Nationwide Building Society to fund tech startups to the tune of £50m

Nationwide Building Society has launched a £50m fund to support startups that can deliver technology that the mutual 15 million members could use.

Although the building society is looking for innovation in banking as a platform, the fund is not only about financial technology (fintech). Nationwide also wants to back tech startups in areas such as delivering technology to support finances in the home, apps to bring communities together and personal data and identity services.

For example, its first participant is a proptech, a startup focused on delivering tech in the property market.

The FinTech fund, as it is known, will be part of the building society’s technology strategy. As well as money startups, the programme will have a senior member of Nationwide staff with relevant experience to provide support and expertise.

The building society has built a good reputation for IT development since investing heavily in rebuilding itself using the latest technologies, especially during a time when most banks were reducing spending to cope with the effects of the 2008 financial crisis.

It was in 2008 when the company embarked on a £1bn project to transform its technology after years of underinvestment, which was typical in the financial services sector.

The project involved upgrading its datacentre, outsourcing IT for the first time and implementing Microsoft technology in the front office and SAP at the back.

This has enabled Nationwide to increase its adoption of digital technology, claiming to be the first high street finance firm to offer an Apple Watch app.

In September last year, Nationwide announced it was using artificial intelligence (AI) technology from Tata Consultancy Services to reduce the complexity of back-end systems as it introduced more digital products.

Mobile services are a core part of this, and the building society is focused on increasing service delivery through this channel. It has grown the number of active mobile banking members by 44%, with 200 million more logins.

Tony Prestedge, Nationwide Building Society’s deputy CEO, said: “By investing in early stage startups, we can be at the forefront of helping develop innovative products and services that will benefit our members now and in the future, allowing us to deliver our ambitious future technology strategy.”

The first startup to receive the building society’s backing is Acasa, which is focused on the property sector. It offers digital tech to support landlords and tenants who live in shared accommodation with their everyday finances.

Acasa’s home management platform – available on iOS, Android and the web – automates and streamlines the process of moving in, managing and moving on for the resident, utility companies and landlords.

For people who share homes, Acasa helps users set up, manage and automatically split utility bills in one place.

Nick Katz, CEO of Acasa, said: “Partnering with Nationwide is going to allow us to accelerate our growth plans, deliver on our mission and make renting better for everyone in the UK and beyond.”