Summary
OakNorth is plugging Wise’s payments engine into its SME platform rather than building its own, after trebling new lending to $1.4bn. With challengers now holding around 60% of mid-sized business lending, service as well as credit is becoming the battleground.
Key takeaways for specialist lenders: - Partnerships beat building: plugging in proven infrastructure can add services such as international payments quickly and at lower cost. - Competition is intensifying: fast-growing challengers are expanding their offering to win and keep SME borrowers. - Overseas borrowers need smooth payments: lenders serving international property investors may benefit from easier cross-border payments.
UK fintech Wise has partnered with OakNorth, the lender focused on growing and mid-sized businesses. OakNorth will build Wise’s international payments engine directly into its small business banking platform, with the partnership due to go live this quarter. The deal shows how specialist lenders are increasingly using third-party infrastructure rather than building every capability in-house.
The wider market context is just as relevant for bridging and development lenders. British Business Bank research puts challenger banks at around 60% of gross lending to mid-sized firms, compared with nearly two decades ago, when the four largest banks held 90%. Naudé described small businesses as squeezed between banks’ strong retail and corporate offerings, which is the same gap that specialist property lenders have long served.
OakNorth’s growth shows the scale of the opportunity. It recorded $1.4bn of new lending in the last year, more than treble its 2024 level.
Source
This post is Vector Finsoft's analysis. Read the original for the full details.
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