In this episode, we speak with Shaul David, a London-based embedded finance expert. Shaul was head of banking at the British banking-as-a-service provider Railsr from 2019 to 2023 and has extensive experience in the sector.
In a significant move for the European embedded finance landscape, Italian banking giant UniCredit has acquired Vodeno and Aion Bank for €370 million. This acquisition marks one of the largest banking-as-a-service deals in Europe and signals growing interest from traditional banks in modernizing their technology stack and expanding into embedded finance solutions. The merger brings together UniCredit's established banking presence with Vodeno's technical capabilities and Aion Bank's full banking license, potentially reshaping how banking services are delivered to corporate clients across Europe.
Key points from the podcast discussion with Shaul David (former Head of Banking at Railsbank):
The Acquisition:
- UniCredit announced the acquisition of Vodeno (Polish banking infrastructure provider) and Aion Bank (Belgian bank) for €370 million
- Both companies were previously owned by Warburg Pincus and jointly offer embedded finance solutions in the EU
- The deal includes approximately 200 developers and additional staff
Strategic Value:
- Provides UniCredit with a full banking license through Aion Bank and modern tech stack through Vodeno
- Enables faster innovation and implementation of new banking products
- Positions UniCredit to compete in the embedded finance market with large corporate clients
- Offers advantage of UniCredit's large balance sheet for lending-focused solutions
NatWest Connection:
- NatWest Box (82% owned by NatWest, 18% by Vodeno Group) continues operation
- The joint venture focuses on large corporate clients in the UK
- Expected to announce a major retail partnership soon
- Relationship likely to continue despite UniCredit ownership
Market Impact:
- Represents one of the largest banking-as-a-service acquisitions in Europe
- May pressure other European banks to respond with their own embedded finance strategies
- Shows growing interest from traditional banks in banking-as-a-service capabilities
- Could lead to more consolidation in the embedded finance sector
Notable Customers & Focus:
- Key clients include NatWest Box and Metro in Germany
- Targeting large enterprise clients rather than startups
- Focus on companies requiring significant scale and balance sheet support