UK fintech Wise is set to reveal a partnership with small business lender Oaknorth as the group looks to make its infrastructure arm a driving force. 

The cross-border finance firm’s tie-up with Oaknorth will see the latter adopt Wise’s international payments engine directly into its own banking platform for small businesses.

Fintechs and challengers have dominated the small business lending market after high street giants retreated. Research from the British Business Bank puts challenger banks on around 60 per cent of gross lending to mid-sized firms, compared to nearly two decades ago, when the four largest banks made up 90 per cent.

Steve Naudé, head of Wise Platform, said the latest partnership, which is set to go live this quarter, tees the division up for its medium-term target of making up 10 per cent of the broader group’s cross-border volumes. It currently sits at six per cent.

“Longer term, we want this to be more than 50 per cent of the group… if you take the size of the market, the size of that cross-border volume and look at what we process today, there is still a significant opportunity out there,” he added.

The focus on the infrastructure division marks a pivotal shift for Wise, which began as a disruptor to the banking sector, seeking to reduce international transfer fees.

Wise infrastructure division becoming ‘core’ to group

“To really solve our mission to make moving money globally as easy as possible… we will have to do it by powering those customers in the tool they’re already using: their bank, their fintech, their payroll provider, their bill pay platform, whatever their use case is,” Naude said.

“That’s why the platform strategy becomes core to the group.”

Oaknorth, which primarily caters to growing mid-sized businesses and entrepreneurs, recorded $1.4bn in total volume of new loans in the last year, more than trebling 2024’s level. 

The new agreement comes as the bank expands into the US, which made up around 40 per cent of new lending in the last year.

The firm joins Monzo, UniCredit, Morgan Stanley and Standard Chartered in using Wise’s infrastructure.

“Small business banking is one of those spaces that has been quite underserved,” Naudé said.

“Banks have strong retail offerings and strong corporate offerings, and then small businesses can get squeezed between the two.”