Spanish bank Santander has partnered with mobile banking software provider Monitise to launch a joint venture, the companies announced on Wednesday.
The two firms will provide up to £10 million ($15.7 million) of capital each over two years to invest in financial technology – or fintech – businesses. The aim is to build companies "with the potential to redefine and support financial services globally," Monitise said in a press release.
For Santander, the venture will allow it to invest in companies that could be potential customers as well as businesses that would enhance its own technological offerings. While Monitise will be able to push its cloud-based mobile banking services to start-ups it invests in and grow its own customer base.
Monitise also said it will benefit from a multi-million pound licence fee, although it would not confirm the amount.
Companies that the get invested in, meanwhile, will get access to Santander's customer base and Monitise's technology.
The 50-50 joint venture comes as banks look to defend themselves against a large number of start-ups aiming to disrupt core business models of traditional financial institutions.
This is not Santander's first foray into fintech investment. The bank has an in-house division called Santander InnoVentures which invests in early stage fintech start-ups.
The venture will be led by Julio Faura, one of Santander's innovation leaders, and chaired by Monitise founder Alastair Lukies. It will operate out of London.