, by curating your product modules, your Lego blocks in different configurations, if you like, to give a different client customer experience or so on.<\/p>\n

\u201cCertain brands may want to choose to give away margin to win market share. That\u2019s a pretty standard strategy. We work with our clients to come up with pricing strategies aligned to their ambition. There\u2019s a difference between a bespoke suit and off the peg, and embedded finance needs to be in the off the peg analogy otherwise it won\u2019t be commercially sustainable longer term.\u201d<\/p>\n

Trust is a pressure issue \u2013 customers trusting the brand, the brand is trusting the bank. How do you protect that trust?<\/strong><\/p>\n

\u201cTrust is sacrosanct, every business will say \u2018our customers are the most important\u2019. Switching from one clothing label to another
\nis instantaneous or from one kind of luxury brand to another. So, consumer trust for such brands is crucial.<\/p>\n

\u201cIn technology, trust is gained by delivering on your promises on time and consistently. At NatWest Boxed this is probably one of our biggest differentiators. Our pedigree comes from supporting 19 million retail customers in the UK, which starts with setting the right standards.<\/p>\n

\u201cThat\u2019s probably step one in the trust game. Then you focus on the things that are important, like service quality, fraud security, for example, the things that are going to maintain this trust for your clients. You back that with the right capability and capacity so you can scale safely, and you focus on that consistently. That kind of operating model is key for trust.\u201d<\/p>\n

Will there be a new normal of people managing all their finances at their favourite shop, at their favourite brand?<\/strong><\/p>\n

\u201cI think the honest answer is \u2018no\u2019 but probably the new normal is that customers will not be turning to their bank for all their financial needs, they may turn to their favourite brands. But equally, it\u2019s not the new normal that any brand will do it. I refer to my Nike example. There needs to be strategic coherence between the brand and offering embedded finance in order to make it viable.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Banking-as-a-Service (BaaS), providing retail banking customers with financial products and services at the point of need, is being touted as the future of banking. IBS Intelligence speaks to George Toumbev, Chief Commercial Officer of NatWest Boxed NatWest\u2019s Banking-as-a-Service business, NatWest Boxed, recently announced a seven-year partnership deal with Saga, the leading UK provider of products […]<\/p>\n","protected":false},"author":35851,"featured_media":567617,"template":"","categories":[11395,11381,41779,11382,11368,11375,11376,42764,11384,11397],"tags":[12663,11649,12004,11438,11409,12472,11769,11549,11515],"class_list":["post-570753","leadership-interview","type-leadership-interview","status-publish","has-post-thumbnail","hentry","category-analytics","category-artificial-intelligence","category-banktech","category-cloud","category-core-banking","category-cybersecurity","category-digital-banking","category-digital-payments","category-payments","category-saas","tag-ai","tag-digital-banking","tag-digital-lending","tag-digital-payments","tag-digital-transformation","tag-financial-inclusion","tag-financial-institutions","tag-financial-services","tag-fintech"],"acf":[],"yoast_head":"\nThe theory and practice of BaaS, George Toumbev, Chief Commercial Officer, NatWest Boxed - 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