What happened: The German bank Sutor Bank has announced that Swiss bank Hypothekarbank Lenzburg has become a minority shareholder of Sutor Bank (Private Banking Magazin; Germany only). The Swiss bank acquired 9,9% of the Hamburg-based private bank. Both companies are actively involved in the banking-as-a-service world and announced that they aim to grow their BaaS offering with the partnership.
My comment: Sutor Bank is not the biggest brand in banking-as-a-service but has partnered with multiple fintech companies over the past years. Most notably, they partner with Raisin (pension products), Fintiba (blocked accounts for international students), and Timefonds (investment products). Sutor Bank's origin goes back to 1921, when it started with private banking, but the focus has shifted heavily towards banking-as-a-service. In recent history, the Sutor Bank got involved in various crypto-related projects and peaked in 2021, when it announced its plan to sell the bank to BCB Group, a payment provider in the digital asset space. However, in 2023, Sutor Bank announced that the partnership was called off due to a non-alignment in the strategies of the companies. Thus, Sutor Bank’s two directors remained the only shareholders until Hypothekarbank Lenzburg’s buy-in.
Hypothekarbank Lenzburg is a well-known player in the local banking-as-a-service market. This is most notably due to its partnership with retail giant Coop (I covered the launch and shut-down nine months later) and challenger bank Neon. In August 2024, Hypothekarbank Lenzburg also acquired Swiss Bankers Prepaid Services (Finews.ch).
This may all be very interesting, but what exactly does the partnership of the banks mean for their banking-as-a-service proposition? So far, we can only speculate. The two banks can offer their banking-as-a-service offerings only in their home country. Probably the easiest way to partner would be to support each other's clients in the expansion to Germany or Switzerland. If this works well, perhaps the endgame is to offer one technology layer with two licences for German and Swiss operations. This would be a fascinating outcome for many, but that would likely take years. Whatever the outcome, I am confident we will hear more from the two banks in our banking-as-a-service bubble in the coming months and years.
