Santander Raises Profit Forecast on Digital Product Strategy
What happened
Santander has hiked its 2028 profit forecast to over €20 billion, citing recent deal activity and a strategic product shift. The bank is increasingly prioritizing fee-based services, digital consumer products, and cross-border partnerships to counter margin compression in its traditional lending and payments businesses.
Why it matters
- The new strategy, dubbed the "ONE Transformation," aims to grow Santander's customer base from 180 million to over 210 million by 2028, targeting a return on tangible equity (RoTE) above 20%. - A core component of the strategy involves generating over €1 billion in annual value from Artificial Intelligence and data by 2028, which will be applied to streamline operations, enhance fraud detection and risk modeling, and deliver more personalized services. - Santander's payments fintech, PagoNxt, recently enabled Real-Time Payments (RTP) in the U.S. by connecting to The Clearing House's RTP® network, giving its two million U.S. customers access to instant payments. This follows PagoNxt's acquisition of Wirecard's European assets and a majority stake in Mexican fintech MIT to bolster its global merchant acquiring arm, Getnet. - In Europe, the bank recently merged its digital-only unit, Openbank, with Santander Consumer Finance to create a single, more efficient digital-first bank, a move designed to better integrate product offerings and reduce operational costs. - The digital strategy for the U.S. market includes the national expansion of its digital platform Openbank, which attracted over $2 billion in deposits within its first three months of operation. - Under Executive Chair Ana Botín, the bank is pursuing a "digital bank with branches" model, focusing on organic growth and simplifying the group's structure following major acquisitions like the $12.2 billion deal for U.S. lender Webster. - To expand its merchant services, Santander UK has entered into a partnership with Worldpay, giving its business clients direct access to Worldpay's payment processing platform for point-of-sale and e-commerce transactions.
Key numbers
- Santander has hiked its 2028 profit forecast to over €20 billion, citing recent deal activity and a strategic product shift.
- - The new strategy, dubbed the "ONE Transformation," aims to grow Santander's customer base from 180 million to over 210 million by 2028, targeting a return on tangible equity (RoTE) above 20%.
- market includes the national expansion of its digital platform Openbank, which attracted over $2 billion in deposits within its first three months of operation.
- Under Executive Chair Ana Botín, the bank is pursuing a "digital bank with branches" model, focusing on organic growth and simplifying the group's structure following major acquisitions like the $12.2 billion deal for U.S.
What happens next
- The new strategy, dubbed the "ONE Transformation," aims to grow Santander's customer base from 180 million to over 210 million by 2028, targeting a return on tangible equity (RoTE) above 20%.
- To expand its merchant services, Santander UK has entered into a partnership with Worldpay, giving its business clients direct access to Worldpay's payment processing platform for point-of-sale and e-commerce transactions.
Quick answers
What happened in Santander Raises Profit Forecast on Digital Product Strategy?
Santander has hiked its 2028 profit forecast to over €20 billion, citing recent deal activity and a strategic product shift. The bank is increasingly prioritizing fee-based services, digital consumer products, and cross-border partnerships to counter margin compression in its traditional lending and payments businesses.
Why does Santander Raises Profit Forecast on Digital Product Strategy matter?
The new strategy, dubbed the "ONE Transformation," aims to grow Santander's customer base from 180 million to over 210 million by 2028, targeting a return on tangible equity (RoTE) above 20%. A core component of the strategy involves generating over €1 billion in annual value from Artificial Intelligence and data by 2028, which will be applied to streamline operations, enhance fraud detection and risk modeling, and deliver more personalized services. Santander's payments fintech, PagoNxt, recently enabled Real-Time Payments (RTP) in the U.S. by connecting to The Clearing House's RTP® network, giving its two million U.S. customers access to instant payments. This follows PagoNxt's acquisition of Wirecard's European assets and a majority stake in Mexican fintech MIT to bolster its global merchant acquiring arm, Getnet. In Europe, the bank recently merged its digital-only unit, Openbank, with Santander Consumer Finance to create a single, more efficient digital-first bank, a move designed to better integrate product offerings and reduce operational costs. The digital strategy for the U.S. market includes the national expansion of its digital platform Openbank, which attracted over $2 billion in deposits within its first three months of operation. Under Executive Chair Ana Botín, the bank is pursuing a "digital bank with branches" model, focusing on organic growth and simplifying the group's structure following major acquisitions like the $12.2 billion deal for U.S. lender Webster. To expand its merchant services, Santander UK has entered into a partnership with Worldpay, giving its business clients direct access to Worldpay's payment processing platform for point-of-sale and e-commerce transactions.
