Banco Santander is integrating Openbank with Santander Consumer Finance as part of an internal adjustment focused on merging operational efficiencies and customer propositions. The company included this information as part of an official communication and is also integrating Consumer Finance as part of digital banking in the European market.
The integration will result in the enhancement of customer bases
Digital banking Openbank currently operates fully in Spain and in 6 other European countries under the financial passporting regulations.
After the integration of Openbank, the expectation is that Santander Consumer Finance will be able to leverage the digital banking infrastructure of Openbank to enhance its consumer base and cross-sell products in retail banking. The expectation is to achieve operational efficiencies and, as a result, cost synergies, and improved customer propositions as a result of reduced duplication of banking products and cross-channel retail banking distribution.
Customers will benefit from more cost-effective, accessible and comprehensive financial support product suites for consumption in Europe as a result of the operational efficiencies attained post-integration.
The Stander brand for retail European banking will change as the Consumer Finance brands will be re-positioned to cross-sell products with the Openbank digital bank infrastructure.
Consumer Finance retail banking will lose its brand as part of the transition
Consumer finance retail banking will lose its brand as part of this transaction. A Santander spokesperson stated,
“This integration will simplify our structure, ease costs, and position us to provide a more extensive and remarkable assortment of products and services to our customers.”
This consolidation of services is in a bid to optimize Santander’s operations in Europe, to identify possible improvements within the now-implemented consolidated digital and consumer finance services, and to quell the profitability pressures posed by the recent and still-ongoing inflation, increased competition of digital finance services, and altered consumer habits.
Reduced overhead, integrated technology, and unified portions of management are expected to facilitate hundreds of millions of euros in savings annually, making a significant impact on the cost-energy estimations.
How will this merger impact customers?
Santander will also directly take on competition from digital firms and fintechs in Europe. Openbank will extend its established operations in Europe, and gain from Santander Consumer Finance’s scale and the significant lending capabilities to the over 18 million customers across 15 markets.
Due to integration, customers can expect a more cohesive experience. The combined platform will provide a comprehensive suite of services, which includes digital checking and savings accounts, consumer loans, credit cards, and auto loans. all available through one digital platform.
Customers have also been promised no disruption to services during the integration. The bank will start the transition of Openbank and Consumer Finance clients to the upgraded platform with new and enhanced digital tools.
Completed merger will allow Santander to focus on their ambitions
The merger will allow Santander to focus on its ambition of being the leading digital bank in Europe.
By marrying the flexibility of a digital challenger bank with the size of a more established player, Santander will be able to strengthen its position in the ever-expanding digital banking market.
This consolidation is part of a broader trend of traditional banks trying to modernize. Following other major European banks, Santander has also taken steps to simplify its business model in order to reinforce its competitive position in the digital market.
Industry observers see integration as bold but necessary,
“Santander is positioning itself for the future of digital banking. Combining digital innovation with lending scale is a smart way to stay competitive.”
With the ongoing changes in the financial sector, digital transformation and operational efficiency are critical. The changes will be critical for the long-term success of the organization. Santander understands this well and integrates the values into their business strategy.
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