CYBG and Salary Finance, a market leading FinTech, are pleased to announce that they have agreed the terms of a new joint venture to add an innovative channel to CYBG’s existing personal lending business.
CYBG will fund Salary Finance’s rapidly growing salary-deducted loans product line, which on average saves customers over £6001 in interest and enables them to pay off debts six to twelve months sooner. The lower rates can be offered due to the efficiency and security provided by the repayments being collected directly through payroll. CYBG has agreed to lend, subject to certain conditions, up to £400 million of personal loans through this new salary finance channel.
Salary Finance is an innovative platform that connects to the payroll of participating employers to provide financial wellbeing benefits for employees, including salary-deducted savings, loans and pay advances, as well as financial education.
Employee financial wellbeing is fast becoming a priority for employers, with a growing body of evidence showing the impact financial stress can have on employee productivity, retention and mental health. This is an important focus at CYBG, which has taken steps to improve access to financial education for customers, launching its B-Tox campaign to encourage people to take control of their finances and be more financially fit. Customers are given guidance on how to better understand their finances, stay in control of their budget, as well as tips on how to manage money to provide greater financial confidence.
Salary Finance has an existing banking relationship with CYBG as an SME customer with a revolving credit facility funding line. CYBG has significantly invested in its digital platform, iB, as part of a £350 million investment programme, ensuring open API capabilities for FinTech collaboration. The new joint venture demonstrates CYBG’s focus on both supporting and partnering with FinTechs and also enables CYBG to provide customers with new products and services in a rapidly evolving financial services market.
Salary Finance reaches over a million employees across all sectors with household name clients in the UK including BT, E.ON, Virgin Active, Mitie, Capgemini, Carlsberg, Dixons Carphone, Saga, L&G and many NHS Trusts, councils and schools.
This joint venture, along with other exciting strategic partnerships with leading tech and FinTech players such as PayPal, demonstrates the attractiveness of CYBG’s iB digital banking platform.
David Duffy, Chief Executive of CYBG, said: “FinTech is revolutionising how the financial sector works - 42% of us in the UK now use the services of at least one FinTech firm. We have been hugely impressed by the Salary Finance team and the clear social purpose that underpins everything they do. We are delighted to be able to support the growth of this innovative platform.”
Asesh Sarkar, Chief Executive of Salary Finance, said: “We are on a mission to make the lives of millions of employees around the world financially healthier and happier. Our flagship salary deducted loans product is a core part of our broader financial wellbeing platform and the funding joint venture with CYBG will enable us to continue to scale the product over the coming years. We are proud to work with a bank that demonstrates such openness to partnering with FinTech firms to create better outcomes in society.”
Salary Finance was founded in 2015 by co-founders Asesh Sarkar, a former banking consultant, Daniel Shakhani, a social entrepreneur, and Dan Cobley, former head of Google UK. The business has been built in Blenheim Chalcot’s West London Venture Builder and received investment last year from Legal and General.
The joint venture is subject to regulatory approval and certain other conditions.
1Based on an average loan of £2,900, over a 30 month loan term, at a representative APR of 9.9%.