Owned by Santander UK but operating as an independent unit, the fund will look to invest in fintech firms around the world, initially focusing on startups involved in e-commerce and payments, online lending and investing, and big data analytics.

Explaining the thinking behind its new fund, Santander cites Accenture research that shows banks having traditionally only accounted for 10% of fintech innovations, whilst VC backed companies have supported 60%.

It is hoping to shift the balance, helping to "support the digital revolution" and ensure that it is at the forefront, bringing innovative services to its customers.

Ana Botin, chief executive, Santander UK, says: "The Santander Fin-Tech Fund builds on our philosophy of collaboration and partnership with small and startup companies at Santander. In this case our aim is to provide fintech companies with much needed capital, whilst we gain know-how and our customers benefit from the latest thinking."

According to Accenture, global fintech investment tripled between 2008 and 2013 from $928 million to $2.97 billion and is expected to double again to between $6 billion and $8 billion by 2018.

With startups and established tech giants posing an increasing threat to their business, many banks have decided that cooperation, rather than competition, is the best approach.

Last year Santander's Spanish rival BBVA set up a similar, $100 million, Silicon Valley-based fintech venture fund while Russia's Sberbank has also pumped in $100 million into its fund, which this week invested in digital challenger Moven. HSBC is also understood to have launched a $200 million fund with the aim of finding startups that can help to refresh its own technology offerings.